Outten & Golden: Empowering Employees in the Workplace

Archive for the ‘whistleblower’ Category

The Legal Implications of Online Whistleblowing

Wednesday, July 10th, 2013

davidyamadaIn Monday’s news, the Golden Corral discount buffet chain got some unwanted national publicity when the YouTube video above, showing how raw meat and other foodstuffs to be served to customers was stored outside near a dumpster at one of its Florida restaurants, went viral. The video was taken supposedly during a health inspection(!) and posted by one of its own chefs. (For details about this incident and similar instances involving the retail food industry, see Olivia Waxman’s article for Timehere.)

Online whistleblowing

The posting of the video to YouTube was a classic example of online whistleblowing.

Websites, blogs, and social media in general have given rise to workers sharing stories of illegal and unethical behavior online, sometimes in lieu of pursuing internal reporting and legal complaint options that they believe will be ineffective. With the ready availability of public forums such as YouTube and Facebook and work-specific sites such eBossWatch and Glassdoor, workers can take their concerns directly to a broader audience.

Some forms of online whistleblowing involve self-identification; others are anonymous. Some mention specific employers and bosses; others do not.

Legal implications

Such online expression should be undertaken with caution, because questions of whether or not it is protected under the law are far from settled.

The Golden Corral chef who posted the video apparently has not lost his job. If he’s fired, it’s possible he’ll have a legal claim under some food safety law, or perhaps a state-based claim for wrongful termination on grounds that his termination violated public policy.

Nevertheless, we need to start with the fact that most U.S. workers are hired at will, which means that they can be fired for any reason or no reason at all. Finding an exception to this broad rule would be the main challenge facing any lawyer representing  a client who was fired for online whistleblowing.

Don’t count on claiming First Amendment protections. Private sector workers are not covered by the First Amendment’s free-speech protections, with one exception (Connecticut); public sector workers are covered only in limited instances when the expression relates to a public concern.

Various whistleblower laws and anti-retaliation provisions are most applicable when someone has filed a formal complaint or at least reported illegal or unethical behavior internally. These protections, on the whole, are less to cover reports posted to various Internet sites.

During the past two years, media coverage of National Labor Relations Board decisions concerning social media has led some people to believe (erroneously) that they have a more or less absolute right to criticize their boss on Facebook. It would take a legal memo for me to explain all the reasons why this is not true. Some workers, mostly union members and non-management employees acting as a group, would be covered. Most other employees would not.

It is worth adding that not all unethical behavior raises a direct legal issue. Also, a wrongful accusation of illegal or unethical behavior posted publicly could lead to a defamation claim, especially if it receives widespread attention.

For more

For those interested in learning about the legal and public policy implications of online whistleblowing concerning employment conditions, Professor Miriam Cherry of St. Louis University School of Law has authored a 2012 law review article, “Virtual Whistleblowing” (link to pdf). Here’s the abstract posted to her Social Science Research Network page:

“With the advent of YouTube, blogs, social networking, and whistleblower websites such as WikiLeaks, the paradigm of whistleblowing is changing. The new paradigm for “virtual whistleblowing” is increasingly online, networked, and anonymous. While whistleblowing can take place in many contexts, this symposium article concentrates on the impact of technological changes on employment law whistleblowing. My contention for some time has been that existing regulation has been inadequate to cover existing forms of whistleblowing. Therefore, it is not surprising that existing whistleblowing laws have also failed to keep pace with the changes brought by modern technology. If older laws cannot be made to fit the new paradigm of virtual work, it is necessary to reassess and determine what changes in the law might fit new forms of whistleblowing more appropriately. This article hopes to begin that conversation.”

As Prof. Cherry’s article indicates, this is a murky area under current employment laws for workers and their employers alike. Those who contemplate engaging in some type of virtual whistleblowing should not blithely assume that their identities cannot be discovered or that the law protects them from retaliation. In situations where these factors matter, it would be prudent to obtain legal advice.

This article was originally printed on Minding the Workplace on July 9, 2013.  Reprinted with permission.

About the Author: David Yamada is a tenured Professor of Law and Director of the New Workplace Institute at Suffolk University Law School in Boston.  He is an internationally recognized authority on the legal aspects of workplace bullying, and he is author of model anti-bullying legislation — dubbed the Healthy Workplace Bill — that has become the template for law reform efforts across the country.  In addition to teaching at Suffolk, he holds numerous leadership positions in non-profit and policy advocacy organizations.

 

Snowden Leak Highlights Few Whistleblower Protections for Intelligence Contract Employees

Wednesday, June 12th, 2013

Mike ElkOn Sunday, The Guardian revealed that Edward Snowden, a 29-year-old information technology specialist employed by the federal contractor Booz Allen Hamilton, was its source for a series of bombshell leaks regarding the National Security Agency’s (NSA) surveillance apparatus. While Snowden’s leaks have raised a series of troubling questions about Americans’ privacy and the national security state, they also make clear how limited the privacy and whistleblower protections are for private contract employees working in the intelligence sector.

Under current federal law, employees working for the federal government have whistleblower protections that provide avenues for them to follow should they want to report potential abuses. As part of last year’s Whistleblower’s Protection Enhancement Act, rights for whistleblowers were enhanced for many categories of federal employees, but intelligence employees were excluded from coverage under the act. Likewise, intelligence workers—both federal and contract employees—were excluded from whistle blower protections offered to military contract employees under the most recent National Defense Authorization Act (NDAA).

While federal workers employed in intelligence gathering have less whistleblower protections than other federal workers, they are still able to raise their complaints with the Inspector General of the agency employing them or with members of Congress sitting on the Intelligence Committees. Under President Barack Obama’s Presidential Policy Directive 19 (PPD-19) issued last October, intelligence workers directly employed by the federal government received enhanced whistleblower protections against retaliation. By contrast, though intelligence employees employed for federal contractors like Booz Allen Hamilton are also allowed to report potential abuses to the Inspectors General of the agencies that contract with their employers, they have no protections against employer retaliation, such as being fired.

“Intelligence community contractors have been shut out of all of the recent reforms,” says Angela Canterbury, director of policy at the Project On Government Oversight (POGO). “They received no coverage under the WPEA for federal employees, the PPD-19 for IC civil servants, and were carved out of the contractor whistleblower protections in the NDAA—based on objections from the Congressional intelligence committees—leaving them with no specific protections for whistleblowing under the law. If you look at intelligence contractors, they have no protections under any of the laws. It really is an accountability loophole.”

The only recourse for conscience-stricken employees classified like Snowden have in these situations is to hope their superiors won’t fire them for reporting abuses. However, with a company like Booz Allen that receives 98% of its $5.76 billion annual revenue from the federal government, there is a substantial financial motivation to not draw any attention to abuses by the federal government.

“Where would a whistleblower go first,” asks Donald Cohen, executive director of the anti-privatization group In The Public Interest. “First, they [would] go up the chain of command and [reporting] it wouldn’t be in the interest of the chain of command. What is in the interest of the chain of command is to keep quiet and keep the contracts flowing. If you are in a public agency you may go up the chain of command and you may run into the same roadblocks but it is clear what you can do from there.”

Not only do intelligent contract employees have fewer whistleblowing protections, but the private corporations that employ them also have fewer legal restrictions when it comes to electronically monitoring and surveilling employees. According to Paul Secunda, a labor law professor at Marquette University, federal workers directly employed by the federal government receive at least some protections from the 4th Amendment against searching their communications, even on federal equipment, without first establishing reasonable cause.

Indeed last year, the FDA was caught employing a sophisticated electronic surveillance system to monitor disgruntled FDA employees who were communicating with Congressional staffers, journalists, federal Inspectors General (IGs), and the Office of Special Counsel (OSC) regarding problems with the design of a medical device. Following an investigation, last June the OSC released a “Memorandum For Executive Department and Agencies,” [PDF], which noted that:

agency monitoring specifically designed to target protected disclosures to the OSC and IGs is highly problematic. Such targeting undermines the ability of employees to make confidential disclosures. Moreover, deliberate targeting by an employing agency of an employee’s submission (or draft submissions) to the OSC or an IG, or deliberate monitoring of communications between the employee and the OSC or IG in response to such a submission by the employee, could lead to a determination that the agency has retaliated against the employee for making a protected disclosure. The same risk is presented by an employing agency’s deliberate targeting of an employee’s emails or computer files for monitoring simply because the employee made a protected disclosure.

However, since contractors are employed by private corporations, arbitrary searches by corporate entities on corporate property are legal, thus making it significantly more difficult for whistleblowers to pass on information without being detected by the corporations employing them.

“Look at Snowden himself, look at what he had to do,” says Secunda. “He couldn’t rely on the 4th Amendment. He basically had to flee the country. If he had still been an employee of the CIA, he would have been a public employee with protections against unreasonable search and seizure. He would have at least theoretically had more robust protections under the law. Given that he was no longer employed by the CIA, given that he was employed by Booz Allen, he does not fall under that state action doctrine against unreasonable search and seizure by the state.”

Already, more than one-third of the 1.4 million people in the United States with top secret security clearance are employed as private contractors. With fewer protections afforded to them, private contractors, many whistleblower advocates worry, could receive an even larger share of this type of work.

“There is not the same level of accountability. We have a situation where the intelligence community is largely run by contractors,” says POGO’s Canterbury. “Perhaps we should look at the influence of the profit motive. Look at a company like Booz Allen where 98% of their revenue is from the federal government. Are they going to recommend things in the national interest or things that are important to their bottom line?”

This article was originally printed on Working In These Times on June 11, 2013.  Reprinted with permission.

About the Author: Mike Elk is an In These Times Staff Writer and a regular contributor to the labor blog Working In These Times.

A Post-Brinker Victory for Employees: Bradley v. Networkers International, LLC

Friday, December 21st, 2012
In the aftermath of the California Supreme Court’s landmark decision in Brinker Restaurant Corp. v. Superior Court(2012) 53 Cal.4th 1004 (Brinker), employers and non-exempt employees are still hashing out the implications of the clarified meal and rest period requirements.  In April, Bryan Schwartz Law discussed the implications of that case on this blog, which can be found here: California Supreme Court’s Long-Awaited Brinker Decision.

 

Last week, in Bradley v. Networkers International, LLC (December 12, 2012)  —Cal. Rptr.3d —, 2012 WL 6182473, the California Court of Appeal in San Diego addressed a common problem in meal and rest period cases: where an employer has no compliant meal and rest period policies that are distributed to employees. This case makes clear that a lack of a meal or rest period policy can provide sufficient commonality for class certification, which is a significant victory for plaintiffs.

Background

While the Brinker case was pending, a number of cases appealed to the Supreme Court were granted review and held, pending the decision in Brinker.  Among the cases relegated to judicial limbo was Bradley v. Networkers International, Inc. (Feb. 5, 2009, D052365). In Bradley, three plaintiffs filed a class action complaint against Networkers International, LLC, alleging violations of California’s wage and hour laws including nonpayment of overtime and failure to provide rest breaks and meal periods. The plaintiffs moved to certify the class, which requires that they “demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives.” Brinker, 53 Cal.4th at 1021. The court determined that the plaintiffs did not demonstrate that common factual and legal questions would predominate over the individual issues and denied class certification. The plaintiffs appealed, but the decision was upheld by the California Court of Appeal. 

Plaintiffs appealed to the California Supreme Court, which granted petition for review but held the case for over three years until Brinker was resolved. After issuing their decision in Brinker, the California Supreme Court remanded Bradleyto the California Court of Appeal, Fourth Appellate District, with directions to vacate its decision on class certification and reconsider the case in light of the Brinker decision.

Before getting to the recent decision from the Fourth Appellate District, a little background is useful. A common fight between employers and employees arises when an employer classifies its employees as “independent contractors,” as opposed to employees. True independent contractors have control over the terms and conditions of their employment and are not subject to California wage and hour protections including overtime and meal and rest periods. Employees, on the other hand, remain under their employer’s control during their working hours and are protected by California’s wage and hour laws. The employee versus independent contractor issue has been a battleground for years in the employment law arena and California courts have developed numerous criteria to assess whether an individual is truly an independent contractor or an employee.

In the recent Bradley case, the three plaintiffs alleged that they were misclassified as independent contractors, and should instead have been treated as employees. All three of the plaintiffs worked for Networkers. Each of the plaintiffs was required to sign an “independent contractor agreement,” which stated that each was an independent contractor rather than an employee. As such, plaintiffs did not receive overtime pay or meal or rest periods. However, contrary to the terms of the agreement, the plaintiffs alleged that they were treated as employees and were subject to the same employment policies.

Networkers argued that plaintiffs’ motion to certify the class should be denied because the case did not involve common questions of fact or law, and therefore, resolution of the case would require mini-trials for each plaintiff. Although the court agreed with Networkers on the first go-around, after the Brinker decision, the court agreed with plaintiffs on all but one cause of action. 

The Court of Appeal’s Decision on Remand

Because Networkers applied consistent companywide policies applicable to all employees regarding scheduling, payments, and work requirements, those policies could be analyzed on a class-wide basis. The court would not need to assess them with respect to each potential class member. In analyzing whether class certification was appropriate the court noted that, “[t]he critical fact is that the evidence likely to be relied upon by the parties would be largely uniform throughout the class.” The court held that the factual and legal issues related to the independent contractor issue would be the same among the plaintiff class members, and therefore appropriate for class treatment.
 
Moreover, in Bradley, as in many workplaces, the employer did not have a policy actually distributed to employees that provides for meal and rest periods. Networkers argued that Brinker was not controlling, in its guidance about meal and rest requirements, because in Brinker the plaintiffs challenged an express meal and rest break policy whereas in Bradley, the plaintiffs were arguing that the employer’s lack of policy violated the law. The Court rejected this argument, holding: “This is not a material distinction on the record before us. Under Brinker, and under the facts here, the employer engaged in uniform companywide conduct that allegedly violated state law.” Bradley, 2012 WL 6182473 *13. The Court noted that plaintiffs had presented evidence on Networkers’ uniform practice and that Networkers acknowledged that it did not have a policy and did not know if employees took meal or rest breaks. In assessing the lack of evidence presented by Networkers and relying on Brinker, the Bradley Court held: “Here, plaintiffs’ theory of recovery is based on Networkers’ (uniform)  lack of a rest and meal break policy and its (uniform) failure to authorize employees to take statutorily required rest and meal breaks. The lack of a meal/rest break policy and the uniform failure to authorize such breaks are matters of common proof.” Bradley, 2012 WL 6182473 *13.

The Bradley decision disposes of a significant hurdle in wage and hour cases by holding that this type of scheme – where no policy is distributed to provide for meal and rest periods- can meet the commonality requirement for class certification. For example, Bryan Schwartz Law is currently representing a group of restaurant workers who were not aware of a meal/rest period policy, and who were not provided with meal or rest periods. In the Bryan Schwartz Law case, there was no policy that provided the workers with coverage to enable them to take their breaks. Under Bradley, certification is appropriate to test, class-wide, whether the employer’s lack of a well-defined policy or practice of providing meal/rest periods violated the Labor Code. 

Although several meal and rest period cases have been decided adversely to workers post-Brinker, the Bradley court determined that each of those cases was distinguishable.  In distinguishing Lamps Plus Overtime Cases (2012) 209 Cal.App.4th 35, the Bradley Court of Appeal noted that it was undisputed that the Lamps Plus employer’s written meal and rest period policy was consistent with state law requirements and that the violations differed at each store and with respect to each employee. Similarly, the Bradley court held that Hernandez v. Chipotle Mexican Grill, Inc. (2012) 208 Cal.App.4th 1487 was distinguishable because the only evidence of a company-wide policy or practice was Chipotle’s evidence that it provided meal and rest breaks as required by law. Likewise, Bradley distinguished Tien v. Tenet Healthcare Corp. (2012) 209 Cal.App.4th 1077, noting that in that case there was “overwhelming” evidence that meal periods were made available and the employer’s liability with respect to each employee depended on issues specific to each employee. Brookler v. Radioshack Corp. is an undecided case that was remanded after Brinker involving wage and hour class certification, which may provide additional clarification on these issues.

The court also rejected Networkers’ argument that because each plaintiff would be owed a different amount of damages, the case should not be certified. Relying, in part, on the concurring opinion in Brinker, the court held that even where plaintiffs are required to individually prove damages, individualized damages inquiries do not bar class certification. The court also reversed its prior decision and determined that class certification on the issue of overtime was appropriate because, assuming the plaintiffs were employees, proof of damages could be determined from the common proof of the pay records.

Although the court decided to remand the off-the-clock work issue, it did so because the factual record did not show that there was a uniform policy requiring each employee to work off the clock.

About the Author: Bryan Schwartz is a practicing attorney. If you believe you have been mis-classified as an independent contractor, have meal and rest period claims, or have questions about other wage and hour violations, contact Bryan Schwartz Law (www.BryanSchwartzLaw.com). Nothing in the foregoing commentary is intended to provide legal advice in a specific case or to form an attorney-client relationship with any reader. You must have a representation agreement with Bryan Schwartz Law to be a client of this firm or author.

New Whistleblower Legislation - A Step in the Right Direction for Employment Rights

Wednesday, August 17th, 2011

Jesci“What exactly is a whistleblower?” I thought to myself when first given the task of updating some content on our website. I had heard the term and had a general understanding that it meant you couldn’t get in trouble by your employer for telling on them. Little did I know there is an entire area of law dedicated to the subject and new legislation was bringing about some major changes.

Luckily, the law seems to be heading in the right direction for employees on whistleblower issues. The government has expanded the law to allow better incentives for corporate employees who are reporting fraud to the Securities Exchange Commission (SEC) including monetary incentives for certain claims up to 30% of total funds recovered as a result of the SEC claim. These changes were brought about with the enactment of the Dodd Frank Act, which also created a whole new office to handle corporate whistleblower claims.

But, corporate employees were not the only ones to see beneficial whistleblower changes as the Food Safety Modernization Act (FSMA) was recently passed. FSMA gives workers in the food industry an easy outlet to express their claims against companies concerning food safety issues. The act is meant to help prevent foodborne illnesses and promote safety in food handling. Also, the government has extended the reporting claims deadline to 180 days for most all industries.

With giving more days to file a complaint and offering better rewards and incentives, it is clear the law is moving in the right direction. The Occupational Safety & Health Administration (OSHA) provides the ease of online complaints as well as the option to call in and give the complaints over the phone. These changes are all in an effort to give incentives to employees to speak out when they see things going wrong in the workplace and not have to fear they will be retaliated against by their employer.

We want these violations in the workplace to be reported for the safety of workers everywhere and for the safety of the general public. Some whistleblower complaints can uncover major health hazards, economic downturns or disasters. Please speak out if you see illegal practices or activities going on in your workplace.

Whistleblower laws continuously are changing across numerous industries to protect your employment rights by making adverse actions against you illegal when you come forward with claims against your employer. Please explore the Workplace Fairness Worker’s Rights section for more information regarding whistleblowing as well as any other employment issue. It is important to know your rights and make sure you are heard.

About the Author: Jesci Drake is a current law student and legal intern for Workplace Fairness.

The Missing Link in Corporate Deviance

Thursday, April 28th, 2011

Jesci“It was a choiceless choice,” claimed Janet Chandler last Thursday night in a special discussion panel put together by GAP (Government Accountability Project) and Georgetown Law. Her choice was to blow the whistle.

Janet was one of three famous whistleblowers on the panel Thursday night discussing their stories and promoting the new book, The Corporate Whistleblower’s Survival Guide by Dylan Blaylock. Whistleblower Larry King, who blew the whistle while project manager for the cleanup at the infamous Three Mile Island nuclear power plant meltdown said he wished there was a comprehensive guide around like this when he chose to blow the whistle. Larry’s efforts uncovering reckless cleanup practices may have helped avoid another huge disaster and saved lives. He had no idea what would happen to him and his family, and not only did he lose his job, but his house as well. He also spent time in the hospital battling bouts of depression. He claimed if he had to do it all over again he would, knowing the dangers that can occur in his line of work. Although he said he would have remained anonymous, had he known it was an option. When asked why he did it, knowing some of the consequences, he exclaimed, “At the end of the day, you have to be able to stand yourself.”

Janet took her case all the way to a Supreme Court victory on a False Claims Act lawsuit against a hospital she was working with. (whistleblowers.org). She was working with federal funds granted to the hospital for supporting mothers and children suffering from drug addictions. The money granted was not allocated correctly, while the hospital was forging data and failing to comply with regulations. She said she was not prepared for the consequences which followed her blowing the whistle. She struggled for years as a single mother during the litigation process which took over 12 years.

Finally, Wendell Potter shared his story as a former VP for Corporate Communications with CIGNA, one of the U.S.’s largest health insurance companies. He spoke out about the deceitful tactics used in the private health care industry leading to more Americans without insurance protection. He also discussed the questionable uses of public relations budgets used to deceive the public, and engage in advertising and lobbying efforts to defeat reform initiatives in congress. (wendellpotter.org). Potter even wrote a book, The Deadly Spin, to detail what he experienced and how the company was deceiving Americans. Wendell took full advantage of his situation by turning it into a career. He now works with and provides education to members of Congress about what the private health insurance industry is really like.

Wendell said if he had not blown the whistle, he would not have gotten the wonderful opportunity to educate people on what the industry is really like. Similarly, Janet has participated in mentoring programs to educate and get the word out about whistleblowing. All of them agree that it was something they had to do to help others. They encourage people in their situations to speak out and use resources like the new book out to help them through these tough situations. Whistleblowers provide the missing link in exposing bad corporate practices.

We can only hope more brave souls will come forward like these three individuals and help ride corporate deviance and illegal practices.

About the Author: Jesci Drake is a current law student and intern with Workplace Fairness.

2011 PayWatch: Average CEO Salary–$11.4 Million

Thursday, April 21st, 2011
Credit: Joe Kekeris

Credit: Joe Kekeris

While 25 million unemployed and underemployed U.S. workers are drowning, CEO pay skyrocketed by 23 percent, for an average salary of $11.4 million in 2010, according to the AFL-CIO Executive PayWatch. Released today, data compiled at PayWatch also show CEOs have done little to create badly-needed jobs, instead sitting on a record $1.93 trillion in cash on their balance sheets.

The 2011 Executive PayWatch features the compensation of 299 S&P 500 company CEOs and provides direct comparisons between those CEOs and the median pay of nurses, teachers, firefighters and others. For instance, while a secretary makes a median annual salary of $29,980, someone like Wells Fargo CEO John Stumpf rakes in $18,973,722 million—632 times the secretary’s salary. The pay gap between Wall Street and Main Street has widened egregiously—as recently as 1980, CEOs made 42 times that of blue-collar workers.

(Check out the 2011 Executive PayWatch to read case studies of six CEOs and find out how many firefighters it takes to make the salary of one CEO. You also can compare salaries of nurses, secretaries and others with CEOs and share the results with your friends on Facebook. Click here to share on Facebook.)

Maybe CEOs can’t focus on job creation because they have more pressing issues—like lobbying to repeal key provisions of a financial disclosure reform bill Congress passed last year. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires corporations to reveal the CEO-to-worker pay gap—and the Wall Street rulers don’t want to do that. (Click here to urge your member of Congress not to weaken Wall Street reform in any way.)180x200_paywatch2011

AFL-CIO President Richard Trumka says the AFL-CIO will work hard to defend this historic reform. The brazen attacks by Wall Street lobbyists to undermine reform “surprise and offend me,” Trumka says, “and I think they will surprise and offend most Americans.”

Apparently Wall Street doesn’t want people to know that while working Americans paid for the economic crisis with their jobs, their homes and their retirement savings, these Teflon CEOs escaped unscathed.

CEO pay has helped fuel the rapidly escalating income inequality in this country which has worsened over the past decade to levels not seen since the years before the Great Depression. The increase of income inequality prior to the 2008 financial crisis and the recent recession is striking: Between 1993 and 2008, the top 1 percent of Americans captured 52 percent of all income growth in the United States.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee (she was represented by a hotel and restaurant local union—the names of the national unions were different then than they are now). With a background in journalism—covering bull roping in Texas and school boards in Virginia—she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

This blog originally appeared in AFL-CIO on April 19, 2011. Reprinted with Permission.

New Robust Protection for Food Safety Whistleblowers

Wednesday, December 1st, 2010

jason zuckermanYesterday, the Senate passed 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.  The bill must be reconciled with a House version of the bill, H.R. 2749, which passed on July 30, 2009, and final passage is expected to occur by the end of the year.

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, 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:

1. Reporting that imported cheese is being stored at the wrong temperature and is therefore susceptible to spoiling or containing harmful bacteria;

2. Reporting that an additive harmful only to infants was added to infant formula;

3. Reporting that bread is being stored in a facility infested with flies and rodents;

4. Reporting that a peanut butter manufacturer did not recall peanut butter it knew might have been made using a batch of contaminated peanuts; and

5. 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.

This article was originally posted on The Employment Law Group.

 

OSHA's squeaky Whistleblower Protection Program

Thursday, October 14th, 2010

Workers Comp Insider LogoMost people are aware that, since 1970, the Occupational Health and Safety Administration (OSHA) has been responsible for issuing and enforcing standards for workplace health and safety. But if I were a betting person, I would wager that far fewer are aware of OSHA’s responsibilities in relation to the Sarbanes Oxley Act. OSHA is charged with protecting workers ” …from retaliation for reporting alleged violations of mail, wire, bank, or securities fraud; violations of rules or regulations of the SEC; or federal laws relating to fraud against shareholders.”

This responsibility is part of the Office of Whistleblower Protection Program (OWPP),for which OSHA has oversight. OWPP was originally intended to protect workers from being retaliated against for such things as reporting safety violations to OSHA, requesting or participating in an OSHA inspection, or testifying in any proceeding related to an OSHA inspection.

Over the years, this responsibility has expanded to encompass oversight of the whistle-blowing provisions for eighteen other statutes, including violations of various airline, commercial motor carrier, consumer product, environmental, financial reform, health care reform, nuclear energy, pipeline, public transportation agency, railroad and securities laws.

And according to a recent report by the Government Accountability Office (GAO), OSHA gets failing grades for discharging its whistleblower protection responsibilities. The GAO cited lack of training, chronic inattention from OSHA leaders, and long delays in resolving cases, among other problems.

Some say the problems are no surprise: too few staff spread too thin, resulting in long case delays and staff demoralization. You can see charts depicting the growth of responsibilities while staff remained flat on pages 16-17 of the GAO Whistleblower Report. (PDF)

Some relief is in the offing – 25 new investigators are scheduled for appointment to OWPP. In addition, the Department of Labor (DOL) is conducting a “top to bottom” review and there is some discussion about whether the program should be moved to another part of DOL.

Whistleblowers are fundamental to workplace safety, but even with protections built into the laws, the reality is that protection for whistle-blowing employees can be a long time in coming, when and if it does. Read about truck driver John Simon’s whistle-blowing ordeal as a case in point. There are unfortunately many other similar stories. OSHA offers employees a a bill of rights to ensure safety, but fundamental to those rights are protections when and if they speak up in the cause of safety.

This article was originally posted on Workers Comp Insider.

About the Author: Julie Ferguson is an insurance industry consultant with more than 20 years experience developing and implementing communications programs for workers compensation, workplace health & safety, employee communications, and general insurance programs. She founded and serves as editor for the nation’s first insurance weblog, Lynch Ryan’s Workers Comp Insider. She also founded and manages HR Web Café, a weblog for ESI Employee Assistance Group; Consumer Insurance Blog for the Renaissance Insurance Group; and is one of the administrators of Health Wonk Review, a bi-weekly health policy carnival. If you have a question for Julie, you can reach her at jferguson@lynchryan.com.

OSHA Launches New Whistleblower Protection Site

Tuesday, July 20th, 2010

Image: Mike HallThe Occupational Safety and Health Administration (OSHA) says that workers who blow the whistle on safety violations and other unlawful practices “play an important role in assuring compliance with federal laws.”

But, say workplace safety advocates, too many times workers don’t speak up about safety and health problems on the job because they fear retaliation from their employers, even though it’s illegal.

OSHA now has a new website specifically dedicated to its whistleblower protection program, www.whistleblowers.gov. The site is designed to provide workers, employers and the public with easily accessible information about the 18 federal whistleblower protection statutes that OSHA currently administers. OSHA chief David Michaels says:

OSHA doesn’t work unless workers feel secure in exercising their rights. This Web page is part of OSHA’s promise to stand by those workers who have the courage to come forward when they know their employer is cutting corners on safety and health.

The new site provides information about workers’ rights and provisions under each of the whistleblower statutes and regulations that OSHA enforces. It also has program fact sheets and information on how a worker can file a retaliation complaint with OSHA. Along with the direct URL, the site can be accessed at www.osha.gov by clicking on the “Whistleblower Protection” link.

Federal workplace safety laws allow workers to file discrimination complaints with OSHA if they believe their employer has retaliated against them for exercising a broad range of rights protected by law.  These rights include filing safety or health complaints with OSHA and seeking an OSHA inspection, participating in an OSHA inspection, participating or testifying in any proceeding related to occupational safety or health, or reporting an injury or illness to their employer.

The Miner Safety and Health Act (H.R. 5663) now before Congress would strengthen whistleblower protections for miners covered by the Mine Safety and Health Administration and workers covered by OSHA.

About The Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and have written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.

Dodd-Frank Bill Provides Robust Whistleblower Protections

Friday, July 16th, 2010

jason zuckermanRecognizing that robust whistleblower protection is critical to preventing another financial crisis, Congress included in the Dodd-Frank financial services reform bill (H.R. 4173) numerous provisions designed to encourage whistleblowing and to provide robust protection from retaliation.  These provisions create monetary awards for whistleblowers who provide original information to the SEC or CFTC, strengthen the whistleblower protection provisions of the Sarbanes-Oxley Act and the False Claims Act, and create additional whistleblower retaliation causes of action.

Reward for Whistleblowing to the SEC and Prohibition Against Retaliation (Section 922). Under Section 922, the SEC will be required to pay a reward to individuals who provide original information to the SEC which results in monetary sanctions exceeding $1 million.  The award will range from 10 to 30 percent of the amount recouped and the amount of the award shall be at the discretion of the SEC.   Factors to be considered in determining the amount of the award include the significance of the information provided by the whistleblower, the degree of assistance provided by the whistleblower, the programmatic interest of the SEC in deterring violations of the securities laws by making awards to whistleblowers, and other factors that the SEC may establish by rule or regulation.  If the amount awarded is less than 10 percent or more than 30 percent of the amount recouped, a whistleblower may appeal the SEC’s determination by filing an appeal in the appropriate federal court of appeals within 30 days of the determination.

Section 922 prohibits the SEC from providing an award to a whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower provided information; who gains the information by auditing financial statements as required under the securities laws; who fails to submit information to the SEC as required by an SEC rule; or who is an employee of the DOJ or an appropriate regulatory agency, an SRO, the PCAOB or a law enforcement organization.

Section 922 creates a new private right of action for employees who have suffered retaliation “because of any lawful act done by the whistleblower– ‘(i) in providing information to the Commission in accordance with [the whistleblower incentive section]; (ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or (iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002,’” the Securities Exchange Act of 1934, and “‘any other law, rule, or regulation subject to the jurisdiction of the [SEC].’”  The action may be brought in federal court and remedies include reinstatement, double back pay with interest, as well as litigation costs, expert witness fees, and reasonable attorney’s fees.

New Whistleblower Protection for Financial Services Employees (Section 1057). Section 1057 creates a robust private right of action for employees in the financial services industry who suffer retaliation for disclosing information about fraudulent or unlawful conduct related to the offering or provision of a consumer financial product or service.  The scope of coverage is quite broad in that Section 1057 applies to organizations that extend credit or service or broker loans; provide real estate settlement services or perform property appraisals; provide financial advisory services to consumers relating to proprietary financial products, including credit counseling; or collect, analyze, maintain, or provide consumer report information or other account information in connection with any decision regarding the offering or provision of a consumer financial product or service.

Section 1057 prohibits retaliation against an employee who has engaged in any of the following protected acts:

• Provided, caused to be provided, or is about to provide or cause to be provided, to an employer, the newly created Bureau of Consumer Financial Protection (Bureau), or any other government authority or law enforcement agency, information that the employee reasonably believes relates to any violation of any provision of Title X of the bill, which establishes new consumer financial protections, or any rule, order, standard or prohibition prescribed or enforced by the Bureau;

• Testified or will testify in a proceeding resulting from the administration or enforcement of any provision of Title X;

• Filed, instituted, or caused to be filed or instituted any proceeding under any federal consumer financial law; or

• Objected to, or refused to participate in any activity, practice, or assigned task that the employee reasonably believes to be a violation of any law, rule, standard, or prohibition subject to the jurisdiction of, or enforceable, by the Bureau.

Remedies include reinstatement, backpay, compensatory damages, and attorney’s fees and litigation costs, including expert witness fees.  Where reinstatement is unavailable or impractical, front pay may be awarded.

Section 1057 employs a burden-shifting framework that is favorable to employees.  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.  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.

The procedures governing Section 1057 claims are substantially similar to those governing retaliation claims brought under the Consumer Product Safety Improvement Act of 2008, 15 U.S.C. § 2087.  The statute of limitations is 180 days and the claim must be filed initially with the Occupational Safety Health Administration (OSHA), which will investigate the complaint and can order preliminary reinstatement.  Once OSHA issues its findings, either party can request a hearing before a Department of Labor (DOL) administrative law judge.  If the DOL has not issued a final order within 210 days of the filing of the complaint, the complainant has the option to remove the claim to federal court and either party can request a trial by jury.  Section 1057 claims are exempt from mandatory arbitration agreements.

Reward for Whistleblowing to the CFTC (Section 748). Section 748 amends the Commodity Exchange Act, 7 U.S.C. § 1 et seq., to create a whistleblower incentive program and whistleblower protections similar to those in section 922, including a new private right of action.  One notable difference between sections 748 and 922 is the ability of a commodity whistleblower to appeal any determination regarding an award made by the Commodity Futures Trading Commission (CFTC) within 30 days.  Protected conduct under section 748 includes providing information to the CFTC in accordance with the whistleblower incentive provision and “assisting in any investigation or judicial or administrative action of the [CFTC] based upon or related to such information.”

Strengthening Sarbanes-Oxley’s Whistleblower Protection Provision (Sections 922 and 922A). Sections 922 and 929A contain important amendments to the Sarbanes-Oxley act (SOX) that broaden the scope of coverage, increase the statute of limitations, exempt SOX whistleblower claims from mandatory arbitration, and clarify that SOX claims removed to federal court can be tried before a jury.

Section 929A clarifies that the whistleblower protection provision of the Sarbanes-Oxley Act (SOX), 18 U.S.C. § 1514A, applies to employees of subsidiaries of publicly-traded companies “whose financial information is included in the consolidated financial statements of [a publicly] traded company.”  This amendment eliminates a significant loophole that some courts have read into SOX that has substantially narrowed the scope of SOX coverage.  Elevating form over substance, some judges have permitted publicly-traded companies to avoid liability under SOX merely because the parent company that files reports with the SEC has few, if any, direct employees, and instead employs most of its workforce through non-publicly traded subsidiaries.

As Judge Levin pointed in Morefield v. Exelon Servs., Inc., ALJ No. 2004-SOX-002 (ALJ Jan. 28, 2004), this loophole is contrary to the purpose of SOX in that “[a] publicly traded corporation is, for Sarbanes-Oxley purposes, the sum of its constituent units; and Congress insisted upon accuracy and integrity in financial reporting at all levels of the corporate structure, including the non-publicly traded subsidiaries . . . [Congress] imposed reforms upon the publicly traded company, and through it, to its entire corporate organization.”  Section 922(b) further expands the coverage of section 806 of SOX to include employees of nationally recognized statistical ratings organizations (NRSROs), including A.M. Best Company, Inc., Moody’s Investors Service, Inc., and Standard & Poor’s Ratings Service.

Section 922(c) increases the statute of limitations for SOX whistleblower claims from 90 to 180 days and clarifies that SOX retaliation plaintiffs can elect to try their cases in federal court before a jury.  In addition, section 922(c) declares void any “agreement, policy form, or condition of employment, including a predispute arbitration agreement” which waives the rights and remedies afforded to SOX whistleblowers.

Strengthening the False Claims Act’s Whistleblower Protection Provision (Section 1079B). Section 1079B amends the anti-retaliation provision of the False Claims Act, 31 U.S.C. § 3730(h), by expanding the definition of protected conduct to include “lawful acts done by the employee, contractor, or agent or associated others in furtherance of an action under this section or other efforts to stop 1 or more violations of [the False Claims Act],” thereby protecting against associational discrimination and covering a broad range of activities that could further a potential qui tam action or could stop a violation of the FCA.  Section 1079B clarifies that the statute of limitations for actions brought under section 3730(h) is three years, which brings much-needed clarity in the wake of the Supreme Court’s decision in Graham County Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 545 U.S. 409 (2005) holding that the most closely analogous state statute of limitations applies to FCA retaliation claims.

“This article was originally posted on http://employmentlawgroupblog.com/”

Your Rights Job Survival The Issues Features Resources About This Blog