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The U.S. Department of Labor (DOL) has announced a settlement with Modern Oil Company, the operator of the Kwick Stop convenience store in Shawnee, Oklahoma. The lawsuit alleged that after OSHA investigated a workplace safety complaint a store in Shawnee, Oklahoma, management grilled the three employees of that store until it determined who called OSHA.  Management then fired the identified whistleblower. The employee was a cashier at the convenience store who complained first to management, and then to OSHA about how the tall stacks of liquor bottles posed a hazard. Whistleblower issues can arise in any type of workplace.

Under Section 11(c) of the OSH Act, whistleblowers do not own any cause of action themselves.  Only the Secretary of Labor can file lawsuits to recover damages for workplace health and safety whistleblowers. Luckily, the Solicitor of Labor decided to file this lawsuit.  It was filed July 15, 2010, and settled on March 1, 2011.  It is case number 5:10-cv-00748-M in the U.S. District Court for the Western District of Oklahoma. This blog reported last August about DOL's decision to file this lawsuit.

The settlement provides that the whistleblower will be reinstated and receive $17,000 in back pay. The court's consent judgment also includes a restraining order that bars the company from violating OSH Section 11(c) in the future, and requires the company to post a notice about the right of all employees to raise concerns about health and safety.

"Every employee has the right to a safe and healthful workplace, and no one should ever fear losing a job or facing retaliation by an employer for exercising that right," said William A. Burke, OSHA's acting regional administrator in Dallas, Texas. "This settlement underscores the Labor Department's commitment to protect workers who have been treated unfairly simply for doing the right thing."

Congress could do the right thing and modernize Section 11(c) by giving workplace safety whistleblowers the same rights that environmental, trucking, nuclear, aviation, food safety, and corporate finance whistleblowers have enjoyed for years. Read my prior pleas for this reform here, here here and here.

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The U.S. Supreme Court is considering whether to review a Michigan decision that allows a church to fire a middle school math teacher after she reported suspected sexual abuse to government authorities. According to the Court's docket, this case has been distributed for consideration at all three Friday conferences this month. The Court's web page says that decisions are normally released on the Monday following each Friday conference. One might therefore conclude that this case is not normal. The case is Weishuhn v. Catholic Diocese of Lansing, Case No. 10-760. Adding to the intrigue, today the Supreme Court accepted another case in which it will consider the scope of the "ministerial exception" to employment lawsuits (Hosanna-Tabor Church v. EEOC, Case No. 10-553). In the Hosanna-Tabor Church case, the Supreme Court will be reviewing a decision by the Sixth Circuit that reinstated the disability and retaliation claims of Cheryl Perich. Perich was a third and fourth grade teacher at the Church's school in Michigan. She took a disability leave for the 2004-2005 school year due to a recent onset of narcolepsy. Before the year was up, and after Perich retained an attorney to represent her in saving her job, the Church fired her. The Sixth Circuit held that, "Perich’s claim would not require the court to analyze any church doctrine; rather a trial would focus on issues such as whether Perich was disabled within the meaning of the ADA, whether Perich opposed a practice that was unlawful under the ADA, and whether Hosanna-Tabor violated the ADA in its treatment of Perich."

So surely if teachers in religious schools can be protected when they hire a lawyer to assert disability claims, they should also be protected when they report suspected sexual abuse to government authorities. No so in Michigan state courts. In Weishuhn v. Catholic Diocese of Lansing, the state court of appeals held that, "Termination of a ministerial employee by a religious institution is an absolutely protected action under the First Amendment, regardless of the reason for doing so." Because Madeline Weishuhn told The Catholic times that, "My ultimate goal is to help each student develop into a young Christian person who has a conscience." her duties were primarily religious, "notwithstanding the fact that she taught four mathematics and two religion classes in her last year of teaching." Weishuhn's petition to the Supreme Court explains, in a footnote on page 16 (page 26 of this PDF file), that:

[S]he was retaliated against for making complaints of sex discrimination in the workplace. Plaintiff also asserted a claim under the Michigan Whistleblowers’ Protection Act after being terminated for reporting suspected sexual abuse of a student to the appropriate governmental authority

The Michigan court of appeals never used the words "sexual abuse" in considering the state's interest in protecting children. On page 8, the court did say, "We recognize that it seems unjust that employees of religious institutions can be fired without recourse for reporting illegal activities, particularly given that members of the clergy, as well as teachers, are mandated reporters." Perhaps soon the U.S. Supreme Court will see the wisdom in granting Madeline Weishuhn's petition so that all teachers will be protected when they report suspected child abuse.

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Yesterday, the Christian Science Monitor released a story about the rewards available to corporate whistleblowers under the Dodd-Frank Act. Correspondent G. Jeffrey MacDonald writes that, "Whistle-blowing is about to get more profitable." He quotes Stephen M. Kohn, Executive Director of the National Whistleblowers Center (NWC). Kohn explains that whistleblowers need to know that compensation is waiting because they'll probably never work again in their field.  A reward "moves somebody from a concern to actually taking the risk," Kohn says. Ann Buchholtz, a research director at the Institute for Ethical Leadership at Rutgers Business School in Newark, New Jersey, told MacDonald that. "if we really want these problems brought to light, we can't put obstacles in the way of whistle-blowers."

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Today the Supreme Court held that workers who make oral complaints about wage and hour violations are protected from retaliation under the Fair Labor Standards Act (FLSA). The Court says that oral complaints are "filed" and that workers who make them have "filed any complaint" in the parlance of the 1938 statute. The decision reverses a narrow holding by the Seventh Circuit U.S. Court of Appeals in Chicago, and allows Kevin Kasten to go to trial against his former employer, Saint Gobain Performance Plastics Corporation. I reported here earlier about the dynamic oral argument presented by Kasten's attorney, my friend Jim Kaster of Minneapolis, Minnesota (pictured). That blog post reviews the facts of what Kasten did to complain and how he got fired. The case is Kasten v. Saint Gobain Performance Plastics Corporation, No. 09-834 (March 22, 2011).

At pages 8-9 of the slip opinion, the Court initially notes that, "an interpretation that limited the provision’s coverage to written complaints would undermine the Act’s basic objectives." The Court explained that the FLSA does not rely on “continuing detailed federal supervision or inspection of payrolls,” but on “information and complaints received from employees seeking to vindicate rights claimed to have been denied.” Quoting Mitchell v. Robert DeMario Jewelry, Inc., 361 U. S. 288, 292 (1960). The FLSA's antiretaliation provision makes this enforcement scheme effective by preventing “fear of economic retaliation” from inducing workers “quietly to accept substandard conditions.” The Mitchell case was the first one Kaster cited in his oral argument, page 3. In the majority opinion, Justice Breyer noted that in 1938 many workers were illiterate, especially the low wage workers that Congress sought to help with the FLSA. Justice Breyer (p. 9) was also mindful of the multiple effects that would arise if oral complaints had no protection:

To limit the scope of the antiretaliation provision to the filing of written complaints would also take needed flexibility from those charged with the Act’s enforcement. It could prevent Government agencies from using hotlines, interviews, and other oral methods of receiving complaints. And insofar as the antiretaliation provision covers complaints made to employers (a matter we need not decide, see infra, at 14–15), it would discourage the use of desirable informal workplace grievance procedures to secure compliance with the Act. Cf. Burlington Industries, Inc. v. Ellerth, 524 U. S. 742, 764 (1998) (reading Title VII to encourage the development of effective grievance procedures to deter misconduct); D. McPherson, C. Gates, & K.Rogers, Resolving Grievances: A Practical Approach 38–40 (1983) (describing the significant benefits of unwritten complaints).

This paragraph should be particularly helpful to advocates seeking protection for internal complaints.

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On Wednesday, March 16, 2011, the U.S. Court of Appeals for the Tenth Circuit in Denver, Colorado, issued a decision that reaffirms the rights of union members to sue under federal law. The issue most frequently affects the right of union members to bring claims under Title VII for discrimination on the basis of race, gender, religion and national origin. However, it could also affect claims under federal whistleblower laws. The issue had long been settled that when Congress creates individual rights, then workers could not lose those rights merely because they belong to a union that can pursue grievances through arbitration. The Supreme Court settled this issue in Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974). In 2009, however, the Supreme Court unsettled this issue with its decision in 14 Penn Plaza LLC v. Pyett, 129 S. Ct. 1456 (2009).

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On Monday, the U.S. Supreme Court issued a landmark decision on the right of criminal defendants to sue to get access to DNA that might prove their innocence. The case is Skinner v. Switzer, Case No. 09-9000 (3-7-2011). Before the Supreme Court got to the DNA issue, it first had to review the standards under which it would allow a complaint to be dismissed. On page 7 of the majority opinion (p. 11 of this PDF file), Justice Ginsburg explains the rule as follows:

Rule 8(a)(2) of the Federal Rules of Civil Procedure generally requires only a plausible “short and plain” statement of the plaintiff’s claim, not an exposition of his legal argument.

That means, "a complaint need not pin plaintiff’s claim for relief to a precise legal theory." The opinion cites as authority a respected treatise, Wright & Miller, Federal Practice & Procedure §1219, and Swierkiewicz v. Sorema N. A., 534 U. S. 506, 514 (2002), but it does not cite the Supreme Court's most recent and controversial opinion on this subject, Ashcroft v. Iqbal, 556 U.S. ___, 129 S.Ct. 1937 (2009). I wrote here before about how dangerous the Iqbal decision could be for whistleblowers. Now, even the Supreme Court itself is declining to cite the decision as a general standard for pleading. Even the dissent in Skinner agreed with the majority's statement about the pleading standard. The Court went on to find that Skinner stated a valid claim, even though, "Skinner’s complaint is not a model of the careful drafter’s art." When whistleblowers face motions to dismiss based on Iqbal, their opposition should now cite to Skinner and argue that Skinner states the most recent and better statement of the standard of pleading.

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The Ninth Circuit Court of Appeals has scheduled oral argument in a case that will decide if disclosures to the media can be protected under the Sarbanes-Oxley Act (SOX). The oral argument will be on Friday, April 15, 2011, at the William K. Nakamura U.S. Courthouse,
1010 Fifth Avenue, 7th Floor, Courtroom #2, in Seattle, WA 98104. The argument is scheduled to start at 9:00 a.m. Pacific time. However, if all the other cases take all their allotted time, then the argument will start at 11:00 a.m. The Court has granted special permission to Stephen M. Kohn, Executive Director of the National Whistleblowers Center (NWC) to present oral argument in the case.  You can read NWC's amicus brief here, and Boeing's opposition brief here. Attorney John Tollefsen will be presenting oral argument for the employees, Matt Neumann and Nick Tides.  The case is Tides v. The Boeing Corporation.

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In a major victory for employees with any kind of discrimination or retaliation claim, the Supreme Court yesterday held that employers are liable when a supervisor is motivated by an illegal motive, then acts within the scope of authority on behalf of the employer, and succeeds in getting someone fired. It no longer matters if the employer has the termination decision reviewed by another manager who has no knowledge of the protected status, or against whom there is no evidence of illegal motive.This holding does away with the Seventh Circuit's narrow "cat's paw" theory which required proof that the decision maker was a rubber stamp for the discriminating supervisor. The case is Staub v. Proctor Hospital. The Supreme Court reversed the decision of the Seventh Circuit Court of Appeals which had taken away a jury's award of $57,640 to Vincent Staub. I wrote previously about the Supreme Court's acceptance and oral argument in this case, and you can find there the facts of what happened to Vincent Staub.

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U.S. District Court Judge Douglas Woodlock issued an order yesterday that applies a ban on arbitration agreements retroactively. Congress enacted the ban as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Section 922 of the Dodd-Frank Act amends the Sarbanes-Oxley Act (SOX) to say that, "No predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section." 18 U.S.C. § 1514A(e)(2). Judge Woodlock considered Dodd-Frank's remedial purpose, and the procedural nature of arbitration, to conclude that Congress intended that any present arbitration of SOX claims must be based on post-dispute agreements to arbitrate. If the employer required the arbitration agreement as a condition of employment, then that agreement cannot compel a whistleblower to use arbitration now, even though the agreement was legal when it was signed. The order has a nice analysis of arbitration agreements, statutory interpretation, and the purposes of SOX and Dodd-Frank.

To use this holding and pursue a SOX claim without being forced into arbitration, the whistleblower must still file the initial written complaint with OSHA on time (now 180 days of the first notice of any adverse action). If you have a SOX claim that arose within the last 180 days, I would urge you to consult a lawyer soon about how to meet this time limit.  You can get a referral to a whistleblower lawyer from the Attorney Referral Service of the National Whistleblower Legal Defense and Education Fund.

Congratulations to Massachusetts attorney Alan Crede who successfully defeated a motion to compel arbitration. The case is Pezza v. Investors Capital Corp., Case No. 10-10113-DPW (D. Mass. 03/01/2011).

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