Category Archives: Retaliation

The Moving Ahead for Progress in the 21^st Century Act or the “MAP-21 Act” was signed into law on July 6, 2012.  This law regarding our highway and other surface transportation systems contains various funding and regulatory provisions.  Among other issues, MAP-21 focuses on enhancing highway safety.

Consistent with that focus, MAP-21 establishes an anti-retaliation whistleblowing provision that protects employees of motor vehicle manufacturers, part suppliers, and dealerships who provide their employer or the Secretary of Transportation with information relating to “any motor vehicle defect, noncompliance, or any violation or alleged violation of any notification or reporting requirement” enforced by the National Highway Traffic Safety Administration.  MAP-21’s whistleblowing provisions also protect employees who file or participate in a proceeding involving such matters or who object to, or refuse to participate in, any activity in violation of 49 U.S.C. ch. 301.

MAP-21 whistleblowing complaints are to be filed with the Department of Labor’s OSHA division for investigation and resolution.  Possible remedies include reinstatement, compensatory damages, and payment of attorney fees and other costs reasonably incurred by the employee.  If it is determined that an employee has brought a frivolous or bad faith complaint, the employer may be awarded a reasonable attorney fee not exceeding $1,000.00.

Takeaway:  The Map-21 whistleblower provision is a new addition to a variety of other whistleblower laws enforced by OSHA.  Motor vehicle manufacturers, part suppliers, and dealerships should take seriously any employee reports or complaints protected by MAP-21 and take no retaliatory acts against the employee in response.

Earlier this week, the IRS announced that it would pay Bradley Birkenfeld a $104 million dollar reward for his “whistleblowing” activity.  Birkenfeld helped expose a widespread tax evasion plan at a well-known Swiss bank.  As a participant in the scheme, Birkenfeld also spent 31 months in federal prison.  The information provided by Birkenfeld aided in securing an agreement with the bank that resulted, among other things, in a $780 million dollar fine.

Notably, according to a former official with the Securities and Exchange Commission, under SEC whistleblower rules, Birkenfeld would not have been entitled to any reward because of his conviction of a related federal offense.  This distinction highlights the myriad of rules, regulations and statutes that cover so-called whistleblowers.

Federal executive branch employees are generally covered under the Whistleblower Protection Act (WPA). The WPA prohibits “personnel action” taken against certain “covered employee[s]” “because of” a “protected disclosure[,]” which usually consists of reporting illegal or improper governmental activities.  Private employers, however, are potentially subject to federal whistleblower laws as well.

For example, the Occupational Safety and Health Administration (OSHA) administers whistleblower claims under seventeen different federal laws. Among those laws, OSHA administers claims of retaliation under the Sarbanes-Oxley Act for reporting violations federal securities laws as well as claims of whistleblowing for violations of environmental laws relating to asbestos in elementary and secondary school systems under the Asbestos Hazard Emergency Response Act.  Other federal laws provide protection beyond direct employees and cover contractors and subcontractors too, such as the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, which applies to allegations of discrimination or retaliation for reporting alleged violations of federal air carrier safety laws or regulations.  Indeed, federal laws cover a wide variety of so-called whistleblower activity, including, reporting allegations of an unsafe cargo containers (International Safe Container Act) or reporting alleged violations of certain environmental laws or regulations (Clean Air Act, Safe Drinking Water Act, Federal Water Pollution Control Act, Toxic Substances Control Act, Solid Waste Disposal Act, and the Comprehensive Environmental Response, Compensation, and Liability Act).

Many states also have whistleblower laws, such as the Minnesota Whistleblower Act.  This is certainly not an exhaustive list of whistleblower laws.

Takeaway:  Whether certain employee activity is protected under a whistleblower law is a fact-intensive question.  But employers should be aware that many federal laws are industry specific and could potentially provide additional considerations when dealing with such conduct. Accordingly, seeking legal counsel when addressing a “whistleblower” situation can be of great assistance in determining what rules and regulations may apply.

Not necessarily.  The Minnesota Supreme Court addressed this question in Hedglin v. City of Willmar.  582 N.W.2d 897 (Minn. 1998).  The Minnesota Whistleblower Act protects employees from retaliation when they report “a violation or suspected violation of any federal or state law or rule adopted pursuant to law.”  In Hedglin, the court held that an employee’s report that some firefighters were showing up to fire calls while drunk was not protected activity because, while reprehensible, no statute or rule prohibited that conduct.

On the other hand, the Hedglin court held that employees did engage in protected activity under the Whistleblower Act when they reported that other firefighters were falsifying roll call sheets and driving fire trucks while drunk.  The court concluded that those reports were protected because they involved violations of state laws prohibiting the theft of public funds and the operation of motor vehicles while under the influence of alcohol.

Takeaway for Employers:  Just because an employee reports conduct that is immoral or reprehensible does not necessarily mean that the employee has engaged in protected activity under the Minnesota Whistleblower Act.

On November 3, 2011, the Occupational Safety and Health Administration (OSHA) published an interim rule amending its regulations relating to the retaliation/whistleblower provision of the Sarbanes-Oxley Act, as revised by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.  See 18 U.S.C. § 1514A.  OSHA is in charge of handling retaliation complaints under Sarbanes-Oxley as well other laws, like the Consumer Product Safety Improvement Act of 2008 and certain federal environmental statutes.  Here’s what employers need to know about the new interim rule:

Which Employers Are Subject to the Sarbanes-Oxley Anti-Retaliation Rule?  The Sarbanes-Oxley anti-retaliation rule applies to most public companies.  Specifically, it applies to:

• Any company with a class of securities registered under section 12 of the Securities Exchange Act of 1934, 15 U.S.C. § 78l, or any subsidiary or affiliate whose financial information is included in the consolidated reports of such company;
• Any company required to file reports under section 15(d) of the Securities Exchange Act of 1934, 15 U.S.C. § 78o(d), or any subsidiary or affiliate whose financial information is included in the consolidated reports of such company; or
• Any nationally recognized statistical rating organization.

The anti-retaliation rule also applies to officers, employees, contractors, subcontractors or agents of covered companies or nationally recognized statistical rating organizations.

What Does the Sarbanes-Oxley Anti-Retaliation Provision Prohibit?  The Sarbanes-Oxley anti-retaliation rule prohibits a covered company or person from discharging, demoting, suspending, threatening, harassing, or in any other manner retaliating against an employee because the employee or any person acting pursuant to the employee’s request has:

• Provided information, caused information to be provided or otherwise assisted in an investigation regarding any conduct that the employee reasonably believes constitutes: (i) a fraud or swindle; (ii) fraud by wire, radio, or television; (iii) bank fraud; (iv) securities and commodities fraud; (v) a violation of any SEC rule or regulation; or (vi) a violation of any provision of federal law relating to fraud against shareholders; and
• The information or assistance was provided to or the investigation was conducted by:  (i) a federal regulatory or law enforcement agency; (ii) any member of Congress or committee of Congress; or (iii) any person with supervisory authority over the employee or any person working for the employer who has authority to investigate, discover, or terminate misconduct.

The anti-retaliation rule also prohibits retaliation against any employee who files, causes to be filed, testifies, participates in, or otherwise assists in a proceeding filed or about to be filed relating to such matters.

How Are Complaints Handled For Alleged Violations of the Sarbanes-Oxley Anti-Retaliation Rule?  Retaliation complaints under Sarbanes-Oxley must be filed with OSHA and processed administratively.  If the complaint establishes a prima facie case of retaliation, OSHA will investigate the matter unless the respondent demonstrates by clear and convincing evidence that it would have taken the same adverse action in the absence of the complainant’s protected activity.

Within 60 days of the filing of the complaint, OSHA will issue written findings regarding whether there is reasonable cause to believe a violation occurred.  If OSHA determines there is reasonable cause to believe a violation occurred, it may order relief to make the complainant whole, such as reinstatement, back pay, or other compensatory damages.  Any party may file objections or a request for a hearing within 30 days of OSHA’s determination.  If a hearing is requested, the hearing will be conducted before an administrative law judge (ALJ).  The decision of the ALJ may be appealed to the Administrative Review Board (ARB).  Decisions of the ARB may be appealed to a United States Circuit Court of Appeals.

If OSHA does not issue a final decision within 180 days of the filing of the complaint, the complainant may bring an action in a United States District Court.

When Is the Interim Rule Effective?  The interim rule took effect on November 3, 2011.  OSHA will accept comments on the interim rule until January 3, 2012, and will publish a final rule at some point in the future.

The Minnesota Whistleblower Act provides that an employer may not discharge, discipline, threaten, discriminate against, or penalize an employee regarding his or her compensation or terms of employment because the employee engages in any of the following forms of protected activity:

(1)   The employee, or a person acting on behalf of an employee, in good faith, reports a violation or suspected violation of any federal or state law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official;

(2)   The employee is requested by a public body or office to participate in an investigation, hearing, inquiry;

(3)   The employee refuses an employer’s order to perform an action that the employee has an objective basis in fact to believe violates any state or federal law or rule or regulation adopted pursuant to law, and the employee informs the employer that the order is being refused for that reason;

(4)   The employee, in good faith, reports a situation in which the quality of health care services provided by a health care facility, organization, or health care provider violates a standard established by federal or state law or a professionally recognized national clinical or ethical standard and potentially places the public at risk of harm; or

(5)   A public employee communicates the findings of a scientific or technical study that the employee, in good faith, believes to be truthful and accurate, including reports to a governmental body or law enforcement official.

See Minn. Stat. § 181.932.  The statute does not permit an employee to make statements or disclosures knowing that they are false or that they are in reckless disregard of the truth.  Nor does the statute authorize disclosures that otherwise violate the law.