Avoiding Retaliation Claims from Whistleblowers

Transcription

1 Avoiding Retaliation Claims from Whistleblowers Christopher L. Ottele Husch Blackwell LLP

2 WHAT IS A WHISTLEBLOWER?

3 What is a Whistleblower? Securities Laws Whistleblowers disclose information reasonably believed to evidence violations of: Health and Safety Laws Contractor Fraud Labor and Employment Laws

4 What Laws Protect Whistleblowers Securities Dodd Frank Act Sarbanes Oxley Health & Safety Affordable Care Act OSHA MSHA Environmental Laws Federal Contractor False Claims Act (qui tam) The National Defense Authorization Act of 2013 (NDAA)

5 What Laws Protect Whistleblowers Labor and Employment Title VII ERISA FMLA NLRA FLSA ADA

6 WHO ENFORCES THE WHISTLEBLOWER RETALIATION LAWS

7 Who has had experience with an employee claiming to report violations of any of these laws? Yes No

8 Federal Agencies Equal Employment Opportunity Commission U.S. Department of Justice

9 Federal Agencies Securities Exchange Commission Occupational Safety and Health Administration

10 Securities and Exchange Commission

11 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

12 Better Call Saul

13 Plaintiff s Attorneys

14 Employees (and their Attorneys) Protecting Themselves 45,000 Total Charges Filed With EEOC Alleging Retaliation 40,000 35,000 30,000 25,000 20,000 Retaliation All Statutes Retaliation Title VII only 15,000 10,000 5,

15 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

16 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

17 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

18 We are Just Getting Started

19 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 jobrelated 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.

20 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

21 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?

22 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?

23 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

24 Popular Culture

25 Media Julian Assange (WikiLeaks) Private Manning (U.S. Army) Edward Snowden (NSA)

26

27 YOU HAVE A WHISTLEBLOWER, NOW WHAT?

28 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?

29 Do Not Ask To Whom the Whistle Blows 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

30 Managing the Whistleblower Care and Feeding of Complainants Performance Serial Complainers RIF Discipline Manner of opposition activity False Complaint