Chicago - March 29-30, 2012

2012 PLUS Professional Risk Symposium

Blowing the Whistle on Retaliation

BLOWING THE WHISTLE ON RETALIATION

MODERATOR: Joan M. Gilbride, Esq., Partner, Kaufman Borgeest & Ryan

PANELISTS: Adeola Adele, Esq., Senior Vice President, Marsh Inc. Cara Lovering, CPCU, AFSB, Vice President, Portfolio Management, Travelers Eric Ross, Claims Manager, Beazley Group plc

Whis-tle-blow-er. Noun. a person who informs on another or makes public disclosure of corruption or wrongdoing.

Generally Speaking:

Protected ActivityAdverse ActionCausal Connection

AFTER THE WHISTLETypes of Retaliation alleged by Employees who report Misconduct

62% Excluded from decision and work activity60% Given the cold shoulder 55% Verbally abused by managers 48% Almost lost job43% Denied promotion or raise 42% Verbally abused by colleagues27% Relocated or Reassigned20% Other forms of Retaliation18% Demoted4% Physical harm to person or property

Source: 2009 Business Ethics Survey report, Ethics Resource Center

STATUTES

SARBANES-OXLEY ACT OF 2002 (“SOX”)

• What activity is protected?

• Who is protected?

• What is the SOX process?

SOX it to Me - Damages under Sarbanes-Oxley

• Reinstatement• Back Pay• Attorneys’ fees and costs• Special Damages including non-economic damages such

as emotional distress damages

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

•What activity is protected?•Who is protected?•What is the Dodd-Frank process?

•Bounty System •Direct Access to Federal Court•Longer reporting periods

RETALIATION TRENDS IN THE COURTS

Blowing the Whistle on RetaliationBurlington Northern Santa Fe Railway v. White, 548 U.S. 53 (2006)

HOLDING: The Court interpreted the anti-retaliation provision broadly, holding that Title VII retaliation claims are not limited to employment-related or workplace action, and further that an adverse action is defined as “conduct that dissuades a reasonable employee from making or supporting a charge of discrimination.”

Gomez-Perez v. Potter, 553 U.S. 474 (2008)

HOLDING: Relying on interpretations of other anti-discrimination statutes with similar language that have been found to permit retaliation claims, the Court held that the ADEA language prohibiting “discrimination based on age” includes claims for retaliation even though it is not explicitly provided for in the statute.

Blowing the Whistle on RetaliationCBOCS West, Inc. v. Humphries, 553 U.S. 442 (2008)HOLDING: The Court held that Section 1981, like Section 1982, can encompass a retaliation claim based on race discrimination. Moreover, Section 1981 retaliations claims can be brought by an individual who suffers retaliation trying to help another.

Kasten v. Saint-Gobain Performance Plastics Corp., 131 S.Ct. 1325 (2011)HOLDING: In rejecting the argument that an employee must provide written complaint, the Court held that for purposes of the anti-retaliation provision of the FLSA, the term “filed any complaint” includes both oral and written complaints.

Thompson v. North American Stainless, 131 S.Ct. 863(2011)HOLDING: The Court held that because of the expansive language of Title VII, the anti-retaliation provisions “must be construed to cover a broad range of employer conduct,” and as such, encompasses claims asserted by relatives or close associates of whistleblower.

The Jury is IN: Recent Jury Verdicts in Retaliation Cases

• $4,000,000 (C.D. Cal.)(Nov. 2010): Police officer terminated in retaliation for whistle blowing

• $3,1000,000 (W.D. Penn)(Nov. 2009): Female employee terminated after complaining about gender discrimination

• $1,555,000(M.D. Tenn)(Jan. 2010): Plaintiff terminated after participating in Sexual harassment investigation

• $1,100,000 (W.D. Wis.)(May 2011): College instructor’s contract not renewed in retaliation for discrimination claims

• $1,026,386 (C.D. Il.)(Aug. 2010): Public library operations manager alleging Title VII retaliation.

Coverage and Underwriting

Blowing the Whistle on RetaliationEmployment Practices Liability Coverage • Insuring Agreement • Key definitions

– Wrongful Act/Wrongful Employment Practice – Loss– Defense Expenses

• Exclusions and carve backs• Other Considerations

– Duty to defend or Reimbursement – Extended reporting period– Other applicable coverage/policies?

Blowing the Whistle on RetaliationExposure Considerations During Underwriting:• Type of Insured • Management • Retaliation Policy • Reporting Procedures• Education and Training• Documentation • Turnover and termination • Use of Employment Counsel

QUESTIONS?