Whistleblower Law Blog

The Employment Law Group® Law Firm Scores Another Victory in Whistleblower Protection Act Case

May 13, 2009

The Merit Systems Protection Board (“MSPB”) has ordered the U.S. Agency for International Development (“Agency”) to pay backpay, including interest, and other benefits to a former investigator who alleged that he was retaliated against for blowing the whistle about agency personnel consuming alcohol while on duty.  The MSPB also ordered the Agency to cancel the former investigator’s reassignment and restore him to his former position as Inspector in Budapest, Hungary.  The order follows a 2008 decision in Drake v. Agency for International Development, where the U.S. Court of Appeals for the Federal Circuit held that the MSPB erred in concluding that Drake’s disclosures were not protected under the Whistleblower Protection Act (“WPA”) because he could not prove that the behavior he observed was a result of intoxication.  According to the court, the appropriate standard for determining whether an employee’s disclosure is protected under the WPA is “not whether [the employee] was able to prove [a violation], but rather could a disinterested observer with knowledge of the essential facts known to and readily ascertainable by [the employee] reasonably conclude that agency personnel were [engaged in] a violation.”   In applying this standard, the court concluded that Drake had a reasonable belief that agency personnel were intoxicated and thus, Drake engaged in protected conduct under the WPA.  The administrative judge had previously found in favor of Drake on the remaining elements of his appeal, that he was entitled to relief when he proved that his disclosure was a contributing factor in his reassignment and that the agency failed to prove by clear and convincing evidence that it would have reassigned him absent his disclosure.

Mr. Drake was represented by Scott Oswald and Nicholas Woodfield of The Employment Law Group® law firm.  For more information about The Employment Law Group® law firm’s Whistleblower Practice and the Whistleblower Protection Act, click here.

House Passes Amendments to the False Claims Act

May 12, 2009

Last week, the House passed S.386 (“Fraud Enforcement Recovery Act”) to curb fraud in the financial services industry and to protect taxpayers’ dollars.  While the bill focuses primarily on potential fraud and misuse of economic stimulus funds, it also includes significant changes to the provisions of the federal False Claims Act (“FCA”).  In particular, the bill amends the FCA to restore legislative provisions and address recent court decisions narrowing its reach.  Examples include: 

• Eliminating the requirement that false claims be presented to the government;
• Expanding FCA liability to include any false claim for government money or property regardless of whether the claim was submitted directly to a government official or employee;
• Expanding the types of conduct that can trigger FCA liability;
• Extending liability to any person who knowingly conceals, avoids or decreases an obligation to pay money to the government; and
• Expanding the definition of “claim” to include any request or demand for money or property whether or not the U.S. government has title to the money or property.

The House also included an amendment to the retaliation provision of the FCA, which would expand the prohibition against retaliation to contractors and agents.  For information about The Employment Law Group® law firm’s Whistleblower Practice under the False Claims Act, click here.

ARB Rules that Whistleblower’s Motive is Irrelevant

April 21, 2009

The Department of Labor’s Administrative Review Board (“ARB”) has affirmed an Administrative Law Judge’s (“ALJ”) decision to award back pay and compensatory damages to a whistleblower for violations of the retaliation provision of the Safe Drinking Water Act (“SDWA”).  In Collins v. Village of Lynchburg, Ohio, Michael Collins alleged that his former employer, the Village of Lynchburg Ohio retaliated against him for making a disclosure to the Ohio Environmental Protection Agency (“OEPA”) about an alleged violation of the SDWA.  In particular, Collins alleged that his employer was using an improper procedure to test Lynchburg’s water supply.

The employer asserted that Collins did not engage in protected conduct because his disclosure was motivated by personal animus against his supervisors.  The ARB expressly rejected this argument, concluding that “even if [an employee] were motivated by a retaliatory intent in making [a disclosure] to OEPA, a complainant’s motivation in making a safety complaint has no bearing on whether the complaint is protected.”   According to the ARB, an employee’s disclosure is protected so long as the complainant “reasonably believe[d] that a violation of the act occurred,” when he made his disclosure.  Finding that Collins satisfied his burden of proof and that his former employer failed to provide a legitimate non-discriminatory reason for terminating Collins’s employment, the ARB affirmed the ALJ’s decision in favor of  Collins.  For more information on whistleblower protection laws and The Employment Law Group® law firm’s Whistleblower Practice, click here.

Center for Public Integrity Reveals Lack of Oversight in Defense Department

April 06, 2009

A new report released by the Center for Public Integrity (CPI) reveals that the number of DoD referrals to the Justice Department for contracting fraud and corruption cases have decreased drastically since 1993.  According to the report, the Justice Department has received 76% fewer cases in fiscal year 2008 compared to fiscal year 1993, despite the upsurge in defense contracting ($200 billion in 1993 compared to nearly $400 billion in 2008).  The CPI attributes the low number of referrals to a number of factors, including shifting priorities, workload increases, and the declining manpower and expertise in the DoD Office of Inspector General (OIG).  According to the report, these problems are not unique to the OIG.  The number of prosecutions of cases involving defense contracting fraud has also decreased since the Clinton administration due to the lack of “personnel to detect, investigate, prosecute and deter criminal activity impacting DoD.”  The good news is that the existing problems are being addressed.  Efforts to increase oversight and accountability in the DoD and Justice Department, include:

• Examining the government’s work in combating fraud and determining whether it is sufficient to catch and deter wrongdoing;
• Reviewing and improving government contracting rules;
• Improving coordination among government investigators; and
• Providing specialized training for agents and prosecutors on procurement fraud.

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

BNA Reports on DOL Decision to Maintain Sarbanes-Oxley Liability Against Bankrupt Firm

March 23, 2009

In an article titled, “ARB Upholds Bankrupt Firm’s SOX Liability But Recalculates Retaliatory Discharge Award,” BNA reports on the Labor Department’s holding in Kalkunte v. DVI Financial Services, Inc., ARB NO. 05-139 (February 27, 2009), where the Administrative Review Board (“ARB”) in a 2-1 decision, found substantial evidence to support a finding that Ms. Kalkunte’s whistleblowing activity, i.e. her disclosure that senior management had provided false information to lenders, board members, and the Securities and Exchange Commission was a contributing factor in her discharge from DVI Financial Services.  The article highlights the extent to which the burden-shifting framework under the Sarbanes-Oxley Act (“SOX”) is very favorable to employees. Finding that the stated reasons for Kalkunte’s discharge “were a pretext, and that the real reason for her discharge was her ongoing preoccupation with the status of the Arnold & Porter investigation” into her disclosures about financial improprieties, the ARB affirmed the Administrative Law Judge’s (“ALJ”) decision that DVI and APS were both liable for whistleblower retaliation.  The ARB also affirmed the ALJ’s award of damages for pain, suffering, mental anguish, and humiliation. 

Ms. Kalkunte was represented by R. Scott Oswald and Nicholas Woodfield of The Employment Law Group® law firm.  For more information about the firm’s Sarbanes-Oxley Whistleblower Practice, click here.

Law 360 Reports on Whistleblower Win in Sarbanes-Oxley Case

March 11, 2009

Law360 writes about the recent Sarbanes-Oxley (“SOX”) decision issued by the Department of Labor’s Administrative Review Board (“ARB”) in Kalkunte v. DVI Financial Services, Inc.  According to the article, this decision is significant because it is the first SOX case to survive an appeal to the ARB.  In Kalkunte, the ARB affirmed an administrative law judge’s opinion concluding that AP, a privately-held subsidiary of DVI Financial Services, was liable under SOX, even though it was not publicly traded.  In reaching this decision, the ARB looked to the Act’s statutory language which holds:  “any officer, employee, contractor, subcontractor, or agent” of publicly traded companies liable for terminating whistleblowers. 

Ms. Kalkunte was represented by Scott Oswald and Nicholas Woodfield of The Employment Law Group® law firm.  For more information about the firm’s Sarbanes-Oxley Whistleblower Practice, click here. 

The National Law Journal Reports on The Employment Law Group® Law Firm’s Success in Seminal Sarbanes-Oxley Case

March 11, 2009

The National Law Journal writes about The Employment Law Group® law firm’s recent win before the U.S. Department of Labor’s Administrative Review Board (“ARB”) in an article titled, “Labor Department Expands Whistleblower Protections to a Company’s Contractors.”  The article discusses this seminal case, Kalkunte v. DVI Financial Services, Inc., in which the ARB held that Section 806 of the Sarbanes-Oxley Act (“SOX”) imposes liability on publicly-traded companies as well as contractors of private companies.  The article quotes Nicholas Woodfield, a Principal at the Washington-based firm, who noted that “The decision is the first time the Labor Department’s administrative review board has upheld an administrative law judge’s decision in favor of a complainant filing a Sarbanes-Oxley whistleblower retaliation claim.” 

Principals Scott Oswald and Nicholas Woodfield of The Employment Law Group® law firm represented Ms. Kalkunte.  To learn more about the firm’s Sarbanes-Oxley Whistleblower practice, click here.

The Employment Law Group® Law Firm Speaks at DC Bar on New Whistleblower Protections for Government Contractors and Employees of State and Local Governments

March 11, 2009

Jason Zuckerman, a Principal at The Employment Law Group® law firm will speak at a D.C. Bar Luncheon Program about the recently enacted whistleblower provision in the economic stimulus bill and additional whistleblower protections for employees of government contractors, including the False Claims Act.  The program will take place on Monday, April 6, 2009 from 12:00 PM – 2:00 PM.  For more information on this program including location and costs, click here.  To register for this program, click here.  

The Employment Law Group® Law Firm is a Contributing Author of ABA Update on Sarbanes-Oxley Whistleblower Retaliation Claims

March 10, 2009

The Employment Law Group® law firm is a contributing author of the 2009 annual update on the whistleblower retaliation provision of the Sarbanes-Oxley Act of 2002, a copy of which is available here. This annual update is a project of the ABA Section of Labor and Employment Law Committee on Federal Labor Standards Legislation Subcommittee on the Sarbanes-Oxley Act of 2002.

The Employment Law Group® Law Firm Speaks At National Whistleblower Assembly

March 06, 2009

Jason Zuckerman, a Principal at The Employment Law Group® Law Firm will speak at a National Whistleblower Assembly event, titled “Ending the Dark Ages, Turning on the Lights Together.”   Mr. Zuckerman will provide practical tips on how to successfully represent whistleblowers before the Department of Labor.  Other featured speakers include Senator McCaskill (D-Mo), author of the recently enacted McCaskill Amendment and Congressman Van Hollen.  The conference, which is hosted by the Make it Safe Coalition and co-sponsored by organizations such as Government Accountability Project, the National Employment Lawyers Association, and the Project on Government Oversight, takes place on March 8-11, 2009 at the UDC David A. Clarke School of Law.  For conference details including information about daily events, click here. The conference is open to the public and free of charge.  To RSVP email  shannad@whistleblower.org.