DETAILED TABLE OF CONTENTS

Transcription

1 DETAILED TABLE OF CONTENTS Dedication... Preface... Acknowledgments... Summary Table of Contents... v vii xi xiii Chapter 1. The Evolution of Whistleblower Protections I. Historical Background A. The 1863 False Claims Act B. Labor Law Developments Restricting Management Discretion to Hire and Fire C. Increased Regulation of Business D. Perceived Increase in Improper Business Activity E. Encouragement of Whistleblowing F. Expansion of Whistleblower Protections G. U.S. Supreme Court Decisions: A Mixed Response on Retaliation Claims Recognizing an Implied Cause of Action for Retaliation The Supreme Court Expands the Definition of Employer Acts That May Constitute Retaliation Under Title VII The Supreme Court Limits First Amendment Protection for Official Speech by Government Employees The Supreme Court Adopts a But-For Causation Standard for Retaliation Claims II. Three Case Histories Illustrating the Evolution of Whistleblower Protections A. Nixon v. Fitzgerald: The Civil Service Reform Act B. Petermann v. Teamsters: The Public Policy Doctrine C. Edward Snowden: Secrecy and Contractors III. Reform of Regulation of Public Securities Markets by the Sarbanes-Oxley Act: The Beginning of a New Era in Whistleblower Protections xv

2 xvi Whistleblowing A. Pre Sarbanes-Oxley: Regulation by Oversight B. Post Sarbanes-Oxley: Undersight in Securities Regulation C. Post Sarbanes-Oxley: Whistleblower Protections in Federal Legislation Become Common : The Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act : The FDA Food Modernization Act and MAP Conclusion IV. Whistleblowing Terminology V. Common Forms of Whistleblower Protection Chapter 2. Part I. Key Issues for Advocates and Advisors Analytical Framework: Balancing Workplace Responsibilities and Conscience I. The Various Responsibilities of Employees A. The Duties of Obedience, Loyalty, and Confidentiality B. Duties as Citizens to Aid in Law Enforcement Modern Ambivalence Toward Misprision of Felony Voluntary Nature of Whistleblowing C. Ethical Considerations Individual Conscience Professional Ethical Codes Consideration for the Rights of Others a. Public Interest b. Interests of Employers and Coworkers c. Interests of Professional Organizations II. Balancing the Interests A. What Whistleblowers May Disclose Public Interest in the Government Sector Public Interest in the Private Sector Organizational Misconduct and Individual Misconduct B. When Whistleblowers May Make Disclosures Known or Suspected Violations Internal or External Disclosures C. To Whom Whistleblowers May Make Disclosures Nongovernmental Recipients Recipients of Disclosures by Public Sector Employees Recipients of Disclosures by Private Sector Employees

3 Detailed Table of Contents xvii 4. Recipients of Disclosures in Emergencies D. How Whistleblowers May Make Disclosures Disruptive Disclosures Violation of Duty of Confidentiality E. For What Reasons Whistleblowers May Make Disclosures Objectively Reasonable and/or Subjective Good Faith False and/or Bad Faith Disclosures Part II. Federal Law Protections in the Private Sector Chapter 3. Overview of Federal Statutory Protections for Whistleblowers in the Private Sector I. Overview II. Coverage of Federal Whistleblower Protection Statutes A. Areas of Federal Coverage B. Characteristics of Federal Whistleblowing Statutes Defining Protected Activity Identifying the Enforcement System III. Department of Labor Administrative Process A. OSHA Investigations Regarding Alleged Retaliation Against Whistleblowers B. Discovery and Trial C. Review by the ARB D. Review in the Federal Courts IV. Burden of Proof A. Burdens of Proof Under Discrimination Statutes (McDonnell Douglas Corp. v. Green) B. Burdens of Proof Under Most DOL-Enforced Statutes C. A Plaintiff s Prima Facie Case Protected Activity a. To Whom Disclosures Must Be Made b. Accuracy of the Plaintiff s Report c. Formality of Complaint and Internal Reporting Employee Suffered an Adverse Employment Action The Causal Connection Chapter 4. The Sarbanes-Oxley and Dodd-Frank Whistleblower Provisions I. Overview A. The Sarbanes-Oxley Act B. The Dodd-Frank Act C. Composition of the Administrative Review Board II. Civil Protections for Employees of Issuers of Securities Registered Under Section 12 or Required to File Reports Under Section 15(d) of the Securities Exchange Act

4 xviii Whistleblowing A. Scope of Civil Protections Retroactivity To Whom Do the Prohibitions Against Retaliation Apply? a. Publicly Traded Companies b. Privately Held Subsidiaries of Publicly Traded Companies (i) Section 929A of the Dodd-Frank Act (ii) Decisions Before the Dodd-Frank Act c. Privately Held Contractors or Subcontractors of Publicly Traded Companies d. Application Overseas e. Individual Liability What Employee Conduct Is Protected? a. Providing Information Under Section 806(a)(1) (i) Types of Information Enumerated in Section 806(a)(1) (ii) Reasonable Belief in Violation (a) Subjective Reasonableness (b) Objective Reasonableness (iii) Fraud (a) Sylvester v. Parexel and Beyond (b) Pre-Sylvester Decisions (iv) Violation of Accounting Principles (v) Internal Policy Violations (vi) Violations of Laws Not Enumerated in the Act (vii) Reporting One s Own Misconduct (viii) Publicly Available Information (ix) Assisting in an Investigation (x) Manner of Providing the Information (xi) To Whom Information Must Be Communicated b. Filing a Proceeding Under Section 806(a)(2) c. Other Conduct Not Specifically Mentioned in Section 806(a) (i) Anonymous Disclosures to Audit Committees (ii) Civil Protections for Securities Analysts (iii) Special Issues When Corporate Counsel Are Whistleblowers What Employer Conduct Is Prohibited? a. Discriminate in Any Manner b. Particular Forms of Discrimination (i) Performance Evaluations (ii) Hostile Environment (iii) Constructive Discharge

5 Detailed Table of Contents xix c. Breach of Confidentiality B. Procedure Department of Labor a. Timeliness (i) Equitable Tolling (ii) Pro Se Litigants b. OSHA Investigative Process c. Hearings Before ALJs d. Scope of Discovery e. Burdens of Producing Evidence (i) Overall Burden-Shifting Framework (ii) Particular Elements (a) Employer Knowledge (b) Causation (c) Clear and Convincing Evidence f. Remedies (i) Reinstatement (ii) Back Pay (iii) Front Pay (iv) Compensatory Damages (v) Mitigation of Damages (vi) Punitive Damages (vii) Attorneys Fees g. Appeals (i) ARB Review (ii) Appeals From ARB Decisions h. Effect of Discharge in Bankruptcy Federal Court Actions Under the Sarbanes-Oxley and Dodd-Frank Acts a. Right to Bring Direct Claim in Federal Court (i) Coverage (ii) Remedies b. Removing a Sarbanes-Oxley Whistleblower Claim to Federal Court c. Jury Trial Arbitration Interplay With Other Remedies Settlement a. Department of Labor Proceedings b. Confidentiality Provisions Potential for Parallel Government Investigations C. Financial Incentives III. Criminal Penalties for Retaliation A. Differences Between Sections 806 and Privately Held Employers What Employee Conduct Is Protected? Wide Scope of Federal Criminal Law Expansion of Subjects of Protected Disclosures

6 xx Whistleblowing B. Parallel Civil and Criminal Proceedings C. Civil RICO IV. Potential Expansion of Public Policy Doctrine V. Rules Concerning Codes of Ethics: Potential Expansion of Employment Termination Remedies A. Section 406 of the Sarbanes-Oxley Act B. Codes of Ethics as Grounds for Breach of Contract Claim VI. State Statutes Enacted Following Passage of the Federal Sarbanes-Oxley Act Chapter 5. Retaliation Claims Under the Federal Antidiscrimination Statutes I. Title VII and Related Civil Rights Acts A. Common Issues in Retaliation Claims Under Employment Discrimination Statutes What Constitutes Discrimination Sufficient to Support a Retaliation Claim Who Is Protected Against Retaliation Causation Standard Injunctive Relief B. The Participation Clause C. The Opposition Clause What Constitutes Opposition Reasonable Belief Standard Manner of Opposing Unlawful Conduct II. Reconstruction Era Civil Rights Acts A. Section B. Sections 1985 and Part III. State Law Protections in the Private Sector Chapter 6. Statutory Protections I. Introduction II. General Whistleblower Protection Statutes A. Coverage Who Is Liable for Retaliation Related Companies Individuals Protected Against Retaliation Independent Contractors Shareholders Attorneys as Whistleblowers B. Types of Protected Activity C. What Information May Be Disclosed Violations of Law Other Non-Legal Violations Danger to the Public Known or Suspected Violations and Good Faith

7 Detailed Table of Contents xxi 5. What Constitutes a Disclosure D. Reporting Violations Protection for Internal or External Disclosure Protection for External Disclosure No Specification of Report Recipient Internal Disclosure Encouraged Before External Disclosure Emergencies Oral or Written Disclosures Others Acting for the Employee Reports Made Pursuant to Job Duties E. Embryonic Whistleblowers F. Limitations and Remedies Exhaustion of Remedies Damages Workforce Notification G. Elements of a Claim and Burdens of Proof H. Summary III. Topic-Specific Whistleblower Protection Statutes Chapter 7. Common Law Protection: The Public Policy Doctrine I. Introduction II. Who Defines Public Policy in the State at Issue, the Legislative Branch or Judicial Branch? A. California: The Judiciary B. Virginia: The Legislature C. State or Federal Legislation D. Administrative Regulations III. Defining Protected Conduct A. Passive Whistleblowing: Refusal to Commit an Illegal Act Refusal to Commit a Crime Refusal to Violate the Civil Law a. Environmental Laws b. Antitrust Laws c. Medical Care Laws d. Unlawful Sexual Behavior Refusal to Commit a Tort Refusal to Violate Ethical Norms a. Professional Codes of Ethics b. Personal Ethics or Morals Questioning Legality of Conduct Obeying the Law B. Active Whistleblowing: Reporting Employer Misconduct Subjects of Protected Disclosures a. Criminal Activity

8 xxii Whistleblowing i. Employer Conduct ii. Coworker Conduct b. Violations of Noncriminal Laws c. Violation of General Safety Laws i. Public Safety ii. Patient Safety d. Violation of Workplace Safety Laws i. Personal Safety ii. Coworker Safety e. Product Safety f. Government Employment When, to Whom, How, and Why Complaints May Be Made a. Degree of Knowledge Required to Receive Protection b. Internal Versus External Disclosures c. Making External Disclosures d. Manner in Which Whistleblowers May Make Disclosures and Be Protected e. Embryonic Whistleblowers f. Employee Participation in Unlawful Conduct Corporate Counsel as Whistleblowers a. Traditional Rule Regarding Corporate Counsel b. Public Policy Claims Permitted by Corporate Counsel C. Discharge for Exercise of Statutory Rights Workers Compensation Benefits Refusal to Take a Polygraph Protecting Personal Health Statutory Right to Earned Wages or Overtime Pay Seeking Protection From Domestic Abuse D. Discharge for Engaging in Important Civic Duties Jury Duty Election Officer Participation in Political Matters Fulfilling Child Support Obligations Rescue of Persons in Danger Consumer Rights Obeying a Lawful Subpoena National Guard Service IV. The Limits of Public Policy A. Employer Not Subject to Public Policy B. No Employment Relationship C. Failure to Renew Contract of Employment or Rehire D. Personal Rights Unrelated to Employment Shareholder Rights Self-Defense Right to Bear Arms

9 Detailed Table of Contents xxiii 4. Privacy Rights Right to Smoke E. Personal Rights Related to Employment Educational Opportunities Noncompetition Agreements F. Extent to Which Constitutional Protections Against Government Employers Are Extended to Private Employers in Public Policy Claims Unreasonable Search and Seizure and Privacy: Drug Testing Privacy: Social, Marital, or Family Relationships Access to Courts and Counsel a. Filing Suit Against Employer b. Seeking Legal Advice Against Employer c. Participating in Coworker s Lawsuit d. Filing Suit Against Customer of Employer e. Seeking Protection From Coworkers Presumption of Innocence Prior Criminal Record G. Constructive Termination H. Adverse Action Less Than Termination V. Procedural Issues A. Tort or Contract Damages Punitive Damages Potential Individual Liability Limitations After-Acquired Evidence B. Retroactive Application C. Order of Proof Chapter 8. Part IV. Federal, State, and Local Law Protections in the Public Sector Whistleblower Protections in the Public Sector I. Protections for Federal Employees A. Statutory Protections for Federal Employees The Civil Service Reform Act of The Whistleblower Protection Act of 1989 and Subsequent Amendments Additional Protections a. Civil Service Employees i. The Inspector General Act of ii. The No FEAR Act iii. President Obama s 2012 Presidential Policy Directive iv. Other Statutes

10 xxiv Whistleblowing b. Non-Civilian Employees c. Additional Protections for Federal Employees Under Other Statutes B. Federal Constitutional Protection: Free Speech General Schema of Protections Elements of a Claim Determining Whether Speech Is Made Pursuant to an Employee s Job Duties Disruptive Speech Remedies II. Protections for State and Local Government Employees A. Federal Constitutional Protection: Free Speech B. State Laws That Protect State or Local Government Employee Whistleblowers Coverage a. Who Is Liable for Retaliation b. Individual Liability of Supervisors What Constitutes Protected Activity Degree of Knowledge Required to Receive Protection Internal vs. External Disclosures Persons to Whom Whistleblowers May Make Disclosures and Be Protected Manner in Which Whistleblowers May Make Disclosures and Still Be Protected Personal Motivation of the Whistleblower De Minimis Exception Common Protections and Remedies in Statutes a. Notices b. Retaliation c. Complaint Process d. Remedies Establishing a Claim and Burdens of Proof C. State Civil Service Rules D. Federal Statutes With State Employee Whistleblower Protection Part V. Strategies for Litigation and Avoiding Litigation Chapter 9. Preemption and Related Issues I. Preemption by Statute and Deference to Preexisting Statutory Remedy A. General Preemptive Effect of Federal Statutes B. Creation of Additional Common Law Remedies When Statutory Remedy Already Exists C. Requirement to Exhaust Existing Remedies

11 Detailed Table of Contents xxv D. Nonjusticiable Claims Due to the Intra-Military Affairs Doctrine II. Preemption in the Union Context A. Deference to the Jurisdiction of the National Labor Relations Board Exception for Deeply Rooted State Interests, Including Some Whistleblower Issues Retaliation for Union-Related Activities B. Preemption in Deference to Labor Arbitration C. Removal to Federal Court D. Exceptions to NLRA and Section 301 Preemption Chapter 10. Litigating Whistleblower Cases I. Forum-Specific Procedural Considerations A. Statutes of Limitations B. Procedural Rules C. Damages D. Decision Maker E. Appeal Rights II. Parallel Administrative Investigations A. Government Investigations Regarding Alleged Violations B Considerations for OSHA Investigations of Alleged Retaliation C. Protecting Information From Public Disclosure III. Common Litigation Issues in Whistleblower Cases A. Issues at the Pleading Stage Removal to Federal Court Change of Venue Cross-Complaints Moving for Dismissal of the Complaint B. Alternative Dispute Resolution DOL Enforcement of Arbitration Agreements Court Enforcement of Arbitration Agreements C. Discovery by Whistleblowers D. Discovery by Employers Internal Investigation Third Parties Damages E. Electronic Discovery Metadata Preservation of Evidence F. Limits on Discovery G. Expert Witnesses Complex Technical Issues Damages H. Summary Judgment

12 xxvi Whistleblowing I. Special Considerations in Jury Trials Courtroom Demeanor Jury Selection Motions In Limine J. Settlement Agreements Covering Whistleblower Claims DOL Review of Settlement Agreements Under Statutes It Administers FINRA and SEC Position on Confidentiality Provisions in Settlement Agreements Offers of Judgment IV. Conclusion Chapter 11. Avoiding Whistleblower Litigation I. Considerations for Employees II. Considerations for Employers A. Creating a Climate That Discourages Improper Conduct Establishing a Policy on Improper Conduct Communicating Commitment to Policies Regular Organizational Meetings and/or Reminders Ethics Training B. Effectively Enforcing Policies Against Improper Conduct Open-Door Policy Ombudsperson Consultants Grievance Procedure Anonymous Complaints Limits on Complaints III. Alternatives to Litigation A. Mediation B. Arbitration Appendices Appendix A: State Statutes Protecting Public Sector Employees... A-1 Appendix B: State Statutes Protecting Private Sector Employees... B-1 Appendix C: Federal Statutes Protecting Employees... C-1 Appendix D: Common Law Public Policy Protections for Whistleblowers... D-1

13 Detailed Table of Contents xxvii Appendix E: Relevant Provisions of Regulations Issued Under the Sarbanes-Oxley Act of E-1 Appendix F: Relevant Provisions of the Dodd-Frank Act of 2010 and Related Regulations... F-1 Table of Cases... T-1 Index... I-1

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