by Stephen Kohn
CONTACTING OR PROVIDING INFORMATION TO A FEDERAL REGULATORY AGENT/INSPECTOR
Federal whistleblower laws permit employees to provide information to inspectors or regulatory agents. These laws allow for a wide range of formal and informal communications with federal investigators/regulators, including oral and written communications, formal testimony, and the filing of a complaint.
THE NEWS MEDIA
From the day Deep Throat secretly met with Washington Post reporter Bob Woodward in a Washington, DC parking garage, the potential impact of whistleblowing was seared into the American psyche. A whistleblower could play a key role in preserving Democratic institutions and force a corrupt president out of office. Going to the press—be it 60 Minutes or a local newspaper—is a quintessential act of whistleblowing. But obtaining protection for going to the news media can be very difficult. Ask Michael Andrew.
After thirty-one years on the Baltimore Police Department, Major Michael Andrew was very troubled. He had witnessed a police-shooting incident in which officers had killed an old man who had barricaded himself in his apartment. He wrote an internal memorandum expressing concerns over the misuse of deadly force. When upper management tried to cover up the potential misconduct surrounding the killing, Major Andrew took his concerns to the Baltimore Sun. For that crime he was fired. As in most whistleblower cases, loyalty trumps truth—even if someone was wrongfully shot to death.
Was providing his memorandum to the newspaper protected? The district court said no and left Major Andrew without a job. The U.S. Court of Appeals for the Fourth Circuit disagreed. A concurring Judge, J. Harvie Wilkinson, eloquently explained why: To “throw out” a case because an employee “took his concerns to the press” would have “profound adverse effects on accountability in government.” Without such protection, “scrutiny of the inner workings of massive public bureaucracies charged with major public responsibilities” would be “in deep trouble.” The “First Amendment should never countenance the gamble that informed scrutiny of the workings of government will be left to wither on the vine. That scrutiny is impossible without some assistance from inside sources such as Michael Andrew.” In conclusion, Judge Wilkinson warned: “[A]s the state grows more layered and impacts lives more profoundly, it seems inimical to First Amendment principles to treat too summarily those who bring, often at some personal risk, its operations into public view. It is vital to the health of our polity that the functioning of the ever more complex and powerful machinery of government not become democracy’s dark lagoon.”
Although no whistleblower statute explicitly states that employee reports to the news media are covered, courts have historically protected them. The news media is widely understood to be the “Fourth Estate” in American politics, wielding significant influence over the actions of both government and its regulators. Most judges who have written on this issue have expressed an understanding that many workers would view the press as an effective means to alert the public and government to potential wrongdoing, and actually place pressure on the elite to fix a problem.
In cases of public employment, there is no question that lawful and reasonable contacts with the press are constitutionally protected under the First Amendment and the Civil Rights Act of 1871 (42 U.S.C. § 1983). The leading First Amendment whistleblower case, Pickering v. Board of Education, protected a schoolteacher who wrote a letter to the editor of his local newspaper.
Administrative agencies have also protected disclosures to the news media. The U.S. Department of Labor has longstanding rules that protect whistle-blower disclosures to the press, including well-established precedent under Occupational Health and Safety Administration and the environmental and nuclear whistleblower laws.
Employees must be very careful when talking to the press. First, many courts still have not made definitive rulings concerning whether communications with the press are covered under various federal or state laws. Second, news reporters, like everyone else, have their own reputations. Some will religiously protect sources; others are not so careful and are more interested in a good story than in making sure a whistleblower is protected. Third, it is not uncommon for employers to initiate press “leak” investigations, on the pretext that confidential information may have been improperly disclosed to the press. Fourth, under the False Claims Act, and other reward-based anti-fraud laws, there are compelling reasons to confidentially provide information to government agencies, and avoid any contact with the press. Fifth, in the area of national security, federal employees have been criminally prosecuted for “leaking” confidential or “secret” information to the press. Sixth, in private sector whistleblower cases, there is no clear precedent that contacting the news media is protected. Seventh, under the laws protecting corporate trade secrets, communications with the news media are not protected, whereas whistleblowers can confidentially disclose such secrets to government investigators.
If done carefully and properly, the news media can be a critical catalyst for positive change. With some significant exceptions, especially when trade secrets or confidential information is at issue, most courts have recognized this reality.
DISCLOSURES TO SUPERVISORS
As mentioned in Rules 16 and 17, nearly all whistleblower laws should explicitly or implicitly protect employees who raise concerns directly with their supervisors. Some state whistleblower statutes actually require employees to inform supervisors of problems as a prerequisite for obtaining protection under local law. However, unless such disclosures are unequivocally covered in the statutory definitions of a whistleblower law, employees must be very careful in simply relying upon the assumption that a court exercise common sense and rule that internal protections are covered.
The Garcetti and Dodd-Frank Act cases stand as reminders that relying solely on internal whistleblower disclosures as the foundation of a legal case, in the absence of explicit statutory protection, is dangerous and may result in a whistleblower losing his or her case.
“WHISTLEBLOWER” WEB SITES/WIKILEAKS
Various organizations sponsor websites or other online services that solicit whistleblowers to disclose confidential information anonymously. These sites often claim that they can protect the identify of their sources. But leaking information through these services is extremely risky and can be counterproductive. There are numerous reasons whistleblowers should be very wary of these sites. Here are a few:
First, there is no legal privilege associated with communications to web sites such as Wikileaks. They are not covered under the attorney-client privilege or a law enforcement privilege. The website that sponsors the “whistleblowing” service can be subjected to subpoena, civil discovery or various high-tech searches conducted under the U.S. Patriot Act and other legal authorities. If a whistleblower is questioned under oath (such as in a deposition) whether they were a source to the website, they either must admit to the leak, plead the 5th Amendment against self-incrimination, or commit perjury. It puts the whistle-blower in a lose-lose-lose situation.
Second, the Chelsea Manning case should be a lesson to any whistle-blower thinking of doing an online document dump. Manning leaked information to Wikileaks. He was discovered and sentenced to 35 years in prison. His mistreatment resulted in two suicide attempts while in military jails. Although Manning wanted to expose wrongdoing, the method he used to disclose his information stripped him of the rights he potentially had as a whistleblower under the military whistleblower law, and opened him to criminal prosecution.
Third, you may be harming legitimate law enforcement investigations. If law enforcement obtained the information confidentially from the whistle-blower, and opened an investigation, the online document dump could tip-off the company about the evidence that could be used against it, and permit the company to create a strong defense. The company could also claim that any investigation was tainted by the improper theft of its documents.
Fourth, courts have been unkind to whistleblowers who “steal” information from
the government or their employer and then have it published online. This type of prejudice can result and has resulted in the dismissal of an otherwise strong case.
Fifth, you could be prejudicing an otherwise strong reward case under the False Claims Act and other related laws.
Finally, the online site is under no legal obligation to protect you. They can profit from your information, even if you go to jail. The law views publishers of information differently from those who leak information. It is rare for a news organization to be prosecuted from publishing classified information, whereas sources of classified information have been investigated, fired, and prosecuted.
Before using an online “whistleblower” website to make a disclosure, contact an attorney. Learn the risks associated with such a document-dump, how you may release materials lawfully, and alternatives that may exist to using these services.
DISCLOSURES THAT BYPASS THE CHAIN OF COMMAND
It is common for whistleblowers to bypass their formal chain of command when they raise concerns within their company. If an immediate supervisor is the perceived problem, employees may decide that this level of management should be ignored and that they should therefore inform higher-level officials of the concern. Likewise, some companies have established complaint processes that employees are either required or urged to follow.
When the U.S. Department of Labor reviewed this issue it held that employees could not be disciplined simply for failing to follow the chain of command when making protected disclosures. Moreover, the DOL ruled that if an employer fired a worker for refusing to follow the chain of command when making a protected disclosure that discharge was, per se, illegal.
TRADE UNIONS AND PUBLIC INTEREST GROUPS
Working directly with union officials to report illegal or unsafe conditions should be protected activity under the National Labor Relations Act and most federal whistleblower laws. The nuclear and environmental whistleblower laws, either in their statutory text or legislative history, make clear that working with union representatives is protected activity. In a 1982 decision, the U.S. Court of Appeals for the Second Circuit agreed and found an employee’s reports to a union safety committee to be protected under the Atomic Energy Act.
In a 1987 case filed under the nuclear whistleblower law, the secretary of the DOL held that employee communications with public interest groups may constitute protected activity. An employee’s decision to work with an advocacy group to ensure that his or her concerns were properly investigated was considered a reasonable response to the discovery of safety problems.
In a water pollution case, the DOL reasoned that bringing “sludge discharge information to the attention” of an “environmental activist” who could be “expected to act on the information” was protected activity. The DOL judge recognized that “while the [employee] did not himself ask” for a government investigation by government officials, there was a “causal nexus” between his disclosure to an environmental activist, the news media, and the fact that an investigation was started.
CORPORATE COMPLIANCE PROGRAMS
Since the passage of the Sarbanes-Oxley Act, every publicly traded corporation in the United States is mandated to have an internal employee-concerns program, which is required to provide confidentiality to employees who blow the whistle internally. The SOX whistleblower protection law specifically protects employees who contact this type of internal department. The federal rules for government procurement and the federal sentencing guidelines also contain provisions that strongly encourage or require companies to establish internal corporate compliance programs.
As explained in Rules 16–18, before using one of these programs, you should try to find out its reputation for independence, honesty, and objectivity. Do the corporate managers truly support employees who utilize these company-controlled systems? Is the program controlled by the company attorneys? More important, you must determine whether contacting compliance officials will be legally protected. Under the Sarbanes-Oxley Act, SOX disclosures to an internal corporate compliance department are protected, but if a law does not explicitly protect such intercorporate reporting, you may share the fate of the employees discussed in Rules 16 and 17, who lost their jobs because they raised internal complaints.
DISCLOSURES BY ATTORNEYS
It is extremely tricky for attorneys to become whistleblowers. Under well-established rules governing attorney-client privilege, lawyers must keep the secrets of their clients. But under whistleblower laws, all employees have the right to report violations of law to appropriate authorities. What happens when these two principles collide?
The U.S. Courts of Appeals have recognized that lawyers can sue for wrongful discharge if they are fired for blowing the whistle inside their companies. In one such case, Shawn and Lena Van Asdale worked as in-house counsel for a publicly traded company. They reported “possible shareholder fraud in connection with a merger” to the company’s general counsel and were subsequently fired. They sued the company under the Sarbanes-Oxley Act. The company asked the Court to throw out the lawsuit on the basis of their status as attorneys. This argument was completely rejected by the Court. Looking at the text of the Sarbanes-Oxley Act, the Court held that attorneys could be protected under the law, reasoning that “Congress plainly considered the role attorneys might play in reporting possible securities fraud.” The Court further explained that procedures could be employed, such as issuing a protective order, to protect a company’s legitimate interests if the case went to trial and confidential matters become relevant to the case.
In a second case, the U.S. Court of Appeals for the Fifth Circuit summed up the status of lawyers: “[T]he attorney-client privilege” is not a “per se bar to retaliation claims under the federal whistleblower statutes.” In other words, being an attorney does not automatically forfeit your whistleblower rights.
Although the courts have been amenable to attorneys filing wrongful discharge lawsuits, the issue of when, how, and to whom an attorney can make a protected disclosure is complex and often contested. It is imperative that attorneys take special care to ensure that any disclosures they make conform to state or federal law. Put another way, be cautious what you report and to whom so that you do not end up fired or disbarred for trying to do the right thing.
Federal and state courts have applied local bar rules to attorney-whistle-blower disclosures. In one such case, Quest Diagnostics, the U.S. Court of Appeals for the Second Circuit dismissed the whistleblower’s case, even though the Court recognized that the dismissal could result in the dismissal of a legitimate whistleblower claim. The Court determined that protecting the attorney-client privilege may, in some cases, “impede the pursuit of meritorious litigation to the detriment of the justice system.”
The U.S. Securities and Exchange Commission has special rules on attorney conduct. Attorneys who “appear” or “practice” before the Commission can (and in some circumstances, must) raise securities fraud issues to the “client” or to his or her supervisors at a law firm. Under federal law (which should trump state bar rules), there are specific circumstances under which a corporate attorney can provide privileged information to the SEC. An article published by Latham & Watkins (a large corporate law firm that does not represent whistleblowers), explained that if an attorney reasonably believes his or her SEC-regulated corporate client is continuing to commit a “material violation” of law that is “likely to cause a substantial injury to the financial interests” of investors, he or she can disclosure privileged information to the SEC. These reports are limited to three circumstances: (1) “to prevent a material violation” of law “that is likely to cause substantial injury to the financial interest” of the company or its investors; (2) to prevent the company from “committing perjury, suborning perjury,” or committing a fraud on the SEC; or (3) to “rectify the consequences of a material violation” caused by the company that is likely to cause a “substantial injury” to the financial interests of investors, if the “a
ttorney’s services were used.” If an attorney meets one of these strict requirements, he or she should also be able to qualify for a financial reward from the SEC under the Dodd-Frank Act, although no court has specifically addressed this issue.
The case law has gone in two directions. Corporations have hidden behind attorney-client privilege to keep information about fraud and their criminal conduct from the public. They have filed disciplinary actions against attorneys whom they have accused of improperly blowing the whistle. But attorney-whistleblowers have pursued their cases and prevailed. The law in this area is still developing, and there are no easy answers for attorneys who want to blow the whistle.
DON’T BE INSUBORDINATE
Blowing the whistle does not give an employee license to be insubordinate. The courts recognize that in the context of protected activities, emotions may run high, and consequently they acknowledge “some leeway for impulsive behavior.” The key issue in these types of cases is “whether an employee’s actions are indefensible under the circumstances.” This analysis often is conducted on a case-by-case basis and is based on the type of work an employee performs and what type of “unduly disruptive” behavior is involved.
BEWARE OF TRAPS
Remember that each whistleblower protection law is different. The laws all have their own definitions of protected activity, and there is no judicial consensus defining even the most basic parameters of employee rights of speech. Often an employee blows the whistle first and then tries to figure out if the disclosures were protected. Before you sound the alarm, find out what law may protect you.
PRACTICE TIPS
• Checklist 2 lists federal whistleblower laws, with citations to important cases, including cases defining the scope of protected activity. The references for this Rule also cite specific court rulings on the scope of protected activities.