Whistleblowing
Anti-Whistleblower Laws
-"Ag-gag" laws common within agricultural industry -State laws forbidding undercover investigation/filming of agricultural activities - Typically to profile animal abuse -Failed bill in PA proposed criminalizing conduct of activists in other industries, such as fracking -American Legislative Exchange Council, supporting such laws, created "terrorist registry" listing those convicted -These laws have been challenged on 1st amendment grounds
Risk of Whistleblowing
-2009 Government Accountability Office reports indicate insufficient protection for employees reporting illegal employer activity -Only 21% of 1800 cases from 2007 had a favorable outcome for the whistleblower -Problems included a legal complexity of whistleblower protection laws
SOX Continued
-Disclosure can be to a federal regulatory or law enforcement agency, a member or committee of congress, or any supervisor of the employee -Entitled to relief under SOX such as back pay, reinstatement of position, litigation costs, attorney fees -Section 1107: Protection for anyone who provides information to law enforcement regarding commission of a federal offense; fines/imprisonment for one retaliating (Protection of this section is not limited to employees of publicly-traded companies)
False Claims Act Today
-FCA reinstituted by congress in 1986 and amended in 2009-2010 -Added anti-retaliation protections (damages and job reinstatement) -Whistleblower can share up to 30% in process of a lawsuit against wrongdoer (Qui Tam Law) -Estimated that over 70% of FCA claims result from whistleblower reports -1987-2013: Government recovered almost 40 billion from FCA claims
History of Whistleblowing
Federal False Claims Act (Lincoln Law) 1863 -Offered incentives to individuals reporting companies/individuals defrauding the government -Introduced by Lincoln to target sales of fake gunpowder to the government during the civil war
2010 Article in Fraud Magazine
Study of 380 state court cases filed by employees for retaliation: -74% fired, 26% suspended/transferred/demoted -22% won lawsuits, 55% lost, 23% new trials ordered -Private sector employees had a more difficult time than public employees -employees are advised to seek legal advice before reporting wrongdoing
Other Laws Providing Narrow Protection
Various other laws provide protection for employees who report specific wrongdoing, such as: -Various environmental statues under EPA -OSHA -HIPPA -National Labor Relations Act
PA Whistleblower Law Continued
"Wrongdoing" is defined in the law as any violation of any state, federal or local law, regulation, ordinance, code of conduct or code of ethics designed to protect the interest of the public or the employer -The law does not protect private sector employees and it is not intended to support a claim that there is a general public policy of protecting whistleblowers who are employed in the private sector
Edward Snowden
-Former CIA employee and federal government contractor -Copies and leaked classified documents indicating NSA spying on citizens with cooperation from telecommunications companies (2013) -Charged by federal prosecutors under the Espoinage Act -Currently in Hiding in Moscow
US Whistleblower Protection Act
-Passed in 1989 --> Protection for federal employees when disclosing waste and fraud 2012 Whistleblower Protection Enhancement Act - Revisions to the act to clarify protections and safeguard employees in the intelligence community and those facing loss of security clearance as retaliation -Provides specific protection for: --Federal employees handling national security issues --Employees of companies with government contracts --Employees who report actions which threaten the integrity of federal science projects
Summary of Current Whistleblower Protections
-Reporting fraud against the federal government -Federal employees reporting waste/fraud -PA government employees reporting waste/fraud -Employees of public corporations reporting fraud on shareholders -Anyone reporting federal crime -Specific laws such as OSHA, EPA, etc
State/Local Government False Act
-Thirty states + DC have similar laws to protect publicly funded programs from fraud -Some limit claims to just medicaid fraud -PA: Bills proposed but have not passed -Note: FCAs target fraud against government, they are not protections for employees otherwise
Sarbanes-Oxley Act (SOX)
2002 federal law passed in response to corporate scandals such as Enron, in which employees and shareholders suffered from corporate financial fraud -SOX requires greater corporate accountability and creates whistleblower protection -Section 806: protection from termination of employment for employees of public companies who are retaliated against for disclosing any conduct the employee reasonable believes violates any federal law relating to fraud against shareholders -Public company = Publicly traded stock, n/a to other employers
The Pennsylvania Whistleblower Law
Applies to PA government employees only; prohibits retaliation against an employee who has made a good faith report of wrongdoing or waste to the employer or an appropriate authority, or who is asked by an appropriate authority to participate in an investigation, hearing or court action -Vary common laws throughout states
Whistleblowing
The act of reporting wrongdoing within an organization to internal or external parties -Wrong doing might be criminal or other illegal conduct, fraud, danger to public health/safety, gross mismanagement, waste of funds, abuse
Reporting Externally
The external parties may include the person or group affected by the wrongful conduct -Government agency, the press, a public service group -Protection for whistleblowers is an attempt to protect their free speech rights against an employer (not covered by A1)
