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The Employment Law Group, P.C. produces this blog to provide general news and information about the field of employment law; the blog does not contain any legal advice upon which you should rely or act. If you need advice on a particular issue or problem, please contact an attorney. Use of this Web site does not create an attorney-client relationship between you and The Employment Law Group.

OSHA Encourages Nationwide Adoption of “Early Resolution” ADR in Whistleblower Cases

On August 18, 2015, the Occupational Safety and Health Administration released a directive to its regional offices to adopt “early resolution” alternative dispute resolution in whistleblower cases.  The directive follows a successful pilot program by OSHA in its Chicago and San Francisco regions.

From October 1, 2012, to September 30, 2013, OSHA ran a pilot ADR program in regions V (Chicago) and IX (San Francisco).  The program provided two options for settling disputes: (1) an “early resolution” process offering parties the assistance of a “neutral, non-decision-making OSHA whistleblower expert;” and (2) a one-day, in-person mediation with a “professional third-party mediator.”

OSHA found the early resolution process a “very effective and viable alternative” to the normal OSHA investigative process.  As a result, OSHA is expanding the pilot program to all of its regional offices, though OSHA did leave regional offices the choice to offer parties additional ADR options.
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August Whistleblower Rewards Include $2.2 Million in Medical Fraud Case

The U.S. Department of Justice announced settlements in six large qui tam cases during August – including a medical fraud case where the whistleblower earned over a two million dollar reward.

The False Claims Act (FCA) penalizes fraud against the U.S. government.  Its qui tam provision allows whistleblowers to sue on behalf of the government, and to get up to 30% of recovered funds as a reward.

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Recent Actions Highlight OSHA’s Role in Enforcing Whistleblower Anti-Retaliation Laws

The Department of Labor’s Occupational Safety and Health Administration is known for its role in implementing and enforcing safety standards in workplaces across the United States. But another main role played by OSHA is its enforcement of the whistleblower anti-retaliation provisions of a number of statutes, including but not limited to: The Occupational Safety and Health Act, the Sarbanes-Oxley Act, the Clean Air Act, the Surface Transportation Safety Act, and the Federal Railroad Safety Act. Several recent actions by OSHA demonstrate the seriousness with which OSHA enforces these statutes.

On August 4, 2015, OSHA announced that it filed suit against Continental Alloys and Services, Inc., a Houston-based company which provides steel for oil and gas companies, for violations of the Occupational Safety and Health Act’s whistleblower provision. In this case, a former employee filed a complaint for wrongful termination after Continental fired her, allegedly because she complained that the company failed to log workplace injuries in violation of OSHA regulations.  The whistleblower reported several instances when the company failed to log injuries, and even recorded a meeting with the company official who failed to record the injuries in order to gather evidence for an internal investigation. Continental fired her as a result of her actions. In its suit, OSHA seeks an injunction barring further retaliation, and reinstatement, back pay, and any other damages suffered by the whistleblower.
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D.C. Circuit Holds Trial Court Cannot “Divine” Reasons for Summary Judgment Not Offered by Movant

In a recent case before the D.C. Circuit Court of Appeals, Coleman v. District of Columbia, et al., 794 F.3d 49 (D.C. 2015), the Court overturned the District Court’s grant of summary judgment in favor of the District of Columbia in a case involving a former Captain of the D.C. Fire Department who claimed her termination was retaliation for whistleblowing. The Court’s opinion, which contains important holdings regarding the standard of proof under the D.C. Whistleblower Protection Act, also emphasizes the moving party’s burden at summary judgment to show “no genuine dispute of material fact.”

In reversing, the Coleman Court noted two legal errors by the lower court: (1) it relied in part on reasons not given by the Fire Department, but instead “divined” by the court and deemed to have been “impliedly offered;” and (2) inappropriately shifted the burden of persuasion back to the plaintiff after the Department articulated a legitimate, non-retaliatory reason for its adverse actions.
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Doctor Who Gave Chemotherapy to Healthy Patients Gets 45 Years in Prison

As previously reported, prosecutors charged a Michigan oncologist, Farid Fata, with numerous criminal counts with the underlying allegation that Dr. Fata intentionally gave chemotherapy to healthy patients in order to maximize Medicare payments. Dr. Fata pled guilty to a majority of these charges.

U.S. District Judge Paul Borman sentenced Fata to 45 years in prison as Fata wept in court. Fata apologized for misusing his talents because of “power and greed.” While the sentence was considerably less than the 175 years sought by U.S Attorney Barbara McQuade’s prosecutors, McQuade said that the 45 year sentence was close to a life sentence for Fata. McQuade also expressed surprise that the case had uncovered such egregious conduct.

Government seeks $3.35 billion from Novartis for violations of AKS and FCA

In late June 2015, the U.S. government filed papers in United States v. Novartis Pharmaceuticals Corp. notifying the court that it seeks $3.35 billion from Novartis in damages and civil fines. This amount roughly consists of $1.52 billion in treble damages and $1.83 billion in fines for the over 160,000 alleged false claims that Novartis submitted to the government.

Though news of the large potential damages is recent, the government has been investigating and litigating this case in the Southern District of New York for several years. In April 2013, the government filed its complaint and intervention against Novartis, alleging that Novartis violated both the False Claims Act and the Anti-Kickback Statute. The government contends that Novartis gave kickbacks, in the form of rebates and discounts, to twenty or more pharmacies in exchange for their switching kidney transplant patients from competitor drugs to Novartis’s drug. The government noted that Novartis is a repeat offender, referencing the government’s multi-million dollar settlement with the company less than three years ago for kickbacks.

Because this is a qui tam case, the whistleblower stands to receive a large award –between 15 to 25 percent of the ultimate settlement.

Grassley Urges Stronger Policing of Medicare Advantage

On May 21, 2015, Senator Chuck Grassley urged tighter policing of the Medicare Advantage program by the Department of Justice. Grassley relied on an investigative report by the Center for Public Integrity, which found that between 2008 and 2013, the Center for Medicare and Medicaid Services has paid more than $70 billion in improper payments to Medicare Advantage plans. Medicare Advantage plans are offered by private insurance companies that contract with Medicare to provide Part A and Part B benefits to beneficiaries.

According to a recent GAO report, the government “could save billions of dollars” by reducing abuse of Medicare Advantage’s payment system. Whistleblower lawsuits are one of the least costly and most effective tools for the government in fighting fraud. Through qui tam actions, whistleblowers are able to bring suit under seal and on behalf of the government to help the government recover funds it paid out as a result of false statements submitted for payment. Whistleblowers in qui tam actions are entitled to 15-25% of the government’s recovery.

New Jersey Supreme Court Extends Whistleblower Protections to “Watchdog” Employees

On July 15, 2015, in Lippman v. Ethicon, Inc., the New Jersey Supreme Court held that whistleblower protections under New Jersey’s Conscientious Employee Protection Act (CEPA) extend to actions taken by employees as part of their normal job duties.

Dr. Joel S. Lippman was employed by Ortho-McNeil Pharmaceuticals, Inc. (OMP) and Ethicon, Inc. as the World-Wide Vice President of Medical Affairs and Chief Medical Officer. Lippman, in his role as Medical Officer, was asked to provide his opinion about the safety of OMP and Ethicon’s products.

Lippman, after he was terminated from his high-level position, filed a retaliation claim under New Jersey’s Conscientious Employee Protection Act. The New Jersey trial court granted OMP and Ethicon’s motion for summary judgment, determining that disclosures Lippman made as part of his normal job duties were not CEPA-protected conduct.
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Third Circuit District Courts Split on Kick-Out Actions Brought After Final Agency Decisions

The U.S. District Court for the Western District of Pennsylvania ruled that plaintiffs claiming retaliation under Federal Railroad Safety Act (FRSA) lose their right to sue in federal court when the Department of Labor (DOL) reaches a final decision in their action, even if that decision is reached more than 210 days after the DOL administrative complaint was filed.

This ruling creates a split among the Third Circuit’s district courts. Just last year, the U.S. District Court for the Eastern District of Pennsylvania found that the right to file a so-called “kick-out” action in federal court is triggered when a final administrative decision isn’t reached within 210 days, and that FRSA contains nothing that extinguishes that right if the DOL subsequently issues a final decision.

In Mullen v. Norfolk Southern, Harry Mullen alleged that the railroad wrongfully terminated his employment because he protested to his supervisors about violations of safety regulations. Mullen’s termination occurred on February 14, 2011. Mullen filed a whistleblower claim with the DOL’s Occupational Safety and Health Administration (OSHA) on April 28, 2011 under the FRSA, 49 U.S.C. § 20109.
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Favorable Jury Verdict for DuPont Tossed Because DuPont Withheld Evidence

The Louisiana-based federal judge in Simoneaux et al. v. E.I. du Pont De Nemours & Co., an environmental qui tam action concerning safety problems at a chemical plant, set aside a jury verdict in favor of DuPont, holding that DuPont withheld crucial evidence that could have changed the outcome of the case. While DuPont failed to produce the evidence at issue in Simoneaux, it had produced the same evidence in an unrelated qui tam action. The court rejected DuPont’s argument that the evidence was available to the relator in Simoneaux because DuPont had produced in the other case. The court held that DuPont had engaged in “misconduct” because the relator in Simoneaux requested the evidence in discovery and DuPont failed to produce it.
The court’s June 25, 2015 ruling states, “[T]he Court finds that Relator has established by clear and convincing evidence that the newly discovered leak calculations and the November 2014 OSHA Citation were called for in discovery. DuPont’s failure to produce them is misconduct for the purposes of Rule 60(b)(3).” The court held that DuPont’s failure to produce the evidence affected the integrity of the trial process and prevented the relator from fully presenting his case. The court emphasized that its decision to set aside the judgement in favor of DuPont does not imply that the outcome of the trial would have been different had DuPont not withheld the evidence.
Based on the unavailability of the evidence, the court granted the relator’s post-verdict motion for relief from judgment, but denied the relator’s motion for a new trial.

Fourth Circuit Holds that Single Discriminatory Incident Can Give Rise to a Hostile Work Environment

In overturning the U.S. District Court for the District of Maryland, the Fourth Circuit Court of Appeals affirmed that a hostile work environment – which typically results from a series of separate incidents – can also exist when an employee is subjected to a single sufficiently severe hostile action.

The Fourth Circuit found that Reya Boyer-Liberto, a former cocktail waitress at the Clarion Resort Fountainbleu in Ocean City, Maryland, was subjected to a severe hostile action when her supervisor called her a “porch monkey” twice in one night. The Court also found that Boyer-Liberto’s engaged in protected activity when she reported the incident.

The Fourth Circuit’s decision overturned the District Court ruling, which was based on the presumption that a claim of hostile work environment must allege a series of discrete events in order to be actionable. The Fourth Circuit found that the actions of Boyer-Liberto’s supervisor were sufficiently severe to give rise to a hostile work environment claim, even though the discriminatory behavior happened in the course of just one night.

The ruling by the Fourth Circuit Court of Appeals that a single instance of discrimination can constitute a hostile work environment enhances workers’ rights. When a single incident is sufficiently severe, employers cannot avoid liability for a hostile work environment claim simply because the alleged underlying discriminatory behavior did not occur in a series of separate incidents.

US Senator Opens Email Address For Government Whistleblowers

A change in duties, suspended security clearance, or isolation from other employees—these are just some of the types of reprisals federal whistleblowers have suffered for exposing fraud to Congress.

On June 11, 2015, U.S. Senator Ron Johnson (R-WI), Chairman of the Senate Homeland Security & Government Affairs Committee, held a hearing on retaliation experienced by federal employees for reporting government waste, fraud, and abuse.

Senator Johnson, emphasizing the importance of protecting whistleblowers who report fraud to Congress, has created an email address, whistleblower@ronjohnson.senate.gov, to ensure that whistleblowing government employees have a clear line of communication to Congress.

“These men and women take great risk to stand up and expose wrongdoing,” said Johnson. “They sacrifice their careers, their reputations and often their financial security. Congress—and this committee in particular—must support federal whistleblowers and ensure that they are adequately protected from retaliation.”

Whistleblowers play a valuable role in fighting waste, fraud, and abuse, and ensuring the financial health of our nation. According to a 2013 report prepared by the Taxpayers Against Fraud Education Fund, the federal government recovers more than $20 for every dollar it spends to pursue whistleblower cases.

According to Johnson, more than 130 whistleblowers have reported waste, fraud, and abuse in 2015 through his Senate-sponsored email address.

Contract to Share Qui Tam Awards is Enforceable

In Fair Lab. Practices Assocs., et al., v. Riedel, et al., the United States District Court for the District of New Jersey ruled that a contract providing that two parties share potential qui tam awards is enforceable.

Plaintiffs Fair Laboratory Practices Associates (FLPA) and NPT Associates are both Delaware partnerships formed for the purpose of prosecuting qui tam actions. Defendant Hunter Laboratories, LLC is a California limited liability company in the commercial reference laboratory business; and Defendant Chris Riedel is Hunter’s sole managing member.

In 2005, Plaintiffs FLPA and NPT filed a qui tam action against Quest Diagnostics, Inc. and Unilab Corporation in the Southern District of New York (New York action). Shortly thereafter, Defendants Hunter and Riedel filed a qui tam (false claims) action against Quest, Unilab, and others in California state court (the California action).
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ARB Reverses ALJ and Finds Pilot Engaged In Protected Activity Under AIR-21

The Department of Labor’s Administrative Review Board (ARB) found that Dawn Sewade, a helicopter pilot for Halo-Flight, Inc., engaged in protected activity under AIR-21 when she reported what she reasonably believed to be unsafe aircraft conditions to Halo-Flight. The ARB also held that Sewade’s allegations of constructive discharge following a retaliatory warning for her report were actionable under AIR-21. The ARB decision reversed a prior decision by the DOL’s Office of Administrative Law Judge s (ALJ) that Sewade’s complaint was not protected activity under AIR-21.

The ARB found that Sewade engaged in protected conduct when she reported a safety concern about her aircraft and refused to fly, claiming that her aircraft was violently pitching and that fuel sampling techniques used by Halo-Flight were not proper. Sewade also reported a mechanic who threatened Sewade’s job security after Sewade made her complaints.
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Supreme Court to Hear Key Employment Law Cases in October 2015 Term

While Supreme Court analysts are still considering the impacts of a number of rulings from the Supreme Court’s October 2014 term, including an important ruling for religious accommodation of employees under Title VII in E.E.O.C. v. Abercrombie & Fitch Stores, the Court has already granted certiorari in a number of cases that could have sweeping impacts on employment law.

In Tyson Foods v. Bouaphakeo, the Court will examine what effect, if any, differences in individual members of classes certified under a class action lawsuit or collective action suit under the Fair Labor Standards Act should have when damages are calculated by use of statistical sampling. In this case, a class of workers in a meat processing plant seek unpaid overtime for the time spent each day to put on (donning) and remove (doffing) protective equipment before and after shifts and before and after lunch breaks. To prove liability and damages at trial, the plaintiffs presented timesheets for the individual plaintiffs as well as average donning and doffing times derived from observations of more than 700 employees. The Eighth Circuit affirmed the use of statistical sampling in this case because the plaintiffs all worked in the same location, used similar equipment to perform their jobs, and the company used a common pay scheme regarding their “donning and doffing” times. The Eighth Circuit also pointed to the fact that since the company had failed to keep adequate records of specific times spent on “donning and doffing” for each specific plaintiff, reasonable inferences drawn from average times and individual timesheets were sufficient.

In Bouaphakeo, the Supreme Court will also examine whether class certification should survive when some members of the class suffered no actual damages from the employer’s activities. This case will be important for determining the outcomes of future cases involving unpaid overtime and employee misclassification, especially given the increase in these types of claims in recent years.
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Multi-Agency Guide Updates LGBT Discrimination Protections for Federal Workers

On June 3, 2015, four U.S. Government agencies released a guide on rights and protections afforded to federal employees and applicants who allege sexual orientation or gender identity discrimination. The guide reflects a growing body of case law that supports the proposition that Title VII of the Civil Rights Act of 1964 and other statutes offer substantial protections for lesbian, bisexual, gay, and transgender (LBGT) employees.

The U.S. Office of Personnel Management (OPM), the U.S. Equal Employment Opportunity Commission (EEOC), the U.S. Office of Special Counsel (OSC), and the U.S. Merit Systems Protection Board (MSPB) collaborated on the guide, titled “Addressing Sexual Orientation and Gender Identity Discrimination in Federal Civilian Employment: A Guide to Employment Rights, Protections, and Responsibilities.” The guide provides federal workers with a description of employee rights and agency responsibilities under Title VII, the Civil Service Reform Act of 1978, and other agency and union procedures.
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District Court Upholds Disability Claim for Employer’s Failure to Perform an Individualized Inquiry into Employee’s Medical Condition

In EEOC v. Kyklos Bearings Int’l, LLC, the United States District Court for the Northern District of Ohio denied summary judgment for Kyklos, an Ohio bearings manufacturer, in an Americans with Disability Act (ADA) case. The district court held that a company doctor’s “sparse” and “superficial” examination was insufficient to support the employer’s claim that it had fulfilled its legal responsibility to conduct an individualized inquiry into the medical condition of an employee it subsequently fired. The Court also held that even though the employee originally complained only of failure to accommodate, the EEOC could bring charges in the case on a different theory.

Dominque Price worked at Kyklos Bearings as a “tugger,” a position which required her to use a motorized scooter to move materials and productions, including “trains” of carts. Price’s job also involved lifting up to fifty pounds. In 2007, Price was diagnosed with breast cancer; she recovered and returned to her job. In August 2011, Kyklos laid off Price for business-related reasons but rehired her in April 2012. Upon her rehiring, Kyklos’s company doctor determined that Price was fit to return to work as a tugger.
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DaVita to Pay $450 Million to Settle Wasted Medication Allegations

On June 24, 2015, DaVita Kidney Care, a division of DaVita Healthcare Partners and one of the largest U.S. kidney dialysis providers, agreed to pay the U.S. government nearly half a billion dollars to settle allegations brought by two former employees that it violated the False Claims Act by intentionally wasting dialysis medications in order to receive higher Medicare payments.

In 2007, two whistleblowers – Dr. Alon Vainer and nurse Daniel Barbir – brought a qui tam action against DaVita after observing that DaVita was throwing out good medicine for which it then billed Medicare. In March 2011, the Justice Department decided not to intervene in the case, but the whistleblowers continued to litigate the case. This settlement is one of the largest recoveries in which the Justice Department did not intervene. The whistleblowers are entitled to 25% to 30% of the nearly half a billion dollar settlement. DaVita’s settlement comes on the heels of two other recent settlements by the company: one in 2014 for $350 million for alleged kickbacks, and one in 2012 for $55 million for the alleged overbilling of a drug.

Canada’s Securities Commission Adopts U.S. Whistleblower Reward Framework

The Ontario Securities Commission (OSC), Canada’s regulatory agency for securities, has backed proposed legislation that draws directly from the U.S. whistleblower reward program. On June 9, 2015, the CBC, Canada’s national public broadcaster, reported that the OSC, which is similar to the U.S. Securities and Exchange Commission, held a roundtable to discuss proposals to protect and reward corporate whistleblowers.

OSC commissioner Mary Condon specifically stated that the proposed legislation takes from the “apparent successes” of the U.S. whistleblower reward program. Since the U.S. whistleblower reward program was enacted, the number of investigations and findings of corporate wrongdoing increased significantly. As a result, the U.S. recovered hundreds of millions of dollars in taxpayer money, and whistleblowers received rewards as high as tens of millions of dollars.
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Fourth Circuit Holds that McDonnell-Douglas Survives Nassar for Prima Facie Retaliation Cases

In a recent case, Foster v. University of Maryland-Eastern Shore, the Fourth Circuit held that the familiar McDonnell Douglas burden-shifting framework survives the but-for causation standard articulated by the Supreme Court in University of Texas Southwestern Medical Center v. Nassar in 2013. The Fourth Circuit held that Nassar does not alter the burden for Title VII plaintiffs at summary judgment because McDonnell Douglas already incorporates a but-for standard. This case is important for plaintiffs, as it sheds light on questions raised by the Supreme Court in Nassar as to how plaintiffs carry their burdens in employment litigation.

Iris Foster worked for the University of Maryland-Eastern Shore as a campus police officer. The University placed her on a standard probationary period of six months upon hiring. The University did not contest that Foster faced significant sexual harassment from a colleague even before she began her employment. Foster complained of the harassment within the first month of her employment, and the University disciplined Foster’s co-worker, transferring him to a different role, requiring him to attend sexual harassment training, and putting him on a “Last Chance Agreement.”
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Sixth Circuit Finds Teleworking a Reasonable Accommodation Depending on the Situation

In EEOC v. Ford Motor Co., the Sixth Circuit ruled that Jane Harris, a resale buyer at Ford who suffers from irritable bowel syndrome (IBS), was not qualified for her position, and therefore Ford did not discriminate against Harris when it denied her request to telework as a reasonable accommodation.

The EEOC brought claims on Harris’s behalf under the Americans with Disabilities Act, alleging that Ford failed to reasonably accommodate Harris when it denied her request for a schedule with maximum flexibility to telework, and retaliated against her for reporting this denial to the EEOC. The District Court granted summary judgment to Ford on both claims.

The Sixth Circuit reversed the District Court and held that whether teleworking is a reasonable accommodation was a question for a jury. In an en banc review, the Sixth Circuit affirmed the District Court’s grant of summary judgment. In the en banc opinion, the Sixth Circuit determined that no reasonable jury could find that telecommuting was a reasonable accommodation under this particular set of facts, but also held that telecommuting could be a reasonable accommodation under a different fact pattern.

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SEC Awards Whistleblower Maximum Possible Share of Settlement in Dodd-Frank Retaliation Case

On April 28, 2015, the Securities and Exchange Commission announced that it was awarding a whistleblower 30 percent of funds recovered in settlement of the Commission’s first retaliation charges brought under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).

The whistleblower’s share will be more than $600,000. In deciding to award the maximum 30 percent, the SEC’s Claims Review Staff weighed heavily the “substantial evidence that the whistleblower suffered unique hardships as a result of reporting.”

In the Matter of Paradigm Capital Management, Inc. and Candace King Weir, File No. 3-15930 (June 16, 2014), the SEC charged the hedge fund investment adviser with retaliating against the whistleblower for reporting what the whistleblower believed to be misconduct to the SEC. The SEC found that Paradigm removed the whistleblower from the whistleblower’s then-current position, changed the whistleblower’s job function, and removed the whistleblower’s supervisory responsibilities, among other retaliatory acts.
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Middle District of Florida Affirms Use of Statistical Sampling in Qui Tam Actions

Allegations of fraud against Medicare, a frequent impetus for qui tam actions under the False Claims Act, often involve an enormous number of false claims as part of a larger scheme of fraud committed by an entity. These large numbers of claims present a practical problem in determining liability and calculating damages. In a recent case, United States ex rel. Angela Ruckh v. Genoa Healthcare, et al., the United States District Court for Middle District of Florida affirmed the use of statistical sampling to demonstrate liability in a qui tam action.

In Ruckh, the Relator alleges that a number of health care facilities defrauded the U.S. government by “upcoding” (billing for higher level services than the facility actually performed). The Relator alleges that the Defendants submitted false claims from fifty-three different health care facilities. Given the impracticality of analyzing each and every claim from the various facilities, the Relator sought to use statistical sampling, as well as expert testimony, to extrapolate the amount of overpayment and assess liability. The Defendants in Ruckh relied on a footnote in a 1993 district court case from Massachusetts, United States v. Friedman, No. 86-0610-MA, 1993 U.S. Dist. LEXIS 21496 (D. Ma. Jul 23, 1993), for the proposition that statistical sampling cannot be used to demonstrate liability and calculate damages.
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Whistleblower Not Obligated to Produce Evidence of Retaliatory Termination

On March 20, 2015, the Department of Labor Administrative Review Board (ARB) reversed and remanded a decision by the DOL’s Office of Administrative Law Judges (OALJ) that held a railroad employee had not proved that his report of a workplace injury was a contributing factor to management’s decision to terminate his employment.

Robert Powers reported to his employer, Union Pacific Railroad Company, that he injured his hand while operating a rail saw at work in May 2007. Over slightly more than a year, Powers saw several doctors who prescribed various treatments. His doctors also imposed a series of work restrictions, including limits on lifting and repetitive motions.

Union Pacific became suspicious about Powers’ reported injuries and resultant work restrictions. The company hired a private investigator who filmed Powers performing tasks around his property, including using a sledgehammer and carrying boxes of ammunition. After an internal administrative procedure that determined that Powers had violated the company’s dishonesty policy and had failed to stay within his medical restrictions, the company terminated Powers’ employment.
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SEC Awards $1.5 Million to Compliance Officer

On April 22, 2015, the U.S. Securities and Exchange Commission announced its second-ever whistleblower award to a compliance professional. The SEC’s award demonstrates that compliance professionals and other fiduciaries can be whistleblowers when the employer fails to take action to address misconduct reported by a fiduciary.

The complainant, in his role as a fiduciary, was statutorily required to disclose the suspected misconduct internally and then wait 120 days for the employer to investigate and take corrective measures before initiating an action under the SEC’s whistleblower award program. Here, the complainant did as required, and the SEC found that the employer did not take meaningful corrective action. The SEC held the financial award to the whistleblower was appropriate given the employer’s failure to remediate.

The SEC’s first ever award to a whistleblower was in 2014. The SEC releases limited information about whistleblower case as it is bound by the law to protect the confidentiality of whistleblowers.

The Employment Law Group, P.C. produces this blog to provide general news and information about the field of employment law.

R. Scott Oswald
Managing Principal
The Employment Law Group

J. Thomas Harrington
The Employment Law Group

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