The topic of the Continuing Legal Education (CLE) seminar is “Blowing the Whistle in 2012: New Developments in Qui Tam Litigation” and will focus on a discussion of recent developments in qui tam litigation including:

• New law on the false certification theory;
• The first-to-file bar;
• The public disclosure bar;
• Other elements and defenses for False Claims Act (FCA) cases in the Eastern District of Virginia

The seminar will include both relators’ counsel and defense attorneys who will discuss FCA liability following amendments and regulatory changes in recent years.  In addition, the talk will include a discussion on practical considerations in qui tam relator suits including:

• What relators’ attorneys consider in choosing potential claims;
• The factors used by the U.S. Attorney’s Office in deciding whether to intervene;
• Litigation of FCA retaliation claims along with pending relator lawsuits

The seminar is being held in at the Westin in Alexandria, VA from 12:00-2:30pm.  Registration will remain open until February 29, 2012.  The Northern VA Chapter of the Federal Bar Association is offering a discount on registration fees to government attorneys to encourage participation

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

On January 25, 2012, six current and former Food and Drug Administration (FDA) employees filled a lawsuit in the U.S. District Court for the District of Columbia alleging that the FDA violated their constitutional privacy rights. The employees claim that the FDA monitored the employees’ emails sent from private accounts over a period of two years. The lawsuit also alleges that the employees were targeted for their whistle-blowing after they expressed concern to Congress that the FDA has approved purportedly unsafe medical devices.

The FDA terminated two of the employees and did not renew the contracts of another two following the whistleblowers’ decision to come forward and report the approval of medical products they believed were unsafe.

Responding to the FDA’s alleged intrusion into the whistleblowers’ private emails, Mr. Oswald told the Federal Times:

“I think the FDA went too far in its zeal to monitor these employees. Employers who access [and] retain emails or other electronic stored information from a third-party server risk violating an employee’s privacy interest.”

The article, “When Can Agencies Monitor Your Email? FDA Case Sparks Debate Over Policy”, appeared in the February 5, 2012 edition of the Federal Times.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

Morris Jones of Capital Insider interviewed The Employment Law Group® law firm attorney Adam Augustine Carter on the recent changes in whistleblower and employment law that will affect employees in 2012.

The points Mr. Carter makes are that:

1. There are almost 2 million home health aides and in-home care providers working in our country. Now with new regulations these workers will get overtime and minimum wage protections.
2. There are now in effect regulations that implement the amendments to the Americans With Disabilities Act (ADAAA) that broaden the definition of who is covered as having a disability and the key change is that an impairment does not need to prevent or severely or significantly restrict a major life activity to be considered to be “substantially limiting” the activity.
3. Revisions to the Sarbanes-Oxley whistleblower regulations clarify and improve the procedures for handling Sarbanes-Oxley whistleblower complaints and implement statutory changes enacted into law as part of the 2010 Dodd-Frank Wall Street Reforms.
4. The Department of Labor’s Administrative Review Board has changed the landscape in 2011 for whistleblowers under Sarbanes-Oxley and the new Dodd Frank amendments to make these laws more powerful for whistleblower claims to succeed and for whistleblowers to be protected so that they don’t have to choose between their job and doing the right thing.

Related articles

• TELG Principal Quoted in Law360 Regarding New Sarbanes-Oxley Whistleblower Regulations (employmentlawgroupblog.com)
• TELG Principal Attorney Adam Augustine Carter Quoted in Bloomberg Article (executivecounselblog.com)
• U.S. DOL ARB Ends Landmark Year Holding Summary Decision Improper Unless Employer Proves Sarbanes-Oxley Act Does Not Apply (employmentlawgroupblog.com)

On June 1, 2009 the employee called the local OSHA office and relayed his continued safety concerns regarding plant operations.  RockTenn suspended the employee on June 18 and then terminated him on June 23 for allegedly giving inaccurate and untruthful testimony during an internal investigation. OSHA concluded that the company had unlawfully and intentionally terminated the worker’s employment for engaging in activity protected by the Occupational Safety and Health Act.

Teresa Harrison, OSHA’s acting regional Administrator in Atlanta stated:

“Employees have the congressionally-mandated right to engage in safety-related matters at their workplace, including participating in accident investigations and contacting OSHA at any time.  We will hold employers accountable for limiting or deterring any employee who exercises these rights.”

The lawsuit asks the court to order remedies that include reinstating the employee; paying back wages and benefits; paying punitive and compensatory damages; and expunging the employee’s personnel records with respect to the matters at issue in the case.  The suit also requests a permanent injunction against future violations of this law by the employer.

Lawyer Monthly makes selects award recipients based on a number of criteria. The selection process includes a comparative review of nominated firms’ recent activities to their industry peers and also firms’ involvement in significant legal cases. Additionally, Lawyer Monthly considers the degree of recognition a firm has among its peer group, the number of nominations a firm receives, and other awards and positive reviews that the firm has received.

The Employment Law Group® law firm is proud to accept this recognition of the results the firm has achieved for its clients and its commitment to advancing the rights of employees and whistleblowers in the U.S. and abroad.

Pennsylvania Gov. Tom Corbett, a Republican, stated:

“The assistant coach who in 2002 witnessed former Penn State assistant coach Jerry Sandusky allegedly abusing a child met the minimum obligation of reporting it up to head coach Joe Paterno, but the assistant did not, in my opinion, meet a moral obligation.”

Corbett also mentioned that within the next few weeks, state lawmakers would introduce bills to explicitly outline educators’ responsibilities if they witness or suspect child abuse.

Iowa, Maryland and New York are also considering tougher laws regarding the reporting of child abuse.

Having whistleblowers in government and the health care sector will ensure that individuals and corporations engaged in fraudulent acts (will think twice about committing crimes).  It will serve as a deterrent….

Recently, whistleblower and SEC attorney Darcy Flynn revealed that the SEC was shredding documents relating to corporations under investigation, including thousands of inquiries into the $50 billion Bernard Madoff Ponzi scheme, Goldman Sachs, and Lehman Brothers.  Before blowing the whistle at the SEC, Flynn blew the whistle on health care fraud:

Flynn also was the whistleblower in the 1995 Medicare fraud case against Blue Cross Blue Shield of Michigan. The Blues settled with the federal government and paid a $27.6 million fine.

Over the next decade, Oswald believes false claims act complaints will go up by a factor of 100.

“There has been an explosion in government contracting. A huge amount of work is being outsourced,” Oswald said.

“Another reason is the expansion of health care services with the health care reform bill. As more people become covered by insurance and prescribed medications there will be more opportunities for pharmaceutical companies to engage in unlawful activities.”

Related articles

• R. Scott Oswald Interviewed by Legal Bisnow (executivecounselblog.com)
• SEC Lawyer Blew Whistle Before (online.wsj.com)
• SEC Shifts Tack on Document Destruction Amid Whistleblower Threat (blogs.wsj.com)

This settlement relates to a contract Oracle entered into in 1998 to sell software licenses and technical support to government entities through GSA’s Multiple Award Schedule (MAS) program.   The MAS program provides the government and other GSA-authorized purchasers with a streamlined process for procurement of commonly used commercial goods and services.  To be awarded a MAS contract, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms.  The settlement resolves allegations that, in contract negotiations and over the course of the contract’s administration, Oracle knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Oracle knowingly made false statements to GSA about its sales practices and discounts.

Tony West, Assistant Attorney General for the Civil Division of the Department of Justice sates:

“Companies that engage in unlawful or fraudulent practices to secure government business undermine the integrity of the procurement process and create an unfair advantage against the majority of companies that are playing by the rules.  Resolutions like this one – the largest GSA false claims settlement in history – demonstrates our commitment to ensure taxpayers are not overpaying for the products and services they receive.”

The settlement resolves a lawsuit filed on behalf of the U.S. government by former Oracle employee, Paul Frascella, who will receive $40 million as his share of the recovery in the case.   Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the United States and share in any recovery obtained by the government.

The article highlights changes to Washington D.C.’s recently amended Whistleblower Protection Act (D.C. WPA); changes which make it the “strongest public sector whistleblower protection statute in the country” and a model for other states to follow. Messrs. Oswald and Zuckerman point out that in order “to encourage public sector employees to blow the whistle on waste, fraud, and abuse, states must provide robust whistleblower protections to employees.”

These changes were brought about after the D.C. Council investigated Harriette Walters, a former employee at the Office of Tax and Revenue, and discovered she had embezzled over $48 million over the course of 18 years. Her co-workers remained silent the entire time because they feared reprisals for blowing the whistle.

Now, “the D.C. WPA protects any current or former employee, applicant for employment, as well as employees of independent and subordinate agencies….[Furthermore,] authorizing actions against individuals is critical to deterring retaliation against whistleblowers.”

Changes to the D.C. WPA include:

1. Broad Scope of Protected Conduct: The D.C. Whistleblower Protection Act protects an employee who lawfully discloses information which he or she reasonably believes evidences gross mismanagement, waste of public funds, abuse of authority in connection with the administration of a public program or the execution of a public contract, a violation of law, regulation, or contractual term, or a substantial danger to public health and safety. The D.C. WPA also protects and employee’s refusal to comply with an illegal order…. [Defined as] a directive to violate or assist in violating any federal, state, or local law, rule, or regulation.
2. Protecting ‘Duty Speech’: The amended D.C. WPA also eliminated the “duty speech” loophole. Foreseeing the assertion of the “duty speech” defense from Garcetti v.Ceballos, the D.C. Council clarified that employees are protected even if their disclosure is made during the course of performing their job duties.
3. Prohibited Types of Retaliation: The D.C. WPA forbids a wide range of retaliatory adverse actions, including “recommended, threatened, or actual termination, demotion, suspension, or reprimand; involuntary transfer, reassignment or detail; referral for psychiatric of psychological counseling; failure to promote or take other favorable personnel action.
4. Causation Standard and Burden-Shifting Framework: The D.C.  WPA applies a causation standard and burden shifting framework that is mare favorable to employees than Title VII of the 1964 Civil Rights Act’s McDonnell Douglas standard. To prevail under the D.C.WPA, an employee must show by a preponderance of the evidence that her protected conduct was a contributing factor in the adverse employment action.
5. Statute of Limitations and Right to Jury Trial: Under the D.C. WPA, a whistleblower may seek a trial by jury within three years after a violation occurs or within one year after he or she first learns of the violation, whichever comes first.
6. Remedies: Remedies available to a whistleblower include injective relief, reinstatement to the same or equivalent position with all seniority rights and benefits, back pay, interest, compensatory damages, attorneys’ fees, and costs.
7. Financial Incentive for Whistleblowing: The District is encourage employees to become whistleblowers by creating financial incentives while simultaneously prohibiting retaliation and holding those who participate in retaliation personally responsible for their acts. 
8. Protection for Employees of D.C. Contractors: The District extends similar protections to the employees of District contractors and instrumentalities.

Messrs. Oswald and Zuckerman conclude that more states should adopt whistleblower protection statutes similar to the District of Columbia’s because strong whistleblower protection laws like the D.C. WPA will incentivize more people to come forward and blow the whistle.

More efficient investigations are among OSHA’s goals, but unless the workload for investigators gets lighter, there are still going to be substantial delays.

You can have the greatest systems in place, but if the demand for them is so great that you have to stand in line for a couple of years, you’re effectively denying the benefits to the populace.

OSHA’s commitment to bolstering investigator training is a positive sign, however, and could translate to a more consistent application of the law to cases.

OSHA is responsible for administering 21 whistleblower laws that prohibit employers from retaliating against employees who report violations of workplace safety, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health care reform, nuclear, public transportation, railroad, and securities laws.

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) announced in a press release significant improvements to its Whistleblower Protection Program.   OSHA Assistant Secretary Dr. David Michaels explained:

The ability of workers to speak out and exercise their legal rights without fear of retaliation is crucial to many of the legal protections and safeguards that all Americans value.  The new measures will significantly strengthen OSHA’s enforcement of the 21 whistleblower laws that Congress charged OSHA with administering. . . .  OSHA is committed to correcting the issues brought to light by the GAO report and our own review.

The Employment Law Group® requested some of the very measures being adopted.  Significant changes to OSHA’s Whistleblower Protection Program include:

• OSHA’s Whistleblower Protection Program will report directly to the assistant secretary instead of being housed in the Directorate of Enforcement.
• OSHA will hold a national whistleblower training conference for all whistleblower investigators.
• OSHA will issue a new edition of the Whistleblower Investigations Manual that will include the new laws enacted since its last revision in 2003.
• OSHA’s audit program will be strengthened and expanded to ensure that complaints are properly handled.

Whistleblower advocates applaud OSHA for adopting the necessary reforms to strengthen protection for employees who report violations of workplace safety,airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health care reform, nuclear, public transportation, railroad, and securities laws.

Related articles

• TELG Principal Quoted in Law360 on Landmark ARB Decision for SOX Whistleblowers (employmentlawgroupblog.com)
• U.S. DOL ALJ Reinstates Truck Driver who Refused to Violate DOT Regulations, Awards $46k in Damages(employmentlawgroupblog.com)
• DOL ARB Clarifies Broad Scope of Protected Conduct for SOX Whistleblowers in Sylvester v. Parexel International LLC(employmentlawgroupblog.com)

 Jason Zuckerman, a principal at The Employment Law Group, which represents employees, said the Sylvester decision was in contrast to past ARB rulings that had erected barriers to complainants.

“The current ARB is applying the statute as Congress intended, and in light of the recent financial crisis, it could not be clearer that robust protection of whistleblowers is a crucial bulwark against corporate fraud,” Zuckerman said.

The ARB held that the heightened pleading standards established in federal courts did not apply to SOX claims initiated with OSHA, and that an allegation of shareholder fraud was not a necessary component of protected activity under SOX.  The Sylvester decision will likely lead to more claims surviving initial motions to dismiss or summary judgment than in the past.

Related articles

• DOL ARB Clarifies Broad Scope of Protected Conduct for SOX Whistleblowers in Sylvester v. Parexel International LLC(employmentlawgroupblog.com)
• Law360 Quotes TELG Attorney on Ruling Expanding Scope of SOX-protected Conduct (employmentlawgroupblog.com)
• DOL ARB Holds Sarbanes-Oxley Covers Claims by Employees of Subsidiaries of Publicly-traded Companies(employmentlawgroupblog.com)

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The DOL Administrative Review Board has issued a very significant en banc decision on the whistleblower provision of the Sarbanes-Oxley Act (SOX) that significantly strengthens the statute by clarifying the broad scope of protected conduct.  The ARB’s opinion in Sylvester v. Parexel International LLC, ARB No. 07-123, ALJ Nos. 2007-SOX-039, 042 (May 25, 2011) represents a substantial departure from the extraordinarily narrow construction of SOX in the opinions issued by the ARB appointed by Secretary Chao.  Read in conjunction with the ARB’s recent Johnson v. Siemens Bldg. Techs. decision broadening the scope of SOX coverage and the recent Dodd-Frank amendments to SOX (exempting SOX whistleblower claims from mandatory arbitration, clarifying that SOX claims can be tried before a jury, broadening the scope of coverage, and increasing the statute of limitations), SOX is becoming a robust remedy for whistleblowers.  The primary effect of Sylvester will be a significant increase in the number of SOX retaliation claims that get past motions to dismiss and motions for summary judgment.  The ARB has now removed ridiculous hoops that SOX complainants were required to jump through, which hoops were plainly inconsistent with the plain meaning of the statute.  And the decision will enable OSHA to rule for more complainants during the investigative stage.  Hopefully, federal courts will accord Chevron deference to the decision.  The ARB held:

1. Twombly/Iqbal heightened pleading standards do not apply to SOX claims initiated with OSHA.
2. A complainant need only express a “reasonable belief” of a violation to engage in SOX-protected activity,
3. The reasonable belief standard requires an examination of the reasonableness of a complainant’s beliefs, but not whether the complainant actually communicated the reasonableness of those beliefs to management or the authorities.
4. Protected activity need not describe an actual violation of law.  A whistleblower complaint concerning a violation about to be committed is protected as long as the employee reasonably believes that the violation is likely to happen. Such a belief must be grounded in facts known to the employee, but the employee need not wait until a law has actually been broken to safely register his or her concern and consistent with this line of authority, an employee’s whistleblower communication is protected where based on a reasonable, but mistaken, belief that the employer’s conduct constitutes a violation of one of the six enumerated categories of law under Section 806.
5. The holding in Platone that an employee’s communication must “definitively and specifically” relate to the listed categories of fraud or securities violation under Section 806 “has evolved into an inappropriate test and is often applied too strictly.”  Instead, the focus should be on whether the employee reported conduct that he or she reasonablybelieves constituted a violation of federal law.
6. SOX protected conduct is not limited to disclosures about shareholder fraud and instead includes disclosures about mail fraud, fraud by wire, radio, or television, and bank fraud.  When an entity engages in mail fraud, wire fraud, or any of the six enumerated categories of violations set forth in Section 806, it does not necessarily engage in immediate shareholder fraud. Instead, the violation may be one which, standing alone, is prohibited by law, and the violation may be merely one step in a process leading to shareholder fraud.  Additionally, a reasonable belief about a violation of “any rule or regulation of the Securities and Exchange Commission” could encompass a situation in which the violation, if committed, is completely devoid of any type of fraud.
7. A SOX complainant need not establish the various elements of criminal fraud to prevail on a Section 806 complaint.  A complainant can have an objectively reasonable belief of a violation of the laws in Section 806, i.e., engage in protected activity under Section 806, even if the complainant fails to allege, prove, or approximate specific elements of fraud, which would be required under a fraud claim against the defrauder directly. In other words, a complainant can engage in protected activity under Section 806 even if he or she fails to allege or prove materiality, scienter, reliance, economic loss, or loss causation.  The purposes of the whistleblower protection provision will be thwarted if a complainant must, to engage in protected activity, allege, prove, or approximate that the reported irregularity or misstatement satisfies securities law “materiality” standards, was done intentionally, was relied upon by shareholders, and that shareholders suffered a loss because of the irregularity.

There are two concurring opinions.  Judges Corchado and Royce opine that thePlatone “definitive and specific requirement” is incompatible with the plain meaning of the statute and therefore should be abandoned.  Judge Brown opines that (i) Rule 12(b)(6) does not apply to SOX complaints, but ALJs can use OALJ summary decision procedure (29 C.F.R. § 18.40) to test the sufficiency of the complainant’s evidence; (ii) the Platone “definitive and specific requirement” should not be applied to SOX but the complainant must establish a basis for concluding that the employer’s conduct of concerns relates to the laws listed under Section 806; (iii) violations of SOX need not relate to fraud against shareholders; and (iv) a SOX complainant alleging that he disclosed shareholder fraud need not prove the specific elements of fraud.

Related articles

• Law360 Quotes TELG Attorney on Ruling Expanding Scope of SOX-protected Conduct (employmentlawgroupblog.com)
• The Employment Law Group Attorney Quoted in Law360 Article on DOL ARB Decision Broadening the Scope of Coverage under SOX(employmentlawgroupblog.com)
• DOL ARB Holds Sarbanes-Oxley Covers Claims by Employees of Subsidiaries of Publicly-traded Companies(employmentlawgroupblog.com)
• DOL ARB Affirms Reinstatement of Sarbanes-Oxley Whistleblower at DOD Contractor (employmentlawgroupblog.com)