Whistleblower Law Blog

Judge Denies Lockheed Martin’s Motion to Dismiss Citing Broad Scope of the Protected Conduct under the False Claims Act

November 01, 2010

In McNerney v. Lockheed Martin Operations Support, Inc., the court held that a whistleblower alleging wrongful termination in violation of the public policy promulgated under the False Claims Act does not have to show that the fraud she disclosed actually resulted in a loss to the government.  Judge Kays noted that that “the public policy behind the FCA is to protect the United States from ‘all fraudulent attempts to cause the Government to pay out sums of money.’” 

The plaintiff, Barbara McNerney, alleged in her complaint:

…Plaintiff was told by Defendant Sortor, to ‘spread the cost’ of certain projects to other unrelated projects. This caused certain projects to be falsely over billed.”  [The plaintiff] also alleges that McNerney complained about the false billing to her supervisor; that nothing was done about it; that this false billing violated the federal False Claims Act (“FCA”) and is contrary to public policy, and that McNerney was terminated as a result of complaining about this practice.

(citations omitted).  Judge Kays reasoned that one could infer from the facts alleged by McNerney that the defendant ordered her to spread the costs to unrelated projects in order to maximize the amount of money extracted from the government – money the government would not ordinarily have obligated – thus a potential violation of the False Claims Act.  This case highlights the importance of protecting a broad range of disclosures aimed at preventing fraud on the Government.  For more information about The Employment Law Group® and its Whistleblower Law Practice, click here.

TELG Principal Moderates D.C. Bar Event on the Dodd-Frank Act’s Whistleblower Reward Programs and Anti-retaliation Provisions

November 01, 2010

Jason Zuckerman, a principal at The Employment Law Group®, will moderate a D.C. Bar Brown Bag titled “Dodd-Frank Act: Robust Protections and Substantial Rewards for Whistleblowers” on November 9, 2010.  The panel of speakers will discuss:

• The whistleblower reward provisions;
• The scope of the new whistleblower ant-retaliation provisions;
• The amendments to the Sarbanes-Oxley Act and False Claims Act;
• Tips for employers to prevent retaliation claims;
• Tips for plaintiffs regarding claim and forum selection; and
• The impact of the new provisions on internal reporting.

Click here for more information about this D.C. Bar event.

Supreme Court Declines to Hear Appeal of Fourth Circuit Decision on Pre-Filing Employment Releases Barring Some Qui Tam Actions

November 01, 2010

The U.S. Supreme Court declined to hear an appeal from the Fourth Circuit’s decision in U.S. ex rel. Radcliffe v. Purdue Pharma LP where the court ruled that an employment release signed by the relator before filing a qui tam action bars that action if the government had specific knowledge of the fraud prior to the relator’s filing.  For more information about The Employment Law Group® law firm’s Whistleblower Law Practice, click here.

TELG Principal Moderates D.C. Bar Event on the Dodd-Frank Act’s Whistleblower Reward Programs and Anti-retaliation Provisions

October 28, 2010

Jason Zuckerman, a principal at The Employment Law Group®, will moderate a D.C. Bar Brown Bag titled “Dodd-Frank Act: Robust Protections and Substantial Rewards for Whistleblowers” on November 9, 2010.  The panel of speakers will discuss:

• The whistleblower reward provisions;
• The scope of the new whistleblower ant-retaliation provisions;
• The amendments to the Sarbanes-Oxley Act and False Claims Act;
• Tips for employers to prevent retaliation claims;
• Tips for plaintiffs regarding claim and forum selection; and
• The impact of the new provisions on internal reporting.

Click here for more information about this D.C. Bar event.

DOL ARB Holds Truck Driver’s Refusal to Drive Unsafe Truck is a Discharge under STAA

October 26, 2010

In Klosterman v. E.J. Davies, Inc., the Administrative Review Board (ARB) held that an employee who left work after refusing to drive an unsafe truck had suffered an adverse action under the retaliation provision of the Surface Transportation Assistance Act (STAA), even though the employer interpreted his conduct as voluntary resignation.   The ARB articulated the standard determining whether there for an adverse action under STAA:

…under [ARB] precedent, “an employer who decides to interpret an employee’s actions as a quit or resignation has in fact decided to discharge that employee.”  Minne, ARB No. 05-005, slip op. at 14.  See also Ass’t Sec’y & Vilanj v. Lee & Eastes Tank Lines, Inc., 1995-STA-036, slip op. at 4-6 (Sec’y Apr. 11, 1996) (employer violated the STAA when it reacted to complainant’s refusal to drive by “consider[ing] [complainant] to have voluntarily quit” rather than by addressing condition complainant had raised, thus by implication employer engaged in adverse action by deciding that complainant had “quit”); Ass’t Sec’y & Lajoie v. Envtl. Mgmt. Sys., Inc., 1990-STA-031, slip op. at 5-6 (Sec’y Oct. 27, 1992) (overturning ALJ’s determination that employee had “voluntarily quit,” the Secretary held that employer had “engaged in adverse action” by “[discharging]” employee when employer “was not willing to address [employee’s] complaint and considered [complainant] discharged if he failed to capitulate” by driving even though employer had not addressed complainant’s concern); Fronczak v. N.Y. State Dep’t of Corr. Servs., 2 Fed. Appx. 213, 215-17 (2d Cir. 2001) (unpublished).

The ARB applied this standard to the facts in Klosterman, finding that it was the employer’s behavior rather than the employee’s which led to the end of the employment relationship.  The employer told the employee to drive the truck or go home.  The employee chose to go home.  Since the employer did not address the employee’s complaints regarding safety, the employer effectively discharged the employee and incorrectly considered the employee’s refusal to drive the unsafe truck as the employee having quit.

The ARB further held that a phone conversation with an OSHA representative is sufficient to meet the 180 day statute of limitation for filing a complaint.  STAA does not require the complaint to be in writing.  For more information about The Employment Law Group® and its Whistleblower Law Practice, click here.

DOL ARB Vacated ALJ’s Decision Where ALJ Was Unaware Complainant Responded to Request for Admissions

October 20, 2010

The Department of Labor’s Administrative Review Board (ARB) vacated an Administrative Law Judge’s summary decision in Williams v. Dallas Independent School District where the Complainant, unbeknownst to the ALJ, responded to requests for admission but did not file that response with the ALJ.  Having assumed that the Complainant did not respond to the requests to admit on time, the ALJ mistakenly granted all of the Respondent’s requests for admission and dismissed the case.  The ARB properly reversed and remanded the ALJ’s decision.

Former Ameriprise Branch Manager Files Whistleblower Lawsuit Alleging Fraud

October 20, 2010

According to the Star Tribune, former Ameriprise branch manager Michael Loscalso filed a federal lawsuit alleging he was fired in retaliation for reporting fraud and other violations of regulatory rules.  Under the Dodd-Frank Act, whistleblowers similar to Loscalso are entitled to protection from retaliation and may even be entitled to a monetary reward in return for their reporting of fraud and other violations committed by their employer.

CA Court of Appeals Upholds Sanctions Against Caremark for Underhanded Electronic Discovery Tactics in False Claims Act Case

October 19, 2010

A California Court of Appeals upheld sanctions against Caremark Rx, LLC for failing to preserve electronic databases of their prescription drugs in a readily-accessible format even though Caremark knew for over two years that lawsuits based on that data were imminent.  The trial court found that:

1. The electronic data evidence was vital to the litigation;
2. Caremark had “acted in bad faith in all aspects of the production of their prescription data base;
3. Caremark had consistently failed to be candid with this court as to the cost and difficulty of retrieval of their prescription data base; and
4. That in light of the multiple disparate cost estimates, “given without foundation” by Caremark, the court “no longer [had] faith” in Caremark’s ability or willingness to state an accurate estimate for cost of retrieval.

The court granted plaintiff’s motion for sanctions including $43k in attorney’s fees and costs.

Whistleblower’s Disclosure of Ponzi Scheme Underscored the Importance of Rewarding Whistleblowers

October 15, 2010

According to an article in the New York Times, a trader named Arthur Schlobohm detected a $160 million Ponzi scheme run by Trevor Cook.   As a result of Mr. Schlobohm’s courageous whistleblowing, Mr. Cook was sentenced to 25 years in prison and ordered to pay $158 million in restitution.

Mr. Schlobohm says that because regulators and law enforcement authorities are more reactive than proactive when it comes to financial crimes, it’s up to members of the industry to alert people about frauds before investors are hurt.

“The private sector — people like myself, people that are allocators of capital, people that are professional analysts in the asset-management world — have the highest degree of knowledge to be able to sniff this out in a minuscule amount of time, like I did,” [Mr. Schlobohm] said.

The Dodd-Frank Act provides monetary rewards to whistleblowers just like Mr. Schlobohm who detect and report fraud committed against private citizens, investors, and shareholders.  Check out more information about The Employment Law Group® and its SEC Whistleblower Practice or CFTC Whistleblower Practice.

TELG Principal Lectures on New Developments in Whistleblower Law and Effective Strategies for Prosecuting Whistleblower Retaliation Claims

October 14, 2010

Jason Zuckerman, a principal at The Employment Law Group®, will lecture on “New Developments in Whistleblower Law and Effective Strategies for Prosecuting Whistleblower Retaliation Claims” on November 3, 2010 in Chicago, IL.  New whistleblower provisions in the Dodd-Frank Act and other recently enacted federal whistleblower protection laws will be discussed.  He will also touch on recent whistleblower case law, new trends in OSHA’s enforcement of whistleblower protection statutes, effective strategies for prosecuting whistleblower retaliation claims, surmounting common defenses, avoiding counterclaims, and pursuing parallel or overlapping claims.  For more information about The Employment Law Group® and its Whistleblower Law Practice.