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© Husch Blackwell LLP
Avoiding Retaliation Claims from WhistleblowersChristopher L. Ottele
WHAT IS A WHISTLEBLOWER?
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What is a Whistleblower?
Whistleblowers disclose information reasonably believed to evidence violations of:
•Securities Laws•Health and Safety Laws
•Contractor Fraud•Labor and Employment Laws
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What Laws Protect Whistleblowers
•Dodd‐Frank Act• Sarbanes Oxley•Dodd‐Frank Act• Sarbanes OxleySecurities
•Affordable Care Act•OSHA•MSHA•Environmental Laws
•Affordable Care Act•OSHA•MSHA•Environmental Laws
Health & Safety
•False Claims Act (qui tam)• The National Defense Authorization Act of 2013 (NDAA)• False Claims Act (qui tam)• The National Defense Authorization Act of 2013 (NDAA)
Federal Contractor
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What Laws Protect Whistleblowers
• Title VII• ERISA• FMLA• NLRA• FLSA• ADA
• Title VII• ERISA• FMLA• NLRA• FLSA• ADA
Labor and Employment
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WHO ENFORCES THE WHISTLEBLOWER RETALIATION
LAWS
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Who has had experience with an employee claiming to report violations of
any of these laws?
Yes
No
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Federal Agencies
Equal Employment Opportunity Commission
U.S. Department of Justice
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Federal AgenciesSecurities Exchange
CommissionOccupational Safety and
Health Administration
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Securities and Exchange Commission
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Who is Most Likely to Bring Enforcement Actions / Suits?
(a) The Securities and Exchange Commission
(b) Commodity Futures Trading Commission
(c) The Equal Employment Opportunity Commission
(d) U.S. Department of Justice
(e) Occupational Safety and Health Administration
(f) Private Attorneys’ General
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Better Call Saul
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Plaintiff’s Attorneys
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Employees (and their Attorneys) Protecting Themselves
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Total Charges Filed With EEOC Alleging Retaliation
Retaliation ‐ All Statutes
Retaliation ‐ Title VII only
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Whistleblower’s Advantages
Employees bringing claims of retaliation have significant advantages in litigation:• Agency Investigative Resources• Economic Damages (back pay and front pay)• Reinstatement• Compensatory Damages (emotional distress)• Criminal Penalties (SOX / Dodd‐Frank / False Claims Act)• Attorney’s Fees (often unilateral)• Punitive, Liquidated or Exemplary Damages• Skilled Contingent Fee Attorneys• Statute of Limitations on Underlying Claim can be as Much as 10 Years
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Whistleblower’s Bounty
What is the maximum amount that a whistleblower can recover under the Dodd‐Frank Act when there has not been an internal report?
(a) $500,000
(b) 10% of the Total Penalty Recovered
(c) Nothing
(d) 30% of the Total Penalty Recovered
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Powerful Incentives
Whistleblower Awards (Bounties)
• False Claims Act (15‐25% for successful qui tam claim)• Dodd‐Frank Act (“original information” about a securities law violation that leads to a successful enforcement action and penalty of $1 million or more, 10‐30%)
• No internal reporting required
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We are Just Getting Started
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Colorado
Public Policy Discharge:
(1) The employer directed the employee to perform an illegal act, OR prohibited the employee from performing a public duty or exercising an important job‐related right or privilege;
(2) The action directed by the employer would violate a specific statute related to public health, safety, or welfare, or would undermine a clearly expressed policy relating to the employee's basic responsibility as a citizen or the employee's right or privilege as a worker;
(3) The employee was terminated as the result of refusing to perform the act directed by the employer; and
(4) The employer was aware that the employee's refusal to perform the act was based on the employee's reasonable belief that the directed act was unlawful.
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Sarbanes-Oxley Primer
Publicly traded employers Prohibits retaliation for complaints of fraud Enforcement:
OSHA investigation, hearing, appeal Court in 180 days
Department of Labor has recently become very employee friendly Expansive ARB decisions
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Sarbanes-Oxley Primer
Dodd-Frank amendments to SOX: Jury trial No mandatory pre-dispute arbitration Longer limitations period Wholly-owned subsidiaries are covered No requirement to exhaust administrative remedies Why rely on SOX if you can use Dodd-Frank?
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Sarbanes-Oxley Primer
Lawson v. FMR Securities (U.S. Sup. Ct.): Does SOX protect employees of a privately-held contractor
or subcontractor of a publicly-traded corporation?
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When Employers Face a Retaliation Claim, What Should be their Greatest
Concern?
(a) Legal Fees
(b) The Power and Might of the Federal Government
(c) Plaintiff’s Attorneys
(d) Jurors’ Preconceptions
(e) Laws Favoring Whistleblowers
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Popular Culture
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Media
Julian Assange (WikiLeaks)
Julian Assange (WikiLeaks)
Private Manning (U.S. Army)
Private Manning (U.S. Army)
Edward Snowden (NSA)
Edward Snowden (NSA)
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© 2014 Husch Blackwell LLP. All Rights Reserved.
YOU HAVE A WHISTLEBLOWER, NOW WHAT?
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Handling Whistleblowers
You have scheduled a meeting with an underperforming employee to discuss a last chance agreement. Just before the meeting, the employee complains of a supervisor’s harassment of a subordinate:
(a) Protect the employee from any disciplinary or adverse action and investigate
(b) Investigate the complaint with promises of fairness, communication and neutrality
(c) Proceed with the last chance agreement and communicate the need for cooperation with the investigation of the supervisor
(d) Cancel the meeting, discuss with outside counsel, and following an investigation of the complaint, determine how to proceed
(e) Other?
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Do Not Ask To Whom the Whistle BlowsAny internal complaint can become the source for a whistleblower complaint• Sarbanes Oxley compliant hotlines or tip lines• Conversations with Supervisors• “Confidential” Communications with Human Resources
• E‐mail• Watercooler• Lawyers
Any internal complaint can become the source for a whistleblower complaint• Sarbanes Oxley compliant hotlines or tip lines• Conversations with Supervisors• “Confidential” Communications with Human Resources
• E‐mail• Watercooler• Lawyers
© 2014 Husch Blackwell LLP. All Rights Reserved.
Managing the Whistleblower
Care and Feeding of
Complainants
Serial Complainers Discipline
Performance RIFManner of opposition activity
False Complaint
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