As featured in #WorkforceWednesday: This week, we’re detailing how self-remediation can help health care employers avoid whistleblower retaliation lawsuits following company downsizing.
We’re also bringing you a breaking news story on the $35 million settlement Activision Blizzard agreed to pay the U.S. Securities and Exchange Commission (SEC).
On December 29, 2022, President Biden signed the Anti-Money Laundering Whistleblower Improvement Act (“the Act”) into law, overhauling the Anti-Money Laundering Act of 2020 (“AMLA”). When initially passed, the AMLA met with extensive criticism by plaintiff-side whistleblower attorneys for failing to set a defined guaranteed rate for whistleblower awards, with the potential awards ranging from zero percent to thirty percent for identifying wrongful conduct in the anti-money laundering area. In response to this criticism and to correct other “shortcomings,” Congress amended the law in 2022 through its omnibus budget to expand enforcement measures within the United States and beyond its borders by clarifying who can be a whistleblower and the rewards for successfully raising compliance complaints. Below, we delve into these changes and their significance for employers. Essentially, these changes will increase employers’ potential liability for retaliation claims by emboldening newly eligible whistleblowers and their lawyers to raise non-compliance complaints.
On December 21, 2022, the Michigan Supreme Court held that the Whistleblowers’ Protection Act (“WPA”) protects employees who report that their employer has violated “suspected” laws in a case called Janetsky v. County of Saginaw. In a first-of-its-kind ruling, the divided Court in Janetsky concluded that an assistant county prosecutor could bring WPA claims against her supervisor who she believed illegally offered a below-minimum plea deal.
Continue Reading Michigan’s Whistleblower Law Protects Employees Reporting Violations of “Suspected” Laws
Laws protecting whistleblowers generally afford anti-retaliation protections when employees “step out of their role” to report discrimination and dangerous or illegal activity, but not to employees when they are performing their issue spotting job duties. Employers who understand this distinction are well positioned to manage underperforming employees in sensitive issue-spotting roles such as information technology, compliance, internal audit and even in-house counsel without running afoul of anti-retaliation laws. The Second Circuit Court of Appeal’s recent decision affirming the Southern District of New York’s dismissal of whistleblower retaliation claims in Johnson v. Board of Education Retirement System of City of New York illustrates this distinction.
Continue Reading Issue Spotting Is Not Whistleblowing
UPDATE – On July 27, 2022, Mayor Bowser signed the Non-Compete Clarification Amendment Act of 2022. The approved Act must now be sent to Congress for a period of 30 days before becoming effective as law.
Washington, D.C. employers will not need to scrap all their non-compete agreements after all. On July 12, 2022, the D.C. Council (the “Council”) passed the Non-Compete Clarification Amendment Act of 2022 (B24-0256) (the “Amendment”), which among other things, tempers the District’s near-universal ban on non-compete provisions to permit restrictions for highly compensated employees. For further analysis on the original D.C. Ban on Non-Compete Act, please see our previous articles here and here.
The Council delayed the initial ban several times in response to feedback from employer groups. However, barring an unlikely veto or Congressional action during the mandatory review period, the amended ban will take effect as of October 1, 2022. We detail the key revisions to the ban below.
Continue Reading Washington, D.C. Scales Back Ban on Non-Competes
Since the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization, state legislatures across the country have accelerated their discussion of new laws either restricting or further protecting access to abortions. A state senate bill in South Carolina, S. 1373 currently pending in the Senate Committee on Medical Affairs, would not only ban almost all abortions in that state, but would also afford novel whistleblower protections. Specifically, S. 1373 imposes criminal penalties, punishable by imprisonment for ten years, for persons who “take any action to impede a whistleblower from communicating about a violation of this article with the Attorney General, a solicitor, or any other person authorized to bring an action in violation of this article.”
Continue Reading South Carolina Abortion Bill Contains Harsh Criminal Penalties for Interfering with Whistleblowers
Exchange Act Rule 21F-17, adopted in 2011 under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, prohibits any person from taking any action to impede an individual from communicating directly with the SEC, including by “enforcing, or threatening to enforce, a confidentiality agreement . . . .” The SEC has prioritized enforcing this rule expansively, by requiring employers to provide SEC-specific carveouts to policies and agreements governing confidentiality. According to an Order issued last week against The Brink’s Company ( “Brink’s” or “Brinks”), the SEC seems to suggest that employers must provide a specific carveout in restrictive covenant agreements permitting employees and former employees to report information to the SEC in addition to the statutory disclosure provided for in the federal Defend Trade Secrets Act (DTSA).
Continue Reading Employers Beware – SEC Renews Enforcement Initiative Against Agreements (This Time a Non-Compete) That Interfere with Whistleblowers’ Unfettered Access to the SEC
Employees who resign from work, sue their employer, and assert “constructive discharge” shoulder a heavy burden to demonstrate that they had no choice but to resign. A recent decision of the Massachusetts Appeals Court, Armato v. Town of Stoneham, shows just how heavy that burden is.
Continue Reading Massachusetts Appeals Court Rejects Whistleblower’s Constructive Discharge Claim
As featured in #WorkforceWednesday: This week, we focus on new developments increasing whistleblower protections across the country and prohibiting mandatory arbitration of sexual assault and harassment claims.
Continue Reading Video: Whistleblower Regulations Increasing, #MeToo Bill Passes, Cyberfraud Risk Mitigation – Employment Law This Week
As featured in #WorkforceWednesday: This week, we’re recapping major items shifting at the state, local, and federal levels, including whistleblower retaliation case law, pay transparency rules, and federal labor policies.
Continue Reading Video: CA Whistleblower Retaliation Cases, NYC Pay Transparency Law, Biden’s Labor Agenda – Employment Law This Week