In what might be an unsettling trend for employers, juries in Philadelphia and Anchorage have recently issued multi-million dollar jury awards in favor of whistleblowers. Specifically, on March 22, 2013, a Philadelphia Common Pleas Court jury awarded Plaintiff-whistleblower Marla Pietrowski $1.7 million for her claims under the New Jersey Conscientious Employee Protection Act, and Ms. Pietrowski’s fee petition, which could result in an additional $500,000 in attorneys’ fees and costs, is pending.  A few days after the Pietrowski award, an Anchorage, Alaska jury awarded Plaintiff-whistleblower Paul Blakeslee $3.5 million for his claim under the federal False Claims Act (FCA). These awards are concerning for additional reasons discussed below.

Pietrowski v. The Kintock Group, Case No. 111003328 (Phil. Cty. Ct. Mar. 22, 2013)

On July 13, 2009, Defendant Kintock Group hired Ms. Pietrowski as a senior case manager in its Vineland, New Jersey facility. In October of 2009, while working in the Vineland facility kitchen, Ms. Pietrowski alleged that her supervisor said that he used his long pinkie fingernail for “bagging,” which she believed to mean bagging cocaine. When she complained internally about that comment, management allegedly responded that the supervisor was a personal friend of the company’s founder and chairman. Ms. Pietrowski also alleged that she complained to management after her supervisor purportedly violated Defendant’s ethical standards by bringing his eight-year-old daughter to a facility that provided transition services to registered sex offenders.

While she was still employed, Ms. Pietrowski filed suit under the New Jersey Conscientious Employee Protection Act. She added allegations that, after filing her complaint, her supervisor excluded her from department meetings, required employees to submit complaints about her work to human resources, and that she was passed over for promotion in 2010. Ms. Peitrowski’s employment was terminated after she filed suit on the basis that she had engaged in misconduct by making false allegations against co-workers.

On March 22, a jury issued a verdict in Ms. Pietrowski’s favor in the amount of $1.7 million, comprised of $78,000 in back pay, $100,000 for pain and suffering, and $1.5 million in punitive damages. The Defendant’s motion for a judgment in its favor regardless of this jury award is still pending.

Blakeslee v. Shaw Infrastructures, Inc., No. 09-cv-00214 (D. Alaska Mar. 26, 2013)

In this case, the plaintiff, who managed about 40 workers for Shaw Environment and Infrastructure (Shaw), claimed to have learned that a Company project manager based in Alaska was a part-owner of another private company that was leasing approximately $2M in equipment to Shaw without competitive bidding.  According to the plaintiff, the project manager had created a leasing company and bought equipment and leased it to Shaw at several times the market rate.  Plaintiff alleged that he began writing a letter to the Company’s CEO reporting the misconduct and, when the project manager learned that he was developing a complaint, the plaintiff was told that he would be laid off if he did not retire.  The plaintiff was discharged days later, and responded by filing a lawsuit claiming that the company had unlawfully retaliated against him in violation of the FCA.

The jury concluded that the Company wrongfully discharged the plaintiff as a result of his whistleblowing activity, and awarded him $445,574 in lost wages, $486,458 for emotional distress, and $2.5M in punitive damages.

Implications

These awards should catch the eye of employers faced with whistleblower claims, as many types of whistleblower claims carry the risk of punitive damages and pose reputational risks. These awards are particularly concerning given that the employers appeared to have viable defenses in both cases, and the complaint in the Pietrowski matter did not implicate a common compliance failure that employers regularly face under whistleblower protection laws.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

Photo of Rachel Fischer Rachel Fischer

Rachel S. Fischer is a senior counsel in the Labor & Employment Law Department.

Rachel represents employers in all types of employment-related disputes, including defending clients against claims of discrimination, harassment, retaliation, wrongful discharge, whistleblowing, breach of contract, and in wage and hour…

Rachel S. Fischer is a senior counsel in the Labor & Employment Law Department.

Rachel represents employers in all types of employment-related disputes, including defending clients against claims of discrimination, harassment, retaliation, wrongful discharge, whistleblowing, breach of contract, and in wage and hour matters. She represents employers in federal and state courts, arbitration tribunals, and before administrative agencies, and has litigated both single plaintiff and class action lawsuits. As an experienced trial lawyer, Rachel has successfully litigated numerous cases from complaint through jury verdict or arbitral award.

Rachel represents employers across a wide variety of industries, including banking and finance, law firms, media and entertainment, sports, and higher education.

Rachel also counsels clients on a broad range of employment law matters, including investigations, employee terminations and discipline, and employment policies and procedures.