The U.S. Department of Labor used its authority under OSHA Section 11(c) of the Discrimination against Employees under OSHA Act of 1970 to order Union Pacific Railroad to pay a total of $400,000 in punitive damages, $90,315 in compensatory damages, $34,900 in attorney fees, and more than $90,000 in back wages to three whistleblowers.  Union Pacific had violated the Federal Railroad Safety Act by firing and suspending workers for reporting workplace safety concerns and a workplace injury.

Webinar: Using New Developments In Whistleblower Laws To Your Client’s Advantage
March 10, 2011
11:00 a.m. Pacific/2:00p.m. ET/1:00p.m. CT/ 12:00 MT

Congress recently enacted several new robust whistleblower reward and protection laws, and strengthened existing whistleblower laws. This webinar will address new developments in whistleblower law, including recent decisions strengthening the rights of federal employee whistleblowers. Topics include:

• The whistleblower reward provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act and the proposed regulations implementing those provisions.
• Dodd-Frank Act amendments strengthening the anti-retaliation provisions of the Sarbanes-Oxley Act and the False Claims Act.
• Three new whistleblower retaliation causes of action in the Dodd-Frank Act.
• Recent case developments under Section 806 of the Sarbanes-Oxley Act, including the Fourth Circuit’s decision in Stone v. Instrumentation Lab. Co., 591 F.3d 239 (4th Cir. 2009) clarifying the right to de novo review in federal court.
• New legislation protecting whistleblowing on food safety.
• Recent developments under the False Claims Act, including legislation closing loopholes.
• Recent case developments in federal employee whistleblower protection, including the MPSB’s recent decision in Conyers v. Dep’t Defense, 2010 MSPB 2047, December 22, 2010).
• An overview of recently enacted federal whistleblower protection laws protecting workers in the transportation and health care industries.

NELA’s expert faculty will address these new whistleblower protection laws and offer practical tips for representing whistleblowers.

Presenters:
Tom Devine
Tom Devine is Legal Director of the Government Accountability Project (GAP) where he has worked since January 1979. GAP is a nonprofit, nonpartisan public interest organization that champions the rights of whistleblowers—those employees who exercise freedom of speech to challenge abuses of power that betray the public trust. During his 29 years at GAP he has represented or informally helped over 4,000 whistleblowers to make a difference, such as stopping nuclear power plants that were accidents waiting to happen, deregulation of meat inspection and the next generation of Star Wars. He has been a leader in the campaigns to pass or defend nearly all major national or international whistleblower laws, from the Whistleblower Protection Act of 1989 for federal employees, and breakthrough laws creating the right to jury trials for corporate whistleblowers for corporate employees, to new U.N. and African Development Bank policies legalizing public freedom of expression for their own whistleblowers, the first time any Intergovernmental Organizations have adopted this cornerstone for global accountability. He has been an “Ambassador of Whistleblowing” for the State Department in over a dozen nations on speaking tours to advocate whistleblower rights as a cornerstone transparency reform for globalization. Mr. Devine has authored or co-authored numerous books, including Courage Without Martyrdom: The Whistleblower’s Survival Guide, law review articles, and newspaper op-ed articles.

Reuben A. Guttman
Reuben A. Guttman is a director at Grant & Eisenhofer where he heads the Federal False Claims Act and whistleblower practice. Mr. Guttman earned his law degree at Emory University Law School in 1985 and his Bachelor’s Degree from the University of Rochester in 1981. He is a Senior Fellow and Adjunct Professor at the Emory University School of Law Center for Advocacy and Dispute Resolution. As part of a U.S. State Department program in conjunction with the Center for Advocacy and Dispute Resolution, he has been one of five visiting professors at Universidad Panamericana in Mexico City training Mexican judges and practitioners on oral advocacy and trial practice. Mr. Guttman is also faculty member of the National Institute of Trial Advocacy. He has been a guest lecturer at a number of universities including Jao Tong University in Shanghai, as well as Peking University and Renmin University in Beijing. He co-founded Voices for Corporate Responsibility, www.voicesforcorporateresponsibility.com, and is the founder of www.whistleblowerlaws.com and www.thecorporateinsider.com.

Stephen M. Kohn
Stephen M. Kohn is a founding member of the Washington, D.C. law firm of Kohn, Kohn & Colapinto, LLP and currently serves as the Executive Director of the National Whistleblower Center. In 1985 he wrote the first-ever legal treatise on whistleblower law, Protecting Environmental and Nuclear Whistleblowers: A Litigation Manual, and since then has written seven other books and numerous law journal articles on whistleblower law and civil liberties. Mr. Kohn started representing whistleblowers in 1984 as the Clinical Director and Director of Corporate Litigation for the Government Accountability Project. His clients have blown the whistle on billion dollar tax frauds, illegal “no-bid” contracts given to insiders for the “Reconstruction of Iraq,” and high level corporate and government misconduct. Mr. Kohn consulted with staff from the Senate Banking Committee during the drafting phase of the Dodd-Frank Act, and contributed suggestions to Section 21F of the Securities Exc hange Act that were ultimately incorporated into the law. He graduated magna cum laude from Boston University, earned a Master’s Degree in political science from Brown University and his law degree from Northeastern University.

Jason Mark Zuckerman
Jason Zuckerman, a Principal at The Employment Law Group, P.C., has been recognized twice by Washingtonian magazine as a “Top Whistleblower Lawyer” and has substantial experience litigating whistleblower retaliation, qui tam, and wrongful discharge cases, including a qui tam action under the False Claims Act that settled for $57 million. Mr. Zuckerman serves as Co-Chair of the Whistleblower Subcommittee of the ABA Labor and Employment Section’s Employee Rights and Responsibilities Committee, Co-Chair of the Sarbanes-Oxley Subcommittee of the Fair Labor Standards Legislation Committee of the American Bar Association’s Labor and Employment Law Section, Co-Chair of the Whistleblower Committee of the District of Columbia Bar’s Labor and Employment Section, and has served as Co-Chair of the National Employment Lawyers Association’s Whistleblower Committee. In addition, Mr. Zuckerman serves on the Government Accountability Project’s Advisory Committee and has worked with public interest groups to enact new whistleblower protection laws and strengthen existing laws. Mr. Zuckerman co-authored a chapter on litigating whistleblower cases for Whistleblowing: The Law of Retaliatory Discharge (BNA Books), drafted a chapter on the D.C. Whistleblower Protection Act for the D.C. Practice Manual and is co-editor of the Whistleblower Law Blog. He graduated magna cum laude from Georgetown University and received his law degree from the University of Virginia.

How To Attend
Register for the webinar at this website.  Join the live program from your office, home, or hotel room using a computer for the web portion and telephone for the audio portion. You may ask questions, participate in surveys, and post comments from your computer during the program. You may also invite colleagues to watch the program from a shared computer or projection screen and speakerphone. Please note that credit (if available) is only provided to registered attendees participating at their own computer and phone. Simple instructions with a link to the program will be sent when you register.

Credit
If applicable, you may obtain credit in multiple jurisdictions simultaneously for this program (see pending/approved list below). Registrants in jurisdictions not listed below will receive a Certificate of Attendance/Completion that may or may not meet credit requirements in other jurisdictions. Where applicable, credit will be only awarded to a paid registrant attending the live program at their own computer and phone. 

This program has been approved for or is pending credit for:
CA, CO, IL, VA

The Internal Revenue Service (IRS) recently issued new rules that now permit whistleblowers to be rewarded for reporting a company’s illegal tax scheme that leads to ill-gotten tax refunds or credits.  Under the IRS’s whistleblower program, whistleblowers can be rewarded up to 30% of the funds recouped in return for reporting tax fraud.  For more information about reporting Tax Fraud, click here.

Today President Obama has signed the FDA Food Safety Modernization Act (FSMA), which imposes stricter food safety standards and grants the Food and Drug Administration greater authority to regulate tainted food.  The FMSA was prompted in part by numerous instances of fatal food contamination that revealed insufficient regulation and oversight of food production, including outbreaks of contaminated peanuts, eggs, and produce.  The Centers for Disease Control and Prevention estimate that there are 76 million cases of foodborne disease each year in the United States, 5,000 of which result in death.

To ensure that workers can disclose food safety concerns without fear of reprisal, Congress included in the FMSA a robust whistleblower protection provision (Section 402) that protects workers engaged in the manufacture, processing, packing, transporting, distribution, reception, holding, or importation of food.

Covered Employees

Section 402 applies to any entity “engaged in the manufacture, processing, packing, transporting, distribution, reception, holding, or importation of food.”

Broad Scope of Protected Conduct

The FSMA prohibits retaliation against an employee who has:

1. provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of any provision of this Act or any order, rule, regulation, standard, or ban under this Act, or any order, rule, regulation, standard, or ban under this Act;
2. testified or is about to testify in a proceeding concerning such violation;
3. assisted or participated or is about to assist or participate in such a proceeding; or
4. objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any provision of this Act, or any order, rule, regulation, standard, or ban under this Act.

A Section 402 complainant need not demonstrate that she disclosed an actual violation of a food safety law or regulation.  Instead, Section 402 employs a “reasonable belief” standard that the Department of Labor (DOL) and federal courts have construed as protecting a reasonable but mistaken belief that an employer may have violated a particular law.  See Van Asdale v. Int’l Game Tech., 577 F.3d  989, 1001 (9th Cir. 2009) (“to encourage disclosure, Congress chose statutory language which ensures that an employee’s reasonable but mistaken belief that an employer engaged in conduct that constitutes a violation of one of the six enumerated categories is protected.”) (internal quotation, citation omitted);  Allen v. Admin. Review Bd., 514 F. 3d 468, 477 (5th Cir. 2008) (applying “reasonable belief” standard in a Sarbanes-Oxley whistleblower retaliation action); Kalkunte v. DVI Fin. Svcs., Inc., ARB Nos. 05-139 & 05-140, 2004-SOX-056 (ARB Feb. 27, 2009) (clarifying that a reasonable but mistaken belief is protected under SOX).  The reasonable belief standard consists of both a subjective and objective component, and objective reasonableness “is evaluated based on the knowledge available to a reasonable person in the same factual circumstances with the same training and experience as the aggrieved employee.”  Allen, 514 F.3d at 477.

The “duty speech” doctrine will not apply to FSMA retaliation claims, as the text specifically protects disclosures made “in the ordinary course of the employee’s duties.”

Some examples of protected conduct include the following:

• reporting that imported cheese is being stored at the wrong temperature and is therefore susceptible to spoiling or containing harmful bacteria;
• reporting that an additive harmful only to infants was added to infant formula;
• reporting that bread is being stored in a facility infested with flies and rodents;
• reporting that a peanut butter manufacturer did not recall peanut butter it knew might have been made using a batch of contaminated peanuts; and
• reporting that a chemical used to lubricate sorting machines has contaminated dietary supplements.

Broad Scope of Prohibited Retaliation

An employer is prohibited from discharging or “in any manner discriminat[ing] against any employee with respect to his or her compensation, terms, conditions, or other privileges of employment.”  The DOL’s Administrative Review Board (ARB) applies the Burlington Northern standard to analogous whistleblower protection statutes, and therefore Section 402 will prohibit not only tangible adverse actions, but also any action that may dissuade a reasonable employee from engaging in further protected activity.  See Melton v. Yellow Transp. Inc., ARB No. 06-052, 05-140, ALJ No. 2005-STA-002 (ARB Sept. 30, 2008) (holding that the Burlington Northern standard applies to whistleblower retaliation claims before the DOL).  Prohibited acts of retaliation will likely include termination, suspension, demotion, reduction in pay, demotion, failure to promote, failure to hire, diminution in job duties, and blacklisting.

Employee-Favorable Causation Standard and Burden of Proof

A complainant can prevail merely by showing by a preponderance of the evidence that her protected activity was a contributing factor in the unfavorable action.  A contributing factor is any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision.  See Klopfenstein v. PPC Flow Techs. Holdings, Inc., ARB No. 04-149 at 18, ALJ No. 2004-SOX-11 (ARB May 31, 2006) (internal citation omitted).  Once a complainant meets her burden by a preponderance of the evidence, the employer can avoid liability only if it proves by clear and convincing evidence that it would have taken the same action in the absence of the employee’s protected conduct.  Clear and convincing evidence is “[e]vidence indicating that the thing to be proved is highly probable or reasonably certain.”  See Peck v. Safe Air Int’l, Inc., ARB No. 02-028 at 9, ALJ No. 2001-AIR-3 (ARB Jan. 30, 2004).

Remedies

Remedies include injunctive relief, reinstatement, back pay with interest, “special damages,” attorney’s fees, litigation costs, and expert witness fees.  Where reinstatement is unavailable or impractical, front pay may be awarded.  “Special damages” has been construed under similar whistleblower protection statutes to include damages for pain, suffering, mental anguish and an injured career or reputation.  See, e.g., Kalkunte, ARB Nos. 05-139 & 05-140 at 15 (SOX case awarding complainant emotional distress damages); Hannah v. WCI Communities, 348 F. Supp. 2d 1332, 1334 (S.D. Fla. 2004) (“a successful Sarbanes-Oxley Act plaintiff cannot be made whole without being compensated for damages for reputational injury that diminished plaintiff’s future earning capacity”).  A complainant may also be entitled to damages for loss to his reputation as part of the “make whole” remedy provided by the statute.  See Hannah, 348 F. Supp. 2d at 1334.

Procedures Governing Section 402 Claims

A complainant must file her complaint with the Occupational Safety and Health Administration (OSHA) within 180 days after the date on which the retaliatory adverse action occurred.  OSHA will investigate the claim and can order preliminary relief, including reinstatement.  Either party can appeal OSHA’s determination by requesting a de novo hearing before a DOL Administrative Law Judge (ALJ), but objecting to an order of preliminary relief will not stay the order of reinstatement.  Discovery before an ALJ typically proceeds at a faster pace than discovery in state or federal court, and the hearings are less formal than federal court trials.  For example, ALJs are not required to apply the Federal Rules of Evidence.  Either party can appeal an ALJ’s decision to the ARB and can appeal an ARB decision to the circuit court of appeals in which the adverse action took place.

If the Secretary of Labor fails to issue a final decision within 210 days of the filing of a complaint, or within 90 days after receiving a written determination from OSHA, the complainant can remove her claim to federal court for de novo review and either party may request a trial by jury.  Section 402 does not preempt or diminish any other remedy for retaliation provided by Federal or State law, and therefore a Section 402 complainant could remove the claim to federal court and add additional claims, such as a common law wrongful discharge action, which would provide an opportunity to obtain punitive damages.

Law360 published an article on the whistleblower protections in the new food safety bill, which was written by R. Scott Oswald and Jason Zuckerman, principal attorneys at The Employment Law Group® law firm.

In an ADA and FMLA action, a former-Baker & McKenzie LLP associate succeeded in shielding his records of mental health treatment.  Judge Jeffrey Cole held that where a discrimination plaintiff seeks damages for “garden variety” emotional distress and has not put his mental state at issue, i.e., by seeking damages for “severe” emotional distress or claiming a mental disability, records of mental health treatment are shielded by the psychotherapist-patient privilege.  This decision will be helpful for whistleblowers when combating an aggressive defense counsel using a mental examination to harass or intimidate the whistleblower or to buttress the employer’s portrayal of the whistleblower as off balance.

The Department of Labor’s Administrative Review Board (ARB) vacated an Administrative Law Judge’s summary decision in Williams v. Dallas Independent School District where the Complainant, unbeknownst to the ALJ, responded to requests for admission but did not file that response with the ALJ.  Having assumed that the Complainant did not respond to the requests to admit on time, the ALJ mistakenly granted all of the Respondent’s requests for admission and dismissed the case.  The ARB properly reversed and remanded the ALJ’s decision.  For more information about The Employment Law Group® and its Whistleblower Law Practice, click here.

A California Court of Appeals upheld sanctions against Caremark Rx, LLC for failing to preserve electronic databases of their prescription drugs in a readily-accessible format even though Caremark knew for over two years that lawsuits based on that data were imminent.  The trial court found that:

1. The electronic data evidence was vital to the litigation;
2. Caremark had “acted in bad faith in all aspects of the production of their prescription data base;
3. Caremark had consistently failed to be candid with this court as to the cost and difficulty of retrieval of their prescription data base; and
4. That in light of the multiple disparate cost estimates, “given without foundation” by Caremark, the court “no longer [had] faith” in Caremark’s ability or willingness to state an accurate estimate for cost of retrieval.

The court granted plaintiff’s motion for sanctions including $43k in attorney’s fees and costs.  For more information about The Employment Law Group® law firm and its Whistleblower Law Practice, click here.

AARP announced in a press release that its attorneys will join the legal team representing whistleblower Kevin Colquitt who reported on the off-label marketing of metal biliary stents wrongfully placed in older patients to treat vascular disease.  According to AARP, “the risky devices are not approved by the Food and Drug Administration (FDA) as safe and effective to treat vascular disease, which involves narrowing of blood vessels in the legs, arms, or kidneys.”  The case is United States ex rel. Kevin N. Colquitt v. Abbott Laboratories et al., Civ. Action No. 3-06-CV-1769 (N.D. Tex.) (Judge Barbara J. Lynn).  For more information about The Employment Law Group® and its Whistleblower Law Practice, click here.

According to the Washington Post, the Office of Special Counsel is investigating the claim of Maria Aran, a whistleblower at the U.S. Citizenship and Immigration Services.   Aran complained that one of the Florida offices mishandled hundreds of naturalization and citizenship certificates.  Instead of emailing her complaint to the Office of Security and Integrity, she mistakenly sent her complaint to over 300 agents nationwide.  Following the disclosure, her supervisor attempted to reassign Aran, but Merit Systems Protection Board stepped in stating, “there are reasonable grounds to believe that the agency decided to reassign Ms. Aran because of her protected disclosures.”

For more information about The Employment Law Group® and its Whistleblower Law Practice, click here.

The U.S. Office of Special Counsel (OSC) issued a press release and a letter addressed to President Barack Obama substantiating Mr. Russ Daul’s allegations that the Department of Defense (DOD), Defense Technical Information Center (DTIC) misappropriated funds.  According to the OSC, DTIC violated the Economy Act, 31 U.S.C. § 1535 by improperly collected fees in excess of its actual costs and did not return the surpluses to its DOD customers.  Mr. Daul is the former Director of the Resource Management Directorate at DTIC and is represented by R. Scott Oswald at The Employment Law Group®.  For more information about The Employment Law Group® and its Federal Employee Representation Practice, click here.

New York recently amended its False Claims Act (FCA) by expanding the Act’s coverage and strengthening the Act’s whistleblower protections.  The New York FCA now applies to violations of New York tax law when the violator’s income from sales exceeds one million for the year in which the violation took place.  Furthermore, whistleblower protections are now afforded to contractors and agents in addition to employees, and whistleblowers are now protected when they are “harmed or penalized by an employer, or prospective employer” because of “lawful acts done by the employee, contractor, agent, or associated others.”   The amendments explicitly confirm that the keeping of documents evidencing fraud or transmitting those documents to the government or the whistleblower’s attorney is a “lawful act” even when the activity violates a contract or a duty of the employee so long as that activity furthers efforts to stop one or more FCA violations. 

For information about The Employment Law Group® and its False Claims Act Whistleblower Practice, click here.

In Kahn v. Dep’t of Justice, the Federal Circuit, relying on the Drake decision, held that a WPA plaintiff need not demonstrate that he blew the whistle on an actual violation of law:

We reiterate, however, that “[t]he test is not whether [the petitioner] was able to prove [a violation], but rather could a disinterested observer with knowledge of the essential facts known to and readily ascertainable by [the petitioner] reasonably conclude . . . that a violation did occur.” Drake, 543 F.3d at 1382 (alterations added).

For more information about The Employment Law Group® and its Whistleblower Law Practice, click here.

In Williams v. Basic Contracting Servs., Inc., the U.S. District Court for the Southern District of West Virginia affirmed the broad scope of protected conduct under False Claims Act (FCA) by holding that a whistleblower who investigates alleged fraud committed by her employer is protected from retaliation under the FCA even if the whistleblower does not pursue a qui tam action against her employer.  The Plaintiff, Williams, alleges that her employer suspended her because she investigated her employer’s alleged practice of overbilling the government for its cleaning services. 

For information about The Employment Law Group® and its False Claims Act Whistleblower Practice, click here.

On September 1, 2010, Administrative Law Judge Robert Rae issued an order holding that a joint employer’s “‘ability to exercise control’ by hiring, transferring, promoting, reprimanding or discharging [a whistleblower], or the ‘ability to influence’ another employer to take such actions is sufficient to establish joint employer liability under the [Surface Transportation Assistance Act].”  The order was issued in the consolidated cases of Myers v. AMS/Breckenridge/Equity Grp. Leasing 1 and Baxter v. AMS/Breckenridge/Equity Grp. Leasing 1.   We originally blogged about ALJ Rae’s denial of the Respondent’s motion to dismiss here.

The Respondent contracted with New Rising Phoenix, Inc., a trucking company, to provide payroll, benefits, and human resource services.  The contract contained language required by Florida law which provided the Respondent with the authority to hire, terminate, and reassign leased employees, and the right to control the safety, risk, and hazards which affect leased employees.  The contract also specified that the responsibility for payment of wages and management of workers’ compensation and unemployment claims lay with the Respondent. 

The respondent argued that while the contract contained such language, it did so only because the language was mandated by Florida law.  In practice, the respondent did not actually exercise any authority over the complainants or any of their co-workers.  ALJ Rae found this argument unconvincing, holding that “Respondent affirmatively contracted for the authority to exercise control over employment . . . any ambiguity created thereby should be construed against Respondent, the party that drafted the contract.” 

Complainants Baxter and Myers were each awarded $25,000 for emotional distress as well as $20,363.20 and $11,035.20 respectively for back pay plus attorneys’ fees and costs. 

The Surface Transportation Assistance Act (STAA) protects bus drivers, truckers, and other employees who blow the whistle about the unsafe operation of commercial motor vehicles.  To learn more about The Employment Law Group® law firm’s Commercial Motor Carrier Whistleblower Practice, click here.