Gregory Keating

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Under the Biden Administration, the Securities and Exchange Commission has aggressively enforced its Whistleblower Program.  As we previously reported here and here, the SEC has increased its focus on employers’ agreements or procedures that it contends interfere with employee access to the SEC.  More recently, the SEC has for the first time turned its attention toward employer compliance programs with draconian results for employers whose internal compliance efforts do not pass muster.  Specifically, on February 3, 2023, the SEC announced a dizzying $35 million fine against Activision Blizzard, Inc. (“Activision”), a video game developer, largely for failing to implement an effective compliance system to process and track workplace misconduct complaints.  Activision’s fine also included a violation for including a “Notice Clause” in the separation agreement template that it used between 2016 and 2021.  We discuss each violation below and what this means for SEC-regulated employers going forward.…

Continue Reading SEC Imposes Staggering $35 Million Fine on Company for Paying Lip Service to Internal Compliance Procedures

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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).…

Continue Reading Video: Whistleblower Risks in an Economic Downturn, Whistleblower Protection Settlement – Employment Law This Week

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.…

Continue Reading The Anti-Money Laundering Act of 2020 Gets a “Glow Up”: Congress Strengthens Enforcement by Enhancing Financial Incentives and Clarifying Whistleblower Eligibility

It’s that time of year again—the Massachusetts Department of Family and Medical Leave (DFML) has rolled out new Paid Family and Medical Leave (PFML) workplace posters, workplace notification forms, and rate sheets for all employers in the Commonwealth. These updated resources provide the DFML’s yearly updates to eligibility requirements, maximum wage replacement benefit amounts, and…

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.
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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.
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Continue Reading Issue Spotting Is Not Whistleblowing

On November 1, 2022, in Dusel v. Factory Mutual Ins. Co., the First Circuit Court of Appeals held that “close temporal proximity” alone does not establish pretext as this evidence “must be considered alongside the . . . record.” Nor does mere close temporal proximity establish pretext where the employer has a legitimate business reason for taking adverse action against the employee, and more particularly, where the employer subsequently discovers the employee’s misconduct in a separate, unrelated matter. Dusel is a win for employers because it signals that engaging in protected activity will not immunize an employee from the consequences of misconduct that violates company policy if the employer enforces its policy consistently and documents the reasons underlying the employee’s discipline.
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Continue Reading First Circuit Upholds Employer’s Win in Retaliation Suit

On July 13, 2022, the Massachusetts Appeals Court signaled a victory for Massachusetts employers who rely upon independent contractors.  In Tiger Home Inspection, Inc. v. Dir. of the Dep’t of Unemployment, the Appeals Court reversed decisions from the Department of Unemployment (“DUA”) and trial court, concluding that the inspectors were independent contractors under Massachusetts’s Unemployment Insurance statute (“Unemployment Law”) and, thus, ineligible for unemployment benefits.  Focusing on Prongs A and C of the Unemployment Law’s “ABC” test for classifying independent contractors, the Appeals Court provided employers with excellent precedent and concrete guidance for navigating those elements of the test.  Notably, the Unemployment Law’s ABC language largely tracks the Massachusetts Wage Act’s “ABC” test, with Prongs A and C using identical language.  As a result, Tiger Home Inspection arguably provides employers with much-needed clarity for navigating both statutes.
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Continue Reading Massachusetts Appeals Court Clarifies the A’s and C’s of Independent Contractor Status

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.”
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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).
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Continue Reading Employers Beware – SEC Renews Enforcement Initiative Against Agreements (This Time a Non-Compete) That Interfere with Whistleblowers’ Unfettered Access to the SEC