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Proskauer Whistleblower Defense

SDNY Refuses to Dismiss Executive’s Dodd-Frank Retaliation Claim

Posted in Dodd Frank

USDCSDNYOn August 24, 2016, the Southern District of New York denied Defendants’ motion to dismiss a Dodd-Frank whistleblower retaliation claim brought by its former co-CEO and Executive Chairman of its Board of Directors, finding that the Plaintiff made a protected complaint alleging securities law violations to a person with supervisory authority.  Kuhns v. Ledger, No. 15-cv-3246. Continue Reading

E.D. Wisconsin: SOX Does Not Protect Whistleblower Complaints Based On Immaterial, Routine Events

Posted in SOX Whistleblower Decisions

Wisconsin-easternOn August 25, 2016, the Eastern District of Wisconsin granted the Defendant’s Motion for Summary Judgment on its former CEO’s SOX whistleblower claim.  The court ruled that Plaintiff’s complaint to the Board of Directors did not implicate any securities violations or fraud, and was not a protected disclosure where it was the Board itself Plaintiff was complaining about.  The court also ruled that Plaintiff’s own actions suggested he condoned the conduct on which he purported to blow the whistle.  Verfuerth v. Orion Energy Systems, Inc., No. 14-cv-352. Continue Reading

OSHA Issues New Guidance Regarding Whistleblower Settlements

Posted in Best Practices, SOX Whistleblower Decisions

oshaOSHA has issued new guidance on approving settlement agreements in whistleblower cases, revising portions of its Whistleblower Investigations Manual.  The guidance, dated August 23 but not released until September 15, states that settlements approved by OSHA cannot contain provisions discouraging employees from making future disclosures or contacting the government.  It also sets forth other settlement provisions that OSHA will refuse to accept, including: (i) waiving the right to a monetary reward; (ii) requiring the employee to return a portion of a cash reward to the employer; (iii) mandating a worker notify the employer before contacting the government; and (iv) requiring the worker affirm to the employer that there were no other contacts with the government.  The guidance further provides disclaimer language to be used to ensure that employees entering into settlement agreements understand their rights. Continue Reading

Fourth Circuit Issues Ruling Interpreting False Claim Act Whistleblower Amendments

Posted in False Claims Act

The Fourth Circuit recently issued a decision interpreting the anti-retaliation provision of the False Claims Act (FCA).  The decision provides important clarification about how courts may interpret 2009 and 2010 amendments to the anti-retaliation provision.  Specifically, it finds that courts may inquire whether the employee’s underlying complaint of FCA fraud is objectively and subjectively reasonable. Continue Reading

CFTC Proposes New Amendments to its Whistleblower Rules

Posted in Dodd Frank

cftcThe U.S. Commodity Futures Trading Commission (“CFTC” or the “Commission”) has proposed numerous amendments to the Whistleblower Rules found in Part 165 of the CFTC’s Regulations. The Commission seeks to enhance the process for reviewing whistleblower claims and clarify staff authority to administer the whistleblower program through the proposed amendments. Significantly, the CFTC has proposed regulations that would give it authority to take enforcement action for whistleblower retaliation and prohibit confidentiality and pre-dispute arbitration clauses in employment contracts that deter employees from reporting violations to the CFTC. Continue Reading

SEC Issues $22 Million Whistleblower Award

Posted in Dodd Frank

MoneyOn August 30, 2016, the SEC issued a $22 million whistleblower bounty award to an individual “whose detailed tip and extensive assistance helped the agency halt a well-hidden fraud” at the whistleblower’s employer. The Acting Chief of the SEC’s Office of the Whistleblower, credited the “company insider,” stating “[w]ithout this whistleblower’s courage, information, and assistance, it would have been extremely difficult for law enforcement to discover this securities fraud on its own.” Continue Reading

OSHA Launches “Expedited Case Processing Pilot” For Whistleblower Claims

Posted in Uncategorized

oshaOn August 1, 2016, the U.S. Department of Labor (DOL) launched a new pilot program, titled “Expedited Case Processing Pilot,” in its Western region.  Here is the DOL’s press release describing the program.  The program enables a complainant filing claims under whistleblower statutes to ask OSHA to cease its investigation and issue findings in an expedited fashion.  Continue Reading

Wisconsin District Court Follows 5th Circuit: Internal Tipsters Are Not Considered “Whistleblowers” Under Dodd-Frank

Posted in Dodd Frank

ED WiscoOn August 12, 2016, the U.S. District Court for the Eastern District of Wisconsin in Lamb v. Rockwell Automation Inc., No. 15-CV-1415-JPS (E.D. Wis. Aug. 12, 2016) held that the Dodd-Frank whistleblower protection provision (Section 922) only protects individuals who provide information to the SEC.  In so holding, the court adopted the Fifth Circuit’s holding in Asadi v. F.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) and rejected the SEC’s regulatory guidance and the Second Circuit’s holding in Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015).   Continue Reading