Whistleblower Law Blog

OSHA Fines Wal-Mart $365,000 for Failing to Provide Employees at Rochester Store with Proper Training and Safe Working Conditions

February 21, 2012

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) last week cited a Wal-Mart Stores, Inc. (Wal-Mart) supercenter in Rochester, NY for 24 repeated and serious violations of workplace safety and health standards. Following an OSHA inspection, OSHA proposed that Wal-Mart pay $365,500 in fines.

The inspection conducted by OSHA’s Buffalo Area Office found that due to fall hazards and obstructed exit routes, employees would be unable to perform proper maintenance on a trash compactor. The inspection also found that employees received no training on how to use personal protective equipment and training on hazardous chemicals in the workplace. These repeat violations resulted in 10 citations for Wal-Mart.

Additionally, OSHA cited the same Wal-Mart store for 14 other serious violations such as failing to provide employees with proper training on how to handle exposure to blood and body fluids, exposing workers to confined space hazards, allowing a trash compactor to be operated with its door open, and displaying an illegible emergency exit sign.

OSHA area director Arthur Dube stated, “The sizable fines proposed here reflect not only the seriousness of these conditions but the fact that several of them are substantially similar to hazards identified at nine other Wal-Mart locations in New York and eight other states.”

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

Rowan Business Forms Ordered by OSHA to Pay Over $83,000 for Terminating Whistleblower Truck Driver Who Reported Hazardous Conditions

February 21, 2012

Last week the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) ordered Rowan Business Forms, a Salisbury, North Carolina-based commercial printing company, to reinstate and pay over $83,000 in back wages and compensatory damages to a former truck driver after OSHA found reasonable cause to believe that Rowan violated the whistleblower provision of the Surface Transportation Assistance Act (STAA).

The former truck driver alleged that Rowan retaliated against him after he raised concerns in 2009 that the company’s dump truck was leaking brake fluid. According to the former employee, the leaking brake fluid almost caused him to hit a car because the brake pedal went all the way down to the truck floor. He reported this incident to his supervisor and was told by the company manager that the leak would be repaired before the next delivery. However, when the truck driver discovered that the repair had not been performed, he refused to drive the truck because he was concerned about his safety. The company terminated him the following day.

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

Former Executive Alleges that GE Retaliated against Him for Objecting to Company’s Efforts to Influence Iraqi Officials

February 17, 2012

Khaled Asadi, a former General Electric executive based in Iraq, filed a lawsuit in federal court in Houston, Texas, against General Electric (GE) on February 3, 2012, alleging that the company retaliated against him after he raised concerns about potential internal corruption. Asadi states in his complaint, that he was coerced to step down from his position at GE because he objected to a decision that he believed could damage GE’s international reputation and may even violate the Foreign Corrupt Practice Act.

Asadi claims that in 2010, GE hired a woman who could influence a senior Iraqi official to help GE obtain contracts from the Iraqi Ministry of Electricity. After he raised the issue with his supervisor and the GE ombudsperson, GE assigned Asadi an “extremely negative and troubling performance review” and forced him to step down from his position, which he had held since 2006.

Asadi brought his suit under the Anti-Whistleblower Retaliation provisions of the Securities Exchange Act, which protects employees of publically traded companies who report unlawful behavior by their employers. Asadi is seeking reinstatement to his prior position at GE, lost wages, and  attorney fees and costs.

A spokesman for GE denied the accusation and stated, “Mr. Asadi’s termination had absolutely nothing to do with any allegations he is making. Regarding our contracts in Iraq, GE followed all requirements and his allegations are false.”

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

Federal Investigation Reveals that Air Force Unlawfully Punished Air Force Mortuary Whistleblowers

February 10, 2012

On January 31, 2012, investigators from the Office of Special Counsel reported that Air Force officials at the Dover military mortuary unlawfully punished four civilian workers who reported numerous incidents in which the mortuary mishandled deceased soldiers’ remains. The whistleblowers, who included mortuary inspectors and embalming and autopsy technicians, alleged that their supervisors retaliated against them for disclosing to the U.S. Office of Special Counsel (OSC) that mortuary workers mishandled soldiers’ body parts. Employees who reported these matters to the OSC were issued five day suspensions, placed on indefinite administrative leave, or terminated.

Based on the employees’ reports, the Office of Special Counsel conducted an initial investigation in November and found that the mortuary had engaged in “gross mismanagement”, where it misplaced body parts of troops killed in Afghanistan. The Air Force acknowledged that it punished the three supervisors who were responsible for the facility’s mishandling remains, but it did not discipline the supervisors who retaliated against those who had reported their wrongdoing. The Office of Special Counsel then began a separate investigation under the Whistleblower Protection Act to look into the whistleblowers’ retaliation claims.

Secretary of the Air Force Michael Donley has taken action based on the results of the latest investigation.  Donley reported on that he had appointed a two-star general to review the specific findings and take “appropriate action.”

“There is no place for reprisal in the Air Force. Reprisals against employees are unethical and illegal and counter to Air Force core values,” stated Donley.

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 Limits Sarbanes-Oxley Retaliation Protections for Foreign Whistleblowers

February 07, 2012

On December 22, 2011, the Department of Labor’s Administrative Review Board (ARB) issued a 3-2 en banc decision that limits the application of the Sarbanes-Oxley Act (SOX) outside of the United States.

The case, Villanueva v. Core Laboratories, ARB No. 09-108, ALJ No. 2009-SOX-006 (ARB December 22, 2011), centered around a whistleblower complaint filed by Colombian citizen William Villanueva. Mr. Villanueva was the CEO of Saybolt Colombia, a subsidiary of Core Laboratories NV, a Dutch company which maintains an office in Houston, Texas and whose securities are publically traded on the New York Stock Exchange.

In 2008 Villanueva alleged that he was the victim of adverse employment actions, including termination from his job, after he warned executives in Houston that other executives were engaging in illegal tax schemes. After Villanueva refused to sign a fraudulent tax return, Core Laboratories purportedly terminated him.

Villanueva then filed a complaint with the Occupational Safety and Health Administration (OSHA) alleging that the Saybolt had violated SOX by retaliating against him and that SOX should protected him as a whistleblower since Core Laboratories is based in the U.S. OSHA dismissed Villanueva’s complaint, after which Villanueva requested a hearing with an Administrative Law Judge (ALJ).

The ALJ dismissed Villanueva’s complaint for a lack of subject matter jurisdiction, reasoning that while the case had domestic components, the principal part of the case was extraterritorial and that SOX did not apply extraterritorially.

On August 6, 2009, Villanueva appealed the ALJ dismissal to the ARB arguing that because executives working at the Core Laboratories headquartered in the U.S. had engaged in fraudulent practices and retaliation, the case did not require extraterritorial application of SOX.

The ARB affirmed the ALJ’s dismissal of the lawsuit, ruling that SOX applies only to disclosures relating to U.S. laws and that the fraud Villanueva alleged involved only Colombian laws with no stated violation or impact on U.S. securities or laws. Additionally, the ARB wrote that the fact that Villanueva reported the alleged misconduct to Core Laboratories executives in Houston does not change the foreign nature of the alleged fraud.

The primary result of the Villanueva decision – and one that has surprised many commentators – is that the ARB rejected the “cause” or “decision-maker” test which had previously been used in favor of an “effects” test. The effects test looks to the effect of the conduct at issue and whether it implicates U.S. law, rather than the origin of the conduct, as the relevant factor for determining whether SOX applies internationally.

Because the ARB’s focus in Villanueva was that the whistleblower had only complained of violations of foreign laws, the ARB required the whistleblower to prove an actual violation of law in order to have a viable whistleblower retaliation claim under SOX.  This conflicts with the ARB’s recent decision in Sylvester v. Parexel Int’l, ARB No. 07-123, ALJ No. 2007-SOX-039 (ARB May 25, 2011), in which the ARB held that a complainant need not prove or identify the law believed to have been violated in order in order to constitute protected activity under SOX.

Judge E. Cooper Brown, Deputy Chief Administrative Appeals Judge, dissented from the majority’s decision in Villanueva, writing that the primary focus of SOX is not the underlying fraud, or even the location of the protected conduct, but rather the retaliation against an employee for blowing the whistle on potential fraud. The majority’s view, according to Judge Brown, was inconsistent with Congress’ intent in passing the Dodd-Frank Act’s strengthening amendments to SOX. According to Judge Brown:

“To construe the legal presumption against extraterritoriality as a bar to claims such as that presented by Villanueva constitutes, in my estimation, a legally indefensible restriction on the protection that Congress intended Section 806 to afford to covered employees.”

Additionally, Judge Brown wrote that the majority’s decision in Villanueva ignores the public policies underlying the original intent behind SOX, the recent amendments broadening SOX, the new causes of action under Dodd-Frank, and the ARB’s own recent decision in Sylvester.

Villanueva’s attorneys intend to file a petition for review of the ARB’s decision with the U.S. Court of Appeals for the Fifth Circuit by the filing deadline on February 17, 2012.

As a result of the ARB’s decision, compliance professionals would now need to investigate and take seriously any complaints that relate to or implicate U.S. laws or have an effect within the U.S. Additionally, foreign offices or subsidiaries can still violate U.S. securities law and regulations, as long as an alleged violation refers to U.S. law.

The Employment Law Group® law firm is a leader in the field of whistleblower law and, together with the National Whistleblower Center and the National Employment Lawyers Association, filed an amicus brief in the Villanueva case.

R. Scott Oswald, Managing Principal of The Employment Law Group®, Selected to Serve as Panelist in Qui Tam Litigation Seminar

February 06, 2012

R. Scott Oswald, managing principal of The Employment Law Group® law firm will serve as a panelist in an upcoming presentation to the Northern Virginia Chapter of the Federal Bar Association on March 7, 2012.

The topic of the Continuing Legal Education (CLE) seminar is “Blowing the Whistle in 2012: New Developments in Qui Tam Litigation” and will focus on a discussion of recent developments in qui tam litigation including:

• New law on the false certification theory;
• The first-to-file bar;
• The public disclosure bar;
• Other elements and defenses for False Claims Act (FCA) cases in the Eastern District of Virginia

The seminar will include both relators’ counsel and defense attorneys who will discuss FCA liability following amendments and regulatory changes in recent years.  In addition, the talk will include a discussion on practical considerations in qui tam relator suits including:

• What relators’ attorneys consider in choosing potential claims;
• The factors used by the U.S. Attorney’s Office in deciding whether to intervene;
• Litigation of FCA retaliation claims along with pending relator lawsuits

The seminar is being held in at the Westin in Alexandria, VA from 12:00-2:30pm.  Registration will remain open until February 29, 2012.  The Northern VA Chapter of the Federal Bar Association is offering a discount on registration fees to government attorneys to encourage participation

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

Federal Times Quotes The Employment Law Group® Managing Principal R. Scott Oswald on Recent Lawsuit Filed by FDA Whistleblowers

February 06, 2012

R. Scott Oswald, Managing Principal of the The Employment Law Group® law firm, was recently interviewed by Federal Times, a weekly newspaper focused on providing insight into issues affecting U.S. government managers and other decision makers.

On January 25, 2012, six current and former Food and Drug Administration (FDA) employees filled a lawsuit in the U.S. District Court for the District of Columbia alleging that the FDA violated their constitutional privacy rights. The employees claim that the FDA monitored the employees’ emails sent from private accounts over a period of two years. The lawsuit also alleges that the employees were targeted for their whistle-blowing after they expressed concern to Congress that the FDA has approved purportedly unsafe medical devices.

The FDA terminated two of the employees and did not renew the contracts of another two following the whistleblowers’ decision to come forward and report the approval of medical products they believed were unsafe.

Responding to the FDA’s alleged intrusion into the whistleblowers’ private emails, Mr. Oswald told the Federal Times:

“I think the FDA went too far in its zeal to monitor these employees. Employers who access [and] retain emails or other electronic stored information from a third-party server risk violating an employee’s privacy interest.”

The article, “When Can Agencies Monitor Your Email? FDA Case Sparks Debate Over Policy”, appeared in the February 5, 2012 edition of the Federal Times.

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

Former BP Employee is Terminated After Refusing to Alter Data About the Progress of Clean-up of the Deepwater Horizon Oil Spill

February 03, 2012

Former BP employee August Walter filed suit  in the U.S. District Court for the Eastern District of Louisiana last week, alleging that the oil company violated the Louisiana Environmental Whistleblower Statute when it terminated Walter after he refused to alter data related to the progress of clean-up for the Deepwater Horizon oil spill.

Walter, a “state planning lead” on BP’s cleanup efforts in the Mississippi gulf coast, raised concerns in May and June 2011 that BP was removing only large tar balls, intentionally leaving smaller oil debris on the beaches.  According to Walter, BP failed to follow the Shoreline Treatment Recommendations, a plan delineated by federal agencies, including the Coast Guard and the Department of Interior.  BP’s reason for its inadequate cleanup efforts, said Walter, was to report to the Coast Guard that it was ready to begin its next phase of cleanup, which in turn would help boost the prices of BP shares.  Walter reports that at one point he was called into a meeting with BP’s VP of Operations, Carla Fontenot, and was asked to falsify data because his reports were inconsistent with BP’s planned progress reports.  When Walter refused to comply with BP’s demands, the company placed him on administrative leave and later terminated his employment.

Walter is seeking back pay, reinstatement to his former position, and compensatory damages.

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

Fifth Circuit Rules for Plaintiff in False Claims Act Retaliation Suit Previously Dismissed on Statute of Limitations Grounds

January 31, 2012

On January 5, 2012, the U.S. Court of Appeals for the Fifth Circuit held that a two-year statute of limitations was the appropriate period for assessing the timeliness of an action brought by a private employee alleging retaliation by a former employer in violation of the False Claims Act (FCA).

The plaintiff, Michael Riddle, allegefs that after he complained to his supervisors at Dyncorp International, Inc. that the company had not fulfilled its obligations to finish a contracting project with the U.S. government, he was “marginalized” and “eventually terminated” on September 21, 2009.  Riddle then filed suit against Dyncorp on March 18, 2010 in the U.S. District Court for the Northern District of Texas, alleging that his employer had violated the FCA when he purportedly sought to prevent the company from making a fraudulent claim for payment to the government.

When Riddle filed suit, the FCA contained no relevant limitations period. In the absence of an express statute of limitations, courts have generally used analogous state statutes of limitations to determine the timeliness of a FCA action.  The district court dismissed Riddle’s suit, holding that the most analogous statute to the FCA is the Texas Whistleblower Act (TWA) which has a 90-day statute of limitations.

The Fifth Circuit reversed the lower court’s dismissal, disagreeing with the district court and finding that the analogy between the FCA and the TWA was “lacking”.  The appeals court noted that the TWA only provides a cause of action to public employees and Mr. Riddle alleged retaliation by a private employer.  In addition to restricting its retaliation protection only to public employees, the court noted that the TWA was also not analogous to the FCA because the TWA requires public employees first “to pursue an administrative remedy before suing”.  This results in TWA limitations periods often exceeding 90 days because the running of the limitations period is suspended while the required administrative proceedings are pending.

In its decision, the Fifth Circuit held that the most analogous Texas state statute for determining the FCA statute of limitations is the two-year period applied to personal injury cases.  The court favored this analogy “because of its association with…a cause of action for wrongful discharge where a person is terminated for refusing to commit an illegal act”. In reversing the district court’s ruling, the court remanded the case for further proceedings.

The appeals court also declined to apply the new three-year statute of limitations for FCA retaliation cases created by the Dodd–Frank Wall Street Reform and Consumer Protection Act because newly-created statute of limitations under Dodd-Frank was not yet in effect when the plaintiff filed his complaint.

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

Jury Orders TD Bank to Pay $67 Million to Victims of Ponzi Scheme

January 30, 2012

On January 18, 2012, a jury for the U.S. District Court for the Southern District of Florida found TD Bank liable for engaging in fraudulent activity and ordered the company to pay $67 million in damages to the victims of the Ponzi scheme. Texas firm Coquina Investments filed a lawsuit against TD Bank in May 2010, accusing the bank of aiding Scott Rothstein in his $1.2 billion Ponzi scheme.

The suit alleges that TD Bank was aware of Rothstein’s illegal business transactions but still allowed him to conduct his affairs with the bank.  Questionable activity, such as sizable funds passing through Rothstein’s account, occurred without any objections from the bank. In a deposition, Rothstein testified that he wouldn’t have been able to conduct his scheme without the help of TD bank management, such as former bank vice president Frank Spinosa, who Rothstein claims to have paid $50,000 to falsify account balances.

TD Bank denies any wrongdoing and maintains, that it was Scott Rothstein “who defrauded investors.”

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