SHINING THE LIGHT ON WHISTLEBLOWER AND RETALIATION CLAIMS NELA 2013Fall Seminar Washington, D.C. October 18-19, 2013

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1 1464 SHINING THE LIGHT ON WHISTLEBLOWER AND RETALIATION CLAIMS NELA 2013Fall Seminar Washington, D.C. October 18-19, 2013 Representing the National Security Whistleblower Lynne Bernabei and Alan R. Kabat Bernabei & Wachtel, PLLC 1775 T Street, N.W. Washington, D.C U.S.A. Phone: (202) Fax: (202) Website: National security employees and contractors are well positioned to disclose abuses arising from the government s monitoring of electronic communications and other misconduct, given their access to classified or sensitive information. This article analyzes the statutory protections that are potentially available to government whistleblowers, and the significant limitations to those protections when classified, national security evidence is involved. These potential protections include (1) Whistleblower Protection Act, 5 U.S.C. 2302; (2) the FBI whistleblower statute and regulations, 5 U.S.C and 28 C.F.R. Part 27; (3) statutes covering some government contractors, 10 U.S.C and 41 U.S.C. 4705, 4712; and (4) the Presidential Policy Directive PPD-19 for national security employees. This article also discusses the Federal Circuit s recent en banc decision, Kaplan v. Conyers, and its whistleblower decision in MacLean v. Dept. of Homeland Security, and efforts by employees to bring Title VII discrimination or retaliation claims based on allegations that their employer improperly interfered with their security clearances. On August 9, 2013, at a weekly press conference, President Obama was asked about the Administration s response to Edward Snowden s disclosures of classified information Snowden being a former employee of a Booz Allen Hamilton, a government contractor that provided services to the NSA, and who previously worked as a federal employee at the CIA: Question: Thank you, Mr. President. Given that you just announced a whole bunch of reforms based on essentially the leaks that Edward Snowden made on all of these surveillance programs, is that change -- is your mindset changed about him? Is he now more a 1

2 1465 whistle-blower than he is a hacker, as you called him at one point, or somebody that shouldn t be filed charges [against]? And should he be provided more protection? Is he a patriot? You just used those words. Answer:... So the fact is, is that Mr. Snowden has been charged with three felonies. If, in fact, he believes that what he did was right, then, like every American citizen, he can come here, appear before the court with a lawyer and make his case. If the concern was that somehow this was the only way to get this information out to the public, I signed an executive order well before Mr. Snowden leaked this information that provided whistleblower protection to the intelligence community -- for the first time. So there were other avenues available for somebody whose conscience was stirred and thought that they needed to question government actions. See Remarks by the President in a Press Conference (Aug. 9, 2013) (emphasis added) (online at: In fact, as the following analysis makes clear, Mr. Snowden, as an employee of a contractor, who made public disclosures of national security information, is not protected under any statute or under the executive order (i.e., the Presidential Policy Directive). It is estimated that there are about 5 million people in the U.S.A. who have any type of security clearance, with 1.4 million holding a top secret clearance. Of that 1.4 million, about 475,000, or approximately one-third, are employees of government contractors. Thus, these issues are of significance to a large number of federal employees and contractors. The flow charts on the following two pages compare the possible protections for whistleblowing disclosures made by government employees and applicants, versus those made by employees of government contractors. 2

3 1466 FBI employee or applicant Were disclosures only internal (FBI/DOJ)? No protection for external disclosures Employee or applicant: other gov t intelligence agencies & components (CIA, DIA, NSA, etc.) Were disclosures only internal? Yes Protected, 5 U.S.C & 28 C.F.R. Part 27 All other Executive Branch employees and applicants Yes, protected under PPD-19 (not yet implemented) Yes Yes Was otherwise prohibited info only disclosed to IG or OSC? Was the disclosure prohibited by law or Executive Order? (classified / some national security info) No No Protected under the Whistleblower Protection Act, 5 U.S.C. 2302, even for sensitive information, MacLean (Fed. Cir. 2013) Protected under the WPA, 5 U.S.C. 2302(b)(8)(B); Jacobs v. Schiffer (D.D.C. 1999) External disclosures that are prohibited by law or statute are not protected under the WPA, 5 U.S.C. 2302(b)(8)(A) Bernabei & Kabat (NELA 2013)

4 1467 Employees of Government Contractors Was disclosure related to any element of the intelligence community, including CIA, DIA, FBI, NSA, and others designated under 50 U.S.C. 401a(4)? Yes No protection for intelligence community contractors, 10 U.S.C. 2409(e) (DoD & NASA); 41 U.S.C. 4712(f) (other agencies) No If information was classified, was its disclosure otherwise prohibited by law? No Yes No protection for disclosures of classified information, 10 U.S.C (DoD & NASA); 41 U.S.C. 4712(h) (other agencies) Was the disclosure only made to: (a) Congress; (b) an Inspector General; (c) Govt. Accountability Office; (d) Agency employee responsible for contract oversight/management; (e) an authorized official at DOJ or other law enforcement agency; (f) a court or a grand jury; or (g) a management official of the contractor or subcontractor, who has responsibility to investigate, discover, or address misconduct? Yes No No protection for external disclosures outside approved channels, 10 U.S.C. 2409(a)(2) (DoD & NASA); 41 U.S.C. 4712(a)(2) (other agencies) Protected; can file complaint with agency IG; if dissatisfied with remedies, can file de novo action in U.S. district court. 10 U.S.C (DoD & NASA); 41 U.S.C (other agencies) Bernabei & Kabat (NELA 2013)

5 1468 I. Whistleblower Protection Act, 5 U.S.C The Whistleblower Protection Act, 5 U.S.C ( WPA ) was recently amended by the Whistleblower Protection Enhancement Act of 2012, Pub. L (Nov. 27, 2012) ( WPEA ), in order to address court decisions and administrative interpretations that had improperly narrowed the scope of protection available to whistleblowers. The WPEA also allows successful claimants to obtain compensatory damages, in addition to lost wages, and allows claimants,for a two-year period,to appeal MSPB determinations to either the Federal Circuit or to any court of appeals of competent jurisdiction, so that claimants will not be limited to the Federal Circuit in appealing adverse MSPB determinations. Section 2302 covers employees of Executive Branch agencies and the Government Printing Office, but does not include employees of the FBI, CIA, Defense Intelligence Agency, National Security Agency, or several other government intelligence agencies. 5 U.S.C. 2302(a)(2)(C). Since most national security whistleblowers who are federal employees are likely to be working at one of those agencies, the WPA will not afford them any protection. As set forth below, even those national security whistleblowers who do not work at an intelligence agency probably cannot use the WPA, except if they made disclosuresof classified information only to the Office of Special Counsel (OSC) or their agency s Inspector General. Section 2302(b)(8)(A) provides that any disclosure of information by a covered employee is not protected if it is prohibited by law or Executive Order: Any employee who has the authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority (8) take or fail to take, or threaten to take or fail to take, a personnel action with respect to any employee or applicant for employment because of (A) any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences (i) any violation of any law, rule, or regulation, or (ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, if such disclosure is not specifically prohibited by law and if such information is not specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs. 5 U.S.C. 2302(b)(8)(A) (emphasis added). Thus, disclosures of classified information made to Congress or outside the agency will ordinarily not be protected by the WPA. 3

6 1469 The so-called Intelligence Community Whistleblower Protection Act of 1998 which is a misnomer since it actually provides no protection to whistleblowers, does set up a procedure whereby whistleblowers in the intelligence community, whether employees or contractors, can make disclosures to Congress. See 50 U.S.C. 403q(5) (CIA employees and contractors); 5 U.S.C. App. 3, 8H (employees and contractors of the FBI, DIA, NSA, and other components of the intelligence community). Under this statute, whistleblowers may first submit their report to their agency s Inspector General, who has 14 calendar days to determine whether the complaint or information appears credible, and if so, the IG is to transmit the complaint or information to the agency head, who then has 7 calendar days to forward such transmittal to the intelligence committees, together with any comments the [agency head] considers appropriate. If the IG does not transmit, or does not transmit in an accurate form, the complaint or information the employee may submit the complaint or information to Congress by contacting either or both of the intelligence committees directly, but onlyif the employee notifies the IG of his intent to do so, and follows direction on how to contact the intelligence committees in accordance with appropriate security practices. 50 U.S.C. 403q(5); 5 U.S.C. App. 3, 8H. However, this statute provides no protection to whistleblowers, and any action taken by the IG or the agency head shall not be subject to judicial review. 50 U.S.C. 403q(5)(F); 5 U.S.C. App. 3, 8H(f). Nonetheless, compliance with this statute may mitigate an agency s removal action. A separate statute does protect disclosures to Congress by active duty members of the Armed Forces, although it does not create a private cause of action. See 10 U.S.C The U.S. Court of Appeals for the Federal Circuit recently differentiated between disclosures of classified information which are barred under this section and disclosures of Sensitive Security Information which are not barred. MacLean v. Dept. of Homeland Security, 714 F.3d 1301 (Fed. Cir. 2013). In MacLean, the employee, a TSA air marshal, had initially complained to his agency IG and his supervisor that TSA issued a directive that improperly canceled missions on flights from Las Vegas, right at a time of a planned Al Qaeda attack that supposedly would have been larger than occurred on 9/11. When Mr. MacLean s internal complaints had no effect, he then told a reporter for MSNBC, which published an article criticizing the TSA directive, and, a year later, he was interviewed in disguise on NBC Nightly News to air other complaints about the TSA. Id. at The directive was not classified as Sensitive Security Information (SSI) at the time it was issued, but TSA subsequently issued an order stating that its content was SSI. Id. The TSA terminated Mr. MacLean after finding out his identity as having made disclosures to MSNBC and NBC. Id. The MSPB, in its first decision, determined that Mr. MacLean s disclosure fell outside the WPA because it was specifically prohibited by law. Id. at After remand to the Administrative Judge, who upheld the removal, the MSPB affirmed in its second decision. While recognizing that the TSA regulation governing the issuance of the directive was not a 4

7 1470 law under the WPA, the MSPB instead held that the disclosure of the [directive] could not qualify for WPA protection because it was directly prohibited by a statute, the Aviation and Transportation Security Act. Id. The Federal Circuit, in a unanimous opinion by Judge Moore, reversed. The Federal Circuit held that Mr. MacLean could assert an affirmative defense under the WPA to his removal, because the disclosure was not specifically prohibited by law. Id. at Both the government and Mr. MacLean agreed that this provision requires that for a disclosure to be exempt from protection, the disclosure must be prohibited by a statute rather than by a regulation. Id. The court carefully examined the Aviation and Transportation Security Act (ATSA), and concluded that the statute s plain language does not expressly prohibit employee disclosures, and only empowers the Agency to prescribe regulations prohibiting disclosure of SSI if the Secretary decides disclosing the information would be detrimental to public safety. Id. at 1309 (quoting 49 U.S.C (b). Thus, the ATSA, unlike other, morespecific statutes (e.g., the Trade Secrets Act), does not have a specific prohibition against disclosures. Id. at Hence, the Federal Circuit remanded for a determination whether Mr. MacLean s disclosure qualifies for WPA protection.... it remains to be determined whether Mr. MacLean reasonably believed that the content of his disclosure evidenced a substantial and specific danger to public health or safety. Id. at In a one-paragraph concurring opinion, Judge Wallach wrote, Mr. MacLean presented substantial evidence that he was not motivated by personal gain but by the desire to protect the public.... I concur to emphasize that the facts alleged, if proven, allege conduct at the core of the Whistleblower Protection Act. Id. at 1311 (Wallach, J., concurring). The government filed a petition for rehearing en banc (July 11, 2013), and Mr. MacLean submitted a response (Aug. 14, 2013). See MacLean v. Dept. of Homeland Security, No (ECF Nos. 72 and 75) (Fed. Cir.). This petition was quickly denied. See Order, MacLean, No (ECF No. 77) (Fed. Cir. Aug. 30, 2013). In contrast, Section 2302(b)(8)(B), which covers disclosures to the Office of Special Counsel (OSC) or the agency s Inspector General, does not have an exclusion for disclosures that are specifically prohibited by law, i.e., disclosure of classified or other secret information: Any employee who has the authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority (8) take or fail to take, or threaten to take or fail to take, a personnel action with respect to 5

8 1471 any employee or applicant for employment because of (B) any disclosure to the Special Counsel, or to the Inspector General of an agency or another employee designated by the head of the agency to receive such disclosures, of information which the employee or applicant reasonably believes evidences (i) any violation (other than a violation of this section) of any law, rule, or regulation, or (ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety; 5 U.S.C. 2302(b)(8)(B). Thus, whistleblowers can disclose any nonpublic information to the OSC or their agency Inspector General, even if it is classified. See Jacobs v. Schiffer, 47 F. Supp. 2d 16, 24 (D.D.C. 1999) ( Mr. Jacobs can, under the protection of the Whistleblower Protection Act, divulge to the OSC whatever nonpublic information he wants. ) (citing 5 U.S.C. 2302(b)(8)(B)). That said, if the OSC receives a disclosure involving foreign intelligence or counterintelligence information, and if that disclosure, is specifically prohibited by law or by Executive Order, the Special Counsel shall transmit such information to the National Security Advisor, the Permanent Select Committee on Intelligence of the House of Representatives, and the Select Committee on Intelligence of the Senate. See 5 U.S.C. 1213(j). The advantages of the WPA for national security whistleblowers are: The WPA protects any disclosure made to the agency IG or the Office of Special Counsel, even if the disclosure includes classified information or other secret information protected by statute or Executive Order. The remedies under the WPA now include compensatory damages. 1 The WPA protects employees and applicants who do not work for the intelligence agencies, such as the Department of Homeland Security, and the non-intelligence components of the Department of Defense. The claimant can file an appeal from the MSPB to the appropriate regional circuit court of appeals, and is not limited to appealing to the Federal Circuit. 1 The MSPB has addressed whether several key amendments in the WPEA could be applied retroactively to cases pending on the WPEA s effective date (Dec. 27, 2012); substantive amendments cannot be applied retroactively, while procedural amendments can be applied retroactively. Compare King v. Dept. of the Air Force, 2013 MSPB 62, 2013 WL (M.S.P.B. Aug. 14, 2013) (no retroactivity for amendment providing for compensatory damages); with Day v. Dept. of Homeland Security, 2013 MSPB 49, 2013 WL (M.S.P.B. June 26, 2013) (retroactivity permissible for amendment expanding scope of protected disclosures). 6

9 1472 The disadvantages of the WPA for national security whistleblowers are: The WPA only covers employees and applicants, and does not protect contractors. The WPA specifically excludes employees and applicants at the FBI, CIA, NSA, and several other intelligence agencies and components. The WPA excludes disclosures made outside the agency or OSC if those disclosures are specifically prohibited by law, either by statute or Executive Order. II. FBI whistleblowers, 5 U.S.C and 28 C.F.R. Part 27. A separate statute, 5 U.S.C. 2303, covers whistleblowers who are employed at the FBI, including applicants for employment: (a) Any employee of the Federal Bureau of Investigation who has authority to take, direct others to take, recommend, or approve any personnel action, shall not, with respect to such authority, take or fail to take a personnel action with respect to any employee of the Bureau as a reprisal for a disclosure of information by the employee to the Attorney General (or an employee designated by the Attorney General for such purpose) which the employee or applicant reasonably believes evidences (1) a violation of any law, rule, or regulation, or (2) mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety. For the purpose of this subsection, personnel action means any action described in clauses (i) through (x) of section 2302 (a)(2)(a) of this title with respect to an employee in, or applicant for, a position in the Bureau (other than a position of a confidential, policy-determining, policymaking, or policy-advocating character). (b) The Attorney General shall prescribe regulations to ensure that such a personnel action shall not be taken against an employee of the Bureau as a reprisal for any disclosure of information described in subsection (a) of this section. (c) The President shall provide for the enforcement of this section in a manner consistent with applicable provisions of sections 1214 and 1221 of this title. 5 U.S.C In contrast to the WPA, which requires initial review by the Merit Systems Protection Board (MSPB), the FBI whistleblower statute has a quite different administrative regime, and the implementing regulations serve to limit the scope of protected conduct. See 28 7

10 1473 C.F.R. Part 27. The DOJ website includes a section that summarizes the process for FBI whistleblowers: First, only disclosures within the FBI and DOJ are protected, specifically to the DOJ Office of Professional Responsibility, the DOJ Office of Inspector General, the FBI Office of Professional Responsibility, the FBI Inspection Division Internal Investigations Section, the Attorney General, the Deputy Attorney General, the Director of the FBI, the Deputy Director of the FBI, or to the highest ranking official in any FBI field office. See 28 C.F.R Thus, disclosures to Congress or anywhere else outside DOJ/FBI, are not covered. Second, an employee or applicant who believes that retaliation occurred must file the complaint with either the DOJ Office of Professional Responsibility or the DOJ Office of the Inspector General, who will conduct an investigation. See 28 C.F.R If this investigation determines that there are reasonable grounds to believe that a reprisal has been or will be taken, the Conducting Office shall report this conclusion, together with any findings and recommendations for corrective action, to the Director, Office of Attorney Recruitment and Management [OARM]. See 28 C.F.R. 27.4(a). Alternatively, if the investigation finds that there was no reprisal, or the investigation takes over 120 days, then the complainant may file a request for corrective action directly to the Director, OARM. See 28 C.F.R. 27.4(c)(1). However, the request for corrective action (or any other submission to the OARM), must not include classified information: Question: What if I find it necessary to submit to OARM classified and/or sensitive materials in support of my request for corrective action? Answer: You should not file classified and/or sensitive information with your request for corrective action. However, in the event such information becomes necessary in proceedings before OARM, appropriate arrangements for the delivery, handling, and transmission of such materials must be in compliance with FBI and other applicable requirements regarding classified and/or sensitive materials. See DOJ, How Do I File a Claim? (online at: The Director, OARM, can stay the personnel action, and, if he determines that a protected disclosure was a contributing factor in a personnel action taken or to be taken, the Director shall order corrective action as the Director deems appropriate. See 28 C.F.R. 27.4(e)(1). As for the WPA, the Director, OARM, can rely upon circumstantial evidence, such as evidence that the employee taking the personnel action knew of the disclosure and that the 8

11 1474 personnel action occurred within a period of time such that a reasonable person could conclude that the disclosure was a contributing factor in the personnel action. Id. Only if the FBI demonstrates by clear and convincing evidence that it would have taken the same personnel action in absence of such disclosure would corrective action be precluded. Id., 27.4(e)(2). Remedies include placing the Complainant, as nearly as possible, in the position he would have been in had the reprisal not taken place; reimbursement for attorneys fees, reasonable costs, medical costs incurred, and travel expenses; back pay and related benefits; and any other reasonable and foreseeable consequential damages. See 28 C.F.R. 27.4(f). However, unlike the federal WPA, there is no right to external review, whether by the MSPB or the federal courts. 2 Either the FBI or the complainant may seek review by the Deputy Attorney General of the final determination or proposed corrective action. The Deputy Attorney General s review is under a standard similar to the Administrative Procedure Act: The Deputy Attorney General shall set aside or modify the Director s actions, findings, or conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; obtained without procedures required by law, rule, or regulation having been followed; or unsupported by substantial evidence. The Deputy Attorney General has full discretion to review and modify corrective action ordered by the Director, provided, however that if the Deputy Attorney General upholds a finding that there has been a reprisal, then the Deputy Attorney general shall order appropriate corrective action. 28 C.F.R Thus, although the FBI whistleblower statute and its regulations provide for an internal administrative scheme that may be faster than under the WPA, and protects internal disclosures relating to national security information, this process does not allow for external review, does not cover external disclosures, and does not cover employees of FBI contractors. 2 Some FBI employees may be able to invoke the MSPB process, based on their status as a veteran under the Veterans Employment Opportunities Act, 5 U.S.C. 3330a. John Parkinson has a pending appeal based on allegations that he was terminated after reporting allegations of sexual misconduct in the workplace to the DOJ Inspector General. See K. Gostola, FBI Whistleblower was Allegedly Terminated for Reporting Fraud & Sexual Misconduct Involving Prostitutes (Aug. 27, 2013) (online at: ( Normally, the MSPB would not have jurisdiction over FBI agents, but he can bring his case before the MSPB because he is what is called preference eligible veteran because he has served in the US Marine Corps Reserve. ); FBI Whistleblower Says He Was Fired for Reporting Sexual Misconduct (Aug. 27, 2013) (online at: 9

12 1475 III. Government Contractors, 10 U.S.C and 41 U.S.C. 4705, There are two statutes that cover government contractors, but both have significant exclusions that, as for the federal WPA, render them useless for most national security whistleblowers, including people like Mr. Snowden. Title 10, covering the Armed Forces, has a section that protects contractor employees of the Department of Defense and the National Aeronautics and Space Administration (NASA) from reprisal for disclosing information that the employee reasonably believes is evidence of gross mismanagement of [an Agency] contract or grant, a gross waste of [Agency] funds, an abuse of authority relating to an [Agency] contract or grant, or a violation of law, rule, or regulation related to an [Agency] contract (including the competition for or negotiation of a contract) or grant. 10 U.S.C. 2409(a)(1). Disclosures are protected only if they are made to any of the following: (A) A Member of Congress or a representative of a committee of Congress; (B) An Inspector General; (C) The Government Accountability Office; (D) An [Agency] employee responsible for contract oversight or management; (E) An authorized official of the Department of Justice or other law enforcement agency; (F) A court or grand jury; (G) A management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover, or address misconduct. 10 U.S.C. 2409(a)(2). The statute provides that complaints may be filed with the Inspector General of DoD or NASA, as appropriate, and the IG will investigate the complaint. If the IG determines that there was a reprisal, he shall submit a report to the head of the agency, who will determine whether to order the contractor to take affirmative action to abate the reprisal against the complainant, and/or order the contractor to reinstate the person together with compensatory damages (including back pay) and/or pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys fees and expert witnesses fees) that were reasonably incurred by the complainant. 10 U.S.C. 2409(c)(1). If the agency head issues an order denying relief, or has not issued an order within 210 days of filing of the complaint, then the complainant may bring a de novo action at law or equity against the contractor to seek compensatory damages and other relief available under this section in the appropriate district court, with right to a jury trial. 10 U.S.C. 2409(c)(2). The burden of proof under the WPA, 5 U.S.C. 1221(e), applies. 10 U.S.C. 2409(c)(6). 10

13 1476 However, the DoD/NASA contractor reprisal statute specifically excludes disclosures relating to the intelligence community, which for purposes of DoD and NASA contractors, includes the Office of the Director of National Intelligence, CIA, FBI, NSA, Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the National Reconnaissance Office, Other offices within the Department of Defense for the collection of specialized national intelligence through reconnaissance programs, the intelligence elements of the Army, the Navy, the Air Force, the Marine Corps, the Coast Guard; and such other elements of any department or agency as may be designated by the President, or designated jointly by the Director of National Intelligence and the head of the department or agency concerned, as an element of the intelligence community. See 50 U.S.C. 401a(4). The statute provides that: (e) Exceptions. (1) This section shall not apply to any element of the intelligence community, as defined in section 3(4) of the National Security Act of 1947 (50 U.S.C. 401a(4)). (2) This section shall not apply to any disclosure made by an employee of a contractor, subcontractor, or grantee of an element of the intelligence community if such disclosure (A) relates to an activity of an element of the intelligence community; or (B) was discovered during contract, subcontract, or grantee services provided to an element of the intelligence community. 10 U.S.C. 2409(e). Since most national security whistleblowers who are employees of contractors at DoD are likely to have worked at an element of the intelligence community component of DoD, they will not be protected. Even those who do not fall into that category may run afoul of the January 2013 amendments, which stipulate that: Nothing in this section, or the amendments made by this section, shall be construed to provide any rights to disclose classified information not otherwise provided by law. See National Defense Authorization Act for Fiscal Year 2013, Pub. L. No , 877(g) (codified as a Note to 10 U.S.C. 2324). It remains possible for employees of contractors of intelligence agencies to make disclosures to the agency s Inspector General, and then to hope that the agency (or thecontractor) will not retaliate against them for having made these unprotected disclosures. The Inspector General Act prohibits personnel actions taken in reprisal for making a complaint or disclosing information to an Inspector General, unless the complaint was made or the information disclosed with the knowledge that it was false or with willful disregard for its truth or falsity. See 5 U.S.C. App. 3, 7(c). However, Section 7 of the Inspector General Act does not create any private cause of action, or require the IG to take action to remedy the reprisal. Title 41, which governs public contracts, has two statutory provisions that provide similar coverage to contractor employees. 41 U.S.C (formerly codified at 41 U.S.C. 265), 11

14 1477 prohibited reprisal against employees of contractors who made disclosures to a Member of Congress or an authorized official of an executive agency or the Department of Justice information relating to a substantial violation of law related to a contract (including the competition for, or negotiation of, a contract). 41 U.S.C. 4705(b). As for the DoD/NASA statute, Section 4705 has an administrative process involving an investigation by the agency IG, who is to issue a report to the head of the agency. 41 U.SC. 4705(c). If the agency head determines that there was a prohibited reprisal, the agency head can order the contractor to abate the reprisal, to reinstate the employee with back pay, and/or to pay the costs and expenses, including attorneys fees and expert witnesses fees. 41 U.S.C. 4705(d)(1). If the contractor fails to implement the relief ordered by the agency head, the agency head shall file an action for enforcement of the order in the United States district court, which court may grant appropriate relief, including injunctive relief and compensatory and exemplary [punitive] damages. 41 U.S.C. 4705(d)(2). Critically, Section 4705 does not contain a statutory exclusion for employees of contractors who work for the intelligence agencies, or who disclose information relating to activities of the intelligence agencies. However, in January 2013, Congress established a new statutory section in Title 41, and suspended Section 4705 for four years, i.e., from January 2, 2013 through January 1, U.S.C. 4705(f). The new Section 4712, the so-called Pilot program for enhancement of contractor protection from reprisal for disclosure of certain information, is more closely modeled on the aforementioned DoD/NASA contractor reprisal statute. See 41 U.S.C Thus like the DoD/NASA statute, but unlike now-suspended Section 4705 Section 4712 specifically carves out intelligence community disclosures: (f) Exceptions. (1) This section shall not apply to any element of the intelligence community, as defined in section 3(4) of the National Security Act of 1947 (50 U.S.C. 401a(4)). (2) This section shall not apply to any disclosure made by an employee of a contractor, subcontractor, or grantee of an element of the intelligence community if such disclosure (A) relates to an activity of an element of the intelligence community; or (B) was discovered during contract, subcontract, or grantee services provided to an element of the intelligence community. 41 U.S.C. 4712(f). As for the 2013 amendments to the DoD/NASA statute, Nothing in this section, or the amendments made by this section, shall be construed to provide any rights to disclose classified information not otherwise provided by law. See 41 U.S.C. 4712(h). Section 4712 take effects 180 days after the date of [its] enactment, i.e., July 1, 2013 (since the statute was enacted on January 2, 2013), and applies to: 12

15 1478 (A) all contracts awarded on or after such date; (B) all task orders entered on or after such date pursuant to contracts awarded before, on, or after such date; and (C) all contracts awarded before such date that are modified to include a contract clause providing for the applicability of such amendments. See National Defense Authorization Act for Fiscal Year 2013, Pub. L. No , 878(b) (codified as a Note to 41 U.S.C. 4712). Thus, the 2013 amendments actually reduced the whistleblower protection available to employees of contractors, by specifically excluding disclosures relating to any element of the intelligence community and classified information. Even though these amendments narrowed the scope of contractor protections, President Obama issued a signing statement which purported to express the Administration s concern about the implications of these amendments: Certain provisions in the Act threaten to interfere with my constitutional duty to supervise the executive branch. Specifically, sections 827, 828, and 3164 could be interpreted in a manner that would interfere with my authority to manage and direct executive branch officials. As my Administration previously informed the Congress, I will interpret those sections consistent with my authority to direct the heads of executive departments to supervise, control, and correct employees communications with the Congress in cases where such communications would be unlawful or would reveal information that is properly privileged or otherwise confidential. See Statement by the President on H.R (Jan. 3, 2013) (emphasis added) (online at: However, as commentators noted, this signing statement is a non sequitur, since Sections 827 and 828 only apply to contractor employees, not federal employees. See M. J. Schaengold & J. J. Deschauer, 2012 Procurement Review, 13-2 Briefing Papers 1, 8 (Jan. 2013) ( The rationale for this concern appears to be ambiguous because these provisions expand whistleblower protections for contractor, subcontractor, and grantee employees, but not federal employees. ). Mr. Snowden and other national security whistleblowers who work for contractors are not protected by either 10 U.S.C or 41 U.S.C. 4712, which exclude classified information, and information from or relating to elements of the intelligence community. 13

16 1479 IV. The Presidential Policy Directive for National Security Employees. The final possible source of protection for national security employees who are whistleblowers is the October 2012 Presidential Policy Directive (PPD). See Protecting Whistleblowers with Access to Classified Information, Presidential Policy Directive/PPD-19 (Oct. 10, 2012) (online at: As a threshold matter, the PPD does not cover contractors, nor does it cover FBI employees, who are already covered by the aforementioned FBI whistleblower statute and regulations. Part A of the PPD, which prohibits retaliation through an adverse personnel action in the intelligence community, applies only to employees who work in the intelligence community. Part B of the PPD, which prohibits retaliation by affecting eligibility for access to classified information, applies to every Executive branch agency in possession of classified information, not just those in the intelligence community. The PPD requires the head of each component of the intelligence community to certify within 270 days (i.e., by July 8, 2013) that the agency s personnel policies provide a process for employees to seek review of Personnel Actions they allege to be in violation of this directive, and that the review process shall be consistent with the policies and procedures used to adjudicate alleged violations of the [WPA], section 2302(b)(8) of title 5. See PPD, A, at 2. Under the PPD, corrective action may include, but is not limited to, reinstatement, reassignment, the award of reasonable attorney s fees, other reasonable costs, back pay and related benefits, travel expenses, and compensatory damages. Id. Similarly, by July 8, 2013, each agency head is to certify that the agency has a review process that permits employees to appeal actions affecting Eligibility for Access to Classified information they allege to be in violation of this directive, i.e., security clearance and related determinations. Id., B, at 3. Once an employee has exhausted the review process under either Section A or B of the PPD, she may request an external review by a three-member Inspector General panel (External Review Panel) chaired by the Inspector General of the Intelligence Community, who is to designate two other panel members from among the Inspector Generals of State, Treasury, Defense, Justice, Energy, Homeland Security, and CIA. Id., C, at 4. The External Review Panel is to complete its review of the claim within 180 days, and can recommend that the agency head take the appropriate corrective action. Id. However, at the time these course materials were written, there was no indication that these agencies had issued or implemented the policies, as was required by July 8, See J. Davidson, Obama s Comment on Whistleblower Protections Is Misleading, Experts Say, Washington Post, Aug. 13, 2013, page B-4. 14

17 1480 The PPD requires that by October 10, 2013, the Director of National Intelligence (DNI) shall issue policies and procedures for ensuring that all employees serving in Intelligence Community Elements are aware of the protections and review processes available to individuals who make protected disclosures. See PPD, D, at 5. It is important to note that the PPD does not protect whistleblowers such as Mr. Snowden, because it only applies to federal employees, not employees of contractors. Even with respect to federal employees, there is no indication that the intelligence community agencies have promulgated the programs and procedures that they were required to have done by July 8, The Administration subsequently claimed, incorrectly, that contractors are protected: When asked if the directive [PPD] has been implemented, the White House did not answer. But it contends that contractors do have whistleblower protections. Although contractors are not mentioned in the policy directive, White House spokesman Eric Schultz said, The president s recent directive provided unprecedented and widely praised protection to whistleblowers in the intelligence agencies. It also provided a road map to guide those agencies as they devise specific policies to implement the president s directive. Other federal laws specifically referenced in the directive prohibit retaliation against federal contractors. The bottom line is that Mr. Snowden could have lawfully raised his concerns without making unauthorized disclosures. See J. Davidson, Obama s Comment on Whistleblower Protections Is Misleading, Experts Say, Washington Post, Aug. 13, 2013, page B-4. This is incorrect, since the PPD does not cover contractors, and the other federal laws referenced by the White House spokesman similarly exclude employees of contractors who make disclosures related to national security issues. V. Kaplan v. Conyers (Fed. Cir. 2013) (en banc) and Whistleblowers. On August 20, 2013, the U.S. Court of Appeals for the Federal Circuit issued its en banc decision in Kaplan v. Conyers, et al., No , 2013 WL (Fed. Cir. Aug. 20, 2013) (en banc). This was a 7-3 decision, and it is likely that the unsuccessful employee (here, Mr. Northover, as Ms. Conyers appeal became moot), and/or the MSPB, will seek further review by the U.S. Supreme Court. As a threshold matter, it must be emphasized that the two employees in this appeal did not have whistleblower claims. However, the government may attempt to argue that the reasoning of Kaplan should apply to whistleblowers who allege that they lost their security clearance and hence were removed from their position, in retaliation for having made protected 15

18 1481 disclosures. As this section explains, that argument should not succeed, given that the WPA is a specific statutory defense to the government s justification for taking a removal action. Kaplan arose from the claims filed by two federal employees Rhonda Conyers and Devon Northover both of whom were civilian employees at the Department of Defense, and who were indefinitely suspended and demoted, respectively, from their positions with the Agency after they were found ineligible to occupy noncritical sensitive positions due to revocation or denial of their eligibility for access to classified information. See2013 WL , at *1. Even though Ms. Conyers was an accounting technician, and Mr. Northover was a commissary stockroom clerk positions seemingly not involving classified information or security issues the DoD took these adverse personnel actions. Ms. Conyers and Mr. Northover filed separate appeals to the MSPB; the DoD took the position that Egan v. Dept. of the Navy, 484 U.S. 518 (1988), which held that the MSPB did not have the authority to review the substance of security clearance determinations, barred these appeals. As the Federal Circuit s opinion explains, the Egan holding is that: Rather, the Court held that the Board has authority to review only: (1) whether an Executive Branch employer determined the employee s position required a security clearance; (2) whether the clearance was denied or revoked; (3) whether the employee was provided with the procedural protections specified in 5 U.S.C. 7513; and (4) whether transfer to a nonsensitive position was feasible. Id. at 530. Kaplan, 2013 WL , at *1. The Administrative Judge hearing Ms. Conyers case declined to apply Egan and instead stated that she would decide the case applying broader standards applicable to cases which do not involve security clearances. Id. at *2. In contrast, the Administrative Judge hearing Mr. Northover s case ruled that Egan applied and that the merits of the Agency s determination were unreviewable. Id. The MSPB then affirmed the Conyers decision and reversed the Northover decision, concluding that Egan did not apply in cases where security clearance determinations are not at issue. Id.The Office of Personnel Management (OPM) petitioned for review to the Federal Circuit, and a 3-judge panel issued a split decision that reversed the MSPB, holding that Egan applied to this case and concluding that determinations pertaining to eligibility to occupy a sensitive position were unreviewable. Id. at *3 (citing Berry v. Conyers, 692 F.3d 1223 (Fed. Cir. 2012)). The Federal Circuit granted rehearing en banc; the majority and dissenting decisions were authored by the same judges who had authored the majority and dissent in the 3-judge panel, i.e., Judges Wallach and Dyk, respectively. 16

19 1482 The majority s position is that Egan prohibits review of removal actions relating to security clearance determinations, not just those involving classified information: The Board and Northover urge this court to limit Egan s application to security clearance determinations, reasoning that national security concerns articulated in that case pertain to access to classified information only. Egan cannot be so confined. Its principles instead require that courts refrain from second-guessing DoD national security determinations concerning eligibility of an individual to occupy a sensitive position, which may not necessarily involve access to classified information.... Egan must apply. Id. at *5. The relevant analysis is not the type of information, but rather on the Executive s discretion to act on threats information-based or not to national security generally. Id. at *6 (citing Egan, 484 U.S. at 527). The majority opinion noted, but rejected the concerns of the MSPB, Mr. Northover, and their amici, that this ruling might adversely affect whistleblower claims: The potential for arbitrary application of this right under the guise of national security is a point of contention for Northover and the Board. These concerns however do not require a different result. Specifically, Northover and the Board raise concerns of the likely preclusion of judicial review of any alleged constitutional and statutory violations (e.g., whistleblower retaliation) for federal employees. 16 Egan rejected similar concerns of arbitrary designations and pretextual removal of federal employees, and there is no basis for a different conclusion in this case.indeed, these concerns can no more justify review of an eligibility determination than of a clearance determination. [FOOTNOTE 16] Petitioners and several amici discuss the terms and purposes behind the Whistleblower Protection Act, Pub. L. No , 103 Stat. 16 (1989) ( WPA ), at great length in their briefs. They contend that the WPA limits the Executive s discretion with respect to the termination or suspension of individuals in sensitive positions where those employment determinations are tied to retaliation for the disclosure of certain classes of information. Petitioners and amici contend that Congress exercised its own authority to protect national security when it passed the WPA because it recognized that disclosures of certain improprieties may actually advance the interests of national security. Whether Congress intended to limit the authority of the Executive in making employment decisions when passing the WPA is not before us, however. There are no whistleblower claims or defenses asserted here. We address only those issues presented by Mr. Northover s case. Id. at *14& n.16 (emphasis added). 17

20 1483 Judge Dyk s dissenting opinion joined by Judges Newman and Reyna sharply criticized the majority s opinion, since The effect is to effectively deny MSPB review for hundreds of thousands of federal employees a number that is likely to increase as more positions are designated as non-critical sensitive. Id. at *15 (Dyk, J., dissenting). In summary: In essence, the majority s decision rests on the flawed premise that the DoD, acting on its own without either Congressional or Presidential authority has inherent authority to discharge employees on national security grounds. No decision of the Supreme Court or any other court supports this proposition. Whatever the policy justifications for precluding MSPB review, this is a matter for Congress (and the President), not the DoD, to determine. Ironically, the majority rests its decision on grounds of separation of powers. But the majority decision both blesses and itself engages in a violation of separation of powers principles sustaining agency action without either Presidential or Congressional authorization, and resting its decision on its own assessment of national security requirements. I respectfully dissent. As an initial matter, the majority s decision is not mandated by, or even supported by, the Supreme Court s decision in Department of the Navy v. Egan, 484 U.S. 518, 108 S. Ct. 818, 98 L.Ed.2d 918 (1988). The majority extends Egan to create an implied exception to MSPB review of the merits of suitability determinations for non-critical sensitive employees here, a commissary employee (Northover) whose job required neither a security clearance nor access to classified information. In Egan, the Supreme Court held that the MSPB could not review the merits of an agency decision to deny an employee a security clearance where that employee was required to access classified information as a condition of his employment. See 484 U.S. at 520, 529. The majority extends Egan to bar the MSPB from reviewing the merits of agency determinations that employees are not suitable to hold sensitive positions. In other words, the majority extends Egan s prohibition of MSPB merits review of the DoD s security clearance determinations to its suitability determinations (i.e., whether an employee is eligible to hold a non-critical sensitive position). Id. at *15-*16 (Dyk, J., dissenting) (emphasis in original). Judge Dyk explained that while Congress had carefully created various specific exceptions to the MSPB s jurisdiction over cases involving national security issues, Congress did not create or authorize a general national security exemption from MSPB review. Id. at *23. Judge Dyk criticized the majority for its policy judgment that the MSPB should not review suitability determinations based on national security. Id. at *24. He concluded that: 18