In a recent interview with Law360 (subscription required), Chris Ehrman, the Director of the U.S. Commodity Futures Trading Commission’s Whistleblower Office, predicted that the number and size of the CFTC’s whistleblower awards will increase in the near future. Ehrman also said that the agency will conduct “straight marketing” to ensure that potential whistleblowers are aware of the agency’s whistleblower bounty program. Continue Reading
Despite 14 pages of vigorous dissent, a majority of a three-judge panel of the Eleventh Circuit has done the right thing and joined the Fourth, Sixth and Ninth Circuits in holding that the National Bank Act (“NBA”) preempts state wrongful discharge claims. In its May 5, 2015, decision, the majority concluded that the NBA’s language empowering banks to “dismiss . . . officers or any of them at pleasure” conflicted with the Florida Whistleblower Act (“FWA”) prohibiting retaliatory discharge and, therefore, affirmed the district court’s dismissal of a claim under the FWA on federal preemption grounds. Wiersum v. U.S. Bank, N.A., No. 14-12289 (11th Cir. May 5, 2015).
A Wall Street Journal article (subscription required) dated May 4, 2015 reports that a backlog of tips received by the SEC Office of the Whistleblower as part of its bounty program has resulted in a delay in paying awards to tipsters. According to the article, of the 297 tipsters who have applied for awards since 2011, 83% have not received a decision as to whether they will receive a monetary award. Continue Reading
Under the “Motor Vehicle Safety Whistleblower Act” (the Bill), which the U.S. Senate approved on April 28, 2015, whistleblower protections and bounties would be available to individuals who report motor vehicle defects. In particular, the Bill would allow employees and contractors of automakers, parts suppliers, and dealerships to receive a monetary award for providing new information to the federal government related to motor vehicle defects and other failures to comply with federal laws that could create a risk of death or serious injury. Continue Reading
The Directorate of Whistleblower Protection Programs recently issued a guidance memorandum titled “Clarification of the Investigative Standard for OSHA Whistleblower Investigations,” for the apparent purpose of clarifying the standards for its whistleblower investigations. A review of this memorandum provides employers with insight as to the standard OSHA uses to determine whether a merits finding is in order. Continue Reading
The ARB recently addressed the standard for proving that protected activity was a “contributing factor” in adverse employment actions. It concluded that evidence showing that an employer would have made the same adverse action decision in the absence of protected activity does not bear on whether the protected activity “contributed” to the adverse action. Powers v. Union Pacific Railroad Co., ARB Case No. 13-034 (Mar. 20, 2015) (3-2 decision). Continue Reading
Proskauer Partner Connie N. Bertram, co-head of the Whistleblowing & Retaliation Practice, participated in a webinar last week with Sean McKessy, Chief of the SEC’s Office of the Whistleblower. The webinar, sponsored by the American Bar Association, was entitled “New Developments in Whistleblower Claims and the SEC.” The participants discussed the Supreme Court’s recent decision in Lawson, the scope of protected activity and adverse employment action under SOX, and whether internal reports are protected under Dodd-Frank. The participants also discussed recent Dodd-Frank bounty recoveries, including a recovery by a controller of a publicly-traded company that had been announced that morning. Continue Reading
The Eastern District of Pennsylvania recently ruled that an employee’s SOX whistleblower retaliation claim failed as a matter of law because no causal connection existed between his complaints and termination and the employer would have taken the same adverse action in the absence of protected activity. Weist v. Tyco Electronics Corp., No. 10-cv-3288 (E.D. Pa. Apr. 10, 2015). We previously blogged this case here and here, as it made a closely watched trip to the Third Circuit on hotly contested issues of protected activity. Continue Reading
In a 2-1 decision issued on April 20, 2015, the Second Circuit expanded the scope of protected activity under the Fair Labor Standard Act’s (FLSA) anti-retaliation provision.
The FLSA prohibits retaliation against an employee who “has filed any complaint . . . related to” the FLSA’s provisions. In Greathouse v. JHS Security, Inc., the Second Circuit considered whether an oral complaint of FLSA violations made by an employee to his superior met the FLSA’s definition of “fil[ing] any complaint.” Specifically, the employee complained orally to his supervisor that he had not been paid in several months. The district court entered a default judgment against the employer, but ruled that the facts alleged did not set forth a FLSA action based upon Second Circuit precedent. Continue Reading
Earlier today, the SEC announced that it would pay an unidentified compliance officer a whistleblower bounty award of between $1.4 and $1.6 million. This is the second award that the SEC has made to a whistleblower with internal audit or compliance responsibilities. According to the SEC, the recipient of the bounty award “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.” Continue Reading