Changing Currents in Employment: Recent Developments in Whistleblower Law Jason M. Zuckerman The Employment Law Group ® Law Firm Tel: Fax:

New Whistleblower Protection Provisions New Whistleblower Protection for Transportation Employees New Whistleblower Protection for Transportation Employees Whistleblower Provision of CPSC Reform Act Whistleblower Provision of CPSC Reform Act Section 1553 of American Recovery and Reinvestment Act Section 1553 of American Recovery and Reinvestment Act Amendments to the Retaliation Provision of the False Claims Act) Amendments to the Retaliation Provision of the False Claims Act)

9/11 Act Transportation Whistleblower Protections Public Transportation Employees Public Transportation Employees –§ 1413 establishes National Transit Systems Security Act of 2007 (“NTSSA”) to protect public transportation employees Railroad Employees Railroad Employees –§ 1521 amends the Federal Rail Safety Act (“FRSA”), 49 U.S.C. § Commercial Motor Carrier Employees Commercial Motor Carrier Employees –§ 1536 amends the Surface Transportation Assistance Act (“STAA”), 49 U.S.C. § 31105

The Implementing Recommendations of the 9/11 Commission Act of 2007 Enacted August 3, 2007 Enacted August 3, 2007 Public Law No Public Law No New Cause of Action: New Cause of Action: –Whistleblower coverage for public transportation employees (§ 1413) Significant Enhancement to Existing WB Protection Laws: Significant Enhancement to Existing WB Protection Laws: –Whistleblower coverage for railroad employees (§ 1521) and commercial motor carrier employees (§ 1536)

9/11 Act Coverage Public Transportation Employees –Section 1413 of the Act protects public transportation employees –Applies to a public transportation agency, a contractor or subcontractor of such agency, or an officer or employee of such agency –Modeled on employee protection provisions of Federal Rail Safety Act (49 U.S.C. § 20109) and Wendell H. Ford Aviation Investment and Reform Act for the 21 st Century (“AIR21”) (49 U.S.C. § 42121)

9/11 Act Coverage Railroad Employees –Section 1521 amends the Federal Rail Safety Act (“FRSA”), 49 U.S.C. § –Applies to a railroad carrier engaged in interstate or foreign commerce, a contractor or subcontractor of such a railroad carrier, or an officer or employee of such a railroad carrier

9/11 Act Coverage Commercial Motor Vehicle Employees Section 1536 amends the Surface Transportation Assistance Act (“STAA”), 49 U.S.C. § Section 1536 amends the Surface Transportation Assistance Act (“STAA”), 49 U.S.C. § Amendments conform the STAA to the procedure and burden of proof set forth in the NTSSA and the amended FRSA (which are essentially derived from AIR21) Amendments conform the STAA to the procedure and burden of proof set forth in the NTSSA and the amended FRSA (which are essentially derived from AIR21) STAA protects drivers of commercial motor vehicles, mechanics, freight handlers, or any other person employed by a commercial motor vehicle carrier who affects safety and security during his or her employment. STAA protects drivers of commercial motor vehicles, mechanics, freight handlers, or any other person employed by a commercial motor vehicle carrier who affects safety and security during his or her employment.

Elements of a Transportation Retaliation Claim Protected Conduct Protected Conduct Knowledge of Protected Conduct Knowledge of Protected Conduct Adverse Action Adverse Action Protected activity contributing factor in decision to take adverse action Protected activity contributing factor in decision to take adverse action

Public Transportation Employees: Protected Conduct NTSSA covers employees who: NTSSA covers employees who: –Provide information or assist an investigation regarding conduct which the complainant reasonably believes constitutes a violation of Federal law relating to public transportation safety or security, or fraud, waste or abuse of federal grants or other funds intended to be used for public transportation safety or security –Refuse to violate or assist in the violation of a federal law –File employee protection complaints under NTSSA –Cooperate with a safety or security investigation conducted by the Department of Transportation (“DOT”), Department of Homeland Security (“DHS”) or National Transportation Safety Board (“NTSB”)

Public Transportation Employees: Protected Conduct NTSSA also covers employees who: NTSSA also covers employees who: –Furnish information to the DOT, DHS, NTSB or any federal, state or local enforcement agency regarding an accident resulting in death or injury to a person in connection with public transportation –Refuse to work under certain conditions –Report hazardous safety or security conditions –Refuse to authorize the use of any safety or security related equipment, track or structures

Railroad Employees: Protected Conduct The amended FRSA protects employees who: The amended FRSA protects employees who: –Notify or attempt to notify the railroad carrier or DOT of a work related illness or personal injury of an employee –Furnish information to the DOT, DHS, NTSB or any federal, state or local enforcement agency regarding an accident resulting in death or injury to a person in connection with railroad transportation –Refuse to work under certain conditions –Report hazardous safety or security conditions –Refuse to authorize the use of any safety or security related equipment, track or structures Complainant’s actions must be lawful and in good faith. Complainant’s actions must be lawful and in good faith.

Railroad Employees: Protected Conduct FRSA protects: FRSA protects: –Providing information or assisting an investigation regarding conduct which the complainant reasonably believes constitutes a violation of Federal law relating to railroad safety or security, or fraud, waste or abuse of federal grants or other funds intended to be used for railroad safety or security –Refusing to violate or assist in the violation of a federal law –Filing a complaint under FRSA Complainant’s actions must be lawful and in good faith. Complainant’s actions must be lawful and in good faith.

Commercial Motor Vehicle Employees: Protected Conduct STAA prohibits an employer from retaliating against an employee because the employee: STAA prohibits an employer from retaliating against an employee because the employee: –filed a complaint or began a proceeding related to a violation of a commercial motor vehicle safety or security regulation, standard, or order –testified or will testify in such a proceeding –refused to operate a vehicle because the operation violates a regulation, standard, or order of the United States related to commercial motor vehicle safety, health or security –cooperated or is about to cooperate, with a safety or security investigation by the DOT, DHS or NTSB about an accident or incident that resulted in injury or death to an individual or damage to property occurring in connection with commercial motor vehicle transportation

Protected Conduct “Reasonable Belief” To prove protected conduct, complainant need not report an actual violation of a transportation safety or security rule. To prove protected conduct, complainant need not report an actual violation of a transportation safety or security rule. “Reasonable belief” standard applies “Reasonable belief” standard applies Objective component assesses whether a person with the complainant’s knowledge and experience would have believed the reported conduct violated the relevant statute Objective component assesses whether a person with the complainant’s knowledge and experience would have believed the reported conduct violated the relevant statute

Adverse Action Prohibits a broad range of adverse actions: Prohibits a broad range of adverse actions: –Termination –Blacklisting –Denying benefits –Failure to hire or rehire Burlington applies Burlington applies

Knowledge of Protected Conduct ALJs will impute knowledge of protected conduct to the decision- maker where a person with knowledge of the protected conduct influenced the decision ALJs will impute knowledge of protected conduct to the decision- maker where a person with knowledge of the protected conduct influenced the decision

Causation Burden of proof favorable to employees Burden of proof favorable to employees Contributing factor is “any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.” Contributing factor is “any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.”

Procedure Under the three transportation whistleblower protection laws, a retaliation claim must be filed with the Department of Labor (“DOL”) within 180 days of the employee first learning of the adverse action Under the three transportation whistleblower protection laws, a retaliation claim must be filed with the Department of Labor (“DOL”) within 180 days of the employee first learning of the adverse action SOL does not run from the date on which the adverse action is implemented SOL does not run from the date on which the adverse action is implemented OSHA conducts investigation and can order preliminary reinstatement OSHA conducts investigation and can order preliminary reinstatement Either party can request a de novo hearing before an ALJ Either party can request a de novo hearing before an ALJ

Procedure Formal rules of evidence do not apply Formal rules of evidence do not apply Either party can request ARB review of ALJ decision Either party can request ARB review of ALJ decision If DOL has not issued a final decision within 210 days after the filing of the complaint, the complainant can file suit in federal district court. If DOL has not issued a final decision within 210 days after the filing of the complaint, the complainant can file suit in federal district court. Either party can request a jury trial Either party can request a jury trial

Remedies Reinstatement Reinstatement Back pay Back pay Attorney Fees Attorney Fees Punitive Damages capped at $250,000 Punitive Damages capped at $250,000

CPSC Reform Act of 2008 (H.R. 4040) Protects employees in the manufacturing, private label, retail and distribution industries (§ 219) Protects employees in the manufacturing, private label, retail and distribution industries (§ 219) Enacted August 14, 2008 Enacted August 14, 2008 Comprehensive CPSC reform prompted by concerns about lead-based toys and other hazardous consumer products Comprehensive CPSC reform prompted by concerns about lead-based toys and other hazardous consumer products

Elements of a CPSC Retaliation Claim Protected Conduct Protected Conduct Knowledge of Protected Conduct Knowledge of Protected Conduct Adverse Action Adverse Action Causation (protected activity contributing factor in decision to take adverse action) Causation (protected activity contributing factor in decision to take adverse action)

Coverage Section 219 of the CPSC Reform Act protects employees in the manufacturing, private labeling, distribution and retail industries who disclose information to an employer, a regulatory agency, or a State Attorney General about a reasonably perceived violation of the Consumer Product Safety Commission Act (“CPSCA”) or any act enforced by the Consumer Product Safety Commission Section 219 of the CPSC Reform Act protects employees in the manufacturing, private labeling, distribution and retail industries who disclose information to an employer, a regulatory agency, or a State Attorney General about a reasonably perceived violation of the Consumer Product Safety Commission Act (“CPSCA”) or any act enforced by the Consumer Product Safety Commission Also protects an employee’s good faith refusal to violate the CPSCA Also protects an employee’s good faith refusal to violate the CPSCA

Protected Conduct An employee engages in protected activity by: An employee engages in protected activity by: –Providing information relating to a violation of the CPSC Reform Act or any Act enforced by the Commission, to the employer, the Federal Government, or the attorney general of a state –Testifying or assisting in a proceeding concerning a violation of the CPSC Reform Act or any law enforced by the Commission –Refusing to participate in an activity that violates the CPSCA

Protected Conduct Specific examples of protected conduct include: Specific examples of protected conduct include: –Reporting violations of the standard for the flammability of children’s sleepwear –Reporting violations of safety specifications for bicycles –Reporting choking incidents involving marbles, small balls, latex balloons and other small parts

Adverse Action Prohibits a broad range of adverse actions Prohibits a broad range of adverse actions –“discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment” Burlington standard applies Burlington standard applies

Causation Burden of proof favorable to employees Burden of proof favorable to employees Contributing factor is “any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.” Contributing factor is “any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.”

Remedies Reinstatement Reinstatement Back Pay Back Pay Attorney’s Fees Attorney’s Fees Punitive damages not authorized Punitive damages not authorized

Procedure 180-day statute of limitations 180-day statute of limitations Applies AIR-21/SOX procedures Applies AIR-21/SOX procedures OSHA investigates OSHA investigates ALJ hearing ALJ hearing Appeal to ARB Appeal to ARB If DOL does not issue a final decision within 210 days of the employee filing the complaint, employee can remove the claim to federal court and is entitled to a trial by jury. If DOL does not issue a final decision within 210 days of the employee filing the complaint, employee can remove the claim to federal court and is entitled to a trial by jury.

Key Provisions of Section 1553 of American Recovery and Reinvestment Act Broad scope of protected conduct Broad scope of protected conduct Broad range of actionable adverse actions Broad range of actionable adverse actions Low burden to establish causation Low burden to establish causation Right to a Jury Trial Right to a Jury Trial No “duty speech” defense No “duty speech” defense No statute of limitations No statute of limitations

Section 1553 Coverage Applies to Private Contractors, State and Local Governments who are recipients of stimulus funds Applies to Private Contractors, State and Local Governments who are recipients of stimulus funds

Section 1553 Protected Conduct Protected conduct includes a disclosure about information that an employee reasonably believes evidences: Protected conduct includes a disclosure about information that an employee reasonably believes evidences: –Gross mismanagement of an agency contract relating to stimulus funds; –Gross waste of stimulus funds; –Substantial and specific danger to public health or safety; –Abuse of authority related to the implementation or use of stimulus funds; or –A violation of a law, rule, or regulation that governs an agency contract or grant related to stimulus funds.

“Duty Speech” Section 1553 specifically protects “duty speech” whistleblowing, i.e., disclosures made by employees in the ordinary course of performing their job duties Section 1553 specifically protects “duty speech” whistleblowing, i.e., disclosures made by employees in the ordinary course of performing their job duties

Objective Reasonableness Courts will likely apply a standard of objective reasonableness from analogous whistleblower protection laws, such as Section 806 of Sarbanes-Oxley Act Courts will likely apply a standard of objective reasonableness from analogous whistleblower protection laws, such as Section 806 of Sarbanes-Oxley Act DOL ARB and two Circuit Courts have imposed a high standard of “objective reasonableness” DOL ARB and two Circuit Courts have imposed a high standard of “objective reasonableness” Allen v. Administrative Review Board, No (5 th Cir. Jan. 22, 2008) Allen v. Administrative Review Board, No (5 th Cir. Jan. 22, 2008) Livingston v. Wyeth, Inc., No (4th Cir. Mar. 24, 2008) Livingston v. Wyeth, Inc., No (4th Cir. Mar. 24, 2008) Welch v. Cardinal Bankshares Corp., ARB No , ALJ No SOX-15 (ARB May 31, 2007) Welch v. Cardinal Bankshares Corp., ARB No , ALJ No SOX-15 (ARB May 31, 2007)

Section 1553 Procedure 180-day statute of limitations 180-day statute of limitations Inspector General investigates Inspector General investigates If an agency head does not issue a final decision within 210 days of the employee filing the complaint, employee can remove the claim to federal court and is entitled to a trial by jury. If an agency head does not issue a final decision within 210 days of the employee filing the complaint, employee can remove the claim to federal court and is entitled to a trial by jury.

Section 1553 Remedies Reinstatement Reinstatement Back Pay Back Pay Compensatory Damages Compensatory Damages Attorney’s Fees Attorney’s Fees

False Claims Act Amendments On May 20, 2009, President Obama signed into law the Fraud Enforcement Recovery Act, which amends the FCA’s retaliation provision (31 USC 3730(h) by: On May 20, 2009, President Obama signed into law the Fraud Enforcement Recovery Act, which amends the FCA’s retaliation provision (31 USC 3730(h) by: –Expanding coverage to any person working on a government contract –Broadening scope of protected conduct