Avoiding Retaliation Claims from Whistleblowers · Whistleblower’s Advantages Employees bringing claims of retaliation have significant advantages in litigation: •Agency Investigative

© Husch Blackwell LLP

Avoiding Retaliation Claims from WhistleblowersChristopher L. Ottele

WHAT IS A WHISTLEBLOWER?

© 2014 Husch Blackwell LLP. All Rights Reserved.

What is a Whistleblower?

Whistleblowers disclose information reasonably believed to evidence violations of:

•Securities Laws•Health and Safety Laws

•Contractor Fraud•Labor and Employment Laws


What Laws Protect Whistleblowers

•Dodd‐Frank Act• Sarbanes Oxley•Dodd‐Frank Act• Sarbanes OxleySecurities

•Affordable Care Act•OSHA•MSHA•Environmental Laws

•Affordable Care Act•OSHA•MSHA•Environmental Laws

Health & Safety

•False Claims Act (qui tam)• The National Defense Authorization Act of 2013 (NDAA)• False Claims Act (qui tam)• The National Defense Authorization Act of 2013 (NDAA)

Federal Contractor


What Laws Protect Whistleblowers

• Title VII• ERISA• FMLA• NLRA• FLSA• ADA

• Title VII• ERISA• FMLA• NLRA• FLSA• ADA

Labor and Employment


WHO ENFORCES THE WHISTLEBLOWER RETALIATION

LAWS


Who has had experience with an employee claiming to report violations of

any of these laws?

Yes

No


Federal Agencies

Equal Employment Opportunity Commission

U.S. Department of Justice


Federal AgenciesSecurities Exchange

CommissionOccupational Safety and

Health Administration


Securities and Exchange Commission


Who is Most Likely to Bring Enforcement Actions / Suits?

(a) The Securities and Exchange Commission

(b) Commodity Futures Trading Commission

(c) The Equal Employment Opportunity Commission

(d) U.S. Department of Justice

(e) Occupational Safety and Health Administration

(f) Private Attorneys’ General


Better Call Saul


Plaintiff’s Attorneys


Employees (and their Attorneys) Protecting Themselves

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Total Charges Filed With EEOC Alleging Retaliation

Retaliation ‐ All Statutes

Retaliation ‐ Title VII only


Whistleblower’s Advantages

Employees bringing claims of retaliation have significant advantages in litigation:• Agency Investigative Resources• Economic Damages (back pay and front pay)• Reinstatement• Compensatory Damages (emotional distress)• Criminal Penalties (SOX / Dodd‐Frank / False Claims Act)• Attorney’s Fees (often unilateral)• Punitive, Liquidated or Exemplary Damages• Skilled Contingent Fee Attorneys• Statute of Limitations on Underlying Claim can be as Much as 10 Years


Whistleblower’s Bounty

What is the maximum amount that a whistleblower can recover under the Dodd‐Frank Act when there has not been an internal report?

(a) $500,000

(b) 10% of the Total Penalty Recovered

(c) Nothing

(d) 30% of the Total Penalty Recovered


Powerful Incentives

Whistleblower Awards (Bounties)

• False Claims Act (15‐25% for successful qui tam claim)• Dodd‐Frank Act (“original information” about a securities law violation that leads to a successful enforcement action and penalty of $1 million or more, 10‐30%)

• No internal reporting required


We are Just Getting Started


Colorado

Public Policy Discharge:

(1) The employer directed the employee to perform an illegal act, OR prohibited the employee from performing a public duty or exercising an important job‐related right or privilege;

(2) The action directed by the employer would violate a specific statute related to public health, safety, or welfare, or would undermine a clearly expressed policy relating to the employee's basic responsibility as a citizen or the employee's right or privilege as a worker;

(3) The employee was terminated as the result of refusing to perform the act directed by the employer; and

(4) The employer was aware that the employee's refusal to perform the act was based on the employee's reasonable belief that the directed act was unlawful.


Sarbanes-Oxley Primer

Publicly traded employers Prohibits retaliation for complaints of fraud Enforcement:

OSHA investigation, hearing, appeal Court in 180 days

Department of Labor has recently become very employee friendly Expansive ARB decisions



Dodd-Frank amendments to SOX: Jury trial No mandatory pre-dispute arbitration Longer limitations period Wholly-owned subsidiaries are covered No requirement to exhaust administrative remedies Why rely on SOX if you can use Dodd-Frank?



Lawson v. FMR Securities (U.S. Sup. Ct.): Does SOX protect employees of a privately-held contractor

or subcontractor of a publicly-traded corporation?


When Employers Face a Retaliation Claim, What Should be their Greatest

Concern?

(a) Legal Fees

(b) The Power and Might of the Federal Government

(c) Plaintiff’s Attorneys

(d) Jurors’ Preconceptions

(e) Laws Favoring Whistleblowers


Popular Culture


Media

Julian Assange (WikiLeaks)

Julian Assange (WikiLeaks)

Private Manning (U.S. Army)

Private Manning (U.S. Army)

Edward Snowden (NSA)

Edward Snowden (NSA)



YOU HAVE A WHISTLEBLOWER, NOW WHAT?


Handling Whistleblowers

You have scheduled a meeting with an underperforming employee to discuss a last chance agreement. Just before the meeting, the employee complains of a supervisor’s harassment of a subordinate:

(a) Protect the employee from any disciplinary or adverse action and investigate

(b) Investigate the complaint with promises of fairness, communication and neutrality

(c) Proceed with the last chance agreement and communicate the need for cooperation with the investigation of the supervisor

(d) Cancel the meeting, discuss with outside counsel, and following an investigation of the complaint, determine how to proceed

(e) Other?


Do Not Ask To Whom the Whistle BlowsAny internal complaint can become the source for a whistleblower complaint• Sarbanes Oxley compliant hotlines or tip lines• Conversations with Supervisors• “Confidential” Communications with Human Resources

• E‐mail• Watercooler• Lawyers

Any internal complaint can become the source for a whistleblower complaint• Sarbanes Oxley compliant hotlines or tip lines• Conversations with Supervisors• “Confidential” Communications with Human Resources

• E‐mail• Watercooler• Lawyers


Managing the Whistleblower

Care and Feeding of

Complainants

Serial Complainers Discipline

Performance RIFManner of opposition activity

False Complaint


Documents

Avoiding Retaliation Claims from Whistleblowers · Whistleblower’s Advantages Employees bringing claims of retaliation have significant advantages in litigation: •Agency Investigative