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CALIFORNIA CORPORATE & SECURITIES LAW

California AG Declares Whistleblower Tally A State Secret

Since 2004, the California Attorney General has been required to maintain a whistleblower hotline to receive calls from persons who have information regarding possible violations of state or federal statutes, rules, or regulations, or violations of fiduciary responsibility by a corporation or limited liability company to its shareholders, investors, or employees.  Cal. Labor Code § 1102.7.  California employers, moreover, are required to “prominently display” in lettering larger than size 14 point type a list of employees’ rights and responsibilities under the whistleblower laws, including the telephone number of the whistleblower hotline.  Cal. Labor Code § 1102.8

A few years ago, I decided to write about how the hotline was being used.  In response to my request, the Attorney General’s office provided me with the number of calls received each year from 2004 to 2010.  See “And What They Will Inform. . .That Will The King Severely Prosecute”. Recently, I asked the office to provide updated information.  Imagine my astonishment when I received the following response:

For the reasons set forth below, we must decline your request. The records that you seek are confidential law enforcement records of the Attorney General. Government Code section 6254, subdivision (f) expressly exempts from disclosure investigatory and security files of the Attorney General including complaints about unlawful practices. (See Dick Williams v. Superior Court (1993) 5 Cal.4th 337, 354.) Investigative records do not lose their exempt status due to a failure to prosecute, or the close of an investigation. (Id. at p. 355 [“While there may be reasons of policy that would support a time limitation on the exemption for investigatory files, such a limitation is virtually impossible to reconcile with the language and history of subdivision (f)”].)

Apparently, the Attorney General’s office skipped that part of the Public Records Act that solemnly declares that “access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state.”  Cal. Gov’t Code § 6250. The Attorney General’s office must think that the SEC is positively meshuge for having the khutspe to actually publish a detailed report on its whistleblower program.  To make matters worse, the SEC’s report actually discloses the number of tips received in each year for the last several years!

Whole Foods Files Its Whole Form 10-K

Much has been written about the ill-starred no-action request submitted by Whole Foods Market, Inc.  The saga, which Professor Bainbridge characterized as a “Bad SNL Skit”, continued with Whole Foods’ filing yesterday of its Form 10-K/A because the company would not be filing its definitive proxy statement within 120 days of its fiscal year end.

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