On Friday, January 6th 2017, the National Whistleblower Center filed an Amicus Brief before the Tenth Circuit in Genberg v. Porter. The Genberg case deals with the definition of reasonable belief under the Sarbanes-Oxley Act (SOX). SOX requires whistleblowers to have a reasonable belief that a violation has happened or might happen in the future in order to be protected. Consequently, the standard for reasonable belief has wide-reaching consequences for whistleblowers reporting on corporate fraud and misconduct. The principal author of the brief, Stephen M. Kohn, writes about the case below:
Today, the National Whistleblower Center (NWC) released its End-of-Year Report, filled with whistleblower successes from 2016. In the past year, the NWC continued its mission to strengthen whistleblower protections and incentives, defend whistleblowers’ rights, and educate people at home and abroad about the power of whistleblowers in combatting fraud and corruption.
Washington, D.C. December 6, 2016. An attempt by large government contractors and the U.S. Chamber of Commerce to undermine the False Claims Act (FCA) was beaten back by whistleblower advocates. The U.S. Supreme Court issued a unanimous decision today in the case of State Farm Fire and Casualty Company v. U.S. ex rel. Rigsby ruling that breaches to the confidentiality (or seal) provision of a case brought under the FCA will not result in an automatic dismissal of the case. Continue Reading Huge Win for Whistleblowers with Unanimous Supreme Court Decision
The National Whistleblower Center (NWC) filed several amici curiae (friend of the court) briefs this year to support whistleblowers and advocate for their protection. In particular, NWC briefs have addressed compelling legal issues including preventing attempts to weaken the False Claims Act (FCA) before the United States Supreme Court, and supporting whistleblower rights for veterans before the Federal Circuit Court.
The NWC wrote amici briefs in two major False Claims Act cases in 2016: Universal Health Services v. U.S. ex rel. Escobar, and State Farm Fire and Casualty Company v. U.S. ex rel. Rigsby. In Escobar, amici asserted that the FCA holds contractors liable not only when they defraud the government and taxpayers by violating express terms of their contract, but also when they violate implied certifications as well. In Rigsby, amici argued that the FCA’s seal provision was designed for the exclusive benefit of the Government, and mandatory dismissal for seal violations would undermine the FCA and hurt taxpayers—the intended beneficiaries of the False Claims Act.
Ruling in Universal Health Services v. U.S. ex rel. Escobar will have major impact in government contract fraud cases.
Washington, D.C. April 19, 2016. The U.S. Supreme Court heard Oral Argument today in a landmark whistleblower case, Universal Health Services v. U.S. ex rel. Escobar, arising under the False Claims Act. The Escobar case will determine how specific government contracts must be to hold fraudsters accountable.
The National Whistleblower Center recently filed an Amicus (friend of the court) brief in the case Universal Health Services v. U.S. ex rel. Escobar. The legal issue behind the case concerns the False Claims Act, America’s premier whistleblower law and its best defense against government contracting fraud. The question at hand asks whether a contractor can only be held liable for defrauding the government and the taxpayers if they violate the express terms of their contract, or if reasonable interpretations of the requirements can serve as the basis for enforcing against fraud as well. Continue Reading National Whistleblower Center presents original documents showing the intent of the False Claims Act
Yesterday, the National Whistleblower Center joined other groups in filing an amici curiae brief with the Department of Labor Administrative Review Board (ARB) in Powers v. Union Pacific Railroad Company, ARB Case No. 13-034. Joining the NWC as amici are the National Employment Lawyers Association, the Truckers Justice Center and Teamsters for a Democratic Union.
The ARB called for amici to file briefs in the Powers case to consider the standard of proof for employees to establish the “contributing factor” test in whistleblower retaliation cases arising under the Sarbanes-Oxley Act (SOX) and other whistleblower statutes. The full ARB is considering whether an earlier 2-to-1 ARB panel decision in Fordham v. Fannie Mae, ARB No. 12-061 was correctly decided. In Fordham, the ARB reversed and vacated an Administrative Law Judge’s recommended decision that had improperly weighed employer defenses in determining whether the employee had demonstrated her whistleblowing was a contributing factor in her termination. Continue Reading NWC Joins Amicus in SOX Whistleblower Retaliation Case
On June 26th, 2014, the National Whistleblower Center joined in an amicus brief filed in Kalyanaram v. New York Institute of Technology before the U.S. Supreme Court in support of the Petition For Writ Of Certiorari.
The issue involves whether whistleblowers can be required to reveal the fact they have filed a False Claims Act case, which is under seal, during employment litigation. In Kalyanaram, the Second Circuit sanctioned the whistleblower because he did not reveal the existence of his FCA lawsuit during questioning at an arbitration hearing. Revealing it would have violated the FCA’s sealing provision, which is essential to ensure the confidentiality of the Government’s investigation. The whistleblower’s employment case was dismissed with prejudice.
The Second Circuit’s decision placed the whistleblower in the position of having to pick his poison: Comply with the FCA and risk dismissal of his employment case or face sanctions that could include dismissal of his FCA claim. If the Court’s decision is allowed to stand, it will have far reaching implications for future whistleblower reward cases in which lawsuits are filed under seal as to not tip off the defendant companies.
The Amicus asked the Supreme Court to hear this case in order to clear up the confusion that exists among litigants and the lower courts regarding the circumstances under which facts relating to a qui tam suit under the FCA may be disclosed in an arbitration proceeding without violating the sealing provisions.
The National Whistleblower Center was represented pro bono by three professors of law at Indiana Tech, James J. Berles, Adam Lamparello and Charles E. MacLean.
The Amicus brief is linked here.
The National Whistleblowers Center (NWC) joined with 24 other organizations to submit an amicus brief to the Fifth Circuit U.S. Court of Appeals. The D.R. Horton company has appealed a major decision of the National Labor Relations Board (NLRB) holding that employees have an inalienable right to bring collective and class action lawsuits.
At stake is the right of employees to join together for collective and class actions. This long-recognized right is under attack by forced arbitration agreements in which companies demand that all their employees give up these rights as a condition of employment.
The D.R. Horton company is attempting to use a recent Supreme Court decision to block collective actions by employees. In AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), a 5-4 majority held that companies can use the Federal Arbitration Act (FAA) to block consumers from bringing class action arbitrations. However, the Supreme Court was looking at California’s attempt to hold such arbitration agreements unconscionable. The Supreme Court did not consider the effect of the National Labor Relations Act (NLRA), 29 U.S.C. § 157, which specifically protects the right of covered employees to act in concert for their mutual aid and protection. Courts have long held that this federal right specifically protects the right of employees to join together in legal actions against their employer. Eastex Inc. v. NLRB, 437 U.S. 556, 566 (1978). No union is necessary for employees to be protected when they act in concert. Brady v. NFL, 644 F.3d 661, 673 (8th Cir. July 8, 2011). Still, it would be good if Congress would enact the Arbitration Fairness Act (AFA) to prohibit companies from forcing any arbitration agreements on consumers or employees.
The NLRB explained its decision saying:
It is well settled that “mutual aid or protection” includes employees’ efforts to “improve terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employe-eemployer relationship.” Eastex, Inc. v. NLRB, 437 U.S.556, 565–566 (1978). The Supreme Court specifically stated in Eastex that Section 7 “protects employees from retaliation by their employer when they seek to improve their working conditions through resort to administrative and judicial forums.” Id. at 565-566. The same is equally true of resort to arbitration.
The NLRB adopted this argument suggested by our prior amicus brief:
Modern Federal labor policy begins not with the NLRA, but with earlier legislation, the Norris-LaGuardia Act of 1932, which aimed to limit the power of Federal courts both to issue injunctions in labor disputes and to enforce “yellow dog” contracts prohibiting employees from joining labor unions. Thus, Congress has aimed to prevent employers from imposing contracts on individual employees requiring that they agree to forego engaging in concerted activity since before passage of the NLRA. [Footnotes omitted.]
This decision applies only to those employees who work for private companies in the United States and have a right to organize a union. However, it will apply to these employees whether or not they actually have a union. Additionally, NLRB decisions often lead other agencies to adopt the same policies. In the past, some NLRB policies have been overturned once a new president appoints Board members who have different philosophies.
Many thanks to attorneys Hal K. Gillespie, Yona Rozen and Joseph H. Gillespie of Gillespie, Rozen and Watsky in Dallas, Texas, and to Michael C. Subit (of Frank Freed Subit & Thomas LLP in Seattle, Washington), Victoria W. Ni (of Public Justice in Oakland, California) and Rebecca M. Hamburg (of the National Employment Lawyers Association in San Francisco) for leading the organizing and writing for this brief.
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