NY Attorney General Eric Schneiderman recently announced his plans to propose legislation that would create a whistleblower incentive program at the state level. The proposal, titled the Financial Frauds Whistleblower Act, would provide monetary awards to eligible individuals who report original information about illegal activity in the banking, insurance, and financial services industries. The Financial Frauds Whistleblower Act also would enhance anti-retaliation protection for employees who report suspicious or illegal activity. Additionally, the proposal provides for confidentiality for whistleblowers.
4th Circuit: 4 Year Statute Of Limitations Applies To SOX Claims
The Fourth Circuit recently held that SOX whistleblower retaliation claims are subject to a four-year statute of limitations and that emotional distress damages are available in SOX actions. Jones v. SouthPeak Interactive Corp. of Del., Case Nos. 13-2399 and 14-1765 (4th Cir. Jan. 26, 2015).
SDNY Follows Asadi: Internal Tipsters Not Dodd-Frank “Whistleblowers”
On December 5, 2014, the Southern District of New York in Berman v. Neo@Ogilvy, No. 14-cv-523, ruled that an employee who complains internally about securities law violations does not qualify as a “whistleblower” under the Dodd-Frank whistleblower protection provision because that statute only protects individuals who report to the SEC. The court followed the Fifth Circuit and diverged from prior decisions from the same district.
New York Times Discusses the Growth of Whistleblower Programs
As federal agencies dole out record-breaking awards to tipsters (such as the SEC’s recent $30 million award), whistleblower programs remain a topic of public interest. Earlier this month, The New York Times published an article about the growth of the whistleblower programs operated by the S.E.C., Justice Department, and I.R.S, which financially incentivize the reporting of misconduct.
ARB Affirms Blacklisting Award To Whistleblower
The ARB upheld a damages award in favor of a whistleblower after his former employer purportedly “blacklisted” him by providing an apparently negative employment reference to a prospective employer. Timmons v. CRST Dedicated Services, Inc., ARB Case No. 14-051 (Sept. 29, 2014). This underscores the impact whistleblower laws have on employers’ post-termination conduct.
SEC Issues Whistleblower Award, Waives Voluntary Requirement
The Securities and Exchange Commission (SEC) decided that a whistleblower who did not “voluntarily” provide information to the SEC was nonetheless eligible to receive a monetary award of $400,000. The whistleblower’s disclosure was not voluntary under the SEC’s own rules because it occurred after a previous inquiry to the company by a self-regulatory organization. Nevertheless, the SEC concluded that it was “appropriate in the public interest and consistent with the protection of investors to waive the ‘voluntary’ requirement” and rewarded the whistleblower monetarily.
Nebraska District Court: Employee’s Disclosures To FINRA Make Her A Dodd-Frank Whistleblower
In a first-impression decision, the U.S. District Court for the District of Nebraska recently ruled that an employee who disclosed information about potential securities law violations to FINRA may qualify as a “whistleblower” under Dodd-Frank, even though the employee did not provide any information to the SEC. Bussing v. COR Clearing, LLC, No. 12-cv-00238, 2014 U.S. Dist. LEXIS 69461 (D. Neb. May 21, 2014).
New York Court of Appeals Expands Potential For State Whistleblower Claims
The New York Court of Appeals recently ruled that a whistleblower need not plead the specific “law, rule or regulation” that the employer purportedly violated to state a cause of action under the New York whistleblower statute. Webb-Weber v. Cmty. Action for Human Servs., 2014 N.Y. Slip. Op. 03428 (May 13, 2014). The New York whistleblower statute prohibits an employer from retaliating against an employee who “discloses, or threatens to disclose to a supervisor or public body an activity, policy, or practice of the employer that is in violation of the law, rule or regulation” that either “creates and presents a substantial and specific danger to the public health or safety, or…constitutes health care fraud.” N.Y.L.L. § 740(2).
Assistant Secretary of Labor for Occupational Safety and Health Asks Congress to Increase OSH Act Whistleblower Statute of Limitations
On April 29, 2014, David Michaels, the Assistant Secretary of Labor for Occupational Safety and Health, testified before the U.S. Senate subcommittee of the Committee on Health, Education, Labor and Pensions regarding proposed changes to the Occupational Safety and Health Act of 1970 (“OSH Act”) whistleblower provision. After highlighting some the recent changes in the OSHA whistleblowing programs, including the development of online complaint filing processes (as discussed in an earlier blog post) and a staffing increase, Assistant Secretary Michaels urged legislators to consider increasing the statute of limitations for filing a whistleblower complaint under the OSH Act.
OSHA Releases Interim Dodd-Frank Whistleblower Regulations
OSHA recently released the interim final text of regulations implementing the whistleblower protection provision (Section 1057) in Dodd-Frank. The interim final regulations establish the timing and processes for handling Dodd-Frank whistleblower complaints, including the procedures for filing a complaint with OSHA, OSHA’s investigation of the complaint, issuance of a decision and order, and appeals. OSHA is accepting comments on the interim final regulations until June 2, 2014.