Whistleblower Law Blog

Topic: Uncategorized

Justice Dept. Talks Tough on White-Collar Crime — Ends “Too Big to Jail”

In a memorandum issued on September 15, 2015, Deputy Attorney General Sally Quillian Yates declared an end to the U.S. Justice Department’s historical leniency on white-collar crime, repudiating the so-called Holder Doctrine — also known as “Too Big to Jail.”

The Holder Doctrine grew out of a June 1999 memorandum written by Eric H. Holder Jr., who at the time served as Deputy Attorney General in the Clinton Administration. Holder later became U.S. Attorney General under President Obama.

Although Holder never recommended leniency for corporate wrongdoers, he instructed prosecutors to consider the “collateral consequences” that could result from pursuing criminal charges against large corporations — and, by extension, the bigwigs who run them. The instability caused by such prosecutions could end up harming “innocent third parties” such as shareholders and employees, he warned; over time, this fear extended to possible damage to the U.S. economy, especially in the case of financial institutions.

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Fourth Circuit Interprets ADAAA Broadly in Overturning Summary Judgment

The U.S. Court of Appeals for the Fourth Circuit, in a recent case on appeal from the Eastern District of North Carolina, interpreted the 2008 Amendments to the Americans with Disabilities Act (ADAAA) broadly and reversed the district court’s grant of summary judgment in favor of the defendant. The opinion contains a number of holdings favorable to ADA plaintiffs, including: 1) that the EEOC’s interpretation of what constitutes a “major life activity” under the ADA deserves Chevron deference from the courts; 2) that reasonable accommodations may include the restructuring of a plaintiff’s job, including the trading of some duties; and 3) that an employer’s retrospective addition of reasons for termination may bolster evidence of pretext on a retaliation claim.

In Jacobs v. N.C. Admin. Office of the Courts, a former deputy clerk at the courthouse in New Hanover County, North Carolina asked that her employer accommodate her social anxiety disorder by reassigning her from providing customer service at the front counter of the courthouse to a job which would require less personal interaction. The employer waited three weeks before acting on the request and then terminated the deputy clerk.
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Two Senators Launch Bipartisan Whistleblower Protection Caucus

In February 2015, Senators Chuck Grassley (R-Iowa) and Ron Wyden (D-Oregon) announced the Whistleblower Protection Caucus, signaling that whistleblower protection is a topic on which politicians on both sides of the aisle can agree. Grassley, a long-time advocate for whistleblower rights, initially announced plans to form the Caucus in April 2014.

The purpose of the Caucus is to bring together like-minded Senators who can shed light on the need for ongoing whistleblower protections. The Caucus will focus on enforcement of whistleblower protections and creating a culture that understands and respects the right to blow the whistle on wrongdoing.
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South Carolina Holds FCA’s First-to-File Rule Overcome by Previous Voluntary Dismissal

The United States District Court for the District of South Carolina held that the False Claims Act’s (FCA) first-to-file rule requires that another complaint must be pending. Thus, the voluntary dismissal of an earlier-filed complaint clears the way for subsequent complaints, and no comparison of content of the complaints is necessary to allow the later-filed case to proceed.

The FCA’s first-to-file bar provides that when a private person brings an FCA action, “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action.”
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Panel Finds Whistleblower Retaliation Against WMATA Employee Who Reported Technology Project

Public records obtained by a nonprofit website- Government Attic, reveal that the Washington, D.C. Metropolitan Area Transit Authority (WMATA) Whistleblower Retaliation Hearing Panel found that a former employee who blew the whistle on a troubled technology project was the victim of retaliation. This case is the first case since the panel was formed in 2010 in which the agency agrees that WMATA violated laws prohibiting whistleblower retaliation.

The panel believes that the former employee’s February 2010 termination was in part due to his cooperation with the agency’s Office of Inspector General (OIG) audit of a $6.9 million information technology project aimed at fixing problems with People Soft software, which is used by Metro.

Although the panel did not reinstate the employee, it ruled that the former employee is a “capable person” and should be given “preferred consideration” for future openings for which he qualifies.

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


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Whistleblower Files Lawsuit against New York Organ Donor Network for Harvesting Organs from Living Patients

Patrick McMahon, a former transplant coordinator for the New York Organ Donor Network, filed a whistleblower lawsuit in the Supreme Court of the State of New York in Manhattan on September 25, 2012 against the federally-funded nonprofit group for allegedly using a “quota” system to pressure doctors and patients’ next of kin to sign consent forms allowing the organization to harvest organs.

According to McMahon’s lawsuit, he witnessed the organ donor network bully hospital staffers and pressured them to prematurely declare patients brain dead in order to harvest their organs. He cites one case from September 2011 in which a nineteen-year-old car crash victim was declared dead, even though according to McMahon he was “still trying to breathe and showed signs of brain activity.” McMahon openly protested the organization’s policies and was terminated four months into his role as a transplant coordinator. In fact, McMahon states that as a result of objecting this practice, another employee called him “an untrained troublemaker with a history of raising frivolous issues and questions.”

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Trial Begins Next Month for Hollywood Effects Artist Alleging that Ascent Media Group Terminated His Employment Because He Reported Workplace Drug Use by Its Creative Director

Andrew MacDonald, an award-winning visual effects director, will go to trial next month in Los Angeles Superior Court against Ascent Media Group (AMG). MacDonald alleges that in 2009 he was terminated after he reported to AMG management “open and notorious drug abuse at the office during working hours” by then-AMG creative director Alex Frisch, best known for his work as visual effects supervisor on the Pirates of the Caribbean movies. MacDonald argues that Frisch posed a threat to public safety and health because of his erratic and aggressive behavior in the workplace while on drugs. MacDonald claims that AMG’s decision to terminate him for reporting Frisch’s workplace drug use violated public policy.

In Fall 2008, AMG merged visual post production studio RIOT with Method Studios. When these two studios were combined, Frisch emerged as the top creative director of the expanded Method, and MacDonald became the executive creative director. During contract negations with AMG’s president, MacDonald brought up his concerns regarding Frisch’s alleged drug abuse and his inability to head the department. He was at the time told not to undermine Frisch because AMG had invested a lot of money to execute the merger.

According to MacDonald, Frisch’s drug use was well-known by others in the office, who nicknamed Frisch the “Powder Donut Man” and “Cokey the Clown, Our Fearless Leader,” because of his cocaine use. In March 2009, when AMG management asked MacDonald if he had any actual proof of Frisch’s drug use, he jokingly asked if the company “needed [him]… to video-tape the bathroom in order to prove that his concern was well-founded.” The next morning, MacDonald was terminated by AMG for allegedly videotaping the bathroom. MacDonald denies having done so and believes AMG terminated him because he reported Frisch’s unlawful drug use.

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

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Morgan Stanley Complex Risk Officer Alleges Whistleblower Retaliation

Earlier this month Clifford Jagodzinski, a former risk manager for Morgan Stanley Smith Barney LLC, filed a complaint in the United States District Court for the Southern District of New York alleging that the financial services firm terminated him in  April 2012 in retaliation for reporting questionable trading practices.

According to Jadozinski’s complaint, he informed his superiors that not only was Morgan Stanley “[bilking] investors” to drive up commissions. He also reported that other employees were involved in improper trading practices, some financial advisors were failing to register their home offices as alternate worksites, and one company advisor was abusing drugs. Although Jadozinski’s supervisor initially praised him for filing these reports, he was told soon after to hold off on his investigations. Morgan Stanley terminated Jadozinski after he informed that the firm should report its improper trading practices to the Financial Industry Regulatory Authority (FINRA).

Jagodzinski is seeking reinstatement to his former position and over $1 million in damages.

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

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Senate Testimony and IG Report Reveal that the VA Inflated Success Rate of Meeting Veterans’ Mental Health Care Needs

On April 23, 2012, representatives from the Veterans Administration (VA) Office of Inspector General (OIG) and former employee from the VA hospital in Manchester testified before the Senate Veterans Affairs Committee about a recent report that showed that the VA inflated its success rate in treating veterans with mental health needs. The report included testimony from Nicholas Tolentino, a former mental health administrator, who said that the VA culture encourages administrators to game performance metrics and tamper with results of VA-wide surveys.

Tolentino and a panel of VA officials discussed the findings of the IG report, which showed that the VA overstated how quickly it serves veterans in need of mental healthcare. The report revealed that in 2011, only forty-nine percent of all new patients received a full mental health evaluation within the department’s required time period of fourteen days, but the VA’s 2011 Performance and Accountability Report stated that ninety-five percent had received the evaluation within the required time period. In addition, the investigation found that only sixty-four percent of patients began treatment within 14 days of their desired start date, while the VA reported that 95 percent had done so.

Chair of the Senate Veterans Affairs Committee Senator Patty Murray had originally requested the IG investigation, and she called the report “substantial and troubling.” In response, William Schoenhard, VA Deputy Undersecretary for Health for Operations and Management, said the VA concurs with the IG’s findings and has instituted a number of changes to address the issues.  “The explanations for the [IG’s] findings are varied, none are satisfactory — we must do more to deliver the mental health services that veterans need,” Schoenhard said.

The VA announced that it will hire 1,900 mental health care staff members, including 1,600 practitioners. In addition, the Agency will also hire family therapists and mental health counselors. The VA is also conducting an extensive internal review of its mental health operations has promised to take proper action to address the concerns raised in the IG’s report.

The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation for reporting fraud or improper practices.

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Former Infosys Principal Consultant Blows the Whistle on Company’s Illegal Visa Practice, Prompting Federal Investigation

Last week CBS News reported that Jay Palmer, a former principal consultant for Infosys Limited, filed a whistleblower retaliation lawsuit against the information technology firm, sparking a federal investigation by the Department of State and Homeland Security and Senator Charles Grassley (R-Iowa).

Palmer alleges that Infosys used the H-1B and B-1 visa programs to commit visa fraud. According to Palmer, the company used these visa programs to bring to the U.S. Indian workers who would be willing to work for less than American worker:

“[Infosys] could outbid everyone or underbid everybody on every contract (because they were paying less.) For example… if I’m gonna pay you $15,000 a year why would I pay an American or a legal worker $65,000 a year? It makes no – it’s just economics.”

In order to bring Indian workers to the U.S., Infosys first used H-1B visas, a program intended for foreign workers with specialized skills or technical abilities that cannot be found among American workers. However, Palmer states, many workers that Infosys brought to the U.S. under this program lacked the specialized skills necessary to qualify for the H-1B visa program.

Furthermore, Palmer alleges that once the U.S. State Department began to limit the number of H-1B visas issued, Infosys began bringing workers to the U.S. under B-1 visas, which are meant for foreign employees traveling to the U.S. to attend training seminars or conventions.  Because the B-1 program prohibits holders from using the visa to work in the U.S., Infosys maintained a list of “do’s and don’ts” on how to obtain B-1 visas for that prohibited purpose. Palmer says that once he blew the whistle on the company’s illegal practices, Infosys executives retaliated against him.

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

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