ARIZONA STATE HOUSE OF REPRESENTATIVES

Phoenix, Arizona

FACT SHEET FOR H.B. 2695

public employees; information disclosure

Purpose

The bill makes technical changes to the existing state whistleblower protection act, A.R.S. § 38-531 et seq., to clarify definitions and procedures. The bill extends protection from retaliation for disclosures of wrongdoing whether oral or written and from preemptive retaliation.

The bill simplifies and clarifies responsibilities of supervisory personnel and governing boards of state agencies, community colleges and schools, and allows reduced costs and simpler procedures when investigating and adjudicating claims by employees reporting waste, fraud or abuse of authority.

It offers protection for employees who report waste, fraud or abuse of authority to local supervisors, removing the need to bring all claims to major state agencies such as the legislature, the governor or the attorney general, and provides protection for the more usual route of oral disclosure.

Specifically, the bill:

(1) removes both a monetary fine of up to $5,000, paid personally by a supervisor, and specification of possible termination for a supervisor carrying out a reprisal against a whistle-blower; clarifies that disciplinary action against one who participated in retaliation is not mandatory, but returns discretion to individual agencies as to appropriate disciplinary action;

(2) removes requirement for hearings (often totaling tens of thousands of dollars) for school boards or other state agencies, and allows hearing by an arbitrator selected by mutual consent, a much less costly procedure;

(3) provides preference for transfer of an employee against whom a forbidden reprisal was taken to an available alternate agency position, providing a fresh start for both supervisor and employee;

(4) clarifies that whistle-blowing is not a defense against a negative personnel action or termination of employment if there is clear and convincing evidence the action or termination was taken because of legitimate reasons;

(5) provides for protection after oral reporting of waste, fraud or abuse to upper management, not just to "distant" public bodies including the governor, the attorney general, law enforcement agencies or governing boards, and provides protection when reporting in the context of official proceedings or investigations; provides that a written summary may be requested by the recipient of the oral disclosure.

(6) provides protection for any disclosure of significant misconduct, not limiting disclosures to a restricted list;

(7) provides a right not to violate the law, and has an anti-gag order provision, pre-empting prior restraint through agency gag orders that could cancel free speech protections before a disclosure is even made;

(8) has modern, realistic burdens of proof, whereby workers establish a prima facie case by demonstrating that protected activity was a significant factor in causing a challenged personnel action;

(9) provides for possible initial complaint of reprisal to a forum free from conflict of interest: a neutral arbitrator chosen by mutual consent or to court;

(10) allows recovery of attorney fees at the first hearing level, allowing an attorney to take cases on a contingency fee basis, providing a more economical means of having a first hearing for

a clearly wronged whistle-blower.

Background

While whistle-blower protection laws are increasingly popular nationwide as a means of reducing waste, fraud or abuse of authority, in Arizona, under the current law, the rights of the employee have been largely symbolic and therefore counterproductive to the intentions of our legislation. This bill takes advantage of experience in other locales to close loopholes in our Arizona whistleblower protection laws.

An Example

A particular situation for K-12 teachers points out why H.B. 2695 is needed. In the Scottsdale School District, which has an independent hearing board for personnel cases, a whistle-blower received an improper reprisal, and was fired. Appealing under the state whistle-blower protection act, the whistle-blower was rehired -- after a hearing which cost the school district $30,000 in legal fees, etc.

But the school district, trying to follow the current statute (ARS 38-532) found that they would have to fine the retaliating supervisor $5,000 and possibly terminate him (a punishment they thought was excessive). Punishing the retaliator would require a new $30,000 hearing, because the retaliating supervisor did not have a lawyer represent him in the previous hearing (in which he was just a witness), and you cannot punish someone who was not represented by an attorney. In addition, the school district would have to make a major effort to bring together a new hearing board, because a hearing could not take place for the retaliating supervisor before the now-tainted previous hearing board.

The school district indicated to their lawyer that they would be inclined to just fire any new whistle-blowers, unless the law got changed, because they could not afford $60,000 for two hearings, plus constituting two hearing boards, whenever there was a whistle-blower retaliation case. This problem is fixed in H.B. 2695, and the school district lawyer is pleased with the proposed wording, which would apply to all school districts and other public agencies.