by Stephen Kohn
Committee on Energy and Commerce, “Food Safety Enhancement Act of 2009,” House Report No. 111-234 (July 29, 2009).
Regulations implementing the food safety whistleblower law are published by the Department of Labor at 29 C.F.R. Part 1987.
The FDA and Department of Labor entered into a Memorandum of Understanding to implement the law on June 20, 2011.
FOREIGN CORRUPT PRACTICES ACT
See Handbook Rules 8 and 9 and Checklists 7 and 8.
FRAUD AGAINST SHAREHOLDERS
Sarbanes-Oxley Act: 18 U.S.C. § 1514A (antiretaliation); 15 U.S.C. § 78j-1-4 (confidential employee concerns program); 15 U.S.C. § 7245 (attorney whistle-blower rules); 29 C.F.R. Part 1980 (Department of Labor regulations implementing SOX whistleblower law). Two critically important Department of Labor decisions interpreting the scope of protected activity, employer coverage, and the requirements needed for filing a complaint are: Sylvester v. Parexel International, 2007-SOX-39/42 (DOL ARB 2011); and Johnson v. Siemens, 2005-SOX-15 (DOL ARB 2011). Both cases provide broad protections for employees.
Funke v. Federal Express Corp., 2007-SOX-43 (DOL ARB, July 8, 2011) (broad definition of protected activity covering third party fraud) (disclosures to local law enforcement protected).
Lawson v. FMR LLC, 134 S.Ct. 1158 (2014) (independent contractors working for mutal funds are protected under SOX).
Kohn, et al., “Whistleblower Law: A Guide to Legal Protections for Corporate Employees” (Westport, CT: Praeger, 2004) (comprehensive guide to the Sarbanes-Oxley Act’s whistleblower protections prior to Dodd-Frank amendments).
S. Rep. No. 107-146, 2nd Session, 107th Congress (2002) (legislative history of SOX whistleblower law prior to the Dodd-Frank amendments).
The U.S. Department of Labor Office of Administrative Law Judges compiles a comprehensive listing of whistleblower decisions under SOX. See www.oalj.dol.gov.
The Sarbanes-Oxley Act is the key federal corporate whistleblower protection law. Under its provisions OSHA conducts a preliminary investigation that can result in the preliminary reinstatement of the whistleblower. The OSHA determination can be appealed, and employees are entitled to either a full hearing before a Department of Labor judge or a jury trial in federal court. The law prohibits mandatory arbitration. The applicability of the nonarbitration provision has been held to be retroactive. Wong v. CKK, 2012 WL 3893609 (S.D.N.Y. 2012). SOX claims may be filed in conjunction with reward claims under the Dodd-Frank Act.
HEALTH CARE ENTITLEMENT
Affordable Care Act, Public Law 111-148, §1558, codified at 29 U.S.C. § 218C (reporting violations of the Public Health Service Act). When blowing the whistle on abusive patient care, whistleblowers should also review applicable state laws for potential coverage.
The Affordable Health Care Act’s Whistleblower provision primarily covers employers who may seek to retaliate against employees for asserting their rights under “Obamacare” or for reporting infractions of the law’s accountability provisions.
IRS WHISTLEBLOWER REWARDS
See Handbook Rule 7.
MILITARY/ARMED SERVICES
Protected Communications, 10 U.S.C. § 1034(a) (“No person may restrict a member of the armed forces in communicating with a member of Congress or an Inspector General”). In addition to permitting members of the armed forces to communicate with Congress and an Inspector General, the statute also permits members of the armed services to blow the whistle to their supervisors, DoD, auditors, or law enforcement officers and other persons designated by rule or regulation. The Inspector General regulation implementing this law is set forth in DoD Directive 7050.06 (July 23, 2007).
A comprehensive paper on the armed services whistleblower law was published online at http://thomasjfiscus.net/files/Whistleblower_Paper_JM.pdf. The paper is entitled “Whistleblowers and the Law; An Analysis of 10 U.S.C. § 1034: The Military Whistleblower Protection Act,” and is dated April 30, 2005. No author is listed.
Additional laws and regulations provide protection for members of the Coast Guard (33 C.F.R. Part 53), employees of DoD “non-appropriated fund instrumentalities” (10 U.S.C. § 1587), and former members of the armed services who file complaints concerning the failure of an employer to comply with re-employment rights (38 U.S.C. §§ 4311, 4322-24).
MINE HEALTH AND SAFETY
Mine Health and Safety Act (antiretaliation), 30 U.S.C. § 815(c).
James A. Broderick and Daniel Minaham, “Employment Discrimination under the Federal Mine Safety and Health Act,” 84 West Virginia Law Review 1023 (1982).
NUCLEAR SAFETY
Silkwood v. Kerr-McGee Corp., 667 F.2d 908 (10th Cir. 1981), reversed at 464 U.S. 238 (1984).
Section 211 of the Energy Reorganization Act, 42 U.S.C. § 5851 (nuclear safety whistleblower law). Implemented by the Department of Labor pursuant to 29 C.F.R. Part 24 and 29 C.F.R. Part 18.
The Nuclear Regulatory Commission considers the harassment and intimidation of whistleblowers as a serious safety matter and has implemented regulations that sanction companies that engage in retaliation. 10 C.F.R. § 50.7. See In re Five Star Products, 38 NRC 169 (1993); “Freedom of Employees in the Nuclear Industry to Raise Concerns without Fear of Retaliation”; Policy Statement, 61 Federal Register 24336 (1996); “Memorandum of Understanding between NRC and Department of Labor, Employee Protection,” 47 Federal Register 54585 (1982).
Vinnett v. Mitsubishi, 2006-ERA-29 (Dept. of Labor ARB, July 27, 2010) and Speegle v. Stone & Webster, 2005-ERA-6 (Dept. of Labor ARB, Sept. 24, 2009) (cases setting forth elements of nuclear safety claims and proof of discrimination).
The U.S. Department of Labor Office of Administrative Law Judges compiles a comprehensive listing of whistleblower decisions under nuclear safety law. See www.oalj.dol.gov.
OSHA/WORKPLACE SAFETY
OSHA section 11(c) is codified at 29 U.S.C. § 660(c). The Labor Department regulations are located at 29 C.F.R. Part 1977.
Government Accountability Office, Whistleblower Protection Program: Better Data and Improved Oversight Would Help Ensure Program Quality and Consistency, GAO 09-106 (Jan., 2009).
Reich v. Cambridgeport Air Systems, 26 F.3d 1187 (1st Cir. 1994) (permitting compensatory and punitive damages to be awarded under OSHA).
U.S. House of Representatives, Hearing Before the Subcommittee on Workforce Protections (April 28, 2010) (Testimony of Lynn Rhinechart, General Counsel, AFL-CIO).
Wood v. Department of Labor, 275 F.3d 107 (D.C. Cir. 2001). During the April 28, 2010 hearing before the House Subcommittee, Mr. Neal Jorgensen testified about a similar incident in Preston, Idaho, in which he was fired by Plastics Industries. Again, the OSHA investigators determined that he was illegally fired, but the OSHA attorneys decided that they would not file a lawsuit in court. See Statement of Neal Jorgensen.
States court rulings protecting OSHA whistleblowers under state law: Kinzel v. Discovery Drilling, 93 P.3d 427 (Alaska 2004); Boston v. Penny Lane Centers, 170 Cal. App. 4th 936 (2009); Fragassi v. Neiburger, 646 N.E.2d 315 (Ill. App. 1995); George v. D.W. Zinser Co., 762 N.W.2d 865 (Iowa 2009); Hysten v. Burlington Northern, 108 P.3d 437 (Kan. 2004); Abraham v. County of Hennepin, 639 N.W. 342 (Minn. 2002); Cerracchio v. Alden Leeds, Inc., 538 A.2d 1292 (N.J. Superior 1988); Gutierrez v. Sundance, 868 P.2d 1266 (N.Mex. App. 1993); D’Angelo v. Gardner, 819 P2d 206 (Nev. 1991); Jenkins v. Central Transport, 2010 U.S. Dist. LEXIS 7739 (N.D. Ohio); Vasek v. Board of County, 186 P.3d 928 (Okla. 2008); Walters v. Boll’n Oilfield, 2008 U.S. Dist. LEXIS 12931 (D. Oreg. 2008). Contra., Burham v. Karl and Geld, 745 A.2d 178 (Conn. 2000). See also Maine Whistleblower Protection Act, 26 M.R.S. §§ 831-833.
PIPELINE SAFETY ACT
Pipeline Safety Improvement Act, 49 U.S.C. § 60129, implemented by the U.S. Department of Labor under 29 C.F.R. Part 1981. The rules governing administrative hearings are codified at 29 C.F.R. Part 18.
The U.S. Department of Labor Office of Administrative Law Judges compiles a comprehensive listing of whistleblow
er decisions under pipeline safety law. See www.oalj.dol.gov.
RIPPING OFF THE TAXPAYER/FALSE CLAIMS ACT
Rule 6 sets forth a detailed analysis of the False Claims Act.
The False Claims Act is codified at 31 U.S.C. § 3729-32 and the Major Frauds Act is codified at 18 U.S.C. § 1031. Additional antiretaliation provisions protecting employees who work on government contracts are contained in the American Recovery Reinvestment Act, P.L. 111-5 (antiretaliation in stimulus), and at 10 U.S.C. § 2409 and 41 U.S.C. § 265 (federal contractors and defense contractors). An overview of the FCA, written from a defense perspective, was prepared by John T. Boese, “Recent Developments under the Federal False Claims Act,” Health Care Compliance Association (April 2016), at www.hccainfo.org/Portals/O/PDFs/Resources/Conference_Handouts/Compliance_Institute/2016/P6handout2.pdf.
SARBANES-OXLEY ACT (“SOX”)
See sources listed under “Fraud Against Shareholders” and cases referenced in Checklist 2, “Whistleblower Protection Under Federal Law.”
SEAMAN WHISTLEBLOWER PROTECTION
Protection of Seaman against Discrimination, 42 U.S.C. § 2114.
Protection for Members of Coast Guard, 33 C.F.R. Part 53.
The U.S. Department of Labor Office of Administrative Law Judges compiles a comprehensive listing of whistleblower decisions and will publish administrative rulings under this law. See www.oalj.dol.gov.
TRADE SECRETS
Defend Trade Secrets Act, 18 U.S.C. § 1833(b).
Senate Committee on the Judiciary, Defend Trade Secrets Act of 2016, Report No. 114-220 (March 7, 2016).
TRANSPORTATION (TRUCKING, RAILROADS, AND PUBLIC TRANSPORTATION)
National Transit Systems Security Act, 6 U.S.C. § 1142.
Railway Safety Labor Act, 49 U.S.C. § 20109.
Surface Transportation Act, 49 U.S.C. §§ 31101, 31105.
U.S. Department of Labor rules implementing the transportation whistle-blower laws: 29 C.F.R. Part 1978 (surface transportation); 29 C.F.R. Part 1982 (national transit and railroad safety). The rules governing the administrative hearings are located at 29 C.F.R. Part 18.
Department of Labor cases setting forth elements of railroad and trucking safety laws, damages, and how to calculate statute of limitations: Anderson v. Amtrak, 2009-FRS-3 (Dept. of Labor ALJ, Aug. 26, 2010) and Canter v. Maverick Transportation, 2009-STA-54 (Dept. of Labor ALJ, Oct. 28, 2010).
The U.S. Department of Labor Office of Administrative Law Judges compiles a comprehensive listing of whistleblower decisions under transportation safety laws. See www.oalj.dol.gov.
WITNESSES IN FEDERAL COURT PROCEEDINGS
Civil Rights Act of 1871, 42 U.S.C. § 1985.
The Supreme Court upheld federal claims under this Reconstruction Era statute in Haddle v. Garrison, 525 U.S. 121 (1998). Unlike most employment laws, this was enacted in 1871 when the current employee-employer relationships did not exist. Instead of prohibiting wrongful discharge, this statute prohibits “conspiracies” to interfere with witnesses at federal court proceedings. Victims of such conspiracies can obtain full tort remedies, including damages for economic harm, compensatory damages, and punitive damages. An issue critical to the future effectiveness of this law is known as the “intracorporate conspiracy doctrine.” Under this doctrine persons employed within one corporation cannot “conspire” with each other. If the courts accept this rule, retaliation cases based on the Haddle precedent would be nearly impossible to establish in the modern work environment. However, a number of courts have rejected this doctrine and permitted Haddle-based claims to go forward. See McAndrew v. Lockheed Martin, 206 F.3d 1031 (11th Cir. 2000) (en banc).
Rule 5: Don’t Forget State Laws
State “public policy” common law and statutory remedies for whistleblowers, along with citations to major cases, are set forth in Checklist 3.
Lawrence Blades, “Employment at Will v. Individual Freedom: On Limiting the Abusive Exercise of Employer Power,” 67 Columbia Law Review 1404 (Dec. 1967). This ground-breaking law journal article was relied upon in numerous court decisions as providing a legal justification for changing the “at-will” doctrine.
Petermann v. International Brotherhood of Teamsters, 344 P.2d 25 (Cal. App. 1959). Stephen Kohn, “Concepts and Procedures in Whistleblower Law,” Quorum Press 2000 (Chapter 2) (setting forth state-by-state analysis).
Robert G. Vaughn, “State Whistleblower Statutes and the Future of Whistleblower Protection,” 51 Administrative Law Review 581 (1999).
Workplace Fairness publishes an online, state-by-state guide to local whistle-blower laws. See www.workplacefairness.org/whistleblowerclaim.
Wendeln v. Beatrice Manor, 712 N.W.2d 226 (Neb. 2006) (discussing difference in damages available to whistleblower under tort versus contract theories of recovery under state law).
Cases rejecting federal preemption of state whistleblower/employment claims: English v. General Electric, 496 U.S. 72 (1990) (state common law not preempted despite existence of federal safety-related whistleblower law); Gervasio v. Continental Airlines, 2008 U.S. Dist. LEXIS 58767 (N.J. 2008) (no federal preemption under Airline Deregulation Act); Hawaiian Airlines v. Norris, 512 U.S. 246 (1994) (no preemption under federal Railroad Safety Act); Lingle v. Norge Division, 486 U.S. 399 (1988) (state retaliatory discharge law not preempted by collective bargaining agreement). In addition, many whistleblower statutes, including those in the Dodd-Frank Act and the Sarbanes-Oxley Act, contain an explicit “savings clause” that preserves an employee’s right to file state lawsuits based on the same underlying facts as those set forth in the federal lawsuit. See, e.g., 18 U.S.C. § 1514A(d) (SOX).
Rule 6: Get a Reward! False Claims Act/Qui Tam
The False Claims Act (FCA), 31 U.S.C. §§ 3729-32.
Modern Legislative History of the FCA: Committee on the Judiciary, “The False Claims Act of 1985,” S. Rep. 99-345, 99th Cong., 2nd Sess. (1986). The major interpretative tool for understanding the 1986 amendments to the FCA that revitalized the law.
Committee on the Judiciary, “The False Claims Act Correction Act of 2008,” S. Rep. 110-507, 110th Cong., 2nd Sess. (2008). Although the 2008 Senate report concerns the False Claims Act Corrections Act, a law that was never passed by Congress, in 2009–10 many of its provisions were approved (either in whole, in part, or in a modified form) and signed into law. See the Fraud Enforcement and Recovery Act, Public Law No. 111-21, § 4 (May 20, 2009); the Patient Protection and Affordable Care Act, Public Law No. 111-148, § 10104(j)(2) (March 23, 2010); and the Dodd-Frank Act, Public Law No. 111-203, § 1079A (July 21, 2010). The 2008 Senate Report is an excellent starting point for understanding these three amendments.
Committee on the Judiciary, “Fraud Enforcement and Recovery Act of 2009,” S. Rep. 111-10, 111th Cong. 1st Sess. (2009) (legislative history for the 2009 FCA amendments). See also Extension Remarks by Congressman Berman, Congressional Record, pp, E1296–97 (June 3, 2009).
Decisions interpreting the original intent of the FCA: U.S. ex rel. Marcus v. Hess, 317 U.S. 537 (1943); United States v. Griswold, 24 F. 361 (D. Ore. 1885).
Decisions interpreting the 1986 amendments: Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765 (2000) (FCA is constitutional); Rockwell International Corp. v. U.S. ex rel. Stone, 549 U.S. 457 (2007) (limiting recoveries by relators; partially reversed by 2010 amendment to FCA); Cook County v. U.S. ex rel. Chandler, 538 U.S. 119 (2003) (municipal corporations covered under FCA); KBR v. U.S. ex rel. Carter, 135 S.Ct. 1970 (2015)(clarifying statute of limitations and original source standards); Universal Health Services v. U.S. ex rel. Escobar, 136 S.Ct. 1989 (2016) State Farm v. U.S. ex rel. Rigsby, 137 S.Ct. 436 (2016) (sanctions for violating seal).
The broad coverage of employers and contractors under the FCA’s anti-retaliation provision was explained in U.S. ex rel. Bias, 816 F.3d 315 (5th Cir. 2016).
Claire Sylvia, “The False Claims Act: Fraud against the Government,” Thomson/West (Danvers, Mass: 2004).
Note, “The History and Development of Qui Tam,” Wash. U. L. Q. 81 (1972).
Joel Hesch, “Understanding the ‘Original Source Exception’ to the False Claims Act’s ‘Public Disclosure Bar’ in Light of the Supreme Court’s Ruling in Rockwell v. United States,” 7 DePaul Bus. & Com. Law Journal 1 (Fall 2008).
Elleta Callahan and Terry Dworkin, “Do Good and Get Rich: Financial Incentives for Whistleblowing and the False Claims Act,” 37 Vill. L. Rev. 273 (1992).
Thomas Harris, “Alternative Remedies & The False Claims Act: Protecting Qui Tam Relators in Light of Government Intervention and Criminal Prosecution Decisions,” 94 Cornell Law Review 1293 (2009).
The U.S. Department of Justice discloses information on FCA recoveries on the webpage for the site Civil Division, Commercial Litigation Branch, Civil Frauds. See DOJ Civil Fraud press releases regarding FCA settlements and judgments, http://www.justice.gov/civil/frauds/Civil%20Fraud.htm. The Civil Frauds web page also has statistics on FCA recoveries and a “primer” outlining basic tenants of the FCA.
As of Sept. 30, 2016, the total recoveries under the whistleblower qui tam provisions of the FCA were $37.685 billion.
Some of the 2010 rewards were: Allegan, Inc. paid $600 million for improper “off-label” marketing of Botox; Teva Pharmaceuticals paid $169 million for inflating prices for medications sold under state Medicaid programs; Hewlett-Packard paid $55 million for paying kickbacks to obtain recommendations for agency purchases of its products; Chevron and Mobil paid $45.5 million and $32.2 million, respectfully, for underpaying royalties on natural gas production on federal lands; Tyco International and three other companies paid $39 million for providing substandard parts for water supply systems. See Taxpayers against Fraud Education Fund, “False Claims Act Update & Alert,” Press Release (Oct. 1, 2010).
On December 14, 2016, the Department of Justice issued a statement from Benjamin Mizer, the Principal Deputy Assistant General for the Civil Division, praising the whistleblower provisions of the False Claims Act. He explained that the “beneficiaries” of FCA litigation include “veterans, the elderly, and low-income families who are insured by federal health care programs; families and students who are unable to afford homes and go to college thanks to federally insured loans; and all of us who are protected by the government’s investment in national security and defense. In short, Americans across the country are healthier, enjoy a better quality of life, and are safer because of our continuing success in protecting taxpayer funds from misuse.”