Texas Whistleblower Laws for Employers

Texas Whistleblower Laws

To inspire workers to report financial, environmental, or safety violations made by their employers, the federal government enacted whistleblower laws designed to protect the reporting employee and punish the violating employer.

Like many states, Texas adopted its own whistleblower laws to aid employees who wanted to report various violations not covered by the federal law, i.e. those that did not fall on federal soil or involve federal contracts. These laws not only impose serious fines and potential criminal charges on employers who break the law, they also protect employees from employer retaliation.

Let us look at Texas whistleblower laws a bit more closely.

What is the Texas Whistleblower Act?

Texas Government Code Section 554 mirrors Federal whistleblower laws by virtue of employee protections offered in exchange for reporting various wrongdoing, such as corporate fraud, OSHA violations, sexual harassment, and other illegal activities.

This code specifies that government organizations cannot terminate, demote, or suspend a whistleblowing employee.

If a whistleblowing employee experiences blowback from his or her government employer in the form of demotion, firing, or harassment, that employee has rights that are protected by law. The employee must report the company’s violation to the appropriate internal channels – filing notice with the human resources department, for example. If that does not resolve the situation, the employee can file a civil lawsuit, with the help of an experienced attorney. The employee has the right to be reinstated at the same level of pay, and at the same level of power within the company. The employee may also be able to sue the employer for any lost wages that resulted from the wrongful termination, and any other damages he or she suffered as a result of the ordeal.

What Employee Groups are Covered?

Employees in both public and limited private sectors are covered by Texas whistleblower laws, although some types of employees have less coverage than others. Those employees with minimal coverage include:

  • Some employees fired for reporting violations of Hazard Communication Act;
  • Certain nursing home workers terminated for whistleblowing;
  • Select workers who report Texas Labor Code violations, mainly acts of discrimination;
  • Workers discharged for using the Worker’s Commission’s toll-free service to report OSHA or similar workplace violations;
  • Physicians who report other physicians to the State Board of Medical Examiners;
  • Some nurses who report acts of other nurses to the State Board of Nurse Examiners; and
  • Certain hospital and nursing home employees discharged for reporting company wrongdoing.

Additionally, the Sarbanes-Oxley Act offers limited protection for whistleblowers reporting SEC violations like securities or trading fraud transpiring in publicly traded entities.  It is important to remember that absent special limited circumstances, employees of privately held companies generally do not have whistleblower protection.

How can I Avoid a Whistleblower Case?

Corporate-level wrongdoing affects everyone, from top-level management to entry-level employees, and it can be detrimental to the success of a business. While no employer anticipates having an employee file a whistleblower lawsuit, sometimes these things happen. An employer’s best line of defense is to have iron-clad corporate bylaws, codes of conduct, an employee handbook, thorough and well-followed complaint and grievance procedures, and a human resources department in place. Make sure all of your employees know that illegal conduct will not be tolerated and have a clear protocol in place for your employees to report wrongdoing when they see it. If you deal with these issues internally as they arise, you can avoid larger legal issues.

With the proper assistance, you can ensure that these elements are in place and that your business has its best chance at success. If you are already involved in legal matter with a whistleblowing employee, reach out to the employment law attorneys at Simon | Paschal PLLC today.

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