REPORT TITLE:
Whistleblowers' Protection


DESCRIPTION:
Amends the Whistleblowers' Protection Act by expanding areas of
protected conduct and the types of reportable violations.  Also
strengthens the remedies available to whistleblowers and
increases penalties for violators.  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.103        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO EMPLOYEE PROTECTION UNDER THE WHISTLEBLOWER LAW.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that, on occasion,
 
 2 employees find it necessary to report violations or suspected
 
 3 violations of a law, rule, regulation, or ordinance adopted by
 
 4 the State of Hawaii, a political subdivision of this State, or
 
 5 the United States, or a code of ethics designed to protect the
 
 6 interest of the public or an employer, which they observe during
 
 7 the course of their work.
 
 8      Unfortunately, many of these alleged violations are not
 
 9 reported due to concerns by employees about potential retaliatory
 
10 discharge, or threats to, or discrimination against them for
 
11 reporting these violations.  Thus, out of fear, violations go
 
12 unreported and uncorrected.
 
13      This problem adversely affects both the well-being and
 
14 productivity of these concerned employees, as well as the
 
15 functioning of the affected agencies or organizations.  It also
 
16 undermines and erodes the public's trust and confidence in
 
17 government, in government employees, and in private sector
 
18 organizations and their employees.
 

 
Page 2                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1      The Whistleblowers' Protection Act, codified as part V of
 
 2 chapter 378, Hawaii Revised Statutes, attempts to provide some
 
 3 protection to employees who speak out.  That Act provides for the
 
 4 ability to bring a civil action for appropriate injunctive
 
 5 relief, or actual damages, or both, within ninety days after the
 
 6 alleged violation of that Act.  That Act also provides for
 
 7 potential reinstatement of the employee, payment of back wages,
 
 8 full reinstatement of fringe benefits, actual damages, or any
 
 9 combination of these remedies.  Recovery of all or a portion of
 
10 the costs of litigation, including reasonable attorney's fees and
 
11 witness fees, is also possible.
 
12      Other states, such as California, and the federal
 
13 government, have adopted similar legislation.  In addition, the
 
14 Government Accountability Project, an organization which provides
 
15 assistance to whistleblowers, has developed a Model State
 
16 Whistleblower Protection Act.
 
17      A reference entitled "The Whistleblowers", by Myron Peretz
 
18 Glazer and Penina Migdal Glazer, researches and analyzes the
 
19 relatively recent phenomenon of whistleblowing or ethical
 
20 protest.  Glazer and Glazer have concluded that these employees
 
21 have often "risked their lives, their careers, and their security
 
22 to "do the right thing".  They found that "many government and
 
23 private sector officials have implemented a consistent pattern of
 

 
Page 3                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1 harsh reprisals - from blacklisting, dismissal, or transfer, to
 
 2 personal harassment - in an effort to define the dissident
 
 3 employees as the source of the problem, to undermine their
 
 4 creditability and effectiveness as potential witnesses".
 
 5      Although Hawaii's Whistleblowers' Protection Act does
 
 6 provide some protection from, and potential compensation for,
 
 7 employer retaliation for ethical protest, penalties for
 
 8 violations of that Act are relatively minor and insignificant (a
 
 9 fine of not more than $500 for each violation).  In contrast to
 
10 the relatively much greater penalties and losses incurred by the
 
11 average whistleblower for attempting to do the right thing, the
 
12 penalties for those who create these hardships are grossly
 
13 disproportionate, totally inadequate, and hardly a deterrent to
 
14 future retaliation.
 
15      Hawaii's Whistleblowers' Protection Act provides only a
 
16 ninety-day period to bring civil action.  Such a short statute of
 
17 limitations may not be adequate in some cases.  Often, more time
 
18 is needed for the whistleblower to gather the necessary evidence
 
19 of retaliation and to support the whistleblower's original
 
20 allegations regarding illegal activities; to discuss the
 
21 situation with legal counsel, union representatives, or public
 
22 support and interest groups; and to evaluate the potential
 
23 personal and career ramifications of pursuing further actions.
 
24 Thus, a longer period of time is warranted.
 

 
Page 4                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1      The purpose of this Act is to strengthen the protection
 
 2 provided by Hawaii's Whistleblowers' Protection Act by providing
 
 3 protection to employees who report violations of law, rule,
 
 4 regulation, ordinance; violations of a code of ethics; or the
 
 5 following:
 
 6      (1)  Danger to public health, safety, and welfare;
 
 7      (2)  Fraud;
 
 8      (3)  Waste, misuse, and misappropriation of public
 
 9           resources; or
 
10      (4)  Malfeasance, misfeasance, or neglect of duty by an
 
11           agency.
 
12      Additionally, this Act also strengthens the remedies
 
13 available to whistleblowers and increases the penalties for
 
14 violations.
 
15      SECTION 2.  Section 378-62, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "[[]378-62[]]  Discharge of, threats to, or discrimination
 
18 against employee for reporting violations of law.  (a)  Subject
 
19 to chapter 92F, no employer shall make, adopt, or enforce any
 
20 rule, regulation, contract, or policy to prevent an employee from
 
21 disclosing information to a public body, or any person, agency,
 
22 or organization where the employee has reasonable cause to
 
23 believe the information discloses a violation or suspected
 

 
Page 5                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1 violation of a law, rule, regulation, or ordinance, adopted
 
 2 pursuant to a law of this State, a political subdivision of this
 
 3 State, or the United States, or a code of ethics designed to
 
 4 protect the interests of the public or an employer, or the
 
 5 information demonstrates one or more of the following:
 
 6      (1)  Danger to public health, safety, and welfare;
 
 7      (2)  Fraud;
 
 8      (3)  Waste, misuse, and misappropriation of public
 
 9           resources; or
 
10      (4)  Malfeasance, misfeasance, or neglect of duty by an
 
11           agency.
 
12      (b)  An employer or agent of the employer shall not
 
13 discharge, threaten, demote, suspend, harass, blacklist, fail to
 
14 promote, transfer, discipline, significantly change duties or
 
15 responsibilities, conduct adverse performance appraisals, or
 
16 [otherwise] in any other manner discriminate against an
 
17 applicant, employee, or former employee regarding the
 
18 applicant's, employee's, or former employee's training, awards,
 
19 compensation, terms, conditions, location, or privileges of
 
20 employment solely because:
 
21      (1)  The employee, or a person acting on behalf of the
 
22           employee, reports or is about to report in any fashion,
 
23           including verbal, written, broadcast, or otherwise, to
 

 
Page 6                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1           a public body, [verbally or in writing,] or any person,
 
 2           agency, or organization, a violation or a suspected
 
 3           violation of a law [or], rule, regulation, or
 
 4           ordinance, adopted pursuant to a law of this State, a
 
 5           political subdivision of this State, or the United
 
 6           States, or a code of ethics designed to protect the
 
 7           interest of the public, or the information demonstrates
 
 8           one or more of the following:
 
 9           (A)  Danger to public health, safety, and welfare;
 
10           (B)  Fraud;
 
11           (C)  Waste, misuse, and misappropriation of public
 
12                resources; or
 
13           (D)  Malfeasance, misfeasance, or neglect of duty by an
 
14                agency
 
15           unless the employee knows that the report is false;
 
16           [or]
 
17      (2)  An employee is requested by a public body to
 
18           participate in an investigation, hearing, or inquiry
 
19           held by that public body, or a court action[.]; or
 
20      (3)  An employee, or any individual who supports the
 
21           employee, refuses to participate in or remain silent
 
22           about a violation or suspected violation of a law,
 
23           rule, regulation, or ordinance, adopted pursuant to a
 

 
Page 7                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1           law of this State, a county of this State, or the
 
 2           United States, or a code of ethics designed to protect
 
 3           the interest of the public, or information
 
 4           demonstrating one or more of the following:
 
 5           (A)  Danger to public health, safety, and welfare;
 
 6           (B)  Fraud;
 
 7           (C)  Waste, misuse, and misappropriation of public
 
 8                resources; or
 
 9           (D)  Malfeasance, misfeasance, or neglect of duty by an
 
10                agency."
 
11      SECTION 3.  Section 378-63, Hawaii Revised Statutes, is
 
12 amended as follows:
 
13      1.  By amending subsection (a) to read:
 
14      "(a)  A person who alleges a violation of this part may
 
15 bring a civil action for appropriate injunctive relief, or
 
16 actual, compensatory, and punitive damages, or [both] any
 
17 combination within [ninety days] twenty-four months after the
 
18 occurrence of the alleged violation of this part.  If applicable,
 
19 the twenty-four-month period shall commence after all grievance
 
20 procedures under collective bargaining agreements, as elected by
 
21 the person alleging the violation, have been exhausted."
 
22      2.  By amending subsection (c) to read:
 

 
 
 
Page 8                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1      "(c)  As used in subsection (a), "damages" means actual,
 
 2 compensatory, and punitive damages for injury or loss caused by
 
 3 each violation of this part, including reasonable attorney
 
 4 fees[.]; except that the State shall not be liable for punitive
 
 5 damages pursuant to section 662-2."
 
 6      SECTION 4.  Section 378-64, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "[[]378-64[]]  Remedies ordered by court.  (a)  Upon motion
 
 9 of the complainant, the court may order a stay of the alleged
 
10 discrimination if the court determines that there are reasonable
 
11 grounds to believe that a violation of this part has occurred,
 
12 exists, or is about to take place.  In addition, the complainant
 
13 shall be entitled to all other civil and criminal remedies
 
14 available under any other state, federal, or county statutes,
 
15 ordinances, rules, or regulations; provided that the complainant
 
16 shall not be entitled to recover duplicative remedies for the
 
17 same claim.
 
18      (b)  A court, in rendering a judgment in an action brought
 
19 pursuant to this part, shall order, as the court considers
 
20 appropriate, reinstatement of the employee, payment of back
 
21 wages, full reinstatement of fringe benefits and seniority
 
22 rights, actual damages, compensatory damages, and punitive
 
23 damages where otherwise allowed, or any combination of these
 

 
Page 9                                                     
                                     H.B. NO.103        
                                                        
                                                        

 
 1 remedies.  A court may also award the complainant all or a
 
 2 portion of the costs of litigation, including reasonable
 
 3 attorney's fees and witness fees, if the court determines that
 
 4 the award is appropriate."
 
 5      SECTION 5.  Section 378-65, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "[[]378-65[]]  Penalties for violations.(a)  A person who
 
 8 violates this part for each violation shall be [fined] subject to
 
 9 one or more of the following:
 
10      (1)  A fine of not more than [$500 for each violation.]
 
11           $10,000;
 
12      (2)  Dismissal from the person's current position; or
 
13      (3)  Disbarment or prohibition from holding state or county
 
14           employment, in the case of state or county employees,
 
15           for up to five years.
 
16 In addition, if the person is employed by the State, the person
 
17 shall be subject to disciplinary proceedings by the department of
 
18 human resources development, if the person is subject to
 
19 chapters 76 and 77; or by the person's appointing body, if the
 
20 person is exempt from chapters 76 and 77; and shall be liable for
 
21 damages in an action brought by the injured party.  Nothing in
 
22 this subsection shall bar a person protected under this part from
 
23 pursuing remedies under section 378-63.
 

 
Page 10                                                    
                                     H.B. NO.103        
                                                        
                                                        

 
 1      (b)  A civil fine which is ordered pursuant to this part
 
 2 shall be [deposited with the director of finance to the credit of
 
 3 the general fund of the State.] provided to the complainant."
 
 4      SECTION 6.  Section 378-69, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "[[]378-69[]]  Conflict with common law, precedence.  (a)
 
 7 The rights created herein shall not be construed to limit the
 
 8 development of the common law nor to preempt the common law
 
 9 rights and remedies on the subject matter of discharges [which]
 
10 that are contrary to public policy.  In the event of a conflict
 
11 between the terms and provisions of this part and any other law
 
12 on the subject, the more beneficial provisions favoring the
 
13 employee shall prevail.
 
14      (b)  Section 386-5 shall not affect subsection (a)."
 
15      SECTION 7.  This Act does not affect rights and duties that
 
16 matured, penalties that were incurred, and proceedings that were
 
17 begun, before its effective date.
 
18      SECTION 8.  Statutory material to be repealed is bracketed.
 
19 New statutory material is underscored.
 
20      SECTION 9.  This Act shall take effect upon its approval.
 
21 
 
22                           INTRODUCED BY:_________________________