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Plaintiff’s turning “whistleblower” shield into a sword – how to protect your hospital

BY A. KEVIN TROUTMAN, Partner, Fisher Phillips

As if healthcare employers in the Lone Star State did not already have enough to deal with, a new tactic seems increasingly popular among disgruntled, would-be plaintiffs who seek to capitalize on an opportunity. Specifically, a very broad antiretaliation provision contained in the Texas Health and Safety Code (THSC) provides a framework that makes it relatively easy to state a claim that can be difficult to have dismissed before the hospital incurs the disruptions, costs, and uncertainty of a trial. This THSC provision makes it even more important for supervisors and administrators to proceed vigilantly when taking disciplinary action against rulebreakers or unsatisfactory performers.

Tucked away in the “Public Health Provisions” chapter, Sec. 161.134 of the THSC makes it illegal to retaliate against employees who report, among other things, a purported “violation of law.” (Sec. 260A.0014 of the THSC establishes a similar framework that is applicable to certain other facilities.) The goal of the statute is indeed worthy. Without question, legitimate whistleblowers who experience retaliation should be fully and fairly compensated. Keeping in mind that whistleblower statutes originated with the goal of combatting serious financial and patient care abuses, Texas law provides other avenues through which genuine whistleblowers can obtain protection and redress.

Statutory Language Provides Openings for Opportunistic Plaintiffs

Unfortunately, however, the far-reaching language of this statute extends an umbrella of protection over a wide range of employee conduct. It can also place a significant evidentiary burden on employers. As a practical matter, the employer who initiates corrective or disciplinary action against a marginal employee may have no idea that the employee engaged in conduct that was even arguably “protected.” In part, this is because an innocuous question or difference of opinion could later be characterized as protected activity. In short, the statute provides ample openings for the opportunistic to exploit.

Covering an expansive swath of activity, the text of Sec. 161.134 provides that a “hospital, mental health facility, or treatment facility may not suspend or terminate the employment of or discipline or otherwise discriminate against an employee for reporting to the employee’s supervisor, an administrator of the facility, a state regulatory agency, or a law enforcement agency a violation of law, including a violation of this chapter, a rule adopted under the chapter or a rule of another agency.”

Thus, the plain language of statute provides that an employment action as mild as a warning or a change in assignment may be prohibited by law, if the reason for the action was the employer’s report to any one of the enumerated recipients. What’s more, the reported action need not have been an actual violation of the law or an applicable rule. If the employee holds a good faith belief that he is reporting a violation, then his conduct is protected, even if his belief turns out to be wrong. Since reports to a supervisor, administrator, regulatory agency and others are covered, any one of a wide range of ambiguous communications could trigger protection. Thus, a disgruntled employee can rather easily establish the foundation for a troublesome claim.

Rebuttable Presumption of Causation Further Boosts Plaintiffs

Of course, that employee must still establish that the hospital’s action was because of protected conduct. Here again, however, the law makes his path a little easier. Specifically, if the employer’s action occurs before the 60th day after the alleged action, the statute establishes a rebuttable presumption that the reason for the employer’s action was his protected activity. This provision obviously tilts the playing field further in favor of the would-be whistleblower plaintiff.

A successful plaintiff can recover reinstatement to his former position (if his employment was terminated); lost wages; reinstatement of lost fringe benefits; compensation for mental anguish; exemplary damages; and attorney fees. In short, these provisions of the THSC can present quite a challenge for an unwary healthcare employers, especially considering all of the rules and requirements applicable in the industry. Combined with the distractions and costs that naturally accompany litigation, these cases can create considerable headaches.

How Can a Hospital Safeguard Against These Claims?

So, obviously, the question is how can a healthcare employer safeguard against being sandbagged by bogus claims under this statute? The answers are rooted in staying focused on core human resources (HR) functions, augmented by a few protective wrinkles.

The foundation for success is based upon maintaining policies that expressly prohibit retaliation against any employee who presents good faith questions or complaints regarding workplace issues. The employer should be prepared to prove that it publicized and disseminated these policies throughout the workplace. The policies should include options for how and to whom employees may present their concerns. These options should be publicized through postings, websites, newsletters and in meetings.

As always, employers can safeguard their interests by keeping supervisors welltrained and vigilant. This represents a special challenge in healthcare, where the patient care demands and tight budgets place many demands on the organization’s leaders. Training (and actual workplace practices) should emphasize the importance of listening and responding to employee concerns, escalating them as appropriate, to ensure that HR and compliance representatives are never blindsided.

To protect the employer, supervisors should document consistently and always be open to considering employees’ concerns. It is advisable to provide reporting options to employees who may have compliance concerns. It is also worth considering a thirdparty hotline that employees may use for reporting. Again, it is vital to demonstrate that these avenues of communications have been widely disseminated. And it is critical for the hospital to be prepared to demonstrate that it investigated each concern dispassionately, with a focus on facts. Of course, the hospital must avoid even the appearance of retaliation against anyone who reports a concern.

Ensure Consistency in Application of Policies

With the last point in mind, it is important to involve HR in all disciplinary decisions, to ensure consistency and even-handed application of hospital policies. Supervisors should of course carefully gather all necessary information before making a disciplinary decision. This information must include consideration of how similar situations have been handled in the past. If an employee has reported a “violation of law,” it is especially important to be able to prove consistent application of policy. This is paramount when attempting to prove that the hospital-based its employment decisions upon legitimate, non-retaliatory reasons.

Before making or implementing disciplinary decisions, it is also worthwhile to examine the employee’s recent conduct and status. Has the employee recently taken leave, made any kinds of complaints or presented any unusual questions to his supervisor, HR or compliance representatives? These inquiries can provide invaluable information to assess whether the employee has recently engaged in protected activity. Protected activity does not give employees a “get out of jail free” card, but it demands a more thorough evaluation of the relevant circumstances.

Equally important, simply the process of reviewing all the circumstances nearly always results in better outcome than a knee-jerk decision.

In sum, this Texas medical whistleblower statute represents yet another risk for hospitals to keep in mind when making employment decisions. Especially in these situations, hospitals can protect themselves by having the above-referenced strong HR practices in place.

It is likely only a matter of time before one of these situations arises in every facility