Whistleblower Law Blog

OSHA announced its new interim final rules for filing whistleblower complaints and invited the public to submit comments.  In a news release, OSHA stated:

“When workers believe their employers are violating certain laws or government regulations, they have the right to file a complaint and should not fear retaliation. Silenced workers are not safe workers,” said Assistant Secretary of Labor for OSHA David Michaels. “Changes in the whistleblower provisions make good on the promise to stand by those workers who have the courage to come forward when they believe their employer is violating the law and cutting corners on a variety of safety, health and security concerns in the affected industries.”

The regulations, which cover workers filing complaints in the railroad, public transit, commercial motor carrier, and consumer product industries, also create greater consistency among various OSHA complaint procedures. The interim final rules establish procedures and time frames for handling complaints under the whistleblower sections of the Implementing Recommendations of the 9/11 Commission Act of 2007 and the Consumer Product Safety Improvement Act of 2008.

For more information about the firm’s Whistleblower Law Practice, click here.

According to the Boston Globe, the White House announced that it will delay the release of a database containing records of contractor fraud and substandard performance, stating “legal and practical issues” must first be addressed.  The database, named the Federal Awardee Performance and Integrity Information System, was established in 2008 and includes information companies must enter regarding their failures on federal government contracts.  President Obama signed into law a provision that requires the database’s release to the public.

The Globe quotes a statement issued by Senator Bernard Sanders saying:

We hand out over $500 billion a year to federal contractors, many of which have well-established histories of systemic illegal, fraudulent, and incompetent behavior.  We cannot let these corporations continue to rip off American taxpayers.  I strongly expect that this new public awareness will go a long way toward putting an end to handing out taxpayer-financed contracts to corporations with a history of fraud.

For more information about the firm’s Whistleblower Law Practice, click here.

OSHA has ordered Utah Transit Authority (UTA) to reinstate a whistleblower and pay more than $130,000 in back wages with interest and attorney’s fees.  According to the complaint, the UTA fired the whistleblower in retaliation for raising security concerns, which violates the Federal Railroad Safety Act.

For more information about the firm’s Whistleblower Law Practice, click here.

According to the Washington Examiner, a D.C. jury awarded Sean McLaughlin damages for retaliation in violation of the DC Whistleblower Protection Act.  McLaughlin alleged D.C. Police Chief Cathy Lanier, a district commander at the time, threatened police officers with “consequences” if they pursued their claims that the police department’s off-duty reimbursable overtime security detail at Gallery Place was illegal.

For more information about the firm’s Whistleblower Law Practice, click here.

A Warren County Circuit held that a fraud investigator can sue her employer for wrongful discharge under Bowman when the employer interferes with her fraud investigations and subsequently fires her for appearing before a grand jury.  Click here for the full opinion.

The employment lawyers at The Employment Law Firm® have extensive experience representing those wrongfully discharged.  To learn more about the firm’s practice areas, click here.

According to the Government Accountability Project’s blog, D.C. Superior Court Judge Leonard Braman held that a recent amendment to the D.C. Whistleblower Protection Act (WPA) exempting whistleblowers from the requirement of notifying the District of a claim within six months of the adverse employment action should apply retroactively.  Therefore, the notice requirement in D.C. Code §12-309 will not bar relief in pending D.C. WPA claims.

For information on The Employment Law Group® law firm’s Whistleblower Practice, click here.

The Attorney General of New York has settled its lawsuit against Sodexo, a provider of school lunches, for $20 million.  Two whistleblowers, John and Jay Carciero, filed the qui tam action alleging Sodexo received illegal kickbacks from the vendors it selected for school lunch programs.  Under New York law, whistleblowers are entitled to a reward of up to 20% of the recouped funds.

For more information about the firm’s Whistleblower Law Practice, click here.

According to the Wall Street Journal, Senate leaders – motivated by a recent salmonella outbreak and massive egg recall – will likely bring their version of the Food Safety Modernization Act to a vote in the full Senate on September 13.  Click here for a copy of Senate Bill S. 510.  The House has already passed its own version of the Bill, H.R. 875, last year.  Click here for a copy of the House version.  Approximately 1300 cases of salmonella may be linked to eggs produced in Iowa and could lead to a recall of more than half a billion eggs.

For more information about the firm’s Whistleblower Law Practice, click here.

According to Time, the new SEC whistleblower reward program established by the Dodd-Frank Act will likely lead to a substantial increase in the reporting of fraud and other wrongdoing by public companies to the SEC.  Under the previous SEC reward program, the SEC granted rewards between 0% and 10% to whistleblowers at the SEC’s discretion.  Under the Dodd-Frank Act, the SEC is now required to grant a reward between 10% and 30% to each whistleblower providing original information leading to a sanction that exceeds $1 million.

For information about The Employment Law Group® law firm’s SEC Whistleblower Practice, click here.

According to an article in Politico, the Congressional Whistleblower Protection Act introduced by Senators Chuck Grassley (R-Iowa) and Claire McCaskill (D-Missouri) has yet to be reported to the full Senate and continues to languish in the Committee on Homeland Security and Government Affairs.  Similar to the Whistleblower Protection Act which protects most federal employees who blow the whistle on illegal activity from retaliation, the Congressional Whistleblower Protection Act would extend the same retaliation protection to congressional staff who report illegal activity occurring within Congress. 

For more information about the firm’s Whistleblower Law Practice, click here.

According to an article in The Washington Post, the whistleblower provisions of the Dodd-Frank Act (DFA), which provide a substantial incentive to report financial fraud, are expected to generate a substantial increase in whistleblower litigation.  The DFA requires the SEC and Commodity Futures Trading Commission (CFTC) to provide a financial reward to whistleblowers who provide original information leading to monetary sanctions that in excess of $1 million.  The law also prohibits employers from retaliating against whistleblowers.

For information about The Employment Law Group® law firm’s SEC Whistleblower Practice and Derivatives Whistleblower Practice, click here.

On August 13, 2010, The Employment Law Group® filed an amicus curiae brief in Johnson v. Siemens Building Technologies, Inc., on behalf of the Government Accountability Project, National Employment Lawyers Association, and National Whistleblowers Center arguing that Section 929A of the Dodd-Frank Act clarifies and confirms existing law on the scope of coverage under SOX, and therefore should be applied to pending cases.  A copy of the brief is available here.  To learn more about the whistleblower provisions of the Dodd-Frank Act, click here.

The attorneys at The Employment Law Group® law firm have substantial experience representing whistleblowers under the Sarbanes-Oxley Act and other whistleblower statutes.  For more about firm’s Sarbanes-Oxley Whistleblower Practice, click here.

In Vinnett v. Mitsubishi Power Systems, the Department of Labor Administrate Review Board held that employees who report nuclear safety concerns engage in protected conduct under Section 211 of the Energy Reorganization Act (ERA) regardless of whether they are blowing the whistle in the course of performing their job duties.  The ARB states:

[T]here is nothing in the language of the ERA that carves out an exception limiting whistleblower protection based on an employee’s job duties. To the contrary, the statute protects “any employee” who engages in protected activity. Congress passed the ERA in 1974 as part of its continuing effort to regulate the production, use, and control of nuclear energy. An employee protection provision was added in 1978 to protect employees who assist or participate in any proceeding to administer or enforce the requirements of the ERA or the Atomic Energy Act of 1954. Nuclear safety is encouraged by protecting workers from retaliation because they report safety concerns. “The whistleblower provision in the [ERA] is modeled on, and serves an identical purpose to, the provision in the Mine Health and Safety Act [sic]. They share a broad, remedial purpose of protecting workers from retaliation based on their concerns for safety and quality.” As the court in Mackowiak observed, “The [Secretary's] ruling simply forbids discrimination based on competent and aggressive inspection work. In other words, contractors regulated by [the ERA] may not discharge quality control inspectors because they do their jobs too well.” Congress amended the ERA in 1992 to expand its whistleblower protection to workers who report safety violations to their employers. Because the ALJ erroneously concluded that Vinnett had not engaged in protected activity because he was just doing his job, the ALJ committed reversible error.

This is a significant rejection of the “duty speech” defense and likely applies to all whistleblower protection actions litigated before DOL.

For information about The Employment Law Group® law firm’s Whistleblower Retaliation Practice and Nuclear Whistleblower Practice, click here.

The Securities and Exchange Commission (SEC) filed an amicus curiae brief asserting that Congress intended Section 806 of the Sarbanes-Oxley Act (SOX) to protect whistleblowers working for consolidated subsidiaries of publicly-traded companies.  The SEC states:

The [SEC] believes that the whistleblower protections of Section 806 apply not only to employees of parent companies that file financial reports with the [SEC], but also to employees of their non-public subsidiaries whose results are required to be included in their parent’s consolidated financial statements.  Thus, the [SEC] agrees with the [Administrative Law Judge] decisions in [Morefield v. Exelon Services, Inc.] and [Walters v. Deutsche Bank AG]. This interpretation is also consistent with the clarifying amendment recently adopted by Congress as Section 929A of the Dodd-Frank Act of 2010.

…

[D]espite the fact that subsidiaries are not expressly listed as covered entities, the language, purpose and structure of the statute indicate that they should be viewed as part of the same “company”….  [I]n covering reporting companies, Congress wished to encourage whistleblowing concerning violations that could render the financial statements of those companies inaccurate or misleading. It is clear from the [SEC’s] requirements concerning consolidated subsidiaries that misconduct at a consolidated subsidiary could lead to defects in the parent’s financials filed with the [SEC], so it is reasonable to conclude that Congress intended the protections to extend to employees of the subsidiaries.

The employment lawyers at The Employment Law Group® law firm have substantial experience representing employees in Sarbanes-Oxley whistleblower proceedings and have written numerous articles about the whistleblower provisions of the Sarbanes-Oxley Act.  For more information about TELG’s Sarbanes-Oxley Whistleblower Practice, click here.

Judge Anderson of the Eastern District of Virginia ordered Nelnet, Sallie Mae, and other defendants in a qui tam whistleblower action to explore potential resolution of Jon Oberg’s claim, which we blogged about here.   One of the defendants, Brazos Higher Education Service Corp., settled the action last week. 

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.

The Solicitor of Labor filed an amicus curiae brief arguing that in enacting Section 806 of Sarbanes-Oxley Act (SOX), Congress intended to protect whistleblowers working for the consolidated subsidiaries of publicly-traded companies.  In Klopfenstein v. PCC Flow Technologies Holdings, Inc., the ARB applied an “agency test” in which the general common law of agency is employed to determine whether an employee of a subsidiary is covered under SOX.  The Solicitor argues that the text, legislative history, and remedial purpose of SOX demonstrate that coverage should extend to employees of all consolidated subsidiaries: 

Although SOX’s legislative history is not conclusive on the issue of subsidiary coverage, SOX’s purpose and its goal of protecting whistleblowers strongly suggest that Congress intended [the whistleblower provisions of SOX] to sweep broadly. Indeed, Congress specifically recognized that subsidiaries play an important role in determining the financial health of a publicly traded company, and that they can be used by the parent company to deceive investors. The Senate Report [No. 107-146] details the potential that corporate fraud would be hidden behind layers of subsidiaries and partnerships and a corporate code of silence that extended beyond the publicly traded parent company.

The employment lawyers at The Employment Law Group® law firm have substantial experience representing employees in Sarbanes-Oxley whistleblower proceedings and have written numerous articles about the whistleblower provisions of the Sarbanes-Oxley Act.  For more information about TELG’s Sarbanes-Oxley Whistleblower Practice, click here.

WTOP reports that Nebraska-based Nelnet, Sallie Mae, and several other student loan companies are exploring a potential resolution of a qui tam whistleblower lawsuit brought by TELG client Jon Oberg accusing them of defrauding the federal government.  Jon Oberg, a former Department of Education researcher, filed the lawsuit on behalf of the federal government under the False Claims Act, alleging the student loan companies knowingly accepted overpayments from the government.

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.

The Ethics Resource Center conducted a study titled Retaliation: The Cost to Your Company and Its Employees showing that employers’ efforts to reduce employee misconduct are insufficient absent the adoption of a strong anti-retaliation policy.  The study concludes that employers should promote ethical behavior and adopt a strong anti-retaliation policy in order to improve the company culture and reduce employee misconduct.  Click here for the full study.

For information about The Employment Law Group® law firm’s Whistleblower Retaliation Practice, click here.

Justice Procaccini commended the defendant’s counsel and The Employment Law Group® law firm’s attorneys R. Scott Oswald and David Scher for their excellent trial work. With the completion of the O’Neill v. Warwick trial marking Procaccini’s ninth anniversary on the bench, the Warwick Beacon reported that:

Procaccini told the court that he loves his work and that he enjoyed this particular case. He said that he respects lawyers who are passionate about their work, calling the trial a “hard fought case” on both sides.

For more information about The Employment Law Group® law firm’s Whistleblower Law Practice, click here.

A jury for the Superior Court of Kent County in Rhode Island found Warwick Public School District not liable under the Rhode Island Whistleblower Protection Act (WPA) for the wrongful termination of Mary Katherine O’Neill, a client of The Employment Law Group®.  School administrators fired Ms. O’Neill following an interview she gave to a local television station regarding alleged grade tampering at Toll Gate High School.

R. Scott Oswald, Managing Principal with The Employment Law Group® law firm, stated for the Providence Journal that:

Ms. O’Neill respects the jury’s decision.  She hopes that the jury trial will provide the impetus for the Warwick School Committee to investigate Ms. O’Neill’s grade changing allegations which the evidence at trial showed have not yet been adequately investigated.  She is gratified by the jury’s service and it’s time.

For more information about The Employment Law Group® law firm’s Whistleblower Law Practice, click here.

On September 21, 2010, Jason Zuckerman, a Principal at The Employment Law Group® law firm will speak at the ALI-ABA Fall 2010 seminar on the whistleblower provisions of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, which we blogged about here.  Zuckerman will discuss Sections 1057, 922 and 748 of the Dodd-Frank Act.  Section 1057 prohibits employers from terminating or discriminating against employees in the financial services industry who report fraud or other illegal activity.  Section 922 authorizes the Securities and Exchange Commission (SEC) to reward whistleblowers who report fraud committed by a publicly-traded company 10% to 30% of the amount recovered by the SEC.  Similarly, Section 748 authorizes the Commodity Futures Trading Commission (CFTC) to reward whistleblowers who report fraud 10% to 30% of the amount recovered.  Both Sections 748 and 922 also prohibit employers from retaliating against employees who report fraud to the government.

For information about The Employment Law Group® law firm’s Whistleblower Retaliation Practice, click here.

The U.S. District Court for the District of Massachusetts held that an employee is protected from retaliation under the retaliation provision of the False Claims Act when reporting any activity that reasonably could lead to a False Claims Act (FCA) suit even when the employee is completely unaware of the FCA.  Plaintiff Christopher Gobble was a sales representative for Forest Pharmaceuticals who complained to supervisors about the company paying kickbacks to doctors who, in return, prescribed Forest Pharmaceutical’s products to patients.  Gobble reported the kickbacks because he knew they were unlawful but he did not realize at the time he made the disclosure that the kickbacks could lead to a qui tam action. Judge Gorton rejected the employer’s position that Gobble failed to plead that he engaged in protected conduct, holding:

“Protected conduct” is to be interpreted broadly and the First Circuit defines it to mean

activities that reasonably could lead to an FCA suit[,] in other words,  investigations, inquiries, testimonies or other activities that concern the employer’s knowing submission of false or fraudulent claims for payment to the government.

United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 237 (1st Cir. 2004).  A plaintiff, however, need not have known that his actions could lead to a qui tam suit under the FCA, or even that a False Claims Act existed, in order to demonstrate that he engaged in protected conduct. Id.

This opinion confirms the broad scope of protected conduct under the FCA.  Click here for the court’s full opinion.

The whistleblower lawyers at The Employment Law Group® law firm have experience protecting whistleblowers and litigating qui tam actions brought under the False Claims Act.  For more information about TELG’s False Claims Act Practice, click here.

The House of Representatives passed the Offshore Oil and Gas Worker Whistleblower Protection Act, which prohibits oil and gas companies from terminating or discriminating against offshore employees who report unsafe conditions or refuse to work in unsafe conditions.  Closing a significant loophole, the legislation extends whistleblower protections currently in place for onshore oil and gas workers to offshore workers.  The legislation also grants employees the right to file a whistleblower retaliation complaint with the Department of Labor (DOL), the right to appeal the DOL’s decision, and the right to a jury trial if the DOL does not issue a decision after 300 days.  Relief available to whistleblowers includes reinstatement, back pay with interest, punitive damages, attorney’s fees, litigation costs, and expert witness fees.  In support of the bill, Congresswoman Jackson Lee from Texas stated:

It is essential that workers be protected when they raise concerns about unsafe working conditions, and they must have the right to stop working if they fear they could be injured or killed.  All workers, especially those in dangerous jobs, are in the best position to discover safety hazards.

Click here for the full text of the bill.  For information about The Employment Law Group® law firm’s Whistleblower Retaliation Practice, click here.

The U.S. Department of Justice filed a brief in U.S. District Court for the Eastern District of Virginia rejecting Nelnet, Inc.’s contention that its settlements with the Department of Education (ED) bar Oberg’s qui tam action.  Dr. Jon H. Oberg, a former employee of the Department of Education, brought a qui tam seeking the return of approximately $1 billion that student loan companies obtained through false pretenses.

Nelnet reached a settlement with the Department of Education under which the company would stop receiving overpayments.  However, the agreement did not require Nelnet to return any of the nearly $1 billion in overpayments it had already received.  In its brief, the U.S. Department of Justice stated, “. . . it is clear from statutory and other authority that Congress has committed exclusive authority to settle claims of fraud, including FCA claims, to the Attorney General” and furthermore that Nelnet has not presented evidence that the Department of Education even intended to release the company from FCA liability.  For the full brief, click here.

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.
 

On July 13, 2010, the U.S. District Court for the Central District of Illinois denied a motion for summary judgment in Schlicksup v. Caterpillar, Inc., allowing a Sarbanes-Oxley (SOX) whistleblower, Daniel Schlicksup, to proceed to trial. Schlicksup, a tax manager with twenty years of experience, alleges that he was involuntarily reassigned by his employer Caterpillar to a position in the Information Technology Department due to his disclosures about the company not paying U.S. taxes on one of its structures.

Judge Mihm applied the adverse employment standard for Title VII retaliation claims prescribed in Burlington N. & Santa Fe Ry. v. White, and concluded that the involuntary reassignment might lead to a loss of “career prospects” and therefore constitutes an actionable adverse employment action.  Click here for the court’s full opinion.

The employment lawyers at The Employment Law Group® law firm have substantial experience representing employees in Sarbanes-Oxley whistleblower proceedings and have written numerous articles about the whistleblower provisions of the Sarbanes-Oxley Act.  For more information about TELG’s Sarbanes-Oxley Whistleblower Practice, click here.