Department of Labor Thanks The Employment Law Group® for its Input on the OSHA’s Whistleblower Program Restructuring Project

March 29, 2012

In detailing its recent announcement of a major restructuring of the Occupational Safety and Health Administration’s (OSHA) Office of the Whistleblower Protection Program, the U.S. Department of Labor thanked The Employment Law Group® for its input in the program restructuring project.

The acknowledgement came in a Department of Labor report entitled “OSHA’s Whistleblower Protection Program Review: Findings and Recommendations”. In the Acknowledgements section of the report, OSHA thanked The Employment Law Group® for “providing its thoughts and ideas on how to improve the program”.

The Department of Labor consulted with The Employment Law Group® and other outside stakeholders and requested their views on OSHA’s administration of its whistleblower program. The Department of Labor’s team assigned to the restructuring project met with R. Scott Oswald, managing principal of The Employment Law Group® on September 16, 2010 and Mr. Oswald shared his opinions regarding the state of the OSHA whistleblower program.

Among the observations and suggestions Oswald offered to the Department of Labor and listed in the restructuring report were the following:

• Whistleblower investigators need to be trained and held accountable for their work
• There is a level of hostility by some investigators
• In some whistleblower investigations, decisions are made before the complainant or witness interviews take place. When interviews do take place, there are no probing questions
• Within the whistleblower program and during investigations there is a lack of transparency within OSHA
• Investigators are not fully testing the evidence
• OSHA is not affording witnesses and employees the opportunity to speak with OSHA without the presence of management. This step would help keep interviews confidential
• OSHA needs to form a greater partnership with the complainant’s attorneys
• OSHA should emphasize early resolution of whistleblower complaints
• Believe in mediation. Mediation should be mandatory
• OSHA should create a national mediation office
• OSHA creates roadblocks to access of information obtained during the investigation
• General attitude by whistleblower investigators is how can they get the case off their desk
• Investigators need training on conflict resolution
• During the course of an investigation, if there are additional claims of adverse action, OSHA must amend the complaint and notify the respondent of the amendment
• Under all the new statutes the burden of proof was changed from motivating to contributing, we find that investigators are either not trained on the difference, have not applied the difference or refuse to accept the difference
• OSHA should provide investigators with annual legal training

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been the victims of retaliation.

Lawyers USA Quotes The Employment Law Group® Principal Dave Scher on Recent Rise in Whistleblower Claims

March 09, 2012

Dave Scher, Principal of The Employment Law Group® law firm, was recently interviewed and quoted by Lawyers USA, a national newspaper focused on news and trends in litigation, as well as law practice management.

Commenting on recent media attention given to corporate rule-breaking and the employees who report it, Mr. Scher noted that “[as] retaliation claims become more and more prevalent, whistleblower type claims are expanding.”

Indeed, the Department of Justice (DOJ) recently announced that it recovered a record-setting $3 billion in False Claims Act settlements for fiscal year 2011, bringing the total recovered since 2009 to $8.7 billion. Similarly, the Department of Health and Human Services (HHS) announced last month that federal agencies succeeded in recovering over $4 billion in fraudulent healthcare payments in 2011.

Noting the variety of whistleblower statutes under federal and state law, Mr. Scher said that the difficulty faced by whistleblowers seeking to bring lawsuits for retaliation against their employers often depends on state laws that specifically cover the conduct reported by whistleblowers. For example, in Virginia, Mr. Scher commented that “you have to have an express statute” and that “[it’s] very, very difficult” to link reported conduct to a covered activity.

The article, entitled “Whistleblower Claims Fueled by Unemployment”, appeared in the February 2012 edition of Lawyers USA.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice  representing employees who have been victims of retaliation.

Department of Labor Administrative Review Board Decision Limits Sarbanes-Oxley Retaliation Protections for Foreign Whistleblowers

February 07, 2012

On December 22, 2011, the Department of Labor’s Administrative Review Board (ARB) issued a 3-2 en banc decision that limits the application of the Sarbanes-Oxley Act (SOX) outside of the United States.

The case, Villanueva v. Core Laboratories, ARB No. 09-108, ALJ No. 2009-SOX-006 (ARB December 22, 2011), centered around a whistleblower complaint filed by Colombian citizen William Villanueva. Mr. Villanueva was the CEO of Saybolt Colombia, a subsidiary of Core Laboratories NV, a Dutch company which maintains an office in Houston, Texas and whose securities are publically traded on the New York Stock Exchange.

In 2008 Villanueva alleged that he was the victim of adverse employment actions, including termination from his job, after he warned executives in Houston that other executives were engaging in illegal tax schemes. After Villanueva refused to sign a fraudulent tax return, Core Laboratories purportedly terminated him.

Villanueva then filed a complaint with the Occupational Safety and Health Administration (OSHA) alleging that the Saybolt had violated SOX by retaliating against him and that SOX should protected him as a whistleblower since Core Laboratories is based in the U.S. OSHA dismissed Villanueva’s complaint, after which Villanueva requested a hearing with an Administrative Law Judge (ALJ).

The ALJ dismissed Villanueva’s complaint for a lack of subject matter jurisdiction, reasoning that while the case had domestic components, the principal part of the case was extraterritorial and that SOX did not apply extraterritorially.

On August 6, 2009, Villanueva appealed the ALJ dismissal to the ARB arguing that because executives working at the Core Laboratories headquartered in the U.S. had engaged in fraudulent practices and retaliation, the case did not require extraterritorial application of SOX.

The ARB affirmed the ALJ’s dismissal of the lawsuit, ruling that SOX applies only to disclosures relating to U.S. laws and that the fraud Villanueva alleged involved only Colombian laws with no stated violation or impact on U.S. securities or laws. Additionally, the ARB wrote that the fact that Villanueva reported the alleged misconduct to Core Laboratories executives in Houston does not change the foreign nature of the alleged fraud.

The primary result of the Villanueva decision – and one that has surprised many commentators – is that the ARB rejected the “cause” or “decision-maker” test which had previously been used in favor of an “effects” test. The effects test looks to the effect of the conduct at issue and whether it implicates U.S. law, rather than the origin of the conduct, as the relevant factor for determining whether SOX applies internationally.

Because the ARB’s focus in Villanueva was that the whistleblower had only complained of violations of foreign laws, the ARB required the whistleblower to prove an actual violation of law in order to have a viable whistleblower retaliation claim under SOX.  This conflicts with the ARB’s recent decision in Sylvester v. Parexel Int’l, ARB No. 07-123, ALJ No. 2007-SOX-039 (ARB May 25, 2011), in which the ARB held that a complainant need not prove or identify the law believed to have been violated in order in order to constitute protected activity under SOX.

Judge E. Cooper Brown, Deputy Chief Administrative Appeals Judge, dissented from the majority’s decision in Villanueva, writing that the primary focus of SOX is not the underlying fraud, or even the location of the protected conduct, but rather the retaliation against an employee for blowing the whistle on potential fraud. The majority’s view, according to Judge Brown, was inconsistent with Congress’ intent in passing the Dodd-Frank Act’s strengthening amendments to SOX. According to Judge Brown:

“To construe the legal presumption against extraterritoriality as a bar to claims such as that presented by Villanueva constitutes, in my estimation, a legally indefensible restriction on the protection that Congress intended Section 806 to afford to covered employees.”

Additionally, Judge Brown wrote that the majority’s decision in Villanueva ignores the public policies underlying the original intent behind SOX, the recent amendments broadening SOX, the new causes of action under Dodd-Frank, and the ARB’s own recent decision in Sylvester.

Villanueva’s attorneys intend to file a petition for review of the ARB’s decision with the U.S. Court of Appeals for the Fifth Circuit by the filing deadline on February 17, 2012.

As a result of the ARB’s decision, compliance professionals would now need to investigate and take seriously any complaints that relate to or implicate U.S. laws or have an effect within the U.S. Additionally, foreign offices or subsidiaries can still violate U.S. securities law and regulations, as long as an alleged violation refers to U.S. law.

The Employment Law Group® law firm is a leader in the field of whistleblower law and, together with the National Whistleblower Center and the National Employment Lawyers Association, filed an amicus brief in the Villanueva case.

R. Scott Oswald, Managing Principal of The Employment Law Group®, Selected to Serve as Panelist in Qui Tam Litigation Seminar

February 06, 2012

R. Scott Oswald, managing principal of The Employment Law Group® law firm will serve as a panelist in an upcoming presentation to the Northern Virginia Chapter of the Federal Bar Association on March 7, 2012.

The topic of the Continuing Legal Education (CLE) seminar is “Blowing the Whistle in 2012: New Developments in Qui Tam Litigation” and will focus on a discussion of recent developments in qui tam litigation including:

• New law on the false certification theory;
• The first-to-file bar;
• The public disclosure bar;
• Other elements and defenses for False Claims Act (FCA) cases in the Eastern District of Virginia

The seminar will include both relators’ counsel and defense attorneys who will discuss FCA liability following amendments and regulatory changes in recent years.  In addition, the talk will include a discussion on practical considerations in qui tam relator suits including:

• What relators’ attorneys consider in choosing potential claims;
• The factors used by the U.S. Attorney’s Office in deciding whether to intervene;
• Litigation of FCA retaliation claims along with pending relator lawsuits

The seminar is being held in at the Westin in Alexandria, VA from 12:00-2:30pm.  Registration will remain open until February 29, 2012.  The Northern VA Chapter of the Federal Bar Association is offering a discount on registration fees to government attorneys to encourage participation

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

Federal Times Quotes The Employment Law Group® Managing Principal R. Scott Oswald on Recent Lawsuit Filed by FDA Whistleblowers

February 06, 2012

R. Scott Oswald, Managing Principal of the The Employment Law Group® law firm, was recently interviewed by Federal Times, a weekly newspaper focused on providing insight into issues affecting U.S. government managers and other decision makers.

On January 25, 2012, six current and former Food and Drug Administration (FDA) employees filled a lawsuit in the U.S. District Court for the District of Columbia alleging that the FDA violated their constitutional privacy rights. The employees claim that the FDA monitored the employees’ emails sent from private accounts over a period of two years. The lawsuit also alleges that the employees were targeted for their whistle-blowing after they expressed concern to Congress that the FDA has approved purportedly unsafe medical devices.

The FDA terminated two of the employees and did not renew the contracts of another two following the whistleblowers’ decision to come forward and report the approval of medical products they believed were unsafe.

Responding to the FDA’s alleged intrusion into the whistleblowers’ private emails, Mr. Oswald told the Federal Times:

“I think the FDA went too far in its zeal to monitor these employees. Employers who access [and] retain emails or other electronic stored information from a third-party server risk violating an employee’s privacy interest.”

The article, “When Can Agencies Monitor Your Email? FDA Case Sparks Debate Over Policy”, appeared in the February 5, 2012 edition of the Federal Times.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.

Capital Insider interviews Attorney Adam Augustine Carter about What Employees Should Know for 2012

January 10, 2012

Morris Jones of Capital Insider interviewed The Employment Law Group® law firm attorney Adam Augustine Carter on the recent changes in whistleblower and employment law that will affect employees in 2012.

The points Mr. Carter makes are that:

1. There are almost 2 million home health aides and in-home care providers working in our country. Now with new regulations these workers will get overtime and minimum wage protections.
2. There are now in effect regulations that implement the amendments to the Americans With Disabilities Act (ADAAA) that broaden the definition of who is covered as having a disability and the key change is that an impairment does not need to prevent or severely or significantly restrict a major life activity to be considered to be “substantially limiting” the activity.
3. Revisions to the Sarbanes-Oxley whistleblower regulations clarify and improve the procedures for handling Sarbanes-Oxley whistleblower complaints and implement statutory changes enacted into law as part of the 2010 Dodd-Frank Wall Street Reforms.
4. The Department of Labor’s Administrative Review Board has changed the landscape in 2011 for whistleblowers under Sarbanes-Oxley and the new Dodd Frank amendments to make these laws more powerful for whistleblower claims to succeed and for whistleblowers to be protected so that they don’t have to choose between their job and doing the right thing.

Related articles

• TELG Principal Quoted in Law360 Regarding New Sarbanes-Oxley Whistleblower Regulations (employmentlawgroupblog.com)
• TELG Principal Attorney Adam Augustine Carter Quoted in Bloomberg Article (executivecounselblog.com)
• U.S. DOL ARB Ends Landmark Year Holding Summary Decision Improper Unless Employer Proves Sarbanes-Oxley Act Does Not Apply (employmentlawgroupblog.com)

OSHA Sues Packaging Manufacturer for Whistleblower Violations

December 09, 2011

The U.S Department of Labor’s Occupational Safety and Health Administration (OSHA) is suing RockTenn Corporation, a consumer packaging manufacturer based in Norcross, Georgia for allegedly violating whistleblower protection laws at its Fernandina Beach plant.  The lawsuit alleges that an employee at the plant had repeatedly raised serious and credible safety concerns with managers, and that those managers ignored the employee’s concerns.

On June 1, 2009 the employee called the local OSHA office and relayed his continued safety concerns regarding plant operations.  RockTenn suspended the employee on June 18 and then terminated him on June 23 for allegedly giving inaccurate and untruthful testimony during an internal investigation. OSHA concluded that the company had unlawfully and intentionally terminated the worker’s employment for engaging in activity protected by the Occupational Safety and Health Act.

Teresa Harrison, OSHA’s acting regional Administrator in Atlanta stated:

“Employees have the congressionally-mandated right to engage in safety-related matters at their workplace, including participating in accident investigations and contacting OSHA at any time.  We will hold employers accountable for limiting or deterring any employee who exercises these rights.”

The lawsuit asks the court to order remedies that include reinstating the employee; paying back wages and benefits; paying punitive and compensatory damages; and expunging the employee’s personnel records with respect to the matters at issue in the case.  The suit also requests a permanent injunction against future violations of this law by the employer.

Lawyer Monthly Names The Employment Law Group® its 2011 Labor & Employment Law Firm of the Year

November 23, 2011

Lawyer Monthly has selected The Employment Law Group® law firm as its 2011 Labor & Employment Law Firm of the Year. Lawyer Monthly is an international legal publication that tracks legal news across many different practice areas and jurisdictions around the world. This month’s edition of Lawyer Monthly lists the publication’s Law Firm of the Year recipients, including The Employment Law Group® law firm.

Lawyer Monthly makes selects award recipients based on a number of criteria. The selection process includes a comparative review of nominated firms’ recent activities to their industry peers and also firms’ involvement in significant legal cases. Additionally, Lawyer Monthly considers the degree of recognition a firm has among its peer group, the number of nominations a firm receives, and other awards and positive reviews that the firm has received.

The Employment Law Group® law firm is proud to accept this recognition of the results the firm has achieved for its clients and its commitment to advancing the rights of employees and whistleblowers in the U.S. and abroad.

Lawmakers Push to Add Stricter Reporting Regulations in Sexual Abuse Cases in Wake of Penn State Scandal

November 16, 2011

In wake of the child sexual assault allegations against former Penn State Assistant Coach Jerry Sandusky that have shocked the nation, lawmakers across the U.S. are moving quickly to tighten up rules on who must report the sexual abuse of a child.  State legislatures are likely going to debate whether new laws are needed to shore up vague guidelines and policies regarding child safety on campus. As the law currently stands, Pennsylvania educators aware of child abuse are merely required to report it to their workplace superiors.

Pennsylvania Gov. Tom Corbett, a Republican, stated:

“The assistant coach who in 2002 witnessed former Penn State assistant coach Jerry Sandusky allegedly abusing a child met the minimum obligation of reporting it up to head coach Joe Paterno, but the assistant did not, in my opinion, meet a moral obligation.”

Corbett also mentioned that within the next few weeks, state lawmakers would introduce bills to explicitly outline educators’ responsibilities if they witness or suspect child abuse.

Iowa, Maryland and New York are also considering tougher laws regarding the reporting of child abuse.

TELG Attorney Quoted in Crain’s Detroit Business Article Predicting Rapid Expansion of Whistleblower Claims

October 14, 2011

On October 14, 2011, Crain’s Detroit Business published an article titled “Are there enough private crimes in Michigan to warrant beefing up the state’s false claims act?” in which The Employment Law Group® law firm attorney R. Scott Oswald states:

Having whistleblowers in government and the health care sector will ensure that individuals and corporations engaged in fraudulent acts (will think twice about committing crimes).  It will serve as a deterrent….

Recently, whistleblower and SEC attorney Darcy Flynn revealed that the SEC was shredding documents relating to corporations under investigation, including thousands of inquiries into the $50 billion Bernard Madoff Ponzi scheme, Goldman Sachs, and Lehman Brothers.  Before blowing the whistle at the SEC, Flynn blew the whistle on health care fraud:

Flynn also was the whistleblower in the 1995 Medicare fraud case against Blue Cross Blue Shield of Michigan. The Blues settled with the federal government and paid a $27.6 million fine.

Over the next decade, Oswald believes false claims act complaints will go up by a factor of 100.

“There has been an explosion in government contracting. A huge amount of work is being outsourced,” Oswald said.

“Another reason is the expansion of health care services with the health care reform bill. As more people become covered by insurance and prescribed medications there will be more opportunities for pharmaceutical companies to engage in unlawful activities.”