Whistleblower Law Blog

The Employment Law Group® Law Firm Establishes that Statements on U-5’s Are Not Absolutely Privileged

August 22, 2008

On July 23, 2008, an arbitration panel of the Financial Industry Regulatory Authority (FINRA) held, for what appears to be the first time in Washington, DC area, that when a brokerage house says why it terminates a regulated employee it is not immune from suit.  In his complaint, a broker alleges that his former employer gave an untrue reason on his form U-5 for why it terminated his employment.  In this case, the employer denied any wrongdoing and moved to dismiss the broker’s defamation claim, arguing that it was immune from suit as any alleged defamatory statements it makes to FINRA on the U-5 are absolutely privileged.  In siding with the former employee to allow the claim to proceed to a determination at hearing, the FINRA panel embraced the position of the sixteen states that have enacted Section 507 of the Uniform Securities Act and rejected the position of New York’s highest court articulated in Rosenberg v. Metlife Inc., 8 N.Y.3d 359, 866 N.E.2d 439, 834 N.Y.S.2d 494 (2007).  The broker is represented by R. Scott Oswald and Adam A. Carter of The Employment Law Group® law firm.

The Employment Law Group® Law Firm Continues to Prevail in SOX Whistleblower Cases Despite Unfavorable Statistics

August 14, 2008

A survey conducted by the University of Nebraska College of Law revealed that in 2007, only four percent of Sarbanes-Oxley (“SOX”) whistleblower cases heard by the Occupational Safety and Health Administration were resolved in favor of the employee seeking whistleblower protection.   Despite the discouraging statistics, the attorneys at The Employment Law Group® law firm continue to obtain favorable decisions which are recognized by other leading attorneys in the field.  For example, in a blog post titled, “Sarbanes-Oxley Whistleblowers:  Are They out of Luck?”, IT Business Edge attorney and journalist writes about a recent decision in Florida where a district court held that a former Best Buy employee and client of The Employment Law Group® law firm could pursue a claim for whistleblower retaliation in federal court.  The Employment Law Group® law firm also made important law protecting SOX whistleblowers in Kalkunte v. DVI Financial Services, Inc., 2004-SOX-56 (ALJ July 18. 2005) and in Leznik v. Nektar Therapeutics, Inc., 2006-SOX-00093(ALJ Nov 16. 2007).

Congress Enacts Whistleblower Protection Law to Enhance Consumer Product Safety

August 01, 2008

Yesterday Congress enacted a new whistleblower law to protect public and private sector employees in the manufacturing and retail industries who disclose information to an employer, a regulatory agency, or a State Attorney General about a reasonably perceived violation of the Consumer Product Safety Commission Act (“CPSCA”) or any act enforced by the Consumer Product Safety Commission.  The law also protects an employee’s good faith refusal to violate the CPSCA.

Under this new whistleblower protection law, a retaliation claim must be filed with the Occupational Health and Safety Administration (“OSHA”) within 180 days of the employee first becoming aware of the retaliatory action.  After OSHA performs an investigation, either party can request a hearing before a Department of Labor Administrative Law Judge (“ALJ”) and can appeal an ALJ decision to the Department of Labor’s Administrative Review Board.  If the Department of Labor has not issued a final decision within 210 days of the filing of the complaint, the employee may remove the complaint to federal court for a jury trial.  A prevailing employee is entitled to reinstatement, back pay, compensatory damages, and litigation costs including reasonable attorney fees and expert witness fees.

The Employment Law Group® Law Firm Establishes Precedent in Sarbanes-Oxley Whistleblower Retaliation Dispute

July 30, 2008

The Employment Law Group® law firm client Mary Garey prevailed in a dispute with her former employer Best Buy in a dispute over whether Ms. Garey is entitled to pursue her claim in federal court.   Ms. Garey, former senior vice president for Best Buy, filed an OSHA complaint alleging that Best Buy retaliated against her by terminating her employment because she attempted to disclose to senior Best buy executives apparent fraud resulting in millions of dollars of losses that were unreported or inaccurately reported to shareholders.

After OSHA completed its investigations, Ms. Garey removed her claim to federal court and Best Buy moved to dismiss.  Judge Jordan held that OSHA’s decision is of no precedential value, and that she is entitled to pursue her claim de novo in federal court.

Federal Circuit Reverses MSPB Dismissal under the Whistleblower Protection Act

July 03, 2008

In Kahn v. Dept. of Justice, the Federal Circuit held that the Merit Systems Protection Board (“MSPB”) erred in dismissing Kahn’s individual right of action (“IRA”) appeal under the Whistleblower Protection Act (“WPA”).  In his IRA appeal, Kahn, a special agent for the Drug Enforcement Agency (DEA), alleged that he was retaliated against after he made disclosures to his superiors about another agent’s alleged violations of DEA rules and regulations.  

The MSPB held that Kahn’s reporting of Agent Annis’ activities were not protected under the Whistleblower Protection Act because the disclosures were made as part of his normal duties as a special agent.  The Federal Circuit reversed, concluding that there was an issue of material fact as to whether Kahn’s disclosure was a part of his normal duties given Kahn’s job description and competing sworn statements from him and his supervisor.  Finding that Kahn presented non-frivolous allegations that his disclosures were outside of the scope of his normal duties, the Federal Circuit remanded the case to the MSPB.

Podcast of Whistleblower Conference Available Online

July 02, 2008

A podcast of a recent conference on the rights of whistleblowers is available at http://www.wcl.american.edu/podcast/podcast.cfm.  The panel on The Emerging Era in Whistleblower Rights and the Public’s Right to Know – Panel 1 – Restoring Openness and Accountability to Government and Corporations is posted at Download – Stream – Email.

The Employment Law Group® Law Firm Will Speak at Program on The Emerging Era in Whistleblower Rights and the Public’s Right to Know

June 10, 2008

On June 23, 2008, Employment Law Group Principal Jason Zuckerman will speak at a program titled, “The Emerging Era in Whistleblower Rights and the Public’s Right to Know.”  The program, which is sponsored by The Government Accountability Project and American University Washington College of Law, will focus on strategies for effecting national security disclosures and protecting public employees’ First Amendment Rights under recently enacted whistleblower reforms.   To register for this event, click here. 

Supreme Court Issues Pivotal Decision About Subcontractor Liability under the False Claims Act

June 09, 2008

Today the Supreme Court issued a ruling on a key issue under the False Claims Act, i.e. whether the False Claims Act includes fraudulent claims made by subcontractors on a federal project or whether it only includes claims submitted directly to the federal government.  In Allison Engine v. Thacker , the Court held that a relator asserting claims under Sections 3729(a)(2) and (3) of the False Claims Act cannot simply show that the defendant’s use of a false record or statement resulted in payment or approval of a false claim.   Instead, the relator must show that the defendant intended to use a false record or statement to induce the government’s payment or approval of a false claim. 

Relying on the plain meaning of Section 3729(a)(3), the Court held that the False Claims Act can be applied to subcontractors and other indirect recipients of government funds.  According to the Court, the False Claims Act was intended to expose any conspiracy to defraud the government in getting a false claim approved or paid and therefore, subcontractors who submitted claims for payment that concealed defects in Gen-Sets manufactured for installation on Navy destroyers, can be liable under Sections 3729(a)(2) and (3) of the False Claims Act.

 

Organizations Rally to Restore Federal Whistleblower Rights

June 09, 2008

Last week, 112 diverse organizations rallied together to persuade leading U.S. Senate and House officials to enact stronger protections for federal employee whistleblowers.  The coalition, led by the Government Accountability Project and the Project on Government Oversight, delivered a letter to legislators advocating prompt reconciliation of the House and Senate versions of whistleblower protection legislation that were enacted  in March 2007 and December 2007.  The letter also emphasized the need for stronger whistleblower protections, including the right to a jury trial and expansion of protections to scientists and national security whistleblowers.

U.S. Tax Court Proposes Amendments to IRS Whistleblower Award Program

June 05, 2008

On June 2, 2008, the U.S. Tax Court proposed new rules for determining IRS whistleblower awards under section 7263.  The proposed rules grant the court jurisdiction over appeals of award determinations and include procedures for commencing a whistleblower award action.  

Among the proposed amendments are references to actions for redetermination of a whistleblower’s employment status, determination of relief from joint and several liability, and lien or levy, and authorization for electronic service.  The press release regarding the proposed amendments to the Tax Court’s Rules of Practice and Procedure is available here.