New Whistleblower Protection Laws and Cross-Cutting Issues in Whistleblower Retaliation Litigation

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New Whistleblower Protection Laws and
Cross-Cutting Issuesin Whistleblower Retaliation
Litigation

• Jason M. Zuckerman
• The Employment Law Group Law Firm
• Tel [phone]
• Fax [phone]
• jzuckerman_at_employmentlawgroup.net
• www.employmentlawgroup.net

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New Whistleblower Protection Provisions

• 9/11 Act for Transportation Employees
• CPSC Reform Act for Manufacturing, Private
  Labeler, Retail and Distribution Employees
• Whistleblower Protections for DoD Contractor
  Employees
• DoD Directive 1401.3

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9/11 Act Transportation Whistleblower Protections

• Public Transportation Employees
• 1413 establishes National Transit Systems
  Security Act of 2007 (NTSSA) to protect public
  transportation employees
• Railroad Employees
• 1521 amends the Federal Rail Safety Act
  (FRSA), 49 U.S.C. 20109
• Commercial Motor Carrier Employees
• 1536 amends the Surface Transportation
  Assistance Act (STAA), 49 U.S.C. 31105

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The Implementing Recommendations of the 9/11
Commission Act of 2007

• Enacted August 3, 2007
• Public Law No. 110-053
• New Cause of Action
• Whistleblower coverage for public transportation
  employees ( 1413)
• Significant Enhancement to Existing WB Protection
  Laws
• Whistleblower coverage for railroad employees (
  1521) and commercial motor carrier employees (
  1536)

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9/11 Act Coverage

• Public Transportation Employees
• Section 1413 of the Act protects public
  transportation employees
• Applies to a public transportation agency, a
  contractor or subcontractor of such agency, or an
  officer or employee of such agency
• Modeled on employee protection provisions of
  Federal Rail Safety Act (49 U.S.C. 20109) and
  Wendell H. Ford Aviation Investment and Reform
  Act for the 21st Century (AIR21) (49 U.S.C.
  42121)

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9/11 Act Coverage

• Railroad Employees
• Section 1521 amends the Federal Rail Safety Act
  (FRSA), 49 U.S.C. 20109
• Applies to a railroad carrier engaged in
  interstate or foreign commerce, a contractor or
  subcontractor of such a railroad carrier, or an
  officer or employee of such a railroad carrier

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9/11 Act Coverage

• Commercial Motor Vehicle Employees
• Section 1536 amends the Surface Transportation
  Assistance Act (STAA), 49 U.S.C. 31105
• Amendments conform the STAA to the procedure and
  burden of proof set forth in the NTSSA and the
  amended FRSA (which are essentially derived from
  AIR21)
• STAA protects drivers of commercial motor
  vehicles, mechanics, freight handlers, or any
  other person employed by a commercial motor
  vehicle carrier who affects safety and security
  during his or her employment.

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Elements of a Transportation Retaliation Claim

• Protected Conduct
• Knowledge of Protected Conduct
• Adverse Action
• Protected activity contributing factor in
  decision to take adverse action

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Public Transportation Employees Protected
Conduct

• NTSSA covers employees who
• Provide information or assist an investigation
  regarding conduct which the complainant
  reasonably believes constitutes a violation of
  Federal law relating to public transportation
  safety or security, or fraud, waste or abuse of
  federal grants or other funds intended to be used
  for public transportation safety or security
• Refuse to violate or assist in the violation of a
  federal law
• File employee protection complaints under NTSSA
• Cooperate with a safety or security investigation
  conducted by the Department of Transportation
  (DOT), Department of Homeland Security (DHS)
  or National Transportation Safety Board (NTSB)

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Public Transportation Employees Protected
Conduct

• NTSSA also covers employees who
• Furnish information to the DOT, DHS, NTSB or any
  federal, state or local enforcement agency
  regarding an accident resulting in death or
  injury to a person in connection with public
  transportation
• Refuse to work under certain conditions
• Report hazardous safety or security conditions
• Refuse to authorize the use of any safety or
  security related equipment, track or structures

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Railroad Employees Protected Conduct

• The amended FRSA protects employees who
• Notify or attempt to notify the railroad carrier
  or DOT of a work related illness or personal
  injury of an employee
• Furnish information to the DOT, DHS, NTSB or any
  federal, state or local enforcement agency
  regarding an accident resulting in death or
  injury to a person in connection with railroad
  transportation
• Refuse to work under certain conditions
• Report hazardous safety or security conditions
• Refuse to authorize the use of any safety or
  security related equipment, track or structures
• Complainants actions must be lawful and in good
  faith.

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Railroad Employees Protected Conduct

• FRSA protects
• Providing information or assisting an
  investigation regarding conduct which the
  complainant reasonably believes constitutes a
  violation of Federal law relating to railroad
  safety or security, or fraud, waste or abuse of
  federal grants or other funds intended to be used
  for railroad safety or security
• Refusing to violate or assist in the violation of
  a federal law
• Filing a complaint under FRSA
• Complainants actions must be lawful and in good
  faith.

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Commercial Motor Vehicle Employees Protected
Conduct

• STAA prohibits an employer from retaliating
  against an employee because the employee
• filed a complaint or began a proceeding related
  to a violation of a commercial motor vehicle
  safety or security regulation, standard, or order
• testified or will testify in such a proceeding
• refused to operate a vehicle because the
  operation violates a regulation, standard, or
  order of the United States related to commercial
  motor vehicle safety, health or security
• cooperated or is about to cooperate, with a
  safety or security investigation by the DOT, DHS
  or NTSB about an accident or incident that
  resulted in injury or death to an individual or
  damage to property occurring in connection with
  commercial motor vehicle transportation

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Protected ConductReasonable Belief

• To prove protected conduct, complainant need not
  report an actual violation of a transportation
  safety or security rule.
• Reasonable belief standard applies
• Objective component assesses whether a person
  with the complainants knowledge and experience
  would have believed the reported conduct violated
  the relevant statute

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Adverse Action

• Prohibits a broad range of adverse actions
• Termination
• Blacklisting
• Denying benefits
• Failure to hire or rehire
• Burlington applies

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Knowledge of Protected Conduct

• ALJs will impute knowledge of protected conduct
  to the decision-maker where a person with
  knowledge of the protected conduct influenced the
  decision

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Causation

• Burden of proof favorable to employees
• Contributing factor is any factor, which alone
  or in connection with other factors, tends to
  affect in any way the outcome of the decision.

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Procedure

• Under the three transportation whistleblower
  protection laws, a retaliation claim must be
  filed with the Department of Labor (DOL) within
  180 days of the employee first learning of the
  adverse action
• SOL does not run from the date on which the
  adverse action is implemented
• OSHA conducts investigation and can order
  preliminary reinstatement
• Either party can request a de novo hearing before
  an ALJ

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Procedure

• Formal rules of evidence do not apply
• Either party can request ARB review of ALJ
  decision
• If DOL has not issued a final decision within 210
  days after the filing of the complaint, the
  complainant can file suit in federal district
  court.
• Either party can request a jury trial

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Remedies

• Reinstatement
• Back pay
• Attorney Fees
• Punitive Damages capped at 250,000

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CPSC Reform Act of 2008 (H.R. 4040)

• Protects employees in the manufacturing, private
  label, retail and distribution industries (
  219)
• Enacted August 14, 2008
• Comprehensive CPSC reform prompted by concerns
  about lead-based toys and other hazardous
  consumer products

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Coverage

• Section 219 of the CPSC Reform Act protects
  employees in the manufacturing, private labeling,
  distribution and retail industries who disclose
  information to an employer, a regulatory agency,
  or a State Attorney General about a reasonably
  perceived violation of the Consumer Product
  Safety Commission Act (CPSCA) or any act
  enforced by the Consumer Product Safety
  Commission
• Also protects an employees good faith refusal to
  violate the CPSCA

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Elements of CPSCRetaliation Claim

• Protected Conduct
• Knowledge of Protected Conduct
• Adverse Action
• Causation

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Protected Conduct

• An employee engages in protected activity by
• Providing information relating to a violation of
  the CPSC Reform Act or any Act enforced by the
  Commission, to the employer, the Federal
  Government, or the attorney general of a state
• Testifying or assisting in a proceeding
  concerning a violation of the CPSC Reform Act or
  any law enforced by the Commission
• Refusing to participate in an activity that
  violates the CPSCA

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Protected Conduct

• Specific examples of protected conduct include
• Reporting violations of the standard for the
  flammability of childrens sleepwear
• Reporting violations of safety specifications for
  bicycles
• Reporting choking incidents involving marbles,
  small balls, latex balloons and other small parts

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Adverse Action

• Prohibits a broad range of adverse actions
• discharge an employee or otherwise discriminate
  against an employee with respect to compensation,
  terms, conditions, or privileges of employment
• Burlington standard applies

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Causation

• Burden of proof favorable to employees
• Contributing factor is any factor, which alone
  or in connection with other factors, tends to
  affect in any way the outcome of the decision.

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Remedies

• Reinstatement
• Back Pay
• Attorneys Fees
• Punitive damages not authorized

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Procedure

• 180-day statute of limitations
• Applies AIR-21/SOX procedures
• OSHA investigates
• ALJ hearing
• Appeal to ARB
• If DOL does not issue a final decision within 210
  days of the employee filing the complaint,
  employee can remove the claim to federal court
  and is entitled to a trial by jury.

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Whistleblower Protections for DOD Contractor
Employees

• Section 846 of National Defense Authorization Act
  for Fiscal Year 2008 (H.R. 4986) amends 10 U.S.C.
  2409
• Protects disclosures to Congress, an Inspector
  General, the Government Accountability Office, or
  a Department of Defense contractor oversight
  employee concerning information that the employee
  reasonably believes evidences
• gross mismanagement of DOD contract or grant
• gross waste of DOD funds
• substantial and specific danger to public health
  or safety, or
• violation of law related to a Department of
  Defense contract

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Whistleblower Protections for DOD Contractor
Employees

• Complaint filed with the IG
• IG can order reinstatement, back pay,
  compensatory damages, and attorney fees and
  costs.
• 210 days after filing, plaintiff can remove
  complaint to federal court and can elect a jury
  trial
• Plaintiff can also pursue FCA retaliation claim

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DoD Directive 1401.3 Further Protection for
Employees of DoD Contractors

• Provides Reprisal Protection for Nonappropriated
  Fund Instrumentality (NAFI) Employees/Applicants
• Updates policy and responsibilities for NAFI
  whistleblower protection
• Encourages NAFI employees to engage in
  whistleblowing activity without fear of reprisal
• Clarifies corrective and disciplinary actions
  regarding allegations of reprisal against a NAFI
  employee who engages in whistleblowing activity

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Coverage

• Office of the Secretary of Defense
• Military Departments
• Office of the Chairman
• Combatant Commands
• Officer of Inspector General of DoD
• Defense Agencies
• Any other organization of the DoD

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Other Remedies for Employees of DoD Contractors

• Employees of DoD Contractors can pursue a claim
  for retaliation under the following statutes
• IG Statute
• False Claims Act
• Common Law Wrongful Discharge

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Cross-Cutting Issues in Whistleblower Litigation

• Cross-Cutting Issues in Whistleblower Protection
• Objective Reasonableness of Plaintiffs
  Disclosure
• Specificity of Disclosure
• Duty Speech
• Choice of Forum
• Preemption
• Counterclaims and After-Acquired Evidence

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Objective Reasonableness

• DOL ARB and two Circuit Courts have imposed a
  high standard of objective reasonableness
• Allen v. Administrative Review Board, No.
  06-60849 (5th Cir. Jan. 22, 2008)
• Livingston v. Wyeth, Inc., No. 06-1939 (4th Cir.
  Mar. 24, 2008)
• Welch v. Cardinal Bankshares Corp., ARB No.
  05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007)
• Objective reasonableness may be decided as a
  matter of law
• Underscores importance of expert witness
  testimony

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Specificity of Disclosure

• DOL ARB has amended whistleblower protection laws
  to require that complainants disclosure
  implicate the substantive law definitively and
  specifically.
• Under ERA, disclosure must implicate nuclear
  safety definitively and specifically
• Platone v. FLYi, Inc., ARB 04-154, 2003-SOX-27
  (ARB Sept. 29, 2006)
• To constitute protected conduct, a complainant's
  protected communications "must relate
  'definitively and specifically' to the subject
  matter of the particular statute under which
  protection is afforded (mail fraud, wire, radio
  and TV fraud, bank fraud, securities fraud, or
  any rule or regulation of the SEC)
• FCA retaliation cases requiring very specific
  disclosure about presentment of false claim

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Duty Speech

• Defense bar has sought to apply Garcetti v.
  Ceballos, 126 S. Ct. 1951 (2006) duty speech
  doctrine to staturoy whistleblower protection
  claims
• SOX does not exclude duty speech claims.
• Deremer v. Gulf Coast, 2006-SOX-2 (ALJ June 29,
  2007)
• The Act contains no language excluding ones job
  duties from protected activity. . . ones job
  duties may broadly encompass reporting of illegal
  conduct, for which retaliation results.
  Therefore, restricting protected activity to
  place ones job duties beyond the reach of the
  Act would be contrary to Congressional intent.
• Leznik v. Nektar Therapeutics, Inc., 2006-SOX-93
  (ALJ Nov. 16, 2007)

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Duty Speech

• ERA
• Mackowiak v. University Nuclear Systems, Inc.,
  735 F.2d 1159 (9th Cir. 1984) QC control
  inspectors vital to the regulatory scheme for
  nuclear plants and therefore cannot be discharged
  when they do their jobs too well.
• False Claims Act
• Employee tasked with the internal investigation
  of fraud against the government must clearly put
  the employer on notice that a qui tam suit is a
  reasonable possibility. Eberhardt v. Integrated
  Design Constr., Inc., 167 F.3d 861 (4th Cir.
  1999)
• Plead how complainants disclosure went beyond
  job duties

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Choice of Forum

• Nineteen states have adopted statutes protecting
  whistleblowers in the private sector.
• Many state whistleblower statutes limit
  protection to external disclosures
• 43 states recognize public-policy exception to
  employment at will
• Punitive damages available in state common law
  wrongful discharge actions

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Choice of Forum

• DOL
• formal rules of evidence do not apply
• broad scope of discovery
• Protective orders disfavored
• Counterclaims cannot be brought in DOL
• Federal court
• whistleblower retaliation claim can be combined
  with tort claims
• Jury trial
• Broader discovery
• Subpoena power

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Preemption

• DOL Whistleblower Protection Statutes do not
  preempt state actions
• English v. General Electric Co., 496 U.S. 72
  (1990).
• 18 U.S.C. 1514A(d) (Nothing in this section
  shall be deemed to diminish the rights,
  privileges, or remedies of any employee under any
  Federal or State law . . . .)
• Common law wrongful discharge action generally
  unavailable where there is a remedy under federal
  law.

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Counterclaims and After-Acquired Evidence

• Counterclaims more common
• Misappropriation or disclosure of trade secret
  information
• Breach of fiduciary duty
• Breach of contract/confidentiality policy
• After Acquired Evidence
• McKennon v Nashville Banner Publishing Co, 513
  U.S. 352 (1995)

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Future Developments

• Amending the Whistleblower Protection Act of 1989
• H.R. 985 and S. 274
• Private Sector Whistleblower Protection
  Streamlining Act of 2007 (H.R. 4047)
• False Claims Act Correction Act
• S. 2041 and H.R. 4854