Category Archives: Whistleblowing

Why companies like Wells Fargo ignore their whistleblowers – at their peril

Source: Elizabeth C. Tippett, The Conversation, October 24, 2016

Enron. Worldcom. The Madoff scandal. The mortgage meltdown. Now Wells Fargo.

High-profile corporate frauds like these all seem to follow the same pattern. First the misconduct is discovered, and then we learn about all of the whistleblowers who tried to stop the fraud much earlier. Congress then tries to enhance whistleblower protections, with varying success.

The Sarbanes-Oxley Act, passed in 2002 after the Enron and Worlcom scandals, was supposed to protect whistleblowers who uncovered accounting frauds, but judges typically rejected their retaliation claims. The Dodd Frank Act, approved in 2010, provides financial rewards for certain whistleblowers. Its success is still unclear.

While these laws may protect employees who expose wrongdoing from retaliation and encourage more to do the same, nothing requires employers to take their disclosures seriously. And as we saw with the latest scandal involving Wells Fargo, several former employees say they tried to get the company’s attention in 2005 and 2006, to no avail….

Lane v. Franks: The Supreme Court Clarifies Public Employees’ Free Speech Rights

Source: Thomas A. Schweitzer, Touro College – Jacob D. Fuchsberg Law Center, Touro Law Center Legal Studies Research Paper Series No. 15-33, 2015

From the abstract:
On June 19, 2014, the United States Supreme Court decided an important First Amendment case concerning the free speech rights of government employees. While public employees speaking as citizens on issues of public concern have the same right to freedom of speech as other citizens when they speak on matters of public concern, the Court has held that when they make statements pursuant to their official duties, they must accept certain limitations on their freedom of speech. In Lane v. Franks, the Court unanimously rejected the extreme position of the Eleventh Circuit, which had held that a public official had no remedy when he was fired in retaliation for turning in a “no show” office holder who was tried, convicted and imprisoned.

While two other appellate courts had conferred broader protection on public employees’ free speech rights in similar cases, there were only a handful of such cases. However, Lane’s actions, which presumably led to his termination, manifestly promoted the public interest in combatting government corruption. Thus, the lower courts’ position that Lane had suffered no remediable wrong evidently convinced all the justices that prompt action was required to set the Eleventh Circuit straight.

Introduction: Employment Law and the Evolving Organization of Work – A Commentary

Source: Emily A. Spieler, Northeastern University Law Journal, Vol. 6 No. 2, 2014

From the abstract:
In 2013, Northeastern University Law Journal hosted a symposium, titled “Employed or Just Working?,” to address issues of legal protections for workers in the United States, regardless of their official classifications.

This article introduces the symposium’s resultant articles. It places the specific topics addressed by issue contributors in the context of the history of workers’ rights being defined and redefined as courts and legislatures responded to complex social, political and economic forces.

This contextualization touches on several periods: the post-Lochner depression era; the era of civil rights activism that gave rise to basic notions of dignity and rejected discrimination based on status; and the emergence of concern in the 1970s regarding the status of at-will employees when their claims collided with matters of public concern – resulting in various anti-retaliation provisions both under the common law and under a myriad of whistleblower statutes. Reflecting an assumption that the employee-employer relationship was amenable to simple analysis and definition, none of the 20th century federal statutes attempted to include even a reasonably useful definition of the key terms of “employee” or “employer.” In fact, the statutory definitions are tautological: employees are individuals employed by employers; employers are entities that employ employees. Despite this statutory assumption, the courts have repeatedly been called upon to apply each statute to nonstandard employment relationships. The definitional problems have never been solved, as the articles in this symposium illustrate.

The author finds that the four contributed articles draw a troubling picture, reminding us that there are inadequate legal protections for misclassified workers and workers in nonstandard and evolving work arrangements.

Whistle Where You Work? The Ineffectiveness of the Federal Whistleblower Protection Act of 1989 and the Promise of the Whistleblower Protection Enhancement Act of 2012

Source: Shelley L. Peffer, Aleksandr Bocheko, Rita E. Del Valle, Allmir Osmani, Shawn Peyton, and Edna Roman, Review of Public Personnel Administration, Vol. 35 no. 1, March 2015
(subscription required)

From the abstract:
The Whistleblower Protection Act (WPA) of 1989 was enacted to provide protection to employees who report wrongdoing on the part of their employers. This study analyzed whether the provisions in the WPA actually protect federal government employees from retaliation by their federal government employers. The research focused on a legal analysis of federal employee WPA claims litigated in federal court. Furthermore, within those cases, the claims were separated by issues—national security, environmental issues, and government ethics—to get a fuller understanding of WPA issues. The findings of the analysis suggested that the WPA did not provide adequate protections for employees. Out of 151 appellate cases that were identified and reviewed in the study, 79% of cases were ruled in favor of defendants—federal agencies. Out of 142 cases involving government ethics and administration issues, 79% of cases were lost by employees. In issues involving the environment, 100% of cases resulted in a loss for employees. Out of four cases involving national security, 75% were lost by federal employees. The results lead to the conclusion that either the WPA as written or the manner in which courts are interpreting the WPA is not consistent with the intent of the legislation—to protect employees. The article further analyses the Whistleblower Protection Enhancement Act (WPEA) of 2012 and whether it cures the defects in the WPA. The analysis shows that the WPEA may not live up to its promise.

United States Supreme Court Expands Whistleblower Protection to Private Contractors, Subcontractors Working for Public Companies

Source: Stuart L. Bass and Anthony Basile, Labor Law Journal, Vol. 65 no. 4, Winter 2014
(subscription required)

…. The issue before the Supreme Court was to interpret the whistleblower provisions of Sarbanes-Oxley. The Court had to decide whether section 806 of SOX prevented retaliation by public companies against employees who were engaged in particular whistleblowing incidents extended to employees of private contractors as well as subcontractors of public companies. Ever since the collapse of Enron Corporation, Congress has focused in insuring corporate whistleblowers are protected from retaliation. Indeed, the Dodd-Frank statute sought to expand SOX’s whistleblower protection to employees of public companies and subsidiaries. … The author suggests in light of the Lawson decision private companies must prepare themselves to deal with whistleblower complaints …. The time has come for all such companies, particularly privately held companies, to develop their own whistleblower policies. ….

Not My Job: Determining the Bounds of Public Employee Protected Speech

Source: Stephen Allred, Labor Law Journal, Vol. 65 no. 4, Winter 2014
(subscription required)

… This article reviews the Supreme Court’s rulings in public employee free speech cases, discusses the significant departure from precedent that Garcetti made to those cases, summarizes the Court’s most recent ruling in Lane, and argues that the Court should return to the broader standard the Court originally announce in Pickering. Were the Court to do so, it would significantly reduce the confusion the Court has created about whether public employees can speak in court – or in other for a – on matters that derive from their ordinary job responsibilities. …

Whistleblower Laws: State or Federal Protection?

Source: Rebecca Goza, Lee Tyner, Jennifer Barger Johnson, Journal of Workplace Rights, Vol. 17, Nos. 3 – 4, 2013-2014
(subscription required)

From the abstract:
This article will discuss the unique complexities associated with whistleblower laws and programs in the United States. It will focus on discussion of the myriad of current federal and state laws created because of concern over risks in this area. The goal of this article is to compare state and federal legislation, for the purpose of identifying the states that offer the best protection to whistleblowers as well as identifying any states that offer better protection to whistleblowers than federal law currently provides.

Whistleblowing in Organizations: A Logit analysis of Litigated Cases

Source: Yvette P. Lopez, Helen Lavan, Marsha Katz, Journal of Workplace Rights, Vol. 17, Nos. 3 – 4, 2013-2014
(subscription required)

From the abstract:
This study examines the issue of whistleblowing in organizations. As suggested by the literature, a variety of legal protections and issues were examined to predict case outcomes in future litigation by individuals who engage in the act of whistleblowing. We used chi square analyses and a logit model to predict when an individual plaintiff would prevail, and the results indicate that case characteristics including discrimination laws, safety behavior, sexual harassment, and refusal to participate in illegal activities are significant predictors. The odds of a finding in favor of the employee increase with the presence of these particular case characteristics. Our examination uses litigated cases as the source of data, which allows for a rich analysis of occurrences relating to whistleblowing in a large number of organizations. The results of this study suggest that individuals increase their chances for successful litigation when these specific issues of discrimination laws, safety behavior, sexual harassment, and refusal to participate in illegal activities are involved in the whistleblowing occurrence.

Whistleblowers/Eco-Heroes – New Tools For Embattled Public Servants

Source: Public Employees for Environmental Responsibility (PEER), December 2014

From the press release:
A unique new online legal help center for federal, state and contract employees confronting whistleblower-related issues was unveiled today by Public Employees for Environmental Responsibility (PEER). Besides proving breakdowns of the scope and strength of whistleblower-related laws, the site enables public employees to schedule free consultations with PEER attorneys….

The new web center provides breakdowns on topics such as –
Recent changes in federal whistleblower law;
How new federal scientific integrity policies work;
New whistleblower protections for employees of federal contractors, subcontractors and grantees;
The evolving and expanding whistleblower responsibilities of Inspectors General;
Whistleblower protections in environmental laws such as the Clean Air Act and Superfund; and
The False Claims Act and whistleblower bounty programs.

The coverage of whistleblower laws, especially at the federal level, has grown in recent years. The importance of these statutory whistleblower rights has been magnified by a 2006 U.S. Supreme Court decision largely stripping government workers of on-the-job First Amendment free speech protections.
Besides federal law, the PEER website displays a detailed analysis and comparison of whistleblower laws in all 50 states and the District of Columbia. The site specifies which states cover what disclosures, under which circumstances and with what remedies….
Related:
Examine new legal resource center for public agency and university scientists
Look at diminished First Amendment protection for government workers
See rating of each state whistleblower law
Revisit the case of Chief Chambers of the U.S. Park Police