Whistleblower lawyer Jason Zuckerman will be speaking on a panel titled “Dodd-Frank 4th Anniversary: Strengthening Anti-Reprisal Rights under the SEC Whistleblower Program” on Wednesday July 30, 2014. The panel will take place on National Whistleblower Appreciation Day and will examine appropriate rule-making for the SEC to clarify and strengthen whistleblower protections available to those who report misconduct internally or externally. Zuckerman is honored to appear on this panel with distinguished panelists Jordan Thomas, Chairman of Whistleblower Practice, Labaton Sucharow, Eric Ben-Artzi, Deutsche Bank financial whistleblower, and Lisa Donner, Executive Director, Americans for Financial Reform. National Whistleblower Appreciation Day acknowledges and commemorates the contributions of whistleblowers to combating waste, fraud, abuse, and violations of laws, and informs workers and the public about the legal rights of citizens of the United States to blow the whistle.
For too long, taxpayers have been subsidizing whistleblower retaliation by paying legal costs incurred by contractors in defending whistleblower retaliation lawsuits. Due to this foolish practice, government contractors had little disincentive not to retaliate against whistleblowers because the government paid the cost of defending such claims. A FAR amendment implementing the whistleblower protection provisions of the NDAA provides that legal costs incurred in defending an NDAA whistleblower retaliation claim are presumptively unallowable until the matter is completely litigated and the contractor prevails. If an NDAA whistleblower claim is settled, costs would be reimbursed only if the contracting officer determines that there was very little likelihood that the claimant would have been successful on the merits. It is long overdue for the government to stop subsidizing whistleblower retaliation.
In a Washington Post article titled Intelligence security initiatives have chilling effect on federal whistleblowers, critics say, whistleblower lawyer Jason Zuckerman warns of the chilling effect of the Obama Administration’s Insider Threat Program. The article leads with a description of a tense meeting between Senator Grassley and FBI officials in which Senator Grassley’s staff asked how a program designed to uncover internal security threats would at the same time protect whistleblowers. According to the article, the FBI officials “said the FBI would protect whistleblowers by ‘registering’ them.”
The apparent plan to “register” whistleblowers is one of many troubling aspects of a program that hearkens back to the McCarthy era. While there are legitimate reasons to safeguard against the unauthorized disclosure of classified information, the Administration should stay the implementation of the Insider Threat program until there are adequate safeguards to protect whistleblowers.
In an article titled “New law drove whistleblower complaints against DOD contractors up,” Jill Aitoro reports that the NDAA whistleblower protection provisions, which became effective one year ago, have generated a substantial increase in whistleblower complaints to the Department of Defense Office of Inspector General. According to the article, “the rate of complaints from Defense Department whistleblowers increased from about four to six a month as of August 2013 to more than 200 since Jan. 1.” In addition, the article reports that whistleblower disclosures about DOD contractor fraud have resulted in several substantial recoveries for the government.
Sections 827 and 828 of the NDAA provide robust whistleblower protection to employees of most government contractors and grantees. Under the NDAA whistleblower protection provisions, protected conduct includes the disclosure of information that the employee reasonably believes is evidence of:
- gross mismanagement of a Federal contract or grant;
- a gross waste of Federal funds;
- an abuse of authority relating to a Federal contract or grant; or
- a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a Federal contract.
To be protected, the disclosure must be made to a Member of Congress or Congressional committee, an IG, the GAO, a federal employee responsible for contract or grant oversight or management at the relevant agency, an authorized official of DOJ or other law enforcement agency, a court or grand jury or a management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover, or address misconduct.
Proving NDAA Whistleblower Retaliation
The burden of proof and causation standard in NDAA whistleblower cases is very favorable to employees. The complainant prevails merely by demonstrating that the protected disclosure was a contributing factor in the personnel action, which can be met by showing knowledge and temporal proximity.
Remedies for Prevailing NDAA Whistleblowers
Remedies include reinstatement, back pay, uncapped compensatory damages (emotional distress damages) and attorney fees and costs.
Procedures for Filing a NDAA Whistleblower Retaliation Claim
An NDAA reprisal claim must be filed initially with the Office of Inspector of General of the agency that awarded the contract or grant about which the employee disclosed wrongdoing, and the statue of limitations is three years after the date of the reprisal. The OIG will investigate the complaint and make recommendations to the agency head. If the agency head fails to provide requested relief within 210 days, the whistleblower may bring an action in federal district court and try the case before a jury.
An article in The Washington Post titled VA uses patient privacy to go after whistleblowers, critics say reports that the VA has routinely used HIPPA to stifle whistleblowers. And a letter from AFGE to the VA’s General Counsel provides examples of the VA disciplining or threatening to discipline whistleblowers for allegedly violating HIPPA or the Privacy Act.
Unfortunately, all too often whistleblowers are disciplined for their disclosures. Indeed, some employers are becoming increasingly aggressive in prosecuting frivolous counterclaims against whistleblowers for engaging in “self-help discovery.” But VA employees who make disclosures to Congress concerning substantial and specific dangers to patients will likely fall within the whistleblower exception to HIPPA. The MSPB’s decision in Parikh v. Department of Veterans Affairs offers a cogent analysis of HIPPA’s whistleblower exception and is a good example of how the Whistleblower Protection Act can provide a strong remedy to VA whistleblowers.
DC whistleblower lawyer Jason Zuckerman will be chairing a DC Bar CLE titled “Recent Developments in Qui Tam, IRS, and SEC Whistleblower Rewards Claims” on July 22, 2014. The speakers are leading experts from the government and private practice:
- Laurence Freedman, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
- Reuben Guttman, Grant & Eisenhofer P.A.
- Arian June, WilmerHale
- Sean McKessy, Chief, Office of the Whistleblower, U.S. Securities & Exchange Commission
- Gerard Mene, Assistant U.S. Attorney
- Jordan Thomas, Labaton Sucharow LLP
- Stephen Whitlock, Director, IRS Whistleblower Office
- Jason Zuckerman, Law Office of Jason M Zuckerman PLLC (Course Chair)
The course will cover the following topics:
This class will focus on recent developments in False Claims Act litigation and claims that qualify for rewards under the SEC and IRS whistleblower rewards programs. You will learn about best practices for investigating and preparing whistleblower submissions to DOJ, IRS, and SEC, as well as best practices for companies to employ in responding to whistleblower disclosures. Current trends in the investigation and prosecution of civil and criminal fraud enforcement actions resulting from whistleblower disclosures will be explored. Our faculty panel also will address the interplay between whistleblower rewards claims and whistleblower retaliation claims.
More information about this CLE is available here.
An article titled CFPB official wants to silence a whistleblower before he can talk to Congress quotes whistleblower lawyer Jason Zuckerman about the rights of federal employees to disclose waste, fraud and abuse to Congress. The article describes the attempt by outside counsel to a CFPB official to strike a whistleblower’s testimony prior to an oversight hearing. The article states:
The attempt to silence Naraghi, said his lawyer Jason Zuckerman, “will likely chill other Bureau employees from disclosing waste, fraud and abuse or other wrongdoing at the bureau.” Zuckerman called it “a disturbing attempt to intimidate Mr. Naraghi, and (it) appears to be an improper attempt to interfere with critical congressional oversight of the Bureau.”
The Whistleblower Protection Act prohibits retaliation against a federal employee for making any disclosure that a federal employee reasonably believes evidences:
- a violation of any law, rule, or regulation;
- gross mismanagement;
- a gross waste of funds;
- an abuse of authority;
- a substantial and specific danger to public health or safety; or
- censorship related to research, analysis, or technical information that cause, or will cause, gross government waste or mismanagement, an abuse of authority, a substantial and specific danger to public health or safety, or any violation of law.
In addition, the Lloyd–La Follette Act of 1912 expressly recognizes the rights of federal employees to blow the whistleblower to Congress: “The right of employees, individually or collectively, to petition Congress or a Member of Congress, or to furnish information to either House of Congress, or to a committee or Member thereof, may not be interfered with or denied.” 5 USC 7211.
DC employment lawyer Jason Zuckerman will be chairing a DC Bar CLE titled “Recent Developments in Sarbanes-Oxley, Dodd-Frank, and False Claims Act Whistleblower Retaliation and Litigation” on July 15, 2014. The CLE features leading practitioners:
- Lynne Bernabei, Bernabei & Wachtel PLLC
- Connie Bertram, Proskauer
- Adam Carter, The Employment Law Group PC
- Nancy Delogu, Littler Mendelson PC
- Megan Guenther, US Department of Labor
- David Marshall, Katz Marshall & Banks LLP
- Daniel P Westman, Morrison & Foerster LLP
- Jason Zuckerman, Law Office of Jason M Zuckerman PLLC (Course Chair)
This class will focus on hot topics in Sarbanes-Oxley (SOX), Dodd-Frank, National Defense Authorization Act (NDAA), and False Claims Act whistle-blower retaliation claims, including:
- The impact of the Supreme Court’s Lawson v Fidelity decision on the scope of SOX coverage
- Whether internal disclosures are protected under Dodd-Frank
- The Labor Department’s Administration Review Board and federal court decisions on the scope of protected conduct under SOX
- The use of “purloined” documents to prove retaliation claims
- Trends in OSHA enforcement of whistleblower protection laws
- Recent decisions construing the 2009 amendments to the False Claims Act
- Extraterritorial application of SOX and Dodd-Frank
- Important distinctions in the remedies and causation standards of each of these statutes
- Implementation of the 2013 NDAA contractor whistleblower protection provisions.
More information about the CLE is available here.
An article titled Supreme Court will review whistleblower complaint reports that the Supreme Court will review a Federal Circuit decision holding that former air marshal Robert MacLean engaged in protected whistleblowing under the Whistleblower Protection Act when he disclosed to the media that the TSA was planning to remove air marshals from long-distance flights due to budgetary constraints. The article quotes Jason Zuckerman about the potential implications of the decision:
Attorney Jason Zuckerman said the case raises the specter of expanding that exception. “A lot of recent surveys have shown that there are still a lot of employees who are very reluctant to blow the whistle,” he said. “Were the court to create a large loophole to the act, that would likely deter others from blowing the whistle.”
Such a ruling, Zuckerman added, would entice agencies to draft employee rules that prohibit disclosures.
“It could also possibly encourage agencies to use secrecy regulations to prevent employees from blowing the whistle to the media,” he said.
An article titled 4th Circ. SOX Ruling A Rare Employer Win On Causation quotes whistleblower lawyer Jason Zuckerman about the standard whistleblowers must meet to prove retaliation under the whistleblower protection provision of the Sarbanes-Oxley Act. The article discusses a Fourth Circuit decision holding that a surveillance equipment company’s former president failed to shown strong enough ties between his firing and actions protected by SOX to meet the causation standard under SOX. Zuckerman pointed out that the decision is flawed in that it weighs evidence on a motion for summary judgment and that causation standard in SOX whistleblower actions remains very favorable to whistleblowers. The article states:
While there was some agreement among plaintiff- and defense-side attorneys on the relative rareness of the Fourth Circuit’s decision in Feldman, with respect to SOX’s causation standard, they were more divided on how broad an impact the ruling could have in other SOX whistleblower cases.
Jason Zuckerman, principal of Zuckerman Law, a firm that represents whistleblowers, said that while he was surprised at the appeals court’s findings on causation, in his view, the ruling in Feldman “does not alter the landscape and is not likely to have much impact.”
“What remains unchanged is that the ‘contributing factor’ causation standard is extraordinarily favorable to SOX whistleblowers. As the court said, the contributing factor is a ‘light burden,’” Zuckerman added. “In my experience, employers recognize that very few SOX claims will be dismissed on summary judgment.”