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New Whistleblower Protection Laws and Cross-Cutting Issues in Whistleblower Retaliation Litigation Jason M. Zuckerman The Employment Law Group ® Law Firm.

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Presentation on theme: "New Whistleblower Protection Laws and Cross-Cutting Issues in Whistleblower Retaliation Litigation Jason M. Zuckerman The Employment Law Group ® Law Firm."— Presentation transcript:

1 New Whistleblower Protection Laws and Cross-Cutting Issues in Whistleblower Retaliation Litigation Jason M. Zuckerman The Employment Law Group ® Law Firm Tel: 202.261.2810 Fax: 202.261.2835 jzuckerman@employmentlawgroup.netwww.employmentlawgroup.net

2 New Whistleblower Protection Provisions 9/11 Act for Transportation Employees 9/11 Act for Transportation Employees CPSC Reform Act for Manufacturing, Private Labeler, Retail and Distribution Employees CPSC Reform Act for Manufacturing, Private Labeler, Retail and Distribution Employees Whistleblower Protections for DoD Contractor Employees Whistleblower Protections for DoD Contractor Employees DoD Directive 1401.3 DoD Directive 1401.3

3 9/11 Act Transportation Whistleblower Protections Public Transportation Employees Public Transportation Employees –§ 1413 establishes National Transit Systems Security Act of 2007 (NTSSA) to protect public transportation employees Railroad Employees Railroad Employees –§ 1521 amends the Federal Rail Safety Act (FRSA), 49 U.S.C. § 20109 Commercial Motor Carrier Employees Commercial Motor Carrier Employees –§ 1536 amends the Surface Transportation Assistance Act (STAA), 49 U.S.C. § 31105

4 The Implementing Recommendations of the 9/11 Commission Act of 2007 Enacted August 3, 2007 Enacted August 3, 2007 Public Law No. 110-053 Public Law No. 110-053 New Cause of Action: New Cause of Action: –Whistleblower coverage for public transportation employees (§ 1413) Significant Enhancement to Existing WB Protection Laws: Significant Enhancement to Existing WB Protection Laws: –Whistleblower coverage for railroad employees (§ 1521) and commercial motor carrier employees (§ 1536)

5 9/11 Act Coverage Public Transportation Employees –Section 1413 of the Act protects public transportation employees –Applies to a public transportation agency, a contractor or subcontractor of such agency, or an officer or employee of such agency –Modeled on employee protection provisions of Federal Rail Safety Act (49 U.S.C. § 20109) and Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century (AIR21) (49 U.S.C. § 42121)

6 9/11 Act Coverage Railroad Employees –Section 1521 amends the Federal Rail Safety Act (FRSA), 49 U.S.C. § 20109 –Applies to a railroad carrier engaged in interstate or foreign commerce, a contractor or subcontractor of such a railroad carrier, or an officer or employee of such a railroad carrier

7 9/11 Act Coverage Commercial Motor Vehicle Employees Section 1536 amends the Surface Transportation Assistance Act (STAA), 49 U.S.C. § 31105 Section 1536 amends the Surface Transportation Assistance Act (STAA), 49 U.S.C. § 31105 Amendments conform the STAA to the procedure and burden of proof set forth in the NTSSA and the amended FRSA (which are essentially derived from AIR21) Amendments conform the STAA to the procedure and burden of proof set forth in the NTSSA and the amended FRSA (which are essentially derived from AIR21) STAA protects drivers of commercial motor vehicles, mechanics, freight handlers, or any other person employed by a commercial motor vehicle carrier who affects safety and security during his or her employment. STAA protects drivers of commercial motor vehicles, mechanics, freight handlers, or any other person employed by a commercial motor vehicle carrier who affects safety and security during his or her employment.

8 Elements of a Transportation Retaliation Claim Protected Conduct Protected Conduct Knowledge of Protected Conduct Knowledge of Protected Conduct Adverse Action Adverse Action Protected activity contributing factor in decision to take adverse action Protected activity contributing factor in decision to take adverse action

9 Public Transportation Employees: Protected Conduct NTSSA covers employees who: NTSSA covers employees who: –Provide information or assist an investigation regarding conduct which the complainant reasonably believes constitutes a violation of Federal law relating to public transportation safety or security, or fraud, waste or abuse of federal grants or other funds intended to be used for public transportation safety or security –Refuse to violate or assist in the violation of a federal law –File employee protection complaints under NTSSA –Cooperate with a safety or security investigation conducted by the Department of Transportation (DOT), Department of Homeland Security (DHS) or National Transportation Safety Board (NTSB)

10 Public Transportation Employees: Protected Conduct NTSSA also covers employees who: NTSSA also covers employees who: –Furnish information to the DOT, DHS, NTSB or any federal, state or local enforcement agency regarding an accident resulting in death or injury to a person in connection with public transportation –Refuse to work under certain conditions –Report hazardous safety or security conditions –Refuse to authorize the use of any safety or security related equipment, track or structures

11 Railroad Employees: Protected Conduct The amended FRSA protects employees who: The amended FRSA protects employees who: –Notify or attempt to notify the railroad carrier or DOT of a work related illness or personal injury of an employee –Furnish information to the DOT, DHS, NTSB or any federal, state or local enforcement agency regarding an accident resulting in death or injury to a person in connection with railroad transportation –Refuse to work under certain conditions –Report hazardous safety or security conditions –Refuse to authorize the use of any safety or security related equipment, track or structures Complainants actions must be lawful and in good faith. Complainants actions must be lawful and in good faith.

12 Railroad Employees: Protected Conduct FRSA protects: FRSA protects: –Providing information or assisting an investigation regarding conduct which the complainant reasonably believes constitutes a violation of Federal law relating to railroad safety or security, or fraud, waste or abuse of federal grants or other funds intended to be used for railroad safety or security –Refusing to violate or assist in the violation of a federal law –Filing a complaint under FRSA Complainants actions must be lawful and in good faith. Complainants actions must be lawful and in good faith.

13 Commercial Motor Vehicle Employees: Protected Conduct STAA prohibits an employer from retaliating against an employee because the employee: STAA prohibits an employer from retaliating against an employee because the employee: –filed a complaint or began a proceeding related to a violation of a commercial motor vehicle safety or security regulation, standard, or order –testified or will testify in such a proceeding –refused to operate a vehicle because the operation violates a regulation, standard, or order of the United States related to commercial motor vehicle safety, health or security –cooperated or is about to cooperate, with a safety or security investigation by the DOT, DHS or NTSB about an accident or incident that resulted in injury or death to an individual or damage to property occurring in connection with commercial motor vehicle transportation

14 Protected Conduct Reasonable Belief To prove protected conduct, complainant need not report an actual violation of a transportation safety or security rule. To prove protected conduct, complainant need not report an actual violation of a transportation safety or security rule. Reasonable belief standard applies Reasonable belief standard applies Objective component assesses whether a person with the complainants knowledge and experience would have believed the reported conduct violated the relevant statute Objective component assesses whether a person with the complainants knowledge and experience would have believed the reported conduct violated the relevant statute

15 Adverse Action Prohibits a broad range of adverse actions: Prohibits a broad range of adverse actions: –Termination –Blacklisting –Denying benefits –Failure to hire or rehire Burlington applies Burlington applies

16 Knowledge of Protected Conduct ALJs will impute knowledge of protected conduct to the decision- maker where a person with knowledge of the protected conduct influenced the decision ALJs will impute knowledge of protected conduct to the decision- maker where a person with knowledge of the protected conduct influenced the decision

17 Causation Burden of proof favorable to employees Burden of proof favorable to employees Contributing factor is any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision. Contributing factor is any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.

18 Procedure Under the three transportation whistleblower protection laws, a retaliation claim must be filed with the Department of Labor (DOL) within 180 days of the employee first learning of the adverse action Under the three transportation whistleblower protection laws, a retaliation claim must be filed with the Department of Labor (DOL) within 180 days of the employee first learning of the adverse action SOL does not run from the date on which the adverse action is implemented SOL does not run from the date on which the adverse action is implemented OSHA conducts investigation and can order preliminary reinstatement OSHA conducts investigation and can order preliminary reinstatement Either party can request a de novo hearing before an ALJ Either party can request a de novo hearing before an ALJ

19 Procedure Formal rules of evidence do not apply Formal rules of evidence do not apply Either party can request ARB review of ALJ decision Either party can request ARB review of ALJ decision If DOL has not issued a final decision within 210 days after the filing of the complaint, the complainant can file suit in federal district court. If DOL has not issued a final decision within 210 days after the filing of the complaint, the complainant can file suit in federal district court. Either party can request a jury trial Either party can request a jury trial

20 Remedies Reinstatement Reinstatement Back pay Back pay Attorney Fees Attorney Fees Punitive Damages capped at $250,000 Punitive Damages capped at $250,000

21 CPSC Reform Act of 2008 (H.R. 4040) Protects employees in the manufacturing, private label, retail and distribution industries (§ 219) Protects employees in the manufacturing, private label, retail and distribution industries (§ 219) Enacted August 14, 2008 Enacted August 14, 2008 Comprehensive CPSC reform prompted by concerns about lead-based toys and other hazardous consumer products Comprehensive CPSC reform prompted by concerns about lead-based toys and other hazardous consumer products

22 Coverage Section 219 of the CPSC Reform Act protects employees in the manufacturing, private labeling, distribution and retail industries who disclose information to an employer, a regulatory agency, or a State Attorney General about a reasonably perceived violation of the Consumer Product Safety Commission Act (CPSCA) or any act enforced by the Consumer Product Safety Commission Section 219 of the CPSC Reform Act protects employees in the manufacturing, private labeling, distribution and retail industries who disclose information to an employer, a regulatory agency, or a State Attorney General about a reasonably perceived violation of the Consumer Product Safety Commission Act (CPSCA) or any act enforced by the Consumer Product Safety Commission Also protects an employees good faith refusal to violate the CPSCA Also protects an employees good faith refusal to violate the CPSCA

23 Elements of CPSC Retaliation Claim Protected Conduct Protected Conduct Knowledge of Protected Conduct Knowledge of Protected Conduct Adverse Action Adverse Action Causation Causation

24 Protected Conduct An employee engages in protected activity by: An employee engages in protected activity by: –Providing information relating to a violation of the CPSC Reform Act or any Act enforced by the Commission, to the employer, the Federal Government, or the attorney general of a state –Testifying or assisting in a proceeding concerning a violation of the CPSC Reform Act or any law enforced by the Commission –Refusing to participate in an activity that violates the CPSCA

25 Protected Conduct Specific examples of protected conduct include: Specific examples of protected conduct include: –Reporting violations of the standard for the flammability of childrens sleepwear –Reporting violations of safety specifications for bicycles –Reporting choking incidents involving marbles, small balls, latex balloons and other small parts

26 Adverse Action Prohibits a broad range of adverse actions Prohibits a broad range of adverse actions –discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment Burlington standard applies Burlington standard applies

27 Causation Burden of proof favorable to employees Burden of proof favorable to employees Contributing factor is any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision. Contributing factor is any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.

28 Remedies Reinstatement Reinstatement Back Pay Back Pay Attorneys Fees Attorneys Fees Punitive damages not authorized Punitive damages not authorized

29 Procedure 180-day statute of limitations 180-day statute of limitations Applies AIR-21/SOX procedures Applies AIR-21/SOX procedures OSHA investigates OSHA investigates ALJ hearing ALJ hearing Appeal to ARB Appeal to ARB If DOL does not issue a final decision within 210 days of the employee filing the complaint, employee can remove the claim to federal court and is entitled to a trial by jury. If DOL does not issue a final decision within 210 days of the employee filing the complaint, employee can remove the claim to federal court and is entitled to a trial by jury.

30 Whistleblower Protections for DOD Contractor Employees Section 846 of National Defense Authorization Act for Fiscal Year 2008 (H.R. 4986) amends 10 U.S.C. § 2409 Section 846 of National Defense Authorization Act for Fiscal Year 2008 (H.R. 4986) amends 10 U.S.C. § 2409 Protects disclosures to Congress, an Inspector General, the Government Accountability Office, or a Department of Defense contractor oversight employee concerning information that the employee reasonably believes evidences Protects disclosures to Congress, an Inspector General, the Government Accountability Office, or a Department of Defense contractor oversight employee concerning information that the employee reasonably believes evidences –gross mismanagement of DOD contract or grant –gross waste of DOD funds –substantial and specific danger to public health or safety, or –violation of law related to a Department of Defense contract

31 Whistleblower Protections for DOD Contractor Employees Complaint filed with the IG Complaint filed with the IG IG can order reinstatement, back pay, compensatory damages, and attorney fees and costs. IG can order reinstatement, back pay, compensatory damages, and attorney fees and costs. 210 days after filing, plaintiff can remove complaint to federal court and can elect a jury trial 210 days after filing, plaintiff can remove complaint to federal court and can elect a jury trial Plaintiff can also pursue FCA retaliation claim Plaintiff can also pursue FCA retaliation claim

32 DoD Directive 1401.3: Further Protection for Employees of DoD Contractors Provides Reprisal Protection for Nonappropriated Fund Instrumentality (NAFI) Employees/Applicants Provides Reprisal Protection for Nonappropriated Fund Instrumentality (NAFI) Employees/Applicants Updates policy and responsibilities for NAFI whistleblower protection Updates policy and responsibilities for NAFI whistleblower protection Encourages NAFI employees to engage in whistleblowing activity without fear of reprisal Encourages NAFI employees to engage in whistleblowing activity without fear of reprisal Clarifies corrective and disciplinary actions regarding allegations of reprisal against a NAFI employee who engages in whistleblowing activity Clarifies corrective and disciplinary actions regarding allegations of reprisal against a NAFI employee who engages in whistleblowing activity

33 Coverage Office of the Secretary of Defense Office of the Secretary of Defense Military Departments Military Departments Office of the Chairman Office of the Chairman Combatant Commands Combatant Commands Officer of Inspector General of DoD Officer of Inspector General of DoD Defense Agencies Defense Agencies Any other organization of the DoD Any other organization of the DoD

34 Other Remedies for Employees of DoD Contractors Employees of DoD Contractors can pursue a claim for retaliation under the following statutes: Employees of DoD Contractors can pursue a claim for retaliation under the following statutes: –IG Statute –False Claims Act –Common Law Wrongful Discharge

35 Cross-Cutting Issues in Whistleblower Litigation Cross-Cutting Issues in Whistleblower Protection Cross-Cutting Issues in Whistleblower Protection 1.Objective Reasonableness of Plaintiffs Disclosure 2.Specificity of Disclosure 3.Duty Speech 4.Choice of Forum 5.Preemption 6.Counterclaims and After-Acquired Evidence

36 Objective Reasonableness –DOL ARB and two Circuit Courts have imposed a high standard of objective reasonableness Allen v. Administrative Review Board, No. 06-60849 (5 th Cir. Jan. 22, 2008) Allen v. Administrative Review Board, No. 06-60849 (5 th Cir. Jan. 22, 2008) Livingston v. Wyeth, Inc., No. 06-1939 (4th Cir. Mar. 24, 2008) Livingston v. Wyeth, Inc., No. 06-1939 (4th Cir. Mar. 24, 2008) Welch v. Cardinal Bankshares Corp., ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007) Welch v. Cardinal Bankshares Corp., ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007) Objective reasonableness may be decided as a matter of law Objective reasonableness may be decided as a matter of law Underscores importance of expert witness testimony Underscores importance of expert witness testimony

37 Specificity of Disclosure DOL ARB has amended whistleblower protection laws to require that complainants disclosure implicate the substantive law definitively and specifically. DOL ARB has amended whistleblower protection laws to require that complainants disclosure implicate the substantive law definitively and specifically. Under ERA, disclosure must implicate nuclear safety definitively and specifically Under ERA, disclosure must implicate nuclear safety definitively and specifically Platone v. FLYi, Inc., ARB 04-154, 2003-SOX-27 (ARB Sept. 29, 2006) Platone v. FLYi, Inc., ARB 04-154, 2003-SOX-27 (ARB Sept. 29, 2006) –To constitute protected conduct, a complainant's protected communications "must relate 'definitively and specifically' to the subject matter of the particular statute under which protection is afforded (mail fraud, wire, radio and TV fraud, bank fraud, securities fraud, or any rule or regulation of the SEC) FCA retaliation cases requiring very specific disclosure about presentment of false claim FCA retaliation cases requiring very specific disclosure about presentment of false claim

38 Duty Speech –Defense bar has sought to apply Garcetti v. Ceballos, 126 S. Ct. 1951 (2006) duty speech doctrine to staturoy whistleblower protection claims –SOX d oes not exclude duty speech claims. Deremer v. Gulf Coast, 2006-SOX-2 (ALJ June 29, 2007) Deremer v. Gulf Coast, 2006-SOX-2 (ALJ June 29, 2007) –The Act contains no language excluding ones job duties from protected activity... ones job duties may broadly encompass reporting of illegal conduct, for which retaliation results. Therefore, restricting protected activity to place ones job duties beyond the reach of the Act would be contrary to Congressional intent. Leznik v. Nektar Therapeutics, Inc., 2006-SOX-93 (ALJ Nov. 16, 2007) Leznik v. Nektar Therapeutics, Inc., 2006-SOX-93 (ALJ Nov. 16, 2007)

39 Duty Speech –ERA Mackowiak v. University Nuclear Systems, Inc., 735 F.2d 1159 (9th Cir. 1984) – QC control inspectors vital to the regulatory scheme for nuclear plants and therefore cannot be discharged when they do their jobs too well. Mackowiak v. University Nuclear Systems, Inc., 735 F.2d 1159 (9th Cir. 1984) – QC control inspectors vital to the regulatory scheme for nuclear plants and therefore cannot be discharged when they do their jobs too well. –False Claims Act Employee tasked with the internal investigation of fraud against the government must clearly put the employer on notice that a qui tam suit is a reasonable possibility. Eberhardt v. Integrated Design & Constr., Inc., 167 F.3d 861 (4th Cir. 1999) Employee tasked with the internal investigation of fraud against the government must clearly put the employer on notice that a qui tam suit is a reasonable possibility. Eberhardt v. Integrated Design & Constr., Inc., 167 F.3d 861 (4th Cir. 1999) –Plead how complainants disclosure went beyond job duties

40 Choice of Forum Nineteen states have adopted statutes protecting whistleblowers in the private sector. Nineteen states have adopted statutes protecting whistleblowers in the private sector. Many state whistleblower statutes limit protection to external disclosures Many state whistleblower statutes limit protection to external disclosures 43 states recognize public-policy exception to employment at will 43 states recognize public-policy exception to employment at will Punitive damages available in state common law wrongful discharge actions Punitive damages available in state common law wrongful discharge actions

41 Choice of Forum DOL DOL –formal rules of evidence do not apply –broad scope of discovery –Protective orders disfavored –Counterclaims cannot be brought in DOL Federal court Federal court –whistleblower retaliation claim can be combined with tort claims –Jury trial –Broader discovery –Subpoena power

42 Preemption DOL Whistleblower Protection Statutes do not preempt state actions DOL Whistleblower Protection Statutes do not preempt state actions –English v. General Electric Co., 496 U.S. 72 (1990). –18 U.S.C. § 1514A(d) (Nothing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law....) –Common law wrongful discharge action generally unavailable where there is a remedy under federal law.

43 Counterclaims and After- Acquired Evidence Counterclaims more common Counterclaims more common –Misappropriation or disclosure of trade secret information –Breach of fiduciary duty –Breach of contract/confidentiality policy After Acquired Evidence After Acquired Evidence –McKennon v Nashville Banner Publishing Co, 513 U.S. 352 (1995)

44 Future Developments Amending the Whistleblower Protection Act of 1989 Amending the Whistleblower Protection Act of 1989 –H.R. 985 and S. 274 Private Sector Whistleblower Protection Streamlining Act of 2007 (H.R. 4047) Private Sector Whistleblower Protection Streamlining Act of 2007 (H.R. 4047) False Claims Act Correction Act False Claims Act Correction Act –S. 2041 and H.R. 4854


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