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Protecting Whistleblowers

New rules and a revised OSHA manual make it easier for whistleblowers to initiate complaints -- and more difficult for employers to defend themselves. OSHA also plans to add another 45 investigators in 2012, on top of the 25 new investigators it added last year.

Thursday, November 17, 2011
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Committed to toughening whistleblower protections, the Occupational Safety and Health Administration recently updated its whistleblower investigation manual and has budgeted $6.1 million for another 45 investigators in 2012.

At the same time, OSHA has published the final rules for the whistleblower regulations in the Sarbanes-Oxley Act, as amended in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Obama administration has made whistleblower protection an OSHA priority, but some employers worry that OSHA is making it more expensive and difficult for them to defend charges of retaliation.

Nearly all respondents (96 percent) to a survey of senior HR, legal and compliance executives by employment and labor law firm Littler Mendelson say they are either very concerned (27 percent) or moderately concerned (69 percent) about potential whistleblower claims.

In addition, more than two-thirds (67 percent) expect whistleblower claims to increase within the next one to two years, while nearly that many (65 percent) say their companies are only moderately prepared to handle whistleblower claims and only 54 percent are confident that management understands unlawful retaliation concepts.

OSHA started beefing up its Whistleblower Protection Program after two audits found that whistleblowers won their complaints in only 1 percent to 2 percent of cases, says attorney David Marshall with Katz, Marshall & Banks in Washington.

 

"For the 10 years preceding the changes, whistleblowers were having nearly an impossible time winning cases before OSHA and the Department of Labor. ... Overall, the OSHA whistleblower staff was understaffed and overworked. The backlog was huge," Marshall says.

The auditors determined that whistleblowers were not getting "fair shake," he says, noting, for example, that OSHA did not always interview whistleblowers or track witnesses, or insist that companies comply with requests for documents.

In some cases, he says, witnesses felt intimidated because employers accompanied them to interviews.  

"What has happened for about 10 years is employers could count on defeating whistleblower complaints a majority of the time," says Marshall. "[OSHA] is taking more seriously today the job of protecting whistleblower rights. ... That's a right Congress wrote and OSHA is enforcing."

However, these changes in procedure come at a cost to employers, says attorney Denise Keyser, with Ballard Spahr in Cherry Hill, N.J.

"OSHA has shown a decided pro-employee bent" under the Obama administration, says Keyser. "[The manual and new rules make] it easier for these investigators to conduct [investigations] and easier to rule against employers."

In revising its Whistleblower Investigations Manual for the first time since 2003, OSHA now allows whistleblowers to file complaints orally and in any language. In addition, witnesses no longer have to submit a signed statement, investigators are required to make every effort to interview every complainant, and investigators must submit specific findings when complaints are dismissed. 

As part of the new rules for SOX -- which protects employees of publicly traded companies from retaliation for reporting violations such as securities and bank fraud, and fraud against shareholders -- the statute of limitations for filing retaliation complaints was extended from 90 days to 180 days, complaints were permitted to be filed orally and in any language, and whistleblowers were given the right to a jury trial in federal court. 

In the past three years, OSHA has taken a number of steps to strengthen its Whistleblower Protection Program, including putting the program directly under the OSHA assistant secretary and adding 25 investigators in 2010. OSHA enforces whistleblower protection under 21 statutes, including laws that cover the environment, nuclear safety, food safety, the financial system and transportation. 

"The best way to prevent [fraud] from happening in the future is to ensure that workers feel free to blow the whistle on corrupt corporate practices without fear of retaliation," stated David Michaels, assistant Secretary of Labor for OSHA.

Marshall says the allowance for oral complaints was because many whistleblowers are "ordinary working people," such as bag handlers, transit workers and painters. "Some are not accustomed to writing out complaints."

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He also notes that OSHA wants to make clear that someone cannot be fired for making an oral complaint. 

While several of the changes make it more difficult for employers, Keyser says, the most potentially harmful change is the requirement that investigators issue specific findings if they dismiss a case. That makes it less likely that investigations will be dismissed, she says. 

The Dodd-Frank amendment to SOX also rejects the use of a "pre-dispute arbitration agreement," she says. Such an agreement -- which is popular among employers -- requires employees to waive their right to sue their employers in exchange for arbitrating such claims.

"These agreements are generally viewed as being to the employer's advantage, as arbitrations are not public, and many arbitrators are less employee-friendly," says Keyser. 

"Be aware," she says. "OSHA's being more active. We'll see more OSHA investigations. You'll see a more energized OSHA. They'll be more likely to give you higher penalties. They're vigorously pursuing workers' claims."

Because of that, employers should proactively audit their workplaces to prevent any violations employees might blow the whistle on, she says.

In addition, says Edward T. Ellis, co-chair of Littler's Whistleblower and Retaliation Practice Group in Philadelphia, employers must also make sure executives and managers are "trained on compliance with laws ... as well as best practices for handling whistleblower claims when they arise."

Employers must also properly treat employees who have filed a complaint, says attorney Edwin Foulke, at Fisher & Phillips in Atlanta, who headed OSHA under President George W. Bush.

"If someone makes a complaint or is involved in investigations, ... these employees have protection. Make sure when doing adverse action against them, have your ducks in a row. ... You've got to realize they have rights and have an administration very interested in supporting those rights," Foulke says. 

He also says that, just because there are a low number of successful complaints, that "doesn't mean the rules are stacked" against whistleblowers.

"I handle a lot of whistleblower investigations," he says. "I think the investigators do a very thorough job on investigations. ...There is a burden of proof."

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