Changes Coming to Whistleblower Laws for Non-Profit Entities and Public Agencies

shari lane headshotBy Shari Lane

Beginning January 1, 2017, Oregon’s public employee whistleblower laws will also apply to the employees and board members of any 501(c)(3) non-profit entity that receives public funds through a grant or contract. Affected employers must create and distribute a policy notifying their employees of these changes.  In addition, after January 1, 2017, violation of these whistleblower laws will be a crime, specifically a Class A Misdemeanor. This creates compliance obligations that non-profits and public agencies must take very seriously.

Read on for the details.

Under ORS 659A.199, non-profit entities and other private employers are prohibited from retaliating against an employee who “has in good faith reported information that the employee believes is evidence of a violation of a state or federal law, rule or regulation.”

That protection is quite broad, encompassing external reports and complaints to administrative agencies, court filings, and public disclosures (such as talking to the press, or posting information on social media). The protections also extend to an internal report or complaint to management, or to non-management when management becomes aware of the complaint or report.  The protection applies even if the report or complaint is false or inaccurate, as long as the employee subjectively believes the report is true and is not acting “out of malice, spite, jealousy, or personal gain.”

As an aside, although ORS 659A.199 has historically been cited as the “whistleblower” law for private employees, there are many other legal protections for employees who disclose, report, complain about, or “oppose” acts that are or that the employee believes are illegal. For example, ORS 659A.030 protects employees who oppose discrimination, harassment, or retaliation based on any of the protected classes established in that chapter; ORS 652 protects employees who complain about problems with their wages; ORS 653 protects employees who complain about or invoke Oregon’s Sick Leave Act; and ORS 654 protects employees who complain about, report, or disclose actual or suspected workplace safety issues.

Oregon laws impose additional obligations upon public employers. In addition to the prohibitions listed above, ORS 659A.200-224 prohibit retaliation for disclosing “mismanagement, gross waste of funds or abuse of authority or substantial and specific danger to public health and safety resulting from action of” the government agency.

Beginning January 1, 2017, public employee whistleblower laws will also apply to the employees and board members of any 501(c)(3) non-profit entity that “receives public funds by way of grant or contract.” That is a significant change. Currently, an employee of a private company, including a non-profit entity, would not be engaging in protected “whistleblowing” activity if he accused his supervisor of mismanagement, or complained that she was abusing her authority.

Because this is an expansion of the rights of the employees of affected non-profit organizations, it is important to understand what is covered. The Oregon Administrative Rules provide the following definitions.

a.  “Mismanagement” means serious agency misconduct having the effect of actually or potentially undermining the agency’s ability to fulfill its public mission.

b.  “Gross waste of funds” means an expenditure that is significantly out of proportion to the benefit expected to accrue to the agency and is more than a debatable expenditure.

c.  “Abuse of authority” means to deliberately exceed or make improper use of delegated or inherent authority or to employ it in an illegal manner.

d. “Substantial and specific danger” means a specified risk of serious injury, illness, peril or loss, to which the exposure of the public is a gross deviation from the standard of care or competence that a reasonable person would observe in the same situation.

Also, public employers may not prohibit employees from responding to requests for information from the legislature, or the fact that a person receiving government services, benefits, or assistance is subject to a felony or misdemeanor warrant for arrest. These prohibitions will apply to non-profit organizations after January 1.

Note that the protections available to public employees are in addition to, not in place of, the protections applicable to private employees.  That is, public agencies may not prohibit disclosure of, or take adverse employment action against, an employee because of disclosure of an actual or suspected violation of law or regulation by the agency.

Public employers—and now covered non-profit organizations—do have slightly more flexibility than their purely private counterparts. Whereas employees of private employers need only be acting in “good faith,” employees of public agencies and covered non-profit organizations must have a “reasonable” belief that the violation or other impermissible activity is occurring.

Another big change is this: After January 1, 2017, violation of these whistleblower laws by a public agency or covered non-profit organization will be a Class A Misdemeanor.

In addition, the new law provides an affirmative defense to an employee of a public agency or covered non-profit organization who, in the course of engaging in protected whistleblowing activity, discloses information that would normally be exempt from disclosure, or that the employee would normally be prohibited by law or policy from disclosing, if the act involved “lawfully accessed” information disclosed to a manager, administrative agency, court, or attorney.

Employers covered by these legislative changes must establish and implement a policy outlining the rights and remedies of whistleblowing employees, and must provide a hard copy or electronic copy of the new policy to each employee. 

It remains to be seen how these broad-sweeping changes will play out in practice. In the meantime, our best advice is to consult with your friendly neighborhood attorney before implementing any new confidentiality policies or disciplining an employee for unauthorized disclosures.

Please Note
Nothing in this communication creates or is intended to create an attorney-client relationship with you, constitutes the provision of legal advice, or creates any legal duty to you. If you are seeking legal advice, you should first contact a member of the Labor and Employment Team with the understanding that any attorney-client relationship would be subsequently established by a specific written agreement with Harrang Long Gary Rudnick P.C. To maintain confidentiality, you should not forward any unsolicited information you deem to be confidential until after an attorney client relationship has been established.

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