As summer starts to sizzle in Colorado, and the Colorado General Assembly closes its session, employers have seen a flurry of new laws affecting Colorado employees. Among them are now expanded protections for whistleblowers.  The Health and Safety Whistleblower law, Senate Bill 22-097, expands whistleblower protections for those who raise workplace health and safety concerns. The Colorado False Claims Act, House Bill 22-1119 expands whistleblower protections for those who raise concerns about fraudulent government bills and statements. While each may appear at first blush as a less-than-noteworthy expansion of existing law, each significantly expands existing law with an accompanying threat of significant damages and penalties for the unwary.   

Colorado’s Public Health Emergency Whistleblower (PHEW) Law Becomes the Health and Safety Whistleblower Law

Governor Jared Polis signed into law Senate Bill 22-097, effective immediately on May 31, 2022, which amended the PHEW law in one small, but incredibly significant, way.

Senate Bill 22-097 provides the following strikethrough of the PHEW law contained in section 8-14.4.102(1) and (2)(a), C.R.S.:

(1) A principal shall not discriminate, take adverse action, or retaliate against any worker based on the worker, in good faith, raising any reasonable concern about workplace violations of government health or safety rules, or about an otherwise significant workplace threat to health or safety, related to a public health emergency to the principal, the principal's agent, other workers, a government agency, or the public if the principal controls the workplace conditions giving rise to the threat or violation.

(2) (a) A principal shall not require or attempt to require a worker to sign a contract or other agreement that would limit or prevent the worker from disclosing information about workplace health and safety practices or hazards related to a public health emergency or to otherwise abide by a workplace policy that would limit or prevent such disclosures.

But that small change means that those who voice “any reasonable concern about workplace violations of government health or safety rules, or an otherwise significant workplace threat to health or safety” are now protected, regardless of whether the concern was tied to COVID-19 or any other public health emergency. As a result, the PHEW law has now been expanded to protect workplace COPs who: (1) raise Concerns about perceived health threats or violations; (2) engage in Opposition to conduct made unlawful by the Health and Safety Whistleblower law; or (3) Participate in protected activity under the Health and Safety Whistleblower law.

As a result, the amended whistleblower law has created a blanket protection for “traditional” complaints to an employer, manager, or human resources representative about any health and safety concern, as well as complaints to coworkers or public statements about perceived violations or threats to health or safety. Such complaints could certainly include COVID-19-related safety issues, but they also now include safety-related issues connected to violence, vaccination, equipment usage, toxic chemicals, irate customers, or any other matter touching upon the health and safety of any worker. Indeed, a reasonable interpretation of the law is that  even a passing remark, instant message to a coworker, or public posting on social media may trigger the protections of the law.

To be sure, the law appears to echo and amalgamate existing federal protections under Section 11(c) of the Occupational Safety and Health Act of 1970 (OSH Act) and Section 7 of the National Labor Relations Act (NLRA). Generally, Section 11(c) of the OSH Act protects those who raise a concern about occupational safety or health and are subject to an unfavorable employment action. Section 7 of the NLRA protects employees, union and non-union, who engage in protected concerted activity for mutual aid and protection, including complaints about workplace safety affecting others or brought on behalf of others. 

But the Colorado Health and Safety Whistleblower law goes further than both of these federal statutes. While Section 11(c) and Section 7 are limited to employees, the Colorado law extends protection to independent contractors. The law applies to all “principals,” which specifically include employers within the meaning of section 8-4-101(6), C.R.S., the state of Colorado and political subdivisions generally immune from suit, and any entity “that contracts with five or more independent contractors in the state each year.”

The law also provides its own remedies both for the Division investigating claims and for those workers suing in court. Under the law, a worker may seek:

• reinstatement, with or without back pay;
• the greater of $10,000 or lost pay from the violation, including back pay and front pay;
• compensatory damages for emotional distress or other pecuniary or non-pecuniary losses;
• punitive damages, if clear and convincing evidence shows malice or reckless indifference by the principal; and
• the worker’s attorneys’ fees.

Furthermore, in determining the appropriate level of damages for a plaintiff alleging intentional conduct by the principal, the Health and Safety Whistleblower law states that a court shall consider the size and assets of the principal, as well as the egregiousness of the action.¹

The Health and Safety Whistleblower law further prohibits contracts, agreements, and policies related to workplace speech about health and safety practices, and makes clear that a principal “shall not require or attempt to require” a worker to sign a contract or agreement, or otherwise abide by a workplace policy, that would limit or prevent a worker from disclosing workplace health and safety practices or hazards.²

As a result, by striking one small phrase in the PHEW law, the Colorado General Assembly has significantly expanded the protection for workers raising any health- or safety-related concerns that impact their job. The scope goes far beyond Section 11(c) of the OSH Act and Section 7 of the NLRA, and the damages and penalties are steep.

Colorado’s False Claims Act Takes the Federal False Claims Act to New Heights

On June 7, 2022, Governor Polis also signed the Colorado False Claims Act, House Bill 22-1119 (CFCA), the state-level equivalent of the federal False Claims Act, 31 U.S.C. §§ 3729, et seq. But the CFCA significantly expands the scope of false claims, the protected entities to which false claims can be made, and the protections for whistleblowers raising concerns with false claims.

Among other things, the CFCA expands the traditional definition of “claims” to create a right of action and significant penalties against any individual or business entity that:

• Knowingly presents a false or fraudulent claim for payment or approval;
• Knowingly makes, uses, or causes to be made or used a false record or statement material to a false or fraudulent claim;
• Has possession, custody, or control of property or money used, or to be used, by the state or a political subdivision and knowingly delivers, or causes to be delivered, less than all of the money or property;
• Authorizes the making or delivery of a document certifying receipt of property used, or to be used, by the state or a political subdivision and, with the intent to defraud the state or political subdivision, makes or delivers the receipt without completely knowing that the information on the receipt is true;
• Knowingly buys, or receives as a pledge of an obligation or debt, public property from an officer or employee of the state or a political subdivision who lawfully may not sell or pledge the property;
• Knowingly makes, uses, or causes to be made or used a false record or statement material to an obligation to pay or transmit money or property to the state or political subdivision, or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the state or political subdivision; or
• Knowingly makes, uses, or causes to be made or used, a false record or statement material to a claim to unemployment insurance benefits when the person has wrongfully recovered unemployment insurance benefits from the state of more than $15,000 in a calendar year.

The scope of such claims is obviously very broad, and could include not only false or incomplete claims for payment, but also false statements incident to an obligation to pay the state or a political subdivision. The addition of “political subdivision” is particularly noteworthy, because it includes, by statute, counties, municipalities, special districts (including, water, fire, and sanitation districts), and hospital authorities, among others. In fact, the CFCA protects not only false claims or statements to these entities, but also to any “contractor, grantee, or other recipient” of funds from those entities, “if the money or property is to be spent or used on the state’s or political subdivision’s behalf or to advance a government program or interest . . . .”³

As a result, any person or company who submits a false or inaccurate statement or bill to a contractor of municipality, hospital authority, or other political subdivision could be liable. So, for example, if a phlebotomist submits a false bill to her employer, a laboratory test contractor of a Colorado hospital authority, she could be liable under the CFCA.

Despite the expansion of protected entities and claims, the penalties mirror the federal False Claims Act, which are currently not less than $11,803 and not more than $23,607, as adjusted for inflation, per violation. Because penalties are applicable to each false claim, complex or long-running transactions (such as those with monthly billing over a course of years) could result in penalties of hundreds of thousands or millions of dollars. In turn, an individual who brings a private right of action to enforce the CFCA is entitled to 25% to 30% of the recovery, as well as attorneys’ fees and costs.

But the penalty is not the end of liability. Those liable under the CFCA are also liable for three (3) times the amount of the damages sustained by the state or political subdivision, and the costs incurred for the investigation and prosecution of the false claim.

Thus, for Colorado employers, the scope and remedies of the CFCA are enough to cause concern. But the CFCA also includes broad, and novel, whistleblower protections. The CFCA’s anti-retaliation provisions protect individuals who: (1) conduct or assist in an investigation, testify, or file an action based on a “reasonable belief of a potential violation”; (2) meet with retained counsel or the government about a matter filed or to be filed; (3) provide the individual’s counsel or government “confidential information”; or (4) file an action under the CFCA. Of note, “confidential information” is specifically defined to include not only emails, medical records, financial records, trade secret information, and intellectual property, but also “information subject to an employment agreement, confidentiality agreement, or nondisclosure agreement for which the person . . . has a fiduciary obligation to maintain as confidential.”⁴ As a result, employees who have a “reasonable belief of a potential violation” are statutorily privileged to engage in self-help to provide confidential, proprietary, and trade secret information of their employer to their own retained counsel, to the state—or to any person with whom they have a statutory or common law privilege (such as a spouse, physician, accountant, or psychotherapist).⁵ 

For those who engage in protected activity, the CFCA then provides a private right of action for anyone “discharged, demoted, suspended, threatened, harassed, intimidated, sued, defamed, blacklisted, or in any other manner retaliated against.”⁶ A successful employee may seek reinstatement, twice the amount of back pay, interest on the back pay, any special damages, and attorneys’ fees and costs. As a result, an employee who is successful in a whistleblower action could receive double damages, in addition to attorneys’ fees, costs, and other damages.

But the CFCA goes even further. Beyond these whistleblower protections, the CFCA also provides a right of action for an employee subject to suit by an employer against the individual for acts later determined to be lawful, as well as: (1) disclosure of confidential information to counsel or the government; (2) “violating an employment contract, confidentiality agreement, nondisclosure agreement, or other agreement”; or (3) committing any other tort or breach of duty if the court determines by a preponderance of the evidence that the employer brought the lawsuit in retaliation.⁷ Thus, employers filing suit for violations of restrictive covenants or related unfair competition by an employee would be wise to ensure that the employee did not raise concerns protected by the CFCA before proceeding.

If an employee is successful in asserting a retaliation claim arising from the filing of a lawsuit, the employee is entitled to not only the damages above, but also not less than twice the attorneys’ fees and costs if filed in a Colorado court, or three times the attorneys’ fees and costs if outside the state. As a result, employers should now be more cautious when considering claims against employees who engage in self-help related to the employee’s belief of a reasonable violation of the CFCA, as the filing of the action could be deemed a costly retaliatory action.

Conclusion

Colorado’s 73^rd General Assembly enacted a number of laws impacting Colorado employers, and the recent expansion of whistleblower protections is one of which employers should be particularly wary. The expansion of protections for those raising any health and safety concern, and for those raising even a reasonable belief of a false or inaccurate statement or bill to a government agency or political subdivision, are both significant.

In light of the expanded whistleblower protections in Senate Bill 22-097 and House Bill 22-1119, Colorado employers should strongly consider:

• Reviewing existing reporting mechanisms to ensure that protected reports are received and addressed appropriately;
• Reviewing existing retaliation policies to ensure they contemplate protected reports for health and safety concerns, and for potential false claims;
• Training supervisors, managers, and human resources professionals on the process to respond to concerns raised by employees; and
• Considering carefully the potential of protected activity before taking action against potential whistleblowers, whether performance management, disciplinary, or legal action.