Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

This morning, the U.S. Supreme Court issued an order inviting the Solicitor General of the United States to file a brief "expressing the views of the United States" in Lawson v. FMR.  This is a good sign that the Supreme Court is interested in the case, and could accept the case if the Solicitor General explains that Supreme Court review would be beneficial.  As the First Circuit decision was terrible for whistleblowers, today's order is a welcome sign.

Stephen Kohn, Executive Director of the National Whistleblowers Center (NWC) and I filed the only amicus brief to the Supreme Court in this case.  Before the First Circuit, however, the Solicitor of Labor and the Securities and Exchange Commission (SEC) both filed amicus briefs urging the First Circuit to find that the Sarbanes Oxley Act (SOX) did cover employees, like Jackie Lawson and Jonathan Zang, who work for contractors of publicly traded companies. After the First Circuit panel majority rejected these arguments, the Department of Labor's Administrative Review Board issued a blistering decision reaffirming how SOX must cover the employees of contractors. Now, the Solicitor General can just copy from any of these amicus briefs, or the ARB's decision in Spinner, to make an excellent argument about why the public interest depends on the Supreme Court accepting the Lawson case for review.

There is no time limit on the Solicitor General to submit this brief, but where the ARB, the Solicitor of Labor, and the SEC are all in agreement, hopefully it will not take long for the Solicitor General to file this brief.  Then the Supreme Court will have another opportunity to review this case.

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Today, Stephen M. Kohn and I are filing a "friend of the court" brief urging the United States Supreme Court to accept review of, and reverse, the First Circuit's decision in Lawson v. FMR. I wrote here previously about the two-judge majority in the First Circuit had terribly misconstrued the Sarbanes-Oxley Act (SOX) to deny protection to the employees of contractors of publicly traded companies. I also wrote about how the Department of Labor's Administrative Review Board (ARB) had rejected the Lawson decision and announced that it would not follow it outside the First Circuit. Spinner v. David Landau and Associates, LLC, ARB Nos. 10-111 and -115, ALJ No. 2010-SOX-29 (ARB May 31, 2012). Now that Jackie Lawson and Jonathan Zang have appealed to the Supreme Court, the National Whistleblowers Center (NWC) is supporting them in urging the Supreme Court to accept the case and reverse the First Circuit decision.

The NWC amicus brief argues that the First Circuit decision opens a huge loophole that prevents SOX from achieving its remedial purpose of protecting all employees when they raise concerns about corporate frauds and other violations of securities laws and regulations. We also note how in a prevision example of a circuit court of appeals rejecting Department of Labor policy, it took that court (the Fifth Circuit) twenty-one (21) years to finally recognize its error. Corporate fraud whistleblowers cannot wait that long for the First Circuit to realize its error. The American people have already waited too long to have a public stock market with the integrity that comes from protecting employees who speak up about misconduct. We expect the Supreme Court to announce some day this Fall if they will ask the federal government to express a position on this appeal, and then whether to accept the appeal for full briefing and consideration on the merits.

We are providing here:

• DOL amicus brief to the First Circuit in Lawson
• SEC amicus brief to the First Circuit in Lawson
• Lawson v. FMR, LLC, 670 F.3d 61 (1st Cir. 2012)
• Spinner v. David Landau and Associates, LLC, ARB Nos. 10-111 and -115, ALJ No. 2010-SOX-29 (ARB May 31, 2012)
• Lawson and Zang's Petition for a Writ of Certiarori
• NWC's Brief of Amicus Curiae in Support of Petitioners

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Whistleblowers beware: this week the Supreme Court dealt a death blow to the Privacy Act. David Colapinto, NWC General Counsel and Privacy Act expert, appeared on NPR to talk about the ruling and it's devastating effects for whistleblowers. Full story here

Congress originally passed the historic Privacy Act after the Nixon administration illegally broke into Daniel Ellsburg's psychiatric records. The law was designed to provide a recourse for whistleblowers whose reputations get smeared by the government, but now the Court has decided that these brave workers can only receive out-of-pocket damages. Any mental or emotional distress is written off to the wind, regardless of how willful

In a strong dissent, Justice Sotomayor made it clear that this is, "not the result
Congress intended when it enacted an Act with the express purpose of safeguarding individual privacy against Government invasion."

But it's clear that the spirit under which this law was enacted is no longer the spirit of government. David Colapinto concluded, "When we look at what is happening with government surveillance of citizens, this is just part of a disturbing trend where our courts and our government are throwing out restrictions on government abuse of power."

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Privacy Act Protections for Whistleblowers At Risk

On Tuesday, October 4, 2011, the National Whistleblower Center filed a friend of the court brief with the U.S. Supreme Court in support of the plaintiff in a Privacy Act case, Federal Aviation Administration v. Cooper, No. 10-1024. The Supreme Court is currently reviewing whether the Privacy Act permits the recovery of damages for non-pecuniary harm, such as mental and emotional injuries, under the Act’s “actual damages” provision. 5 U.S.C. § 552a(g)(4)(A).

In the lower court, the Ninth Circuit held that the plaintiff was entitled to seek damages for emotional distress. The government, however, has appealed to the Supreme Court to seek a reversal claiming that the term “actual damages” should be narrowly construed to limit Privacy Act damages suits to recovery of out of pocket losses or economic harm caused by the government’s willful or intentional violation of the Act.

Whistleblowers who report wrongdoing by Federal agencies and government officials frequently are subject to violations of privacy. It cannot be over-stated how vital avenues of legal redress, including rights available under the Privacy Act, are to those courageous employee-whistleblowers, both actual and potential, who put the public good before their own careers and who face violations of their privacy as a result of taking unpopular positions. Protecting the privacy of these individuals is an essential component in encouraging employees to reveal severe abuses of power and dangerous industrial practices. Even under the best of circumstances, whistleblowers run enormous risks and suffer retaliation for reporting wrongdoing. If the Privacy Act does not provide remedies for actual non-pecuniary harms (such as for emotional distress and humiliation), then whistleblowers face even greater disincentives to expose misconduct or violations of law.

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Dr. Duane Bonds has filed a petition with the U.S. Supreme Court this week. Dr. Bonds was our nation's top researcher on sickle cell disease until she blew the whistle on the unauthorized cloning of participants' cells. In January, the U.S. Court of Appeals for the Fourth Circuit ruled that she had a right to a jury trial on her claims under the Whistleblower Protection Act (WPA). Bonds v. Leavitt, 629 F.3d 369, 384 (4th Cir. 2011). However, it let stand the dismissal of her claims of retaliation against her in violation of Title VII. Title VII is part of the Civil Rights Act. The Fourth Circuit said that Title VII protects federal employees only to the extent that it protects employees in the private sector, and that protection applies only to concerns about discrimination in employment. The Fourth Circuit held that Title VII does not protect federal employees when they raise concerns about discrimination against minority members of the public.

My colleague Michael D. Kohn and I filed Dr. Bonds' petition for a writ of certiorari this week asking the Supreme Court to accept this case so it can say that federal employees are protected when they protest discrimination against the minorities the government is supposed to serve. The key provision of Title VII, 42 U.S.C. §2000e-16 provides that all personnel actions taken against a federal employee “shall be made free from any discrimination based on
race, color, religion, sex, or national origin,” Recently, the federal appeals court in the District of Columbia said that this provision requires the federal government to set a higher standard than it imposes on the private sector.  Ford v. Mabus, 629 F.3d 198 (D.C. Cir. 2010). Dr. Bonds' petition provides the Supreme Court a chance to make this holding apply throughout the country.  More information about Dr. Bonds' case is available in this prior blog post.

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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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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 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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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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Today the Supreme Court issued a landmark decision that prohibits employers from retaliating against a whistleblower's family members or other associates. The decision in Thompson v. North American Stainless LP is unanimous, and reverses an en banc decision of the Sixth Circuit Court of Appeals in Cincinnati, Ohio. The decision makes clear that victims of retaliation do not have to show that they themselves engaged in any "protected activity." Instead, they must show that they are "person[s] aggrieved" by unlawful retaliation. The Supreme Court declines to identify any "fixed class of relationships for which third-party reprisals are unlawful." Instead, courts will have to decide the application in each case, based upon "the particular circumstances." In the decision, the Supreme Court relies heavily on its 2006 decision in Burlington N. & S. F. R. Co. v. White, 548 U. S. 53. The Court today reiterates that employers are not allowed to take any action that would dissuade a "reasonable worker" from engaging in protected activity. The Court recognizes that this standard "must be construed to cover a broad range of employer conduct." The Court said that it is "obvious" that allowing employers to fire a fiance would discourage employees from raising concerns about violations of the law.

Until recently, I thought this issue had been well settled.  The EEOC had long held that employers may not retaliate against those associated with others who engaged protected activity. Courts, including the Sixth Circuit, had agreed that spouses, for example, had a right to sue when they suffered retaliation prompted by the other spouse's protected activity.  See, for example, EEOC v. Ohio Edison, 7 F.3d 541 (6th Cir. 1993). The National Labor Relations Board (NLRB) had also held that retaliation against relatives was against the law. See NLRB v. Advertisers Mfg. Co., 823 F.2d 1086, 1088-89 (7th Cir. 1987). Since then, a series of more hostile appellate court decisions have barred such claims. Today, that era of hostility is over.

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