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REPORT: The Recovery Act, Unsung Hero of the Year

Thursday, February 18th, 2010

Image: Kate ThomasMarking the first anniversary of the American Recovery and Reinvestment Act (ARRA), the SEIU is releasing a new report today analyzing the social and economic impact of the Recovery Act. This report explains what the aggregate numbers on economic growth and job creation fail to illustrate–how the Recovery Act helped counter the recession by protecting human services and the workers employed to deliver those services at a local level.

Reporting by state recipients of Recovery Act direct government investment spending demonstrates that this spending has saved or created 1,239,437 jobs in both the public and private sector. When you include the impact of indirect spending–jobs created or saved as a result of the consumer spending of directly funded job holders–the total rises to 1,859,156 jobs that have been saved or created. Pretty amazing. Without it, the unemployment rate in December 2009 may have reached 11.2 percent, 1.2 percent higher than the actual rate of 10.0 percent that month.

How Recovery Act Investments in Human Services Created and Saved Hundreds of Thousands of Jobs -
While it would be impossible to describe all of the significant findings of this report in just one blog post, I’ll be doing just that in a series of blog posts at SEIU.orgover the next couple of days. I’ll also be highlighting the stories included in this report–collected from a combination of public sources, government Web sites, and interviews with SEIU state-level leaders–which uniquely illustrate how states and some local units of government have used ARRA resources to limit scaling back.

For workers like Akbar Chatman–a substance abuse counselor for the Department of Mental Health in Los Angeles County–the Recovery Act played a critical role in helping him do his job. Watch:

While conditions are far better than they would have been without the stimulus fund actions that were taken, it is clear that substantial challenges remain. Without additional fiscal relief, new budget gaps could force state governments to shed 900,000 jobs this year.

View the report in full at http://seiu.me/arra

Download the (PDF) report:
“How Recovery Act Investments in Human Services Created and Saved Hundreds of Thousands of Jobs”

*This post originally appeared in SEIU Blog on February 17, 2010. Reprinted with permission.

About the Author: Kate Thomas is a blogger, web producer and new media coordinator at the Service Employees International Union (SEIU), a labor union with 2.1 million members in the healthcare, public and property service sectors. Kate’s passions include the progressive movement, the many wonders of the Internet and her job working for an organization that is helping to improve the lives of workers and fight for meaningful health care and labor law reform. Prior to working at SEIU, Katie worked for the American Medical Student Association (AMSA) as a communications/public relations coordinator and editor of AMSA’s newsletter appearing in The New Physician magazine.

With A Third of Workers at Risk of Job Losses, Progressives Launch New Drive For More Aid (VIDEO)

Friday, December 18th, 2009

Image: Art LevineWith heavy defections from Blue Dog Democrats, the House of Representatives still narrowly passed Wednesday evening 217 to 212 a $154 billion jobs package. It included funds for states to retain front-line workers, aid to the unemployed and transportation projects.

But a jobs bill has yet to be voted on in the Senate, where it’s likely to be viewed more skeptically and reduced in scope in the absence of a major grass-roots campaign. Political activism becomes even more urgent, because a combination of continuing high unemployment and the transitioning of people in and out of jobs could mean that as many as a third of the workforce could be unemployed or undermployed in 2010, according to Lawrence Mishel, director of the Economic Policy Institute.

That’s why a potentially powerful 60-group liberal coalition, Jobs For America Now!, announced earlier Wednesday, becomes especially important. Its leaders are proposing a far more ambitious $400 billion proposal, based in part on plans put forward in the last several weeks by the AFL-CIO and other progressive and civil-rights organizations.

(The full story of the progressive drive for jobs creation can be read here at Truthout.org.)

There’s no doubt that they face an uphill battle to get ambitious jobs legislation through Congress. There was, after all, that close vote yesterday in the House, right-wing propaganda about the failings of the first $787 billion stimulus (it actually saved or created up to 1.6 million jobs), and the spread of an aggressive “deficit hawk” mentality to conservative Democrats.

Even so, Thea Lee, the deputy chief of staff of the AFL-CIO, outlined the themes unifying the organizations: “Across the country, working Americans are calling for urgent action on the jobs crisis, and this action must be on a scale to match the crisis. We must also focus on fundamentally transforming our economy so we never face this type of crisis again — reforming our labor laws, our trade policy, and our financial system to restore needed balance.”

During the debate over the jobs bill, House Speaker Nancy Pelosi (D-CA) declared on the House floor, “This legislation brings jobs to Main Street by increasing credit for small businesses, rebuilding the infrastructure of America, and keeping police and fireman and teachers on the job. As we create jobs for Americans, we are doing so in a fiscally responsible way. These investments are fully paid for by redirecting TARP funds from Wall Street to Main Street.”

With every single Republican voting no, she defiantly pointed out how far the American economy had come under the Obama administration even as joblessness is still rampant. “There were 740,000 jobs lost in the first month of this year compared to 11,000 last month. We’re on the road to recovery…We’re creating jobs for Main Street, not just wealth for Wall Street,” she said. “This legislation creates jobs, helps meet the needs of those who are unemployed, and puts us America back on a path to prosperity.”

Action can’t come too soon, and our obstructionist legislators would do well to listen to the plight of the unemployed as powerfully described in James McMurtry’s song, “We Can’t Make It Here.” Even though it was written during the Bush era, it’s all too applicable now:

The groups and leaders featured in the press conference call Wednesday before the vote were almost a Who’s Who of American Liberalism. They included the Campaign for America ‘s Future; Anna Burger, the chair of Change to Win;, the veteran organizer Alan Charney of the grass-roots advocacy group,US Action, and the coalition’s interim director; Benjamin Todd Jealous, the NAACP President;and Wider Opportunities for Women. The importance of the coalition goes beyond the specifics of their proposals to their commitment to provide grass-roots muscle in all 50 states to push for jobs legislation in the tough struggle ahead, especially in the Senate. And that’s what’s been missing before on this issue: united activism around jobs which could, potentially, have more diverse grass-roots support in 2010 than health care reform did this year.

The importance of the new coalition was underscored by an aide to Rep. Bobby Rush (D-Ill), who co-chairs the bipartisan Jobs Now! Congerssional caucus. The aide told Truthout: “These are the A-List groups. If that coalition steps up to the plate, they’ll bring plenty of resource capacity: polling, lobbying, putting pressure on the usual suspects.” Right now, though, the staffer observed, “Clearly everyone’s focused on pushing health care across the finish line, and that’s not even done. After that, everyone will be talking about jobs, jobs, jobs — at least until November.”

So, despite the narrow vote on Wednesday, there’s some realistic hope that a combination of continuing unemployment, grass-roots organizing and political necessity could push through meaningful jobs legislation — and the Pelosi-backed bill is considered a very good start.

After Wednesday’s vote, union leader Anna Burger declared:

Our jobs crisis cannot be solved by one bill alone. But today the House demonstrated the bold and swift leadership the American people demand. It’s time to provide relief to the millions of workers who get up each morning and scour the help wanted ads in the hopes of finding a good job that can support a family. Congress today made an essential first step to invest in programs to immediately put people back to work…

But our work is far from over. Our leaders must continue to work non-stop to pass a comprehensive jobs agenda that puts millions of Americans back to work today and makes strategic investments to create the jobs that Americans will need in the future.

The biggest differences between the House-passed measure and the progressive-backed proposals are the sheer amount of spending and the absence in the current House bill of public sector job creation targeting hard-hit communities. As described by the coalition, this jobs-creation provision — which could create one million new jobs with $40 billion in federal funding, according to Rep. Keith Ellison (D–Minn.) — is a vital one. The group’s call to action describes its importance:

We can directly create jobs that put people to work helping communities meet pressing needs, including in distressed communities facing severe unemployment. These initiatives must be designed so they maintain existing wage and benefit standards and do not displace existing jobs or simply exchange one group of unemployed workers for another.

The urgent call to action is often at odds, though, with the pragmatic, even cynical, calculations of conservaDems who are worried that big deficit spending could be a potent Republican issue in their home states that trumps joblessness.

Compare the different perspectives. First, here’s what’s at stake for American workers, as described by the Jobs Now! coalition:

An Urgent Call for Action to Stem the U.S. Jobs Crisis

The U.S. unemployment rate exceeded 10% in October for the first time in a quarter century. Over 15 million Americans are able and willing to work but cannot find a job. More than one out of every three unemployed workers has been out of a job for more than six months. The situation facing African American and Latino workers is even bleaker, with unemployment at 15.6% and 12.7%, respectively.

These grim statistics don’t capture the full extent of the hardship. There are another 9 million people working part time because they cannot find full-time work. Millions of others have given up looking for a job, and so aren’t counted in the official unemployment figures. Altogether, over 17% of the labor force is underemployed–more than 26 million Americans–including one in four minority workers. Last, given individuals moving in and out of jobs, we can expect a third of the workforce, and 40% of workers of color, to be unemployed or underemployed at some point over the next year. (emphasis added.)

Despite an effective and bold recovery package we are still facing a prolonged period of high unemployment. Two years from now, absent further action, we are likely to have unemployment at 8% or more, a higher rate than that attained even at the worst point of the last two downturns.

Joblessness on this scale creates enormous social and economic problems–and denies millions of families the ability to meet even their most basic needs. .

Then take a look at the political machinations among Democrats who feel themselves to be vulnerable politically, along with some retiring members who feel they can vote their conscience on behalf of a jobs package. Here’s how The Hill reported their current thinking:

The close votes reflect the growing unease among centrist Democrats that the deficit spending that Congress has undertaken to right the economy is becoming a potent campaign issue.

“We’ve got to indicate we’re serious about the deficit,” said Rep. Gerry Connolly (D-Va.), who voted “no” and represents a Republican-leaning district with low unemployment. “We didn’t cause the deficit, but we have to address it.”

Rep. Brian Baird (D-Wash.), who is retiring from Congress, changed his vote to put Democrats over the top. That signals a potent variable in vote counting next year — retirees who no longer need to respond to traditional political pressures…

Political analysts are closely watching for more centrist retirements. Those members will have no fear of losing committee assignments and can’t be won over with promises of campaign help or other inducements…

But Democrats facing tough re-election fights found themselves trying to determine if voters are angrier about 10 percent unemployment or trillions in deficits.

“My staff is looking at it,” said a newly elected Democratic member from a conservative district as the clock ticked down. “If I can’t make a good case that a lot of money is coming back to my district, I can’t support it. I wish we had more time.”

He voted “no.”

Compare that political calculation with the fear and anxiety gripping America’s unemployed, with half of them reporting depression, panic and heavy borrowing from friends. The New York Times reported this week:

Poll Reveals Trauma of Joblessness in U.S.

More than half of the nation’s unemployed workers have borrowed money from friends or relatives since losing their jobs. An equal number have cut back on doctor visits or medical treatments because they are out of work.

Almost half have suffered from depression or anxiety. About 4 in 10 parents have noticed behavioral changes in their children that they attribute to their difficulties in finding work.

It doesn’t seem that many members of Congress fully understand yet the havoc that’s been let loose in the land because of widespread unemployment. Meanwhile, posturing over ideology continues. They all might benefit if they could listen with open hearts to the plight of those without work in their districts and states, as aptly depicted in the song, “We Can’t Make It Here,” written by James McMurty during the Bush era, even before the meltdown, and unfortunately, it still applies today.

Who is listening to them now?

*This article originally appeared in The Huffington Post on December 17, 2009. Reprinted with permission from the author.

About the Author Art Levine is a contributing editor of The Washington Monthly, and a former Fellow with the Progressive Policy Insititute. He has also written for Mother Jones, The American Prospect, The New Republic, The Atlantic, Slate, Salon and numerous other publications. He is the author of 2005’s PPI report, Parity-Plus: A Third Way Approach to Fix America’s Mental Health System, and is currently researching a book on mental health issues. Levine also posts commentary at Art Levine Confidential

Stimulus and Jobs: We Can Do Better

Wednesday, November 4th, 2009

Image: Dean BakerThe Obama administration came out with its first set of numbers on the jobs impact of its stimulus package. It’s pretty much along the lines of what was predicted. To date, the package has created close to one million jobs. That is good news, but in an economy with more than 15 million unemployed workers, it is not nearly good enough. We need to do more, much more.

Fortunately, there is an easy and quick way to begin to get these unemployed workers back to work. It involves paying workers to work shorter hours. The mechanism can take the form of a tax credit to employers. The government can give them a tax credit of up to $3,000 in order to shorten their workers’ hours while leaving their pay unchanged. The reduction in hours can take the form of paid sick days, paid family leave, shorter workweeks or longer vacations. The employer can choose the method that is best for her workers and the workplace.

A map showing Michigan, the west coast, the southwest and the southeast as hardest hit by unemployment. (Photo: austrini / flickr)

A map showing Michigan, the west coast, the southwest and the southeast as hardest hit by unemployment. (Photo: austrini / flickr)

If take-home pay is left unchanged as a result of the credit, then demand should be left unchanged. If workers are on average putting in fewer hours and demand is unchanged, then employers will need to hire more workers.

This logic is about as simple as it gets. The process is also quick and cheap. In principle, the government can go this route to save jobs at a cost of a bit more than $20,000 per job, far less than the estimates of the cost per job under the administration’s stimulus package.

We don’t even have to speculate about whether this sort of short-hours arrangement can work. Germany put a short-hours program in place at the start of its recession. Its unemployment rate today is 7.6 percent, about the same as the unemployment rate it had going into the recession. Imagine that workers in the United States, like workers in Germany, were dealing with the recession by putting in four-day weeks (while getting paid for five) or getting an extra two weeks a year of paid vacation. This sure beats being unemployed or being threatened with unemployment.

Seventeen states already have a “work-share” program in place that allows employers to use unemployment insurance money to cover a reduction in work hours, without a corresponding reduction in pay. More than 100,000 layoffs have been prevented as result of this program.

Sen. Jack Reed of Rhode Island has a bill that would increase funding for work-share programs and remove some of the bureaucracy that makes it difficult for employers to take full advantage of the programs that currently exist. The bill would also provide start-up money for the states that do not have work-share programs.

The Reed bill would be a big step towards following the Germany model, taking advantage of a program that is already in place. It could very quickly make a big dent in the unemployment rate, by preserving many of the jobs that are now being lost.

In this respect, it is important to clear up a common confusion about the economy. Every month, we get a figure from the Labor Department for the new jobs created or lost. However, this is a net figure. Approximately four million people leave their jobs every month, about half of these workers, or two million, lose their jobs involuntarily. If the economy creates more than four million new jobs, then we will have a positive jobs figure for the month. If the economy creates less than four million new jobs, then the Labor Department will report that the economy lost jobs in the month.

Suppose that this work-share program reduced the number of people who lose their jobs involuntarily by 20 percent, or 400,000 workers per month. This would have the same effect to our job count as adding 400,000 additional new jobs. If this rate could actually be maintained over a full year, then it would imply that the economy would generate nearly five million new jobs.

All the projections show that the unemployment rate is likely to continue to rising for the immediate future and remain high for years to come. The Congressional Budget Office projects that the unemployment rate will average 10.2 percent next year and even in 2011 it will average 9.1 percent. If this projection proves accurate, it would be a disastrous scenario for tens of millions of people.

There are quick and effective ways to increase employment, with shorter hours at the top of the list. Making tens of millions of people suffer for economic mismanagement and the greed of the bankers is not acceptable. We must do something.

This article originally appeared in Center for Economic Policy and Research on November  2, 2009. Reprinted with permission from the author.

About the Author: Dean Baker is co-director of the Center for Economic and Policy Research in Washington, DC.  He is frequently cited in economics reporting in major media outlets, including the New York Times, Washington Post, CNN, CNBC, and National Public Radio.  He writes a weekly column for the Guardian Unlimited (UK), and his blog, Beat the Press, features commentary on economic reporting.  His analyses have appeared in many major publications, including the Atlantic Monthly, the Washington Post, the London Financial Times, and the New York Daily News. He received his Ph.D in economics from the University of Michigan.

Minimum Wage Raises Us All

Friday, June 19th, 2009

Over the past few weeks, I’ve explored a variety of proposals for additional federal stimulus measures. The federal government could make greater investments in repairing public infrastructure; fund the construction of affordable housing; extend tax credits to employers who increase employee health coverage; provide incentives for states to expand access to food stamps, welfare, and Medicaid; or even create a mass public jobs program. So far, none of those proposals is in the cards. But one overlooked recovery measure is already underway: the minimum wage increase scheduled for July 2009.

A new research brief from Kai Filion at the Economic Policy Institute highlights the stimulative impact of raising the minimum wage.

Remember that back in 2007, Congress obliged President Bush to sign a long-delayed minimum wage increase into law by attaching it to a must-pass war appropriations measure. After ten years in which the value of the minimum wage was continuously eroded by inflation, Congress raised the minimum from $5.15 to $5.85 an hour in 2007. In 2008, it went up to $6.55. Next month, it’s headed up to $7.25. And the economy is benefiting. So far, minimum wage increases have generated $4.9 billion in spending according to Filion, while the next increase will produce $5.5 billion in additional spending. As Filion succinctly explains “by increasing workers’ take-home pay, families gain both financial security and an increased ability to purchase goods and services, thus creating jobs for other Americans.”

The issue brief also takes on the most familiar minimum wage misconception – that raising pay inherently means increasing unemployment. Surveying a bevy of recent studies that have failed to detect significant increases in unemployment when the minimum wage rises, the issue brief considers factors like improved productivity, better employee retention and the stimulative effect of increased spending which may help explain why, in practice, jobs don’t disappear when low pay gets a mandatory boost.

The minimum wage increase all queued up and ready for July is good news, but of course there’s more policy work to be done. During the campaign President Obama pledged to seek an increase in the minimum wage to $9.50 by 2011, a measure that would provide great additional stimulus if the first steps began soon. Add that to the stimulus policy wish list.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared in the DMI Blog on June 11, 2009. Re-printed with permission by the author.


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Newsworthy But Not Sexy

Wednesday, June 17th, 2009

If you are a reporter and reading this, try this exercise: you’re a single parent; you have two children, ages two and seven; you have a high school diploma. Write yourself a budget: give yourself a job in line with your qualifications (with a typical salary), then figure out how much a typical apartment in the L.A. basin area costs, how much to budget for food, health care, child care, transportation. The assignment serves a purpose: to bring home the fact that it is impossible to support a family on minimum wage. The numbers simply cannot work. You can make up relatives to take care of the children while you’re working, you can make up a second or even a third job, you can pretend that L.A.’s public transportation works well enough that you won’t spend hours commuting, you can discover the holy grail–a minimum wage job with health insurance!–but no matter how many miracles you make up, you’re going to be relying on credit cards and getting deeper and deeper in debt.

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Since the ’90s, real wages have dropped. While this economy means that everybody is feeling the pinch, a press that already underreported the “working poor” has stopped talking about them altogether. Every story is about how the formerly-rich and -middle class are dealing with cuts in income. This makes sense in one sense; reporters are, in essence, reporting about the trends as they themselves are experiencing them. As reporters are being laid off right and left, those who are left are seeing budgets drying up for local news coverage, and advertisers don’t target the working poor because the working poor have no money. So reporting is going for the most accessible story, the cheapest to produce, the one that will resonate with advertisers’ target demographics: how their own class is dealing with this economy.

Barbara Ehrenreich wrote an excellent article, Too Poor to Make the News this weekend, pointing out that while the press will pay lip service to unemployment, stories about the working poor who are losing the minimum-wage jobs that barely got them by are not “sexy” enough. People losing their houses are more likely to get press sympathy than those who simply can’t make their rent. And at the same time, nonprofits that service low-wage populations have seen their endowments drop and donations decline, leading to layoffs and service cuts.

Economic stimulus money isn’t likely to get to the people at the bottom. Measures enacted to get it to the people who need it most, like reforming unemployment insurance, have been stymied by several state governors more interested in political rhetoric than their constituents. Affordable universal health care is gearing up for a fight against an apathetic or even hostile Congress. When the press doesn’t cover the people who are hurting the most, it’s easy to say that modernizations to unemployment and health care aren’t necessary. If the press were to show the true state of poverty in America today, the public would demand that something be done.

Unfortunately, as I see it, the press is too afraid of losing what’s left of its own industry to use their platform to leverage change.

About the Author: Janaki Spickard-Keeler works as a Media Outreach Specialist at Massey Media, a progressive communications strategy firm in DC. As a writer and researcher, Janaki crafts prose that speaks to journalists and editors and places her clients’ stories in the press. Janaki’s weekly writing on the world of press relations and what the media covers appears on the Massey Media blog, Own the Press.

This article originally appeared in Own the Press on June 15th, 2009. Re-printed with permission by the author.

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Congress Enacts Robust Whistleblower Protections to Prevent Fraud in Stimulus Spending

Tuesday, February 17th, 2009

The economic stimulus bill passed by Congress on February 12, 2009 includes robust whistleblower protections to ensure that employees of private contractors and state and local governments can disclose waste, fraud, gross mismanagement or a violation of law related to stimulus funds.  This article summarizes the key provisions of Senator McCaskill’s (D-Mo.) whistleblower protection amendment to the stimulus bill (“McCaskill Amendment”).

Covered Employers

The McCaskill Amendment applies to private contractors, state and local governments, and other non-Federal employers that receive a contract, grant or other payment appropriated or made available by the stimulus bill.

Broad Scope of Protected Conduct

Protected conduct includes a disclosure to a person with supervisory authority over the employee, a State or Federal regulatory or law enforcement agency, a member of Congress, a court or grant jury, the head of a Federal agency, or an inspector general information that the employee reasonably believes evidences:

  • Gross mismanagement of an agency contract or grant relating to stimulus funds;
  • A gross waste of stimulus funds;
  • A substantial and specific danger to public health or safety related to the implementation or use of stimulus funds;
  • An abuse of authority related to the implementation or use of stimulus funds; or
  • A violation of a law, rule, or regulation that governs an agency contract or grant related to stimulus funds.

Significantly, internal disclosures are protected, which is a substantial expansion of two current analogous whistleblower protection laws protecting contractors, both of which do not expressly cover internal disclosures.  See 10 U.S.C. § 2409; 41 U.S.C. § 265.  The McCaskill Amendment specifically protects so-called “duty speech” whistleblowing, i.e., disclosures made by employees in the ordinary course of performing their job duties. Courts will likely apply a standard of objective reasonableness from analogous whistleblower protection laws, such as Section 806 of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, which evaluates the reasonableness of a belief based on the knowledge available to a reasonable person in the same factual circumstances with the same training and experience as the aggrieved employee.

Prohibited Acts of Retaliation

The McCaskill Amendment prohibits a broad range of retaliatory employment actions, including termination, demotion, or any other discriminatory act, which includes any act that would dissuade a reasonable person from engaging in protected conduct.   See Burlington N. & Santa Fe R.R. Co. v. White, 548 U.S. 53 (2006).

Employee-Favorable Burden of Proof

To prevail in a whistleblower action under the McCaskill Amendment, an employee need not show that the protected conduct was a significant or motivating factor in the reprisal, but instead must merely prove that the protected conduct was a “contributing factor” to the reprisal.  The Amendment specifically clarifies that an employee can meet the “contributing factor” standard through temporal proximity or by demonstrating that the decision-maker knew of the protected disclosure.  An employer can avoid liability by demonstrating by “clear and convincing evidence,” a high evidentiary burden, that it would have taken the same action in the absence of the employee engaging in protected conduct.

Remedies

A prevailing employee is entitled to “make whole” relief, which includes: (1) reinstatement; (2) back pay; (3) compensatory damages; and (4) attorneys’ fees and litigation costs.  Where an agency files an action in federal court to enforce an order of relief for a prevailing employee, the court may also award exemplary damages.

Administrative Exhaustion Requirement and Right to a Jury Trial

Actions brought under the whistleblower provisions of the McCaskill amendment must be filed with the appropriate inspector general.  Unless the inspector general determines that the action is frivolous, does not relate to covered funds, or has been resolved in another Federal or State administrative proceeding, the inspector general must conduct an investigation and make a determination on the merits of the whistleblower retaliation claim no later than 180 days after receipt of the complaint. Within 30 days of receiving an inspector general’s investigative findings, the head of the agency shall determine whether there has been a violation, in which event the agency head can award a complainant reinstatement, back pay, compensatory damages, and attorney fees.  If an agency head has denied relief in whole or in part or has failed to issue a decision within 210 days of the filing of a complaint, the complainant can bring a de novo action in federal court, which shall be tried by a jury at the request of either party.  The McCaskill Amendment expressly clarifies that predispute arbitration agreements do not apply to claims brought under the Amendment.

Alternative Remedies

In addition to the relief available under the McCaskill Amendment, employees of government contractors have other options to remedy whistleblower retaliation.  The retaliation provision of the False Claims Act, 31 U.S.C. § 3730 (h), prohibits retaliation against an employee who has taken actions “in furtherance of” an FCA enforcement action, including initiating an FCA action, investigating a potential FCA action and testifying in an FCA action.  At least twenty-four states have adopted laws similar to the FCA, nearly all of which include an analogous retaliation provision.  Unlike the McCaskill Amendment, the retaliation provision of the FCA does not require administrative exhaustion.  Employees of contractors and of state governments may also have claims under state whistleblower protection statutes, but some of those statutes do not protect internal whistleblowing.  In addition, employees of private contractors may have a claim of common law wrongful discharge in violation of public policy, a tort remedy that provides access to a jury trial and punitive damages.  When evaluating a whistleblower retaliation claim arising from an employee’s disclosure about fraud on the government, it is critical to consider whether the employee also has a qui tam action and to preserve the employee’s ability to pursue a qui tam action, which may entail avoiding public disclosure of the fraud.

In sum, the McCaskill Amendment provides a critical safeguard against fraudulent spending of stimulus funds.

About the AuthorsJason Zuckerman, a Principal at The Employment Law Group law firm (www.employmentlawgroup.com) has litigated more than fifty whistleblower retaliation, qui tam, and wrongful discharge cases. He also litigates civil rights, discrimination, non-compete, and unpaid overtime actions in federal and state courts. Mr. Zuckerman serves as Co-Chair of the National Employment Lawyers Association’s Whistleblower Committee and Co-Chair of the Whistleblower Committee of the District of Columbia Bar’s Labor and Employment Section.

R. Scott Oswald, a Principal at The Employment Law Group law firm (www.employmentlawgroup.com) litigates whistleblower complaints nationally.  Notably, Mr. Oswald was the lead trial counsel in the ground-breaking Sarbanes-Oxley (SOX) whistleblower case of Kalkunte v. DVI, which remains one of the few SOX whistleblower cases in which the SOX whistleblower prevailed at the trial level.  Mr. Oswald is the President-Elect of the Metropolitan Washington Employment Lawyers Association.

Cross-posted from The Employment Law Group’s Whistleblower Law Blog.

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