Workforce Bulletin

Addressing whistleblower claims is one of the most sensitive and complex issues employers face. It becomes especially challenging when the claims involve compliance officers, risk officers, or even lawyers tasked with identifying potential problems.

In this one-on-one interview, Epstein Becker Green attorney Alex Barnard sits down with George Whipple to explore the unique challenges whistleblower allegations present within organizations. Alex explains how courts distinguish between performing one's job duties and raising legitimate whistleblower concerns, particularly when internal experts are involved. He also outlines key strategies for investigating claims fairly, avoiding retaliation, and navigating the fine line between good-faith and bad-faith whistleblowing.

In an earlier article (found here), we discussed how a federal district court’s decision that mere 501(c)(3) status can trigger obligations under Title IX created shock waves throughout the private independent school community. A recent ruling by the United States Court of Appeals for the Fourth Circuit has reversed that decision, holding that tax-exempt status is not federal financial assistance for Title IX purposes.

The plaintiff in Buettner-Hartsoe v. Baltimore Lutheran High Sch. Ass’n (4^th Cir., Mar. 27, 2024) was a student who alleged that she was sexually harassed at ...

Recently, a Georgia federal district court permitted an employer’s counterclaims against its former employee-whistleblower to proceed in a False Claims Act (“FCA”) lawsuit after determining that the employer’s amended counterclaims for breach of fiduciary duty and breach of contract were sufficiently independent from the underlying FCA claims to survive a motion to dismiss, despite significant factual overlap. The decision in U.S. ex rel. Cooley v. ERMI, LLC, et al.., a qui tam FCA action where the plaintiff, known as a “Relator,” brings the claim on behalf of the ...

On November 13, 2023, in USA ex rel, Morgan-Lee, et al. v. The Whittier Health Network, LLC, et al., a Massachusetts federal district judge concluded that although the plaintiff engaged in protected activity when she raised suspicions about billing fraud under the False Claims Act, her termination was not retaliatory where she engaged in erratic, confrontational, and insubordinate communication exchanges with superiors and colleagues. Morgan-Lee is a positive development for employers because it reinforces that engaging in protected activity does not shield an employee ...

On November 14, 2023, the Securities and Exchange Commission (“SEC”) announced its enforcement results for fiscal year 2023, boasting increases in enforcement and financial remedies across all of its programs. The SEC filed a staggering 784 enforcement actions, obtained orders for nearly $5 billion in financial remedies, and distributed nearly $1 billion to harmed investors.

The SEC’s most notable results, however, came from its Whistleblower Program: In fiscal year 2023, the SEC issued whistleblower awards totaling nearly $600 million, the most ever awarded in one ...

As featured in #WorkforceWednesday: This week, we’re focusing on three recent Securities and Exchange Commission (SEC) charges against employers for violating whistleblower protection laws and how all employers should take extra steps to ensure compliance in their separation agreements:

Recent charges issued by the SEC represent a dramatic change in the enforcement of whistleblower protections. Epstein Becker Green attorney Greg Keating explains how this can impact all employers, both public and private, and should encourage them to take a closer look at their ...

On September 25, 2023, the United States Court of Appeals for the Eleventh Circuit clarified what a whistleblower plaintiff must allege to demonstrate they had a “reasonable belief” that their employer violated the Sarbanes-Oxley Act (“SOX”). In Ronnie v. Office Depot, LLC, the Eleventh Circuit adopted an employer-friendly “totality of the circumstances” standard for evaluating whether a plaintiff’s belief was “reasonable.” Ronnie is a win for employers in the Eleventh Circuit because it makes clear that, to establish that they engaged in protected ...

Less than two weeks after it last penalized a private employer for alleged violations of whistleblower protection rules in its employee separation agreements, the Securities and Exchange Commission (“SEC”) once again takes aim at the language of a separation agreement it alleges violates Rule 21F-17(a) of the Exchange Act (“Rule 21F”). Just yesterday, the SEC issued an Order settling charges with a commercial real estate services and investment firm for such violations through a fine of $375,000, among other terms. The SEC’s aggressive and continued ...

The Securities and Exchange Commission (“SEC”) continues to aggressively enforce its whistleblower program under the Biden Administration. As we have reported (here and here), the SEC has cracked down on employers’ agreements and procedures that it contends interfere with employee access to the SEC. Most recently, on September 8, 2023, the SEC issued an Order imposing a $225,000 penalty to a private energy and technology company, Monolith Resources LLC (“Monolith”), for allegedly violating whistleblower protection rules in its employee separation ...

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.

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.

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.”

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.

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).

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.

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.

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.

As featured in #WorkforceWednesday: This week, we’re focusing on what employers can expect from the National Labor Relations Board (NLRB) in 2022.

On January 26, 2022, legislation (“Amendments”) amending and significantly expanding the scope of New York’s whistleblower laws will take effect.

As our previous Insight explained in more detail, the Amendments make it much easier for individuals to bring a retaliation claim under New York Labor Law § 740 (“Section 740”) and increase coverage for workers who allege that they have been retaliated against for reporting suspected employer wrongdoing to include former employees and independent contractors.

As featured in #WorkforceWednesday:  This week, we look at significant developments for employers from across the federal government, including at the Occupational Safety and Health Administration (OSHA), the Equal Employment Opportunity Commission (EEOC), and the Securities and Exchange Commission (SEC).

The Securities and Exchange Commission’s Whistleblower Program under the Biden administration has picked up where it left off under President Obama, aggressively enforcing Rule 21F-17(a) against employers whose policies may impede employees from communicating with the SEC.  On June 23, 2021, the SEC fined Guggenheim Securities, LLC (“Guggenheim”) for maintaining a policy that it contended impeded potential whistleblowers from communicating with the SEC by requiring employees to obtain permission before reporting securities violations. Even though the SEC was unaware of any instances in which a Guggenheim employee was prevented from reporting a potential securities law violation or in which Guggenheim acted to enforce the policy, the SEC nevertheless found that the company had violated Rule 21F-17(a).