Whistleblower Law Blog

Judge Orders Student Loan Companies and Qui Tam Whistleblower Oberg to Explore Potential Resolution of Qui Tam Claim

August 09, 2010

Judge Anderson of the Eastern District of Virginia ordered Nelnet, Sallie Mae, and other defendants in a qui tam whistleblower action to explore potential resolution of Jon Oberg’s claim, which we blogged about here.   One of the defendants, Brazos Higher Education Service Corp., settled the action last week. 

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.

DOL Solicitor Asserts that SOX Covers Employees of Consolidated Subsidiaries of Publicly-Traded Companies

August 09, 2010

The Solicitor of Labor filed an amicus curiae brief arguing that in enacting Section 806 of Sarbanes-Oxley Act (SOX), Congress intended to protect whistleblowers working for the consolidated subsidiaries of publicly-traded companies.  In Klopfenstein v. PCC Flow Technologies Holdings, Inc., the ARB applied an “agency test” in which the general common law of agency is employed to determine whether an employee of a subsidiary is covered under SOX.  The Solicitor argues that the text, legislative history, and remedial purpose of SOX demonstrate that coverage should extend to employees of all consolidated subsidiaries:

Although SOX’s legislative history is not conclusive on the issue of subsidiary coverage, SOX’s purpose and its goal of protecting whistleblowers strongly suggest that Congress intended [the whistleblower provisions of SOX] to sweep broadly. Indeed, Congress specifically recognized that subsidiaries play an important role in determining the financial health of a publicly traded company, and that they can be used by the parent company to deceive investors. The Senate Report [No. 107-146] details the potential that corporate fraud would be hidden behind layers of subsidiaries and partnerships and a corporate code of silence that extended beyond the publicly traded parent company.

The employment lawyers at The Employment Law Group® law firm have substantial experience representing employees in Sarbanes-Oxley whistleblower proceedings and have written numerous articles about the whistleblower provisions of the Sarbanes-Oxley Act.  For more information about TELG’s Sarbanes-Oxley Whistleblower Practice,.

WTOP Reports Qui Tam Whistleblower Oberg and Student Loan Companies are Exploring Potential Resolution of Qui Tam Claim

August 09, 2010

WTOP reports that Nebraska-based Nelnet, Sallie Mae, and several other student loan companies are exploring a potential resolution of a qui tam whistleblower lawsuit brought by TELG client Jon Oberg accusing them of defrauding the federal government.  Jon Oberg, a former Department of Education researcher, filed the lawsuit on behalf of the federal government under the False Claims Act, alleging the student loan companies knowingly accepted overpayments from the government.

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.

New Study Indicates Strong Anti-retaliation Policy Benefits Employers

August 05, 2010

The Ethics Resource Center conducted a study titled Retaliation: The Cost to Your Company and Its Employees showing that employers’ efforts to reduce employee misconduct are insufficient absent the adoption of a strong anti-retaliation policy.  The study concludes that employers should promote ethical behavior and adopt a strong anti-retaliation policy in order to improve the company culture and reduce employee misconduct.  Click here for the full study.

For information about The Employment Law Group® law firm’s Whistleblower Retaliation Practice, click here.

Kent County Superior Court Associate Justice Daniel Procaccini Commends Both Sides for their Trial Work in O’Neill v. Warwick

August 04, 2010

Justice Procaccini commended the defendant’s counsel and The Employment Law Group® law firm’s attorneys R. Scott Oswald and David Scher for their excellent trial work. With the completion of the O’Neill v. Warwick trial marking Procaccini’s ninth anniversary on the bench, the Warwick Beacon reported that:

Procaccini told the court that he loves his work and that he enjoyed this particular case. He said that he respects lawyers who are passionate about their work, calling the trial a “hard fought case” on both sides.

For more information about The Employment Law Group® law firm’s Whistleblower Law Practice, click here.

Kent County Jury Finds for School District in O’Neill v. Warwick

August 04, 2010

A jury for the Superior Court of Kent County in Rhode Island found Warwick Public School District not liable under the Rhode Island Whistleblower Protection Act (WPA) for the wrongful termination of Mary Katherine O’Neill, a client of The Employment Law Group®.  School administrators fired Ms. O’Neill following an interview she gave to a local television station regarding alleged grade tampering at Toll Gate High School.

R. Scott Oswald, Managing Principal with The Employment Law Group® law firm, stated for the Providence Journal that:

Ms. O’Neill respects the jury’s decision.  She hopes that the jury trial will provide the impetus for the Warwick School Committee to investigate Ms. O’Neill’s grade changing allegations which the evidence at trial showed have not yet been adequately investigated.  She is gratified by the jury’s service and it’s time.

For more information about The Employment Law Group® law firm’s Whistleblower Law Practice, click here.

The Employment Law Group® Speaks on Whistleblower Provisions in the Dodd-Frank Act at ALI-ABA Fall 2010 Seminar

August 03, 2010

On September 21, 2010, Jason Zuckerman, a Principal at The Employment Law Group® law firm will speak at the ALI-ABA Fall 2010 seminar on the whistleblower provisions of the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act, which we blogged about here.  Zuckerman will discuss Sections 1057, 922 and 748 of the Dodd-Frank Act.  Section 1057 prohibits employers from terminating or discriminating against employees in the financial services industry who report fraud or other illegal activity.  Section 922 authorizes the Securities and Exchange Commission (SEC) to reward whistleblowers who report fraud committed by a publicly-traded company 10% to 30% of the amount recovered by the SEC.  Similarly, Section 748 authorizes the Commodity Futures Trading Commission (CFTC) to reward whistleblowers who report fraud 10% to 30% of the amount recovered.  Both Sections 748 and 922 also prohibit employers from retaliating against employees who report fraud to the government.

Protected Conduct Under the False Claims Act Does Not Require a Showing that Plaintiff Knew About the Act

August 03, 2010

The U.S. District Court for the District of Massachusetts held that an employee is protected from retaliation under the retaliation provision of the False Claims Act when reporting any activity that reasonably could lead to a False Claims Act (FCA) suit even when the employee is completely unaware of the FCA.  Plaintiff Christopher Gobble was a sales representative for Forest Pharmaceuticals who complained to supervisors about the company paying kickbacks to doctors who, in return, prescribed Forest Pharmaceutical’s products to patients.  Gobble reported the kickbacks because he knew they were unlawful but he did not realize at the time he made the disclosure that the kickbacks could lead to a qui tam action. Judge Gorton rejected the employer’s position that Gobble failed to plead that he engaged in protected conduct, holding:

“Protected conduct” is to be interpreted broadly and the First Circuit defines it to mean

activities that reasonably could lead to an FCA suit[,] in other words,  investigations, inquiries, testimonies or other activities that concern the employer’s knowing submission of false or fraudulent claims for payment to the government.

United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 237 (1st Cir. 2004).  A plaintiff, however, need not have known that his actions could lead to a qui tam suit under the FCA, or even that a False Claims Act existed, in order to demonstrate that he engaged in protected conduct. Id.

This opinion confirms the broad scope of protected conduct under the FCA.  Click here for the court’s full opinion.

The whistleblower lawyers at The Employment Law Group® law firm have experience protecting whistleblowers and litigating qui tam actions brought under the False Claims Act.  For more information about TELG’s False Claims Act Practice, click here.

House Passes Whistleblower Legislation to Protect Oil Rig Employees Who Report Unsafe Conditions

August 03, 2010

The House of Representatives passed the Offshore Oil and Gas Worker Whistleblower Protection Act, which prohibits oil and gas companies from terminating or discriminating against offshore employees who report unsafe conditions or refuse to work in unsafe conditions.  Closing a significant loophole, the legislation extends whistleblower protections currently in place for onshore oil and gas workers to offshore workers.  The legislation also grants employees the right to file a whistleblower retaliation complaint with the Department of Labor (DOL), the right to appeal the DOL’s decision, and the right to a jury trial if the DOL does not issue a decision after 300 days.  Relief available to whistleblowers includes reinstatement, back pay with interest, punitive damages, attorney’s fees, litigation costs, and expert witness fees.  In support of the bill, Congresswoman Jackson Lee from Texas stated:

It is essential that workers be protected when they raise concerns about unsafe working conditions, and they must have the right to stop working if they fear they could be injured or killed.  All workers, especially those in dangerous jobs, are in the best position to discover safety hazards.

Click here for the full text of the bill.  For information about The Employment Law Group® law firm’s Whistleblower Retaliation Practice, click here.

U.S. Dept. of Justice Urges Federal Court to Allow $1 Billion False Claims Act Case to Move Forward Against Nelnet

July 30, 2010

The U.S. Department of Justice filed a brief in U.S. District Court for the Eastern District of Virginia rejecting Nelnet, Inc.’s contention that its settlements with the Department of Education (ED) bar Oberg’s qui tam action.  Dr. Jon H. Oberg, a former employee of the Department of Education, brought a qui tam seeking the return of approximately $1 billion that student loan companies obtained through false pretenses.

Nelnet reached a settlement with the Department of Education under which the company would stop receiving overpayments.  However, the agreement did not require Nelnet to return any of the nearly $1 billion in overpayments it had already received.  In its brief, the U.S. Department of Justice stated, “. . . it is clear from statutory and other authority that Congress has committed exclusive authority to settle claims of fraud, including FCA claims, to the Attorney General” and furthermore that Nelnet has not presented evidence that the Department of Education even intended to release the company from FCA liability.  For the full brief, click here.

The plaintiff is represented by Wiley Rein LLP and The Employment Law Group® law firm.  For more information about the firm’s Whistleblower Law Practice, click here.