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Proskauer Whistleblower Defense

DC Circuit: Internal Investigation Documents Are Protected from Disclosure in FCA Case

Posted in False Claims Act

district of columbiaReversing a lower court decision, the D.C. Circuit recently concluded – for a second time – that certain internal audit documents are protected from disclosure by the attorney-client communication and work production privileges. On August 11, 2015, the D.C. Circuit issued a second writ of mandamus regarding the same group of documents, internal reports which the plaintiff/whistleblower sought in connection with his False Claims Act suit alleging kickbacks and overbilling related to Iraq War subcontracting. The appellate court reversed the district court’s order requiring KBR, Inc. to produce the documents, holding that permitting disclosure would “inject[] uncertainty into application of attorney-client privilege and work-product protection to internal investigations.” Continue Reading

New Jersey District Court: Dodd-Frank Protects Internal Whistleblower

Posted in Dodd Frank

New_Jersey_state_seal.jpgFurther reflecting the divide amongst courts regarding the definition of “whistleblower” under the Dodd-Frank Act, the District Court of New Jersey recently held that an employee who internally reports an alleged securities law violation is subject to the statute’s anti-retaliation protections.  Dressler v. Lime Energy, No. 3:14-cv-07060, 2015 U.S. Dist. LEXIS 106532 (D.N.J. Aug. 13, 2015). Continue Reading

E.D.N.Y Denies Motion For Summary Judgment In FCA Retaliation Case Based On Finding Of Pretext

Posted in False Claims Act

ednyThe U.S. District Court for the Eastern District of New York recently found that two former employees of Eihab Human Services (Company) raised a genuine issue of material fact as to whether they were discharged in retaliation for reporting that an executive director ordered an employee to create fraudulent billing records in violation of the whistleblower protection provisions in the federal and state False Claims Acts (FCA).  Krause v. Eihab Human Servs., Inc., No. 10-cv-898, 2015 WL 4645210 (E.D.N.Y. Aug. 4, 2015). Continue Reading

Fifth Circuit Revives SOX Whistleblower Claim But Rejects Allegations Not Exhausted Before OSHA

Posted in SOX Whistleblower Decisions

5th cir.In Wallace v. Tesoro Corp., the Fifth Circuit revived a SOX whistleblower complaint that was dismissed by the U.S. District Court for the Western District of Texas, finding that the plaintiff’s alleged belief that the company violated SEC rules was not objectively unreasonable (as plead in the complaint).  (Case No. 13-cv-51010, July 31, 2015).  The Fifth Circuit also affirmed the dismissal of claims not included in the OSHA complaint on the grounds that they were not administratively exhausted. Continue Reading

Frivolous Whistleblower Claim Yields Stiff Sanctions

Posted in State-Specific Whistleblower Claims

sanctionsThe New Jersey Appellate Division recently upheld sanctions of more than $191,000 to Sunhillo Corporation (Company) in connection with its defense of claims under the New Jersey Conscientious Employee Protection Act, Fulton v. Sunhillo Corp., No. A-3950-13T2, 2015 WL 4390550 (N.J. Super. Ct. App. Div. Jul. 20, 2015), finding the whistleblower claims frivolous. Continue Reading

SEC Issues Interpretive Rule Regarding Definition of Dodd-Frank “Whistleblower”

Posted in SEC

secIn response to the disagreement amongst courts regarding the scope of Dodd-Frank’s employment retaliation protections, on August 4, 2015, the SEC issued an “interpretive rule” clarifying that individuals who have not reported alleged misconduct to the SEC may nevertheless qualify as “whistleblowers”. Continue Reading

New York’s First Department: Harassment Claims Not Barred By Whistleblower Claim

Posted in State-Specific Whistleblower Claims

whistle5As reported by New York Law Journal reporter Ben Bedell, the New York’s Appellate Division, First Department recently held that employees could file suit against their former employer for both sexual harassment and violation of New York’s whistleblower protection law even though the statute bars employees from seeking remedies available under any other law. Continue Reading

SEC Pays More Than $3 Million Whistleblower Award

Posted in SEC

secOn July 17, 2015, the SEC announced a whistleblower award of more than $3 million to a “company insider” whose information assisted the SEC in unveiling a “complex fraud.” This payout (which is the SEC’s third largest) follows the SEC’s announcement in April that it awarded a Compliance Officer a whistleblower bounty of approximately $1.5 million. Continue Reading

N.J. High Court Rules “Watchdog” Employees Protected Under State Whistleblower Law

Posted in State-Specific Whistleblower Claims

New_Jersey_state_seal.jpgOn July 15, 2015, the Supreme Court of New Jersey ruled that an employee who monitors corporate compliance—a so-called “watchdog” employee—can engage in protected activity by blowing the whistle under the New Jersey Conscientious Employee Protection Act (“CEPA”) in the course of performing the tasks and functions of the job for which he or she was hired.  Lippman v. Ethicon, No. A-65/66-13.  In so ruling, the Court rejected a well-established line of lower court cases holding that activities which are part and parcel of an employee’s assigned responsibilities cannot amount to whistleblowing—otherwise known as the “job-duties” exception. Continue Reading