DETAILED TABLE OF CONTENTS

DETAILED TABLE OF CONTENTS Dedication... Preface... Acknowledgments... Summary Table of Contents... v vii xi xiii Chapter 1. The Evolution of Whistleblower Protections... 1-1 I. Historical Background... 1-3 A. The 1863 False Claims Act... 1-4 B. Labor Law Developments Restricting Management Discretion to Hire and Fire... 1-5 C. Increased Regulation of Business... 1-8 D. Perceived Increase in Improper Business Activity... 1-10 E. Encouragement of Whistleblowing... 1-10 F. Expansion of Whistleblower Protections... 1-11 G. U.S. Supreme Court Decisions: A Mixed Response on Retaliation Claims... 1-13 1. Recognizing an Implied Cause of Action for Retaliation... 1-13 2. The Supreme Court Expands the Definition of Employer Acts That May Constitute Retaliation Under Title VII... 1-14 3. The Supreme Court Limits First Amendment Protection for Official Speech by Government Employees... 1-16 4. The Supreme Court Adopts a But-For Causation Standard for Retaliation Claims... 1-16 II. Three Case Histories Illustrating the Evolution of Whistleblower Protections... 1-17 A. Nixon v. Fitzgerald: The Civil Service Reform Act... 1-17 B. Petermann v. Teamsters: The Public Policy Doctrine... 1-21 C. Edward Snowden: Secrecy and Contractors... 1-23 III. Reform of Regulation of Public Securities Markets by the Sarbanes-Oxley Act: The Beginning of a New Era in Whistleblower Protections... 1-27 xv

xvi Whistleblowing A. Pre Sarbanes-Oxley: Regulation by Oversight... 1-27 B. Post Sarbanes-Oxley: Undersight in Securities Regulation... 1-28 C. Post Sarbanes-Oxley: Whistleblower Protections in Federal Legislation Become Common... 1-31 1. 2010: The Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act... 1-31 2. 2011 2012: The FDA Food Modernization Act and MAP-21... 1-32 3. Conclusion... 1-32 IV. Whistleblowing Terminology... 1-33 V. Common Forms of Whistleblower Protection... 1-34 Chapter 2. Part I. Key Issues for Advocates and Advisors Analytical Framework: Balancing Workplace Responsibilities and Conscience... 2-1 I. The Various Responsibilities of Employees... 2-2 A. The Duties of Obedience, Loyalty, and Confidentiality... 2-2 B. Duties as Citizens to Aid in Law Enforcement... 2-4 1. Modern Ambivalence Toward Misprision of Felony... 2-5 2. Voluntary Nature of Whistleblowing... 2-7 C. Ethical Considerations... 2-7 1. Individual Conscience... 2-7 2. Professional Ethical Codes... 2-9 3. Consideration for the Rights of Others... 2-11 a. Public Interest... 2-11 b. Interests of Employers and Coworkers... 2-13 c. Interests of Professional Organizations... 2-16 II. Balancing the Interests... 2-16 A. What Whistleblowers May Disclose... 2-17 1. Public Interest in the Government Sector... 2-17 2. Public Interest in the Private Sector... 2-17 3. Organizational Misconduct and Individual Misconduct... 2-18 B. When Whistleblowers May Make Disclosures... 2-21 1. Known or Suspected Violations... 2-21 2. Internal or External Disclosures... 2-22 C. To Whom Whistleblowers May Make Disclosures... 2-23 1. Nongovernmental Recipients... 2-24 2. Recipients of Disclosures by Public Sector Employees... 2-25 3. Recipients of Disclosures by Private Sector Employees... 2-25

Detailed Table of Contents xvii 4. Recipients of Disclosures in Emergencies... 2-26 D. How Whistleblowers May Make Disclosures... 2-26 1. Disruptive Disclosures... 2-27 2. Violation of Duty of Confidentiality... 2-27 E. For What Reasons Whistleblowers May Make Disclosures... 2-27 1. Objectively Reasonable and/or Subjective Good Faith... 2-28 2. False and/or Bad Faith Disclosures... 2-28 Part II. Federal Law Protections in the Private Sector Chapter 3. Overview of Federal Statutory Protections for Whistleblowers in the Private Sector... 3-1 I. Overview... 3-1 II. Coverage of Federal Whistleblower Protection Statutes... 3-2 A. Areas of Federal Coverage... 3-2 B. Characteristics of Federal Whistleblowing Statutes... 3-6 1. Defining Protected Activity... 3-6 2. Identifying the Enforcement System... 3-9 III. Department of Labor Administrative Process... 3-10 A. OSHA Investigations Regarding Alleged Retaliation Against Whistleblowers... 3-11 B. Discovery and Trial... 3-13 C. Review by the ARB... 3-15 D. Review in the Federal Courts... 3-16 IV. Burden of Proof... 3-16 A. Burdens of Proof Under Discrimination Statutes (McDonnell Douglas Corp. v. Green)... 3-17 B. Burdens of Proof Under Most DOL-Enforced Statutes... 3-18 C. A Plaintiff s Prima Facie Case... 3-20 1. Protected Activity... 3-21 a. To Whom Disclosures Must Be Made... 3-21 b. Accuracy of the Plaintiff s Report... 3-21 c. Formality of Complaint and Internal Reporting... 3-22 2. Employee Suffered an Adverse Employment Action... 3-23 3. The Causal Connection... 3-24 Chapter 4. The Sarbanes-Oxley and Dodd-Frank Whistleblower Provisions... 4-1 I. Overview... 4-3 A. The Sarbanes-Oxley Act... 4-3 B. The Dodd-Frank Act... 4-5 C. Composition of the Administrative Review Board... 4-6 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... 4-6

xviii Whistleblowing A. Scope of Civil Protections... 4-8 1. Retroactivity... 4-8 2. To Whom Do the Prohibitions Against Retaliation Apply?... 4-8 a. Publicly Traded Companies... 4-8 b. Privately Held Subsidiaries of Publicly Traded Companies... 4-10 (i) Section 929A of the Dodd-Frank Act... 4-10 (ii) Decisions Before the Dodd-Frank Act... 4-11 c. Privately Held Contractors or Subcontractors of Publicly Traded Companies... 4-12 d. Application Overseas... 4-13 e. Individual Liability... 4-15 3. What Employee Conduct Is Protected?... 4-16 a. Providing Information Under Section 806(a)(1)... 4-16 (i) Types of Information Enumerated in Section 806(a)(1)... 4-16 (ii) Reasonable Belief in Violation... 4-16 (a) Subjective Reasonableness... 4-17 (b) Objective Reasonableness... 4-17 (iii) Fraud... 4-20 (a) Sylvester v. Parexel and Beyond... 4-20 (b) Pre-Sylvester Decisions... 4-22 (iv) Violation of Accounting Principles... 4-25 (v) Internal Policy Violations... 4-26 (vi) Violations of Laws Not Enumerated in the Act... 4-27 (vii) Reporting One s Own Misconduct... 4-28 (viii) Publicly Available Information... 4-28 (ix) Assisting in an Investigation... 4-29 (x) Manner of Providing the Information... 4-29 (xi) To Whom Information Must Be Communicated... 4-31 b. Filing a Proceeding Under Section 806(a)(2)... 4-32 c. Other Conduct Not Specifically Mentioned in Section 806(a)... 4-33 (i) Anonymous Disclosures to Audit Committees... 4-33 (ii) Civil Protections for Securities Analysts... 4-34 (iii) Special Issues When Corporate Counsel Are Whistleblowers... 4-34 4. What Employer Conduct Is Prohibited?... 4-36 a. Discriminate in Any Manner... 4-36 b. Particular Forms of Discrimination... 4-37 (i) Performance Evaluations... 4-37 (ii) Hostile Environment... 4-38 (iii) Constructive Discharge... 4-38

Detailed Table of Contents xix c. Breach of Confidentiality... 4-39 B. Procedure... 4-40 1. Department of Labor... 4-40 a. Timeliness... 4-40 (i) Equitable Tolling... 4-41 (ii) Pro Se Litigants... 4-43 b. OSHA Investigative Process... 4-44 c. Hearings Before ALJs... 4-47 d. Scope of Discovery... 4-47 e. Burdens of Producing Evidence... 4-49 (i) Overall Burden-Shifting Framework... 4-49 (ii) Particular Elements... 4-50 (a) Employer Knowledge... 4-50 (b) Causation... 4-51 (c) Clear and Convincing Evidence... 4-52 f. Remedies... 4-54 (i) Reinstatement... 4-55 (ii) Back Pay... 4-58 (iii) Front Pay... 4-59 (iv) Compensatory Damages... 4-60 (v) Mitigation of Damages... 4-61 (vi) Punitive Damages... 4-61 (vii) Attorneys Fees... 4-61 g. Appeals... 4-62 (i) ARB Review... 4-62 (ii) Appeals From ARB Decisions... 4-64 h. Effect of Discharge in Bankruptcy... 4-65 2. Federal Court Actions Under the Sarbanes-Oxley and Dodd-Frank Acts... 4-65 a. Right to Bring Direct Claim in Federal Court... 4-65 (i) Coverage... 4-65 (ii) Remedies... 4-66 b. Removing a Sarbanes-Oxley Whistleblower Claim to Federal Court... 4-67 c. Jury Trial... 4-68 3. Arbitration... 4-68 4. Interplay With Other Remedies... 4-69 5. Settlement... 4-69 a. Department of Labor Proceedings... 4-69 b. Confidentiality Provisions... 4-70 6. Potential for Parallel Government Investigations... 4-72 C. Financial Incentives... 4-73 III. Criminal Penalties for Retaliation... 4-76 A. Differences Between Sections 806 and 1107... 4-76 1. Privately Held Employers... 4-77 2. What Employee Conduct Is Protected?... 4-77 3. Wide Scope of Federal Criminal Law... 4-78 4. Expansion of Subjects of Protected Disclosures... 4-79

xx Whistleblowing B. Parallel Civil and Criminal Proceedings... 4-79 C. Civil RICO... 4-80 IV. Potential Expansion of Public Policy Doctrine... 4-81 V. Rules Concerning Codes of Ethics: Potential Expansion of Employment Termination Remedies... 4-83 A. Section 406 of the Sarbanes-Oxley Act... 4-83 B. Codes of Ethics as Grounds for Breach of Contract Claim... 4-85 VI. State Statutes Enacted Following Passage of the Federal Sarbanes-Oxley Act... 4-88 Chapter 5. Retaliation Claims Under the Federal Antidiscrimination Statutes... 5-1 I. Title VII and Related Civil Rights Acts... 5-2 A. Common Issues in Retaliation Claims Under Employment Discrimination Statutes... 5-4 1. What Constitutes Discrimination Sufficient to Support a Retaliation Claim... 5-4 2. Who Is Protected Against Retaliation... 5-8 3. Causation Standard... 5-8 4. Injunctive Relief... 5-9 B. The Participation Clause... 5-10 C. The Opposition Clause... 5-13 1. What Constitutes Opposition... 5-13 2. Reasonable Belief Standard... 5-16 3. Manner of Opposing Unlawful Conduct... 5-17 II. Reconstruction Era Civil Rights Acts... 5-18 A. Section 1981... 5-18 B. Sections 1985 and 1986... 5-19 Part III. State Law Protections in the Private Sector Chapter 6. Statutory Protections... 6-1 I. Introduction... 6-2 II. General Whistleblower Protection Statutes... 6-2 A. Coverage... 6-3 1. Who Is Liable for Retaliation... 6-3 2. Related Companies... 6-4 3. Individuals Protected Against Retaliation... 6-5 4. Independent Contractors... 6-6 5. Shareholders... 6-7 6. Attorneys as Whistleblowers... 6-8 B. Types of Protected Activity... 6-9 C. What Information May Be Disclosed... 6-9 1. Violations of Law... 6-9 2. Other Non-Legal Violations... 6-10 3. Danger to the Public... 6-10 4. Known or Suspected Violations and Good Faith... 6-11

Detailed Table of Contents xxi 5. What Constitutes a Disclosure... 6-12 D. Reporting Violations... 6-13 1. Protection for Internal or External Disclosure... 6-13 2. Protection for External Disclosure... 6-14 3. No Specification of Report Recipient... 6-14 4. Internal Disclosure Encouraged Before External Disclosure... 6-14 5. Emergencies... 6-15 6. Oral or Written Disclosures... 6-15 7. Others Acting for the Employee... 6-15 8. Reports Made Pursuant to Job Duties... 6-16 E. Embryonic Whistleblowers... 6-16 F. Limitations and Remedies... 6-17 1. Exhaustion of Remedies... 6-17 2. Damages... 6-18 3. Workforce Notification... 6-18 G. Elements of a Claim and Burdens of Proof... 6-19 H. Summary... 6-19 III. Topic-Specific Whistleblower Protection Statutes... 6-20 Chapter 7. Common Law Protection: The Public Policy Doctrine... 7-1 I. Introduction... 7-3 II. Who Defines Public Policy in the State at Issue, the Legislative Branch or Judicial Branch?... 7-4 A. California: The Judiciary... 7-4 B. Virginia: The Legislature... 7-7 C. State or Federal Legislation... 7-9 D. Administrative Regulations... 7-10 III. Defining Protected Conduct... 7-11 A. Passive Whistleblowing: Refusal to Commit an Illegal Act... 7-12 1. Refusal to Commit a Crime... 7-12 2. Refusal to Violate the Civil Law... 7-14 a. Environmental Laws... 7-14 b. Antitrust Laws... 7-15 c. Medical Care Laws... 7-15 d. Unlawful Sexual Behavior... 7-16 3. Refusal to Commit a Tort... 7-17 4. Refusal to Violate Ethical Norms... 7-18 a. Professional Codes of Ethics... 7-18 b. Personal Ethics or Morals... 7-21 5. Questioning Legality of Conduct... 7-22 6. Obeying the Law... 7-23 B. Active Whistleblowing: Reporting Employer Misconduct... 7-24 1. Subjects of Protected Disclosures... 7-24 a. Criminal Activity... 7-24

xxii Whistleblowing i. Employer Conduct... 7-24 ii. Coworker Conduct... 7-27 b. Violations of Noncriminal Laws... 7-29 c. Violation of General Safety Laws... 7-30 i. Public Safety... 7-30 ii. Patient Safety... 7-31 d. Violation of Workplace Safety Laws... 7-33 i. Personal Safety... 7-33 ii. Coworker Safety... 7-33 e. Product Safety... 7-35 f. Government Employment... 7-37 2. When, to Whom, How, and Why Complaints May Be Made... 7-39 a. Degree of Knowledge Required to Receive Protection... 7-39 b. Internal Versus External Disclosures... 7-40 c. Making External Disclosures... 7-41 d. Manner in Which Whistleblowers May Make Disclosures and Be Protected... 7-42 e. Embryonic Whistleblowers... 7-42 f. Employee Participation in Unlawful Conduct... 7-43 3. Corporate Counsel as Whistleblowers... 7-43 a. Traditional Rule Regarding Corporate Counsel... 7-43 b. Public Policy Claims Permitted by Corporate Counsel... 7-45 C. Discharge for Exercise of Statutory Rights... 7-47 1. Workers Compensation Benefits... 7-47 2. Refusal to Take a Polygraph... 7-49 3. Protecting Personal Health... 7-50 4. Statutory Right to Earned Wages or Overtime Pay... 7-51 5. Seeking Protection From Domestic Abuse... 7-52 D. Discharge for Engaging in Important Civic Duties... 7-52 1. Jury Duty... 7-53 2. Election Officer... 7-53 3. Participation in Political Matters... 7-54 4. Fulfilling Child Support Obligations... 7-55 5. Rescue of Persons in Danger... 7-55 6. Consumer Rights... 7-56 7. Obeying a Lawful Subpoena... 7-57 8. National Guard Service... 7-57 IV. The Limits of Public Policy... 7-57 A. Employer Not Subject to Public Policy... 7-57 B. No Employment Relationship... 7-58 C. Failure to Renew Contract of Employment or Rehire... 7-58 D. Personal Rights Unrelated to Employment... 7-59 1. Shareholder Rights... 7-59 2. Self-Defense... 7-60 3. Right to Bear Arms... 7-60

Detailed Table of Contents xxiii 4. Privacy Rights... 7-61 5. Right to Smoke... 7-61 E. Personal Rights Related to Employment... 7-61 1. Educational Opportunities... 7-61 2. Noncompetition Agreements... 7-62 F. Extent to Which Constitutional Protections Against Government Employers Are Extended to Private Employers in Public Policy Claims... 7-62 1. Unreasonable Search and Seizure and Privacy: Drug Testing... 7-63 2. Privacy: Social, Marital, or Family Relationships... 7-63 3. Access to Courts and Counsel... 7-64 a. Filing Suit Against Employer... 7-64 b. Seeking Legal Advice Against Employer... 7-65 c. Participating in Coworker s Lawsuit... 7-66 d. Filing Suit Against Customer of Employer... 7-66 e. Seeking Protection From Coworkers... 7-67 4. Presumption of Innocence... 7-67 5. Prior Criminal Record... 7-68 G. Constructive Termination... 7-68 H. Adverse Action Less Than Termination... 7-69 V. Procedural Issues... 7-70 A. Tort or Contract Damages... 7-70 1. Punitive Damages... 7-70 2. Potential Individual Liability... 7-72 3. Limitations... 7-72 4. After-Acquired Evidence... 7-72 B. Retroactive Application... 7-73 C. Order of Proof... 7-73 Chapter 8. Part IV. Federal, State, and Local Law Protections in the Public Sector Whistleblower Protections in the Public Sector... 8-1 I. Protections for Federal Employees... 8-2 A. Statutory Protections for Federal Employees... 8-3 1. The Civil Service Reform Act of 1978... 8-3 2. The Whistleblower Protection Act of 1989 and Subsequent Amendments... 8-4 3. Additional Protections... 8-8 a. Civil Service Employees... 8-8 i. The Inspector General Act of 1978... 8-8 ii. The No FEAR Act... 8-9 iii. President Obama s 2012 Presidential Policy Directive... 8-10 iv. Other Statutes... 8-11

xxiv Whistleblowing b. Non-Civilian Employees... 8-12 c. Additional Protections for Federal Employees Under Other Statutes... 8-12 B. Federal Constitutional Protection: Free Speech... 8-13 1. General Schema of Protections... 8-13 2. Elements of a Claim... 8-17 3. Determining Whether Speech Is Made Pursuant to an Employee s Job Duties... 8-18 4. Disruptive Speech... 8-23 5. Remedies... 8-24 II. Protections for State and Local Government Employees... 8-25 A. Federal Constitutional Protection: Free Speech... 8-25 B. State Laws That Protect State or Local Government Employee Whistleblowers... 8-25 1. Coverage... 8-26 a. Who Is Liable for Retaliation... 8-26 b. Individual Liability of Supervisors... 8-27 2. What Constitutes Protected Activity... 8-27 3. Degree of Knowledge Required to Receive Protection... 8-30 4. Internal vs. External Disclosures... 8-32 5. Persons to Whom Whistleblowers May Make Disclosures and Be Protected... 8-33 6. Manner in Which Whistleblowers May Make Disclosures and Still Be Protected... 8-35 7. Personal Motivation of the Whistleblower... 8-35 8. De Minimis Exception... 8-36 9. Common Protections and Remedies in Statutes... 8-37 a. Notices... 8-37 b. Retaliation... 8-37 c. Complaint Process... 8-38 d. Remedies... 8-38 10. Establishing a Claim and Burdens of Proof... 8-39 C. State Civil Service Rules... 8-41 D. Federal Statutes With State Employee Whistleblower Protection... 8-42 Part V. Strategies for Litigation and Avoiding Litigation Chapter 9. Preemption and Related Issues... 9-1 I. Preemption by Statute and Deference to Preexisting Statutory Remedy... 9-3 A. General Preemptive Effect of Federal Statutes... 9-3 B. Creation of Additional Common Law Remedies When Statutory Remedy Already Exists... 9-7 C. Requirement to Exhaust Existing Remedies... 9-12

Detailed Table of Contents xxv D. Nonjusticiable Claims Due to the Intra-Military Affairs Doctrine... 9-12 II. Preemption in the Union Context... 9-13 A. Deference to the Jurisdiction of the National Labor Relations Board... 9-13 1. Exception for Deeply Rooted State Interests, Including Some Whistleblower Issues... 9-15 2. Retaliation for Union-Related Activities... 9-16 B. Preemption in Deference to Labor Arbitration... 9-17 C. Removal to Federal Court... 9-20 D. Exceptions to NLRA and Section 301 Preemption... 9-22 Chapter 10. Litigating Whistleblower Cases... 10-1 I. Forum-Specific Procedural Considerations... 10-2 A. Statutes of Limitations... 10-2 B. Procedural Rules... 10-3 C. Damages... 10-4 D. Decision Maker... 10-4 E. Appeal Rights... 10-5 II. Parallel Administrative Investigations... 10-5 A. Government Investigations Regarding Alleged Violations... 10-5 B Considerations for OSHA Investigations of Alleged Retaliation... 10-6 C. Protecting Information From Public Disclosure... 10-7 III. Common Litigation Issues in Whistleblower Cases... 10-8 A. Issues at the Pleading Stage... 10-8 1. Removal to Federal Court... 10-8 2. Change of Venue... 10-10 3. Cross-Complaints... 10-10 4. Moving for Dismissal of the Complaint... 10-10 B. Alternative Dispute Resolution... 10-11 1. DOL Enforcement of Arbitration Agreements... 10-12 2. Court Enforcement of Arbitration Agreements... 10-12 C. Discovery by Whistleblowers... 10-14 D. Discovery by Employers... 10-15 1. Internal Investigation... 10-15 2. Third Parties... 10-16 3. Damages... 10-17 E. Electronic Discovery... 10-18 1. Metadata... 10-19 2. Preservation of Evidence... 10-19 F. Limits on Discovery... 10-20 G. Expert Witnesses... 10-21 1. Complex Technical Issues... 10-21 2. Damages... 10-21 H. Summary Judgment... 10-22

xxvi Whistleblowing I. Special Considerations in Jury Trials... 10-23 1. Courtroom Demeanor... 10-23 2. Jury Selection... 10-24 3. Motions In Limine... 10-24 J. Settlement Agreements Covering Whistleblower Claims... 10-25 1. DOL Review of Settlement Agreements Under Statutes It Administers... 10-25 2. FINRA and SEC Position on Confidentiality Provisions in Settlement Agreements... 10-27 3. Offers of Judgment... 10-28 IV. Conclusion... 10-28 Chapter 11. Avoiding Whistleblower Litigation... 11-1 I. Considerations for Employees... 11-2 II. Considerations for Employers... 11-3 A. Creating a Climate That Discourages Improper Conduct... 11-3 1. Establishing a Policy on Improper Conduct... 11-4 2. Communicating Commitment to Policies... 11-6 3. Regular Organizational Meetings and/or Reminders... 11-7 4. Ethics Training... 11-8 B. Effectively Enforcing Policies Against Improper Conduct... 11-9 1. Open-Door Policy... 11-10 2. Ombudsperson... 11-11 3. Consultants... 11-12 4. Grievance Procedure... 11-12 5. Anonymous Complaints... 11-12 6. Limits on Complaints... 11-14 III. Alternatives to Litigation... 11-14 A. Mediation... 11-14 B. Arbitration... 11-15 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

Detailed Table of Contents xxvii Appendix E: Relevant Provisions of Regulations Issued Under the Sarbanes-Oxley Act of 2002... 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