Whistleblower Law Blog

OSHA Files Suit against U.S. Postal Service for Alleged Discrimination and Retaliation

March 15, 2012

On February 28, 2012, the Occupational Safety and Health Administration (OSHA) confirmed allegations that the United States Postal Service retaliated against a Seattle safety specialist who advised a co-worker to file a safety complaint. OSHA investigated the initial claim and found that the Postal Service violated the whistleblower protection provisions of the Occupation Safety and Health Act.

The Postal Service transferred the safety specialist, who remains unnamed as a protected whistleblower, to another office after he helped a co-worker report “unhealthful conditions” to OSHA. In addition, the Postal Service gave the specialist’s work to someone on a lower pay grade and told him that he would not receive a pay raise because his supervisors did not approve of his filing a safety complaint with OSHA.

The lawsuit, filed in the U.S. District Court for the Western District of Washington, asks that the Court order the Postal Service to pay the safety specialist for lost wages, benefits, and compensatory damages for emotional distress. It also seeks a permanent injunction against the Postal Service to prevent future violations of the Occupational Safety and Health Act, since this is OSHA’s second lawsuit against the Seattle Distribution Center.

In June 2009, OSHA sued the Postal Service alleging that an employee was wrongfully discharged after reporting unhealthy working conditions. The whistleblower in the  2009 case was the same employee that the safety specialist advised in the current case. A spokesman from OSHA stated that the 2009 case was withdrawn.

OSHA’s regional administrator, Dean Ikeda, stated that the Postal Service refused to settle the case out of court. Ikeda said, “This is something we take very seriously. Hostility and retaliation against whistleblowers are simply unacceptable.”

The Employment Law Group® law firm represents employees nationally who have been exposed to hazardous work conditions.

Lawyers USA Quotes The Employment Law Group® Principal Dave Scher on Recent Rise in Whistleblower Claims

March 09, 2012

Dave Scher, Principal of The Employment Law Group® law firm, was recently interviewed and quoted by Lawyers USA, a national newspaper focused on news and trends in litigation, as well as law practice management.

Commenting on recent media attention given to corporate rule-breaking and the employees who report it, Mr. Scher noted that “[as] retaliation claims become more and more prevalent, whistleblower type claims are expanding.”

Indeed, the Department of Justice (DOJ) recently announced that it recovered a record-setting $3 billion in False Claims Act settlements for fiscal year 2011, bringing the total recovered since 2009 to $8.7 billion. Similarly, the Department of Health and Human Services (HHS) announced last month that federal agencies succeeded in recovering over $4 billion in fraudulent healthcare payments in 2011.

Noting the variety of whistleblower statutes under federal and state law, Mr. Scher said that the difficulty faced by whistleblowers seeking to bring lawsuits for retaliation against their employers often depends on state laws that specifically cover the conduct reported by whistleblowers. For example, in Virginia, Mr. Scher commented that “you have to have an express statute” and that “[it’s] very, very difficult” to link reported conduct to a covered activity.

The article, entitled “Whistleblower Claims Fueled by Unemployment”, appeared in the February 2012 edition of Lawyers USA.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Interline Logistics Group LLC Ordered by OSHA to Reinstate and Pay Whistleblower Truck Driver $190,000 After He Refused to Violate Department of Transportation Regulation

March 08, 2012

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) last week ordered Interline Logistics Group LLC, a trucking company headquartered in Kennesaw, Georgia, to reinstate a Sauk Village truck driver, and pay over $190,000 in back wages and compensatory damages for violating the whistleblower provision of the Surface Transportation Assistance Act (STAA).

The truck driver filed a whistleblower complaint with OSHA against Interline Logistics Groups LLC. OSHA’s investigation found that after the company sent the truck driver to a repair shop to service the deficient brakes, it ordered him to go back to his dispatch location to pick up a return load. The truck driver refused to follow orders because he had already exceeded the maximum number of driving hours allowed by the DOT. The following day, Logistics Group terminated the driver for not following dispatch instructions. OSHA found reasonable cause to believe that the truck driver was terminated for reporting a safety issue with his brakes and refusing to violate DOT regulations.

OSHA’s Assistant Secretary of Labor, Dr. David Michaels, stated in a press release:

This case sends a clear message that employers are simply not allowed to retaliate against workers for reporting work-related safety concerns or against drivers who refuse to violate DOT regulations that determine how many hours they are allowed to work and how much rest they receive.

The Employment Law Group ® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

R. Scott Oswald, Managing Principal of The Employment Law Group® Publishes Article in The Rocket Docket News on Recent Developments in Qui Tam Litigation

March 07, 2012

The Employment Law Group® law firm’s managing principal, R. Scott Oswald, has published an article in The Rocket Docket News, entitled “Blowing the Whistle in 2012: New Developments in Qui Tam Litigation”. The article focuses on recent developments in the field of qui tam litigation including:

• Recent interpretations of the Fraud Enforcement and Recovery Act of 2009 (FERA) which hold that no proof of specific intent to defraud is necessary to establish False Claims Act (FCA) liability.
• How the Patient Protection and Affordable Care Act (PPACA) amends both the FCA and the Anti-Kickback Statute (AKS) by providing that claims submitted in violation of the AKS automatically constitute per se false claims under the FCA and that an individual “need not have actual knowledge or specific intent to commit a violation of the AKS.”
• The implication that prosecutors need not rely on the implied false certification theory when litigating claims of AKS violations as such violations are now per se false claims under PPACA.
• The continuing relevance of the implied false certification for all other types of FCA claims.
• The effect of the Supreme Court’s recent decision in Schindler Elevator Corp. v. U.S. ex rel. Kirk on the public disclosure bar in qui tam suits.

The Rocket Docket News is the newsletter of the Northern Virginia Chapter of the Federal Bar Association. Mr. Oswald’s article appears in the publication’s Winter 2012 edition.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

OSHA Issues Citations to Publix Supermarket after Jacksonville Employee Loses His Hand

March 02, 2012

On February 13, the Occupational Safety and Health Administration (OSHA) issued citations to Publix Supermarket for sixteen safety and health violations after a worker lost his hand while cleaning conveyor equipment at a Jacksonville distribution center in September. OSHA proposed a total of $182,000 in penalties for repeat violations, including failure to create and follow safety procedures, neglecting to adequately train employees on how to use equipment, and refusing to submit OSHA injury reports from 2007-2010.

Based on the supermarket’s repeated violations, OSHA required Publix to participate in its Severe Violator Enforcement Program. According to OSHA, previous violations include an employee being crushed by a Publix truck at a Deerfield Beach warehouse in 2007 and unsafe working conditions at another facility in Dacula, Georgia in 2008. As part of the Severe Violator Enforcement Program, Publix will be required to undergo routine follow-up inspections by OSHA.

Publix Media and Community Relations Manager Dwaine Stevens denied that OSHA’s citations are valid and stated that the company will appeal. “In the meantime,” he said, “we are actively working on identifying and addressing any issues that may have contributed to this unfortunate incident and are constantly developing ways to improve our safety performance.”

The Employment Law Group® law firm represents employees nationally who have been exposed to hazardous work conditions.

OSHA Cites Hershey Co. and SHS Staffing Solutions with Workplace Safety and Health Violations Following Complaints Made by Foreign Students for Exploitive and Unsafe Working Conditions

March 02, 2012

Following complaints made by foreign student workers, this week the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) cited Exel Inc., a facility owned by Hershey Co., with nine workplace safety and health violations and proposed $283,000 in penalties. OSHA also issued one citation to SHS Group LP, doing business as SHS Staffing Solutions, and proposed a $5,000 penalty.

The complaint was filed by the National Guestworker Alliance on behalf of a group of foreign students working under the U.S. Department of State’s J-1 visa program, a nonimmigrant visa issued to international students who wish to work in the United States during the summer to learn about the country and promote cultural exchange. These students paid between $3,000 and $6,000 through the Council for Educational Travel USA (CETUSA) to work in the U.S. for three months in order to immerse themselves in American culture. The students complained that they took the job under the impression that they would participate in cultural exchange, but instead found themselves working a low-wage job  that left them will little time, energy or money for cultural immersion.

The complaint alleges abuse of the J-1 visa program, as well as exploitive and unsafe working conditions. OSHA found that for four years, Exel willfully failed to log workplace injuries and illnesses, including those suffered by the foreign student workers.

The Labor Department’s Wage and Hour Division is also conducting an investigation of potential Fair Labor Standards Act (FLSA) violations related to the work performed by the CETUSA- sponsored foreign students.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Department of Labor Administrative Review Board Decision Upholds Judgment for AIR21 Whistleblower

March 02, 2012

On January 31, 2012, the Department of Labor’s Administrative Review Board (ARB) affirmed the decision of the Administrative Law Judge (ALJ) in the case of Luder v. Continental Airlines which found that Continental Airlines retaliated against a pilot who blew the whistle on perceived violations of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21). Additionally, the ARB held that the ALJ had improperly granted both back and front pay to former pilot Roger Luder, and remanded the case in order to determine the proper amount of damages.

In 2007, Mr. Luder and a co-pilot were scheduled to fly a Continental flight from Miami to Houston. Prior to departure, Mr. Luder’s co-pilot informed him that the plane had experienced turbulence during the previous flight that had gone unreported. Federal regulations require that planes be inspected after experiencing turbulence and, accordingly, Luder insisted that the plane be inspected prior to taking off and wrote a log entry regarding the turbulence. Subsequent to the incident, Continental temporarily suspended Luder and issued him a “termination warning” letter due to his ostensibly “unprofessional behavior.” Luder eventually claimed to suffer from Post-Traumatic Stress Disorder (PTSD), depression, and anxiety that arose from the retaliation he endure which, in turn, caused him to fail a flight simulator test and then be disqualified from flying.

The ALJ found that Luder’s actions constituted protected activity and that the airline’s actions were ‘materially adverse’ and retaliatory under AIR 21. The ALJ ordered Continental to pay Luder front and back pay as a result of the time he missed from work due to his health problems and also awarded the pilot monetary damages for having suffered retaliation.

Continental appealed the decision to the ARB claiming that Luder’s entry of the turbulence into the logbook was not a protected activity, citing Fabre v. Werner Enters which held that an action undertaken as “an integral part of compliance with the regulations” without further steps does not constitute a protected activity. The ARB, however, rejected this claim and distinguished Luder’s action from the situation in Fabre because Luder had gone above and beyond merely noting the turbulence in the logbook by insisting that the aircraft be inspected and refusing to fly until an inspection had been performed.

In addition to affirming the sufficiency of Luder’s protected activity under AIR 21, the ARB also found that the ALJ had properly ruled that Continental’s temporary suspension of Luder constituted an adverse action under the ‘materially adverse standard’ as the suspension resulted in a loss of wages. The ARB also held that while in some instances a warning letter does not necessarily constitute an adverse action, here the warning letter to Luder constituted an adverse action because having such a letter on file rendered Luder ineligible for an internal transfer according to company policy. Finally, the ARB viewed as significant the ALJ’s finding that the warning letter threatened Luder with further disciplinary action, including termination, and as a result, Luder “would be extremely reluctant to question airline safety because engaging in similar unacceptable behavior would result in his being fired.”

This most recent decision on what constitutes an adverse action against a whistleblower under AIR 21 comes after the Menendez v. Halliburton decision in September 2011 in which the ARB adopted a broad interpretation of the anti-retaliation provision of the Sarbanes-Oxley Act. In Menendez, the ARB noted that adverse actions “[refer] to unfavorable employment actions that are more than trivial, either as a single event or in combination with other deliberate employer actions alleged.”

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation, including employees in the airline industry.

Mayo Clinic Ordered by The Department of Labor to Reinstate a Courier Who Was Terminated After Complaining About the Clinic’s Vehicles

March 01, 2012

The U.S. Department of Labor last week ordered Minnesota-based Mayo Clinic to reinstate James Seehusen, a former courier. The clinic terminated Seehusen after he complained that it failed to repair a broken windshield on a vehicle, perform proper daily inspections on vehicles, and require drivers to obtain proper certification in order to operate the clinic’s shuttle bus.

The Mayo Clinic contends that it took immediate action to address Seehusen’s complaints, and that it terminated him for a disciplinary issue unrelated to his complaints. Department of Labor Administrative Law Judge Daniel Soloman ruled that the Mayo Clinic violated the Whistleblower Protection Act because it failed to prove that it would have terminated Seehusen regardless of his safety complaints.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Citigroup Settles Mortgage Fraud Lawsuit for $151 Million, Whistleblower to Collect $31 Million

February 23, 2012

Last Wednesday, U.S. District Judge Victor Marrero approved a settlement in which Citigroup Inc., the nation’s third-largest bank, agreed to pay $158.3 million to settle claims that it defrauded the federal government by misleading the government into insuring high-risk home mortgages.

The settlement  resolves a lawsuit against Citigroup brought by a whistleblower under the federal False Claims Act. The whistleblower, Ms. Sherry Hunt, a quality control manager at Citibank, is entitled to collect $31 million of the settlement amount for her role in exposing the fraudulent conduct.

According to the lawsuit, Citigroup falsely certified that many of its mortgage loans qualified for insurance under the FHA program of the Department of Housing and Urban Development (HUD). Among Hunt’s allegations was the claim that Citibank employees erased the records of approximately 1,000 loans that a Citibank quality-control team had designated as potentially fraudulent. In violation of HUD requirements, these defects that the quality control identified were not included in reports to the government.

According to government investigators, 30% of the HUD-insured mortgaged made or underwritten by Citibank since 2004 have gone into default, resulting in a nearly $200 million loss to the government. In its complaint against Citibank, the government noted that “a substantial percentage of those claims resulted from loans that were ineligible for FHA insurance and never should have been insured.”

As part of the settlement agreement, CitiMortgage, a subsidiary of Citibank “admits, acknowledges and accepts responsibility” for having misled the government into insuring high-risk home mortgages.

Since the False Claims Act was amended in 1986, more than $34 billion of fraud against the government has been recovered.  According to the U.S. Attorney’s office in the Southern District of New York, the $158.3 million settlement is the second-largest amount ever paid in a mortgage fraud case.

The whistleblower, Ms. Hunt, is still employed by Citigroup and is now a vice president of quality assurance.  Commenting on her role as a whistleblower, Ms. Hunt said:

 “I had to do something to stop them . . . I felt that if I were brave enough to come forward and take a stand, then maybe others would, too.”

The Employment Law Group® law firm focuses on the area of whistleblower protection law, and has helped many clients come forward to file suit against employers that fraudulently billed the U.S. government and has helped whistleblowers protect their careers.

Department of Health and Human Services Announces Record-Breaking $4.1 Billion in Healthcare Fraud Recoveries in 2011

February 21, 2012

Last week, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced that the federal agencies succeeded in recovering $4.1 billion in fraudulent healthcare payments in 2011.  This figure – detailed in the annual Health Care Fraud and Abuse Control Program (HCFAC) report – is a record high, with recovered funds having increased nearly 50% since 2009.

According to the report, between 2009 and 2011 the federal government collected $7.20 for every $1.00 spent on fighting fraud. This is an increase from the period between 1997 and 2008 in which the government recovered $5.10 for every dollar spent on countering fraud.

Officials attributed the rise in recoveries to increased efforts to screen healthcare providers by conducting site visits to ensure that healthcare providers deemed to be moderate fraud risks have a legitimate office before these providers can be enrolled to participate in Medicare and Medicaid. Additionally, those providers considered to be higher risks are now subject to criminal background checks.

According to the report, approximately $2.4 billion of the recovered funds were recovered by cases brought under the False Claims Act (FCA).  The FCA allows individual citizens to bring charges in the name of the U.S. government against parties who fraudulently receive government funds. The qui tam provision of the FCA allows individuals who bring such lawsuits to receive 15 to 30% of the total amount funds recovered.

Among the common types of fraudulent health care claims, the HCFAC report details:

“unlawful pricing by pharmaceutical manufacturers, illegal marketing of medical devices and pharmaceutical products for uses not approved by the FDA, Medicare fraud by hospitals and other institutional providers, and violations of laws against self-referrals and kickbacks.”

The nearly $2.4 billion recovered under the FCA in 2011 marks the second consecutive year in which the government has recovered more than $2 billion in FCA claims. Since the beginning of 2009, HHS has recovered in excess of $6.6 billion in federal health care spending under the FCA. It is estimated that there is $60 billion to $90 billion in Medicare fraud every year.

According to Attorney General Eric Holder, such fraudulent practices “harm all of us – government agencies and programs, insurers and health care providers, and individual patients.”

The Employment Law Group® law firm focuses in the areas of employment law and whistleblower protection law, has helped many clients file suit against employers that fraudulently billed the U.S. government, and has established favorable precedents under the retaliation provision of the False Claims Act.