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Whistleblower Law Blog

Topic: P.C.

MSPB: Cat’s Paw Doctrine Protects Federal Whistleblowers

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The Merit Systems Protection Board (MSPB) adopted the U.S. Supreme Court’s 2011 formulation of “cat’s paw” liability to find that the Transport Security Administration (TSA) acted illegally when it fired an employee who blew the whistle on lax airport security measures.

The MSPB’s decision in Aquino v. Department of Homeland Security was its first formal application of the cat’s-paw doctrine to the Whistleblower Protection Act (WPA), which forbids retaliation against whistleblowers working for the federal government. Previous board decisions had reached a similar result using a different theory; the switch should help MSPB actions to survive appeal in federal court.

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Supreme Court Says SOX Can Fit Almost Anyone

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NOTE: A version of this post first appeared on Law360.com.  The author, R. Scott Oswald, was counsel of record on an amicus curiae brief filed in this case.

In deciding Lawson v. FMR LLC, the first whistleblower case they have heard under the Sarbanes-Oxley Act (SOX), the justices of the U.S. Supreme Court agreed that the law’s ambiguous anti-retaliation provision offered two alternatives, both somewhat unappealing:

  • Either it doesn’t protect a large class of whistleblowers — in many cases, the people most likely to discover financial wrongdoing;
  • Or it protects virtually anyone hired by a publicly traded company or by its employees, either directly or indirectly, and forbids reprisal for a huge range of fraud reports.

Led by Justice Ruth Bader Ginsburg, a 6-3 majority unflinchingly chose the broader interpretation, instantly giving SOX “a stunning reach,” in the words of a dumbfounded dissent by Justice Sonia Sotomayor.

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The Top Ten Whistleblower Decisions of 2013: Part 1

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For whistleblowers and their advocates, 2013 was a whipsaw year: Big advances followed sharp letdowns in quick rotation — sometimes from the same source. (Ahem, Supreme Court and White House.)

Plus there was the Snowden sideshow. But since NSA leaker Edward Snowden was never a real whistleblower — he acted outside the law and fled the consequences — his headline-grabbing revelations taught us no useful legal lessons.

Instead, the true news of 2013 was choppy-but-clear progress toward more employee-friendly readings of federal whistleblower laws. After two years of success at the administrative level, retaliation victims started getting their day in ever-higher courts. The U.S. Supreme Court put a cherry on the trend by hearing arguments in Lawson v. FMR LLC, its first whistleblowing case under the crucial Sarbanes-Oxley Act (SOX).

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R. Scott Oswald Publishes Article Review of Whistleblower-Favorable Trends in 2012

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R. Scott Oswald, managing principal of The Employment Law Group, P.C., recently published an article in Law360 reviewing favorable developments in employment law for whistleblowers during 2012.

According to Oswald, these developments “further open the door to greater whistleblower revelations in the future, resulting in fewer laws being broken, savings for taxpayers, safer working conditions, increased awards to relators, other benefits and even lives being saved.”

Among the significant developments for whistleblowers in 2012 discussed were:

  • The Department of Justice collecting nearly $5 billion in False Claims Act settlements and judgments
  • The IRS and SEC Whistleblower Offices announced some of their first and largest awards
  • The passage of the Whistleblower Protection Enhancement Act (WPEA) strengthened legal protections for federal employees who blow the whistle by disclosing government abuse, fraud and waste
  • States continued to enact local False Claim Acts to come into compliance with the federal False Claims Act
  • The Administrative Review Board (ARB) at the Department of Labor continued its whistleblower-favorable trend
  • Federal courts interpreted the Dodd-Frank Act’s anti-retaliation provisions to include internal complaints, with the first Dodd-Frank claims surviving a motion to dismiss in federal court.

The article, “2012 Opens The Door For More Whistleblower Participation”, was published in the January 3, 2013 edition of Law360.

 

The Employment Law Group® law firm has an nationwide whistleblower protection practice representing employees who have been victims of retaliation, including a $819,000 False Claims Act whistleblower retaliation verdict on behalf of a client.

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The Daily Cavalier Interviews Attorney Adam Carter on Recent $819,000 Whistleblower Retaliation Verdict in False Claims Act Lawsuit Involving Misuse of NIH Research Grants

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Last week, The Daily Cavalier, a newspaper serving the University of Virginia community in Charlottesville, Virginia, interviewed Adam August Carter, principal of The Employment Law Group® law firm, on his client, Dr. Weihua Huang’s recent $819,000 whistleblower retaliation jury verdict.

Dr. Huang was a UVA researcher working on a research project funded by the National Institute of Health (NIH) who faced retaliation and termination after reporting improper and unauthorized modifications to the terms of a National Institute of Health (NIH) research grant.

On October 12, 2012, a federal jury awarded Dr. Huang compensation for back pay which accumulated after his termination in November 2009, as well as approximately $500,000 in non-economic damages, including damage done to his academic reputation.  Additionally, Dr. Huang may receive further compensation in the form of court fees and costs and “front-pay”, or funds which would compensate him for the future earnings Huang could have receive had he continued in his position at UVA.

According to Dr. Huang’s attorney, Adam Augustine Carter, the recent ruling could have a significant impact on UVA and judicial precedent regarding the False Claim Act, a federal law that permits legal action against individuals or corporations that fraudulently obtain government funds.

Specifically, according to Mr. Carter, “it’s clear now that the University accepts federal funds in trust for the benefit of all the taxpayers and that the University is not going to be permitted to make changes at its whim without the clear authorization of the principal investigator.”

Mr. Carter further mentioned that this case may not mark the last time the issue arises either, noting that “[the defendants] said they do this all the time and that it’s routine, which tells me that this [ruling] is really going to shake up the way the accounting is going to be done on these NIH grants,” he said.

The article, entitled “Whistleblower wins unfair contract termination suit: Court ruling awards former laboratory researcher more than $800,000, finds unfair contract termination”, was published on October 17, 2012 in the online edition of The Cavalier Daily.

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

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TheScientist Magazine Features Story on $819,000 Whistleblower Retaliation Verdict in Favor of TELG Client Dr. Weihua Huang

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Last week, The Scientist, a magazine for life science researchers and academics, featured an article highlighting a recent $819,000 whistleblower retaliation jury verdict for Dr. Weihua Huang, a former University of Virginia (UVA) researcher and client of The Employment Law Group® law firm.  Dr. Huang alleged that UVA administrators retaliated against him for reporting that his supervisor had altered and misused a National Institutes of Health (NIH) research grant budget.

The Scientist article quoted Dr. Huang’s attorney, Adam Augustine Carter, principal of The Employment Law Group® law firm, who commented that “this decision is important to the entire [research] grant community because, on these grants, levels of efforts are assigned and the principal investigator is responsible for the use of the money.”

The article, entitled “Court Awards Whistleblower $820,000: A jury finds that UVA wrongfully fired a researcher for reporting that his supervisor altered an NIH grant budget”, was originally published on October 19, 2012.

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ABC Feature Story Highlights Misconduct Leading to Whistleblower Lawsuit Alleging Defense Contractor Jorge Scientific Defrauded U.S. Taxpayers

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On October 17, 2012, ABC ran a feature story involving two whistleblowers represented by The Employment Law Group® law firm.  The whistleblowers are former employees of Jorge Scientific Corporation, a defense and intelligence contractor with the federal government recently filed a qui tam lawsuit against the company for misconduct they witnessed while working for the company overseas in Kabul, Afghanistan.

According to attorney David Scher, who represents the whistleblowers, “the case represents one of the most egregious violations of the trust the U.S. government has placed in a defense contractor to look out for and protect American interests in a war zone such as Afghanistan.”

The former employees – Kenneth Smith (a decorated former police officer) and John Melson (a former U.S. Marine who currently serves in the U.S. Army National Guard) –brought their suit under the False Claims Act, a law that allows relators such as themselves, to bring qui tam actions against wrongdoers on behalf of the federal government on account of fraudulent activity involving government contracts.

In their suit, Smith and Melson assert that Jorge Scientific failed to meet is responsibilities as a government contractor and engaged in irresponsible conduct involving taxpayer money.  Specifically, the whistleblowers claim that Jorge Scientific’s vice president, Chris Sullivan, encouraged gross misconduct in at the company’s Kabul location that cause the former employees to resign from their positions as security and protection professionals.  Smith and Melson further charge that Jorge Scientific’s executives’ actions compromised the U.S. mission in Afghanistan and imperiled the lives of other company employees, in addition to U.S. and coalition military and government personnel.

The lawsuit claims that Jorge executives repeatedly violated the company’s rules of conduct including: indiscriminately firing weapons and possessing prohibited grenades, and tossing live ammunition into bonfires while intoxicated during parties, thereby causing the bullets to explode and, in one instance, a bullet struck a company employee near his eye.  Furthermore, the suit alleges that Jorge Scientific ignored complaints by U.S. military personnel after servicemembers discovered errant bullets in the nearby community.  Many of these “parties” took place during work hours and were paid for with taxpayer funds, the lawsuit alleges.

The relators – Smith and Melson – claim that for their refusal to participate in this misconduct, Jorge Scientific retaliated against them by isolating them, using racist and homophobic epithets toward them, and remanding that they consume alcohol and illegal drugs, an even physically threatening them during drunken brawls which the plaintiffs avoided.  After this behavior persisted and fed up with the gross misconduct by their employers, Jorge Scientific forced the relators’ constructive discharge from their positions.

“The recorded video shows, without a doubt, the irresponsible and dangerous actions on the part of the Jorge corporation and supports the relator’s charges. We hope this legal action results in changed behavior by Jorge, the US military and other contractors representing American interests,” Scher added.

Part of the conduct described by the whistleblowers can be viewed here.

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

 

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Law360 Interviews TELG Attorney Adam Augustine Carter on $819,000 Whistleblower Retaliation Jury Verdict for Former University of Virginia Scientist

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Last week a federal jury in Virginia awarded an $819,000 verdict to Dr. Weihua Huang in his False Claims Act suit alleging that two University of Virginia administrators retaliated against him for reporting what he believed was misuse of a National Institutes of Health (NIH) research grant.

According to Dr. Huang’s lawsuit, two University of Virginia administrators declined to review Huang’s contract after he raised questions about the alleged misuse of NIH research funds.  The jury awarded Dr. Huang, a former genetics and addiction researcher in UVA’s Department of Psychiatry and Neurobehavioral Science, $500,000 in compensatory damages and approximately $320,000 in wages he lost after he was retaliated against for blowing the whistle.

Dr. Huang’s attorney, Adam Augustine Carter of The Employment Law Group® law firm, told Law360 that the case represented a significant victory for False Claims Act whistleblowers at research institutions who receive federal grant funding.

Mr. Carter told Law360 that “this case should encourage other whistleblowers that are seeing abuse in federal grants to come forward” and that while “it is tough for people to come forward in such situations, Dr. Huang’s courage has set an example for whistleblowers.”

Additionally, according to Mr. Carter, the case “should act as a reminder to institutions that they may not retaliate against whistleblowers who question the alleged misuse of federal grant money.”

Such whistleblowers, he noted, hold federal funds in trust and “employees who engage in protected activity or who question the way the funds are distributed or used cannot be retaliated against.”

The article, entitled “UVA Whistleblower Nets Award In FCA Suit Over Health Grant”, originally appeared in the October 16, 2012 edition of Law360.

 

The Employment Law Group® law firm’s whistleblower attorneys have helped many clients file suit against employers that fraudulently bill the U.S. government, and have established favorable precedents under the retaliation provision of the False Claims Act.

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TELG Principal Attorney, Adam Augustine Carter, Quoted in The Richmond Times-Dispatch on Recent $819,000 Verdict in False Claims Whistleblower Retaliation Suit

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The Richmond Times-Dispatch recently reported on last week’s $819,000 jury verdict in favor of a former University of Virginia research neuroscientist represented by The Employment Law Group® law firm, Dr. Weihua Huang, who acted reported the alleged misuse of federal research grant dollars and suffered retaliation for his whistleblowing.

Dr. Huang’s attorney, Adam Augustine Carter, told the Richmond-based paper that the jury’s decision in favor of the whistleblower is important as a precedent for cases brought under the federal False Claims Act since there have been “precious few of these cases that go to trial and get a verdict.”

According to Mr. Cater, “this case should serve to encourage other courageous whistleblowers to report abuse in federal grants to come forward.”  While doing so, Carter noted, “is often tough, Dr. Huang’s courage has set an example.”

The article, entitled “Jury awards $800,000 to U.Va. researcher”, appeared in the October 14, 2012 edition of the Richmond Times-Dispatch.

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The Charlottesville Daily Progress Quotes TELG Principal Attorney, Adam Augustine Carter, on Recent $819,000 Verdict in Huang Whistleblower Retaliation Case

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Following last week’s $819,000 jury verdict in favor of former University of Virginia research scientist Dr. Weihua Huang for retaliation he experienced when blowing the whistle on the alleged misuse of federal grant dollars, The Daily Progress interviewed Dr. Huang’s attorney, Adam Augustine Carter of The Employment Law Group® law firm.

The Charlottesville-based publication quoted Mr. Carter as stating that “this verdict is important to the entire [research] grant community because, on these grants, levels of efforts are assigned and the principal investigator is responsible for the use of money. That is the person who needs to be responsible and, in this case, that responsibility was taken over by the lab director.”

In his remarks to the paper, Mr. Carter also highlighted that the decision is important for setting precedent for cases filed under the federal False Claims Act as “there are precious few of these cases that go to trial and get a verdict.”

The Huang verdict is a precedent-setting case as it is one of the few lawsuits tried to a verdict since Congress amended the anti-retaliation provisions of the False Claims Act in May 2009.

The article, entitled “UVa whistleblower wins $820,000 in federal lawsuit”, originally appeared in the October 12, 2012 edition of The Daily Progress.

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