H-1053.1

SECOND SUBSTITUTE HOUSE BILL 1076

ByHouse Appropriations (originally sponsored by Representatives Hansen, Fitzgibbon, Berry, Dolan, J. Johnson, Ramos, Simmons, Ramel, Ortiz-Self, Gregerson, Ryu, Bronoske, Valdez, Callan, Kloba, Hackney, Chopp, Ormsby, Stonier, Frame, Santos, Macri, Pollet, and Harris-Talley)

AN ACT Relating to allowing whistleblowers to bring actions on behalf of the state for violations of workplace protections; adding a new chapter to Title 49 RCW; and creating new sections.

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

(1) "Agency" means the department of labor and industries, except that for purposes of chapter 49.60 RCW "agency" means the Washington state human rights commission.

(2) "Aggrieved person" means a person against whom one or more violations of the provisions of this act was committed, and includes an individual who is asserting a claim that he or she is or was misclassified as an independent contractor in violation of the provisions of law under section 4 of this act.

(3) "Person" means any natural person, partnership, corporation, association, or other legal entity, including any local or political subdivision of a state.

(4) "Qui tam relator" or "relator" means an aggrieved person, whistleblower, or representative organization or local or political subdivision of a state designated under section 3(9) of this act, that brings a public enforcement action under section 3 of this act.

(5) "Qui tam action" means an action brought by a relator under section 3 of this act.

(6) "Whistleblower" means a current or former employee, contractor, subcontractor, or employee of a contractor or subcontractor with knowledge of facts that the individual reasonably believes constitute a violation of the provisions of this act.

(2) A relator that prevails in a qui tam action is entitled to an award of reasonable attorneys' fees and costs.

(3) No qui tam action may be brought for a violation alleged in the notice required by section 5 of this act if the employer demonstrates that the agency already resolved the merits of that violation, including through settlement, in relation to the same facts and aggrieved employees.

(4) A qui tam action must be commenced within 60 days of the date on which the relator receives notice that the agency will not investigate any of the alleged violations; otherwise, a qui tam action must be commenced within 240 days of the date the relator submitted the written notice of the claim. If the agency notifies the relator that it intends to investigate some but not all of the alleged violations, the relator may commence a qui tam action as to the uninvestigated violations at any time but must do so no later than 240 days from the date the relator submitted the written notice of the claim. Any other actionable violations may then be added to the lawsuit within 240 days of the date the relator submitted the written notice. A statute of limitations applicable to a claim in the qui tam action shall be tolled as of the date the relator submits the written notice of the claim to the agency or the date the agency commenced an investigation regarding the same facts and violations alleged in the notice, whichever is earlier.

(5)(a) No qui tam action may be brought with respect to modifying, revoking, or suspending a license, variance, or permit; or for any violation of a posting, notice, agency reporting, or filing requirement, or solely with respect to a violation of a recordkeeping requirement, except where the requirement involves injury reporting or a safety or health violation.

(b) Where an employer has voluntarily entered into consultation under RCW 49.17.250, no qui tam action may be brought with respect to any alleged violation included in the scope of the consultation. An employer who has been notified pursuant to section 5 of this act may not then enter into consultation under RCW 49.17.250 to avoid a qui tam action.

(6) The requirements of Rule 23 of the superior court rules of civil procedure do not apply to a qui tam action.

(7) The right to bring a qui tam action under this section may not be impaired by any private agreement.

(8) A qui tam action is a public action and does not preclude a cause of action by an individual or individuals or operate as an estoppel for relief based on the same set of alleged facts, except that a court shall offset any award of restitution or damages to an aggrieved employee in one action by the amount of restitution or damages awarded or paid in settlement to the same aggrieved employee in another action.

(9) An aggrieved person or whistleblower of the entity alleged to have violated a law enumerated in section 4 of this act may designate in writing a representative organization or local or political subdivision of a state to initiate a qui tam action on the person's behalf.

(1) Chapter 49.46 RCW, known as the minimum wage act;

(2) Chapter 49.48 RCW, relating to the payment of wages;

(3) Chapter 49.52 RCW, relating to wage rebates;

(4) RCW 49.28.130 through 49.28.150, relating to health care facility employee overtime;

(5) Chapter 39.12 RCW, relating to prevailing wage;

(6) Chapter 49.17 RCW, the Washington industrial safety and health act of 1973;

(7) Chapter 49.58 RCW, known as gender equal pay and advancement opportunities;

(8) Chapter 49.60 RCW, known as the Washington law against discrimination;

(9) Chapter 19.30 RCW, relating to farm labor contractors;

(10) Chapter 49.12 RCW, known as the industrial welfare act; and

(11) Section 9 of this act.

(2) If the agency intends to investigate an alleged violation, any resolution by the agency of the merits of that violation must occur within 180 days of receiving the notice under subsection (1) of this section. If the agency decides not to investigate an alleged violation, it must notify the relator within 60 business days of the date it receives the notification submitted by the relator. While investigating an alleged violation, the agency may simultaneously pursue all relief available to it under the agency's administrative enforcement authority and under the agency's authority to bring a civil action, where applicable.

(3) As part of its investigation, the agency may attempt to remedy an alleged violation through settlement. If the settlement obtained by the agency provides the aggrieved employee or employees with not less than 100 percent of any wrongfully withheld wages or benefits, including 12 percent interest per annum, and the aggrieved employees receive payment in full before the end of the 180-day investigation period, the agency shall notify the relator that the agency will not commence an action in relation to that violation, and the settlement shall preclude further claims for the same wages or benefits paid in the settlement.

(4) If the agency objects to the state being represented by a particular attorney proposed by the relator, the agency may file an objection to the attorney general. Upon finding, after notice and hearing, that, based on the attorney's past conduct while representing a client or clients, the attorney does not meet the required professional standards of representatives, or, alternatively, if the attorney fails to zealously pursue the remedies available under this chapter, the attorney general may, within 30 days of receiving the objection, order that the qui tam action may not be filed or maintained by the particular attorney on behalf of the relator.

(a) As of right within 30 days after the filing of the qui tam action;

(b) For good cause shown, as determined by the court, after the expiration of the 30-day period.

(2) If the agency intervenes in a qui tam action, the agency shall have primary responsibility for litigating the action and shall not be bound by an act of the relator in bringing the action. If the agency proposes to settle a qui tam action, the agency must give notice to the relator and the attorney general. The court may allow the attorney general to intervene and object to the settlement. If the agency proposes to dismiss a qui tam action, the agency must give notice to the relator and the relator must have an opportunity to be heard. The agency may dismiss or settle the action if court determines that the dismissal or settlement is fair, adequate, reasonable, and in the public interest.

(3) If the agency does not intervene, the relator shall have the right to litigate the action. The court must review and approve any settlement. The proposed settlement must be submitted to the agency and to the attorney general at the same time that it is submitted to the court, and the agency may present to the court its position on the proposed settlement or intervene as provided in subsection (1) of this section. The court may also allow the attorney general to intervene and object to the dismissal. The court shall approve a settlement only upon a determination that it is fair, adequate, reasonable, and in the public interest.

(4) Any settlement of a qui tam action may not be confidential.

(i) If the agency has not intervened, forty percent to the relator and sixty percent to the agency;

(ii) If the agency has intervened, twenty percent to the relator and eighty percent to the agency.

(b) The relator shall equitably distribute the share of penalties due the relator among the parties aggrieved by the practices complained of in the qui tam action. The relator shall submit a distribution summary to the agency, which may order a different distribution within sixty days after receipt of the distribution summary, provided that the relator shall receive a service award that reflects the burdens and risks assumed by the relator in prosecuting the action.

(2) Damages recovered in a qui tam action shall be awarded for distribution to the aggrieved employees, whether directly or through the agency. The agency may request the appointment of an administrative law judge or special master to assist in the distribution of the amounts.

(3) This section does not limit the state's right to seek restitution and damages, where available, for aggrieved employees as part of a qui tam action in which it has intervened.

(2) Any employee aggrieved by a violation of this section may:

(a) Bring an action in court for compensatory damages or equitable relief, including restraint of prohibited actions, restitution of wages or benefits, reinstatement, costs, reasonable attorneys' fees, and any other appropriate relief; and, in addition,

(b) If the aggrieved employee has been discharged from employment because of the exercise of the rights afforded by this chapter, provide notice to the agency pursuant to section 5 of this act.

(i) Upon receipt of such notification, the agency shall commence an expedited investigation within 10 days to be completed within 90 days.

(ii) For purposes of this subsection (2)(b), a rebuttable presumption is established that the discharge of any employee who engaged in any conduct allowed by this chapter within ninety days after the employee engaged in the conduct is retaliatory and in violation of section 1 of this act.

(iii) The employer may rebut the presumption by showing by clear and convincing evidence that it had a legitimate, nondiscriminatory reason to discharge the employee, which was not motivated in any part by conduct allowed by this chapter.

(iv) If the employer fails to rebut the presumption, the agency shall order the immediate reinstatement of the employee. The employer may appeal the order of reinstatement pursuant to chapter 34.05 RCW.

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