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Clay Wire was recently on the Fraud in America podcast to discuss the use of Strategic Lawsuits Against Public Participation (SLAPP), and how fraudsters and employers often threaten or file retaliatory claims or lawsuits against whistleblowers in order to deter them (and others) from shining a light on fraud or other illegal conduct. You can check out the episode here.
While there is always a risk that a whistleblower may face a retaliatory counterclaim or separate lawsuit, Colorado has enacted some of the most robust protections and remedies for whistleblowers who face this situation.
In the state of Colorado, private sector employees, public sector employees, and independent contractors are all allowed to file whistleblower complaints if they witness fraud, workplace violations, safety violations, or other violations of the law. Job applicants can also file whistleblower complaints if they experienced discrimination or retaliation during the hiring process.
In addition, private individuals can file a whistleblower complaint if they have knowledge of any fraud against the state or federal government.
In 2022, the Colorado General Assembly passed, and Governor Polis signed the new Colorado False Claims Act (FCA). This new Colorado FCA covers a much broader scope of fraudulent conduct than the State’s prior law, which was limited to only Medicaid fraud.
Embedded within Colorado’s new FCA is a unique and robust Anti-SLAPP protection for whistleblowers.
Section 24-31-1204(8) of the Colorado Statutes now provides clear and robust protection for whistleblowers who engage in a number of lawful acts related to the investigation, evaluation, development, and filing of a whistleblower or qui tam case.
First, the statute goes beyond the normal scope of adverse employment actions that other laws define as unlawful retaliation and explicitly includes situations where the whistleblower is “intimidated, sued, defamed, [or] blacklisted…” 24-31-1204(8)(b), C.R.S. The inclusion of being “sued” as a retaliatory act that falls within the statute’s protections is unique and provides for both defensive and offensive responses to retaliatory claims or lawsuits brought against whistleblowers.
Second, the statute creates a privilege, or exclusion from liability, for whistleblowers to disclose “confidential information,” which is broadly defined under the statute, to the whistleblower’s attorneys, others with whom they share a privilege (such as spouses), and the State government. 24-31-1204(8)(c). This privilege for the sharing and use of confidential information is a potent defensive tool for whistleblowers who face retaliatory lawsuits or claims.
Third, and perhaps most importantly and uniquely, the Colorado FCA contains its own Anti-SLAPP or anti-retaliatory lawsuits provision and remedies.
The statute states that “if a defendant, employer, or other person retaliates against an individual by bringing another action against the individual for,” and the court determines that the lawsuit was brought for “the purpose of retaliating” against the whistleblower, then the whistleblower may recover, in addition to other consequential damages and any award, two times the amount of attorney fees expended in defense against the retaliatory claim if the case is in Colorado or three times the attorney fees if the case is brought outside the state. 24-31-1204(8)(e).
The protections are broad and cover any lawsuit or claim that alleges liability based on (1) what are deemed “lawful acts” under the statute; (2) disclosure of “confidential information” to the whistleblower’s attorney or the State; (3) violation of an employment contract, confidentiality agreement, nondisclosure agreement, or other agreement; or (4) any other breach of duty or tort, such as a breach of fiduciary duty. 24-31-1204(8)(e)(I).
This last piece is the most important part of the Anti-SLAPP protection provided by the new Colorado FCA. By providing for a doubling or tripling of attorney fees expended in defense of the retaliatory lawsuit or claim, the General Assembly imposed a real deterrent against such lawsuits and provided whistleblowers with a better route to counsel who may now be incentivized to take a defense case on a contingent fee basis.
Moreover, this provision provides broader whistleblower protections than Colorado’s general Anti-SLAPP statute. While the Anti-SLAPP law requires that the offending lawsuit or claim must have arisen from the protected conduct, i.e., the protected speech or act is an element of the claim alleged, the Colorado FCA contains no such requirement. Any retaliatory lawsuit brought against a whistleblower is subject to the statute’s provisions.
As Clay mentioned during the podcast, there is always risk for whistleblowers. However, it is the role of a whistleblower advocate and attorney to manage and mitigate that risk. The new Colorado FCA provides lawyers like Clay, and whistleblowers, with a potent defensive and offensive tool to combat SLAPP or retaliatory claims or lawsuits.
If you are contemplating blowing the whistle and are concerned about the risks, or if you are being threatened with a lawsuit because of your whistleblowing, contact us today so that we can help you determine whether Colorado’s new FCA provides you with the benefit of these tools and protections.
Clayton “Clay” Wire is a trial lawyer who works with whistleblowers to expose illegal conduct, collect government rewards, and protect them from retaliation. Clay believes that whistleblowers are people with the moral, ethical, and personal fortitude to speak up when they see illegal conduct, and that without them, our society would crumble. He has represented individuals in whistleblower retaliation and bounty cases, including in unique Qui Tam cases and in complex retaliation cases brought by in-house counsel. He also represents employees in discrimination and harassment cases, as well as contract disputes.
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