Emboldening Whistleblowers

Statistics show more whistleblower retaliation lawsuits being filed, while the number of whistleblower cases actually getting settled remains flat. Experts urge HR professionals to train managers on handling these claims and documenting whistleblowing employees' performance to stave off charges of retaliation.

Monday, September 17, 2012
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More employees may be stepping forward to file whistleblower claims, but it seems that few of these cases are actually coming to a resolution.

In an analysis of OSHA data from 2008 to 2011, Chicago-based law firm Seyfarth Shaw found the number of whistleblower suits rose by nearly 20 percent (from 2,219 to 2,648) in that time frame, while the percentage of cases resolved between 2008 and 2011 went from 1,938 to 1,948, a one-half-percent increase.

Seyfarth's recent research looked at whistleblower claims involving retaliation, which the firm thinks "is indicative of the overall rise of whistleblower claims in general, at least at the federal level," says James Curtis, a Chicago-based partner and member of the firm's employment whistleblower team.

Congress' addition of nine new whistleblower statutes to OSHA's responsibilities in the past decade -- beginning with Sarbanes-Oxley in 2002 -- has resulted in an "enormous increase in cases being filed by whistleblowers," says Richard Moberly, professor of law at the University of Nebraska College of Law in Lincoln, Neb. However, "OSHA has received few new resources and investigators to handle this increased caseload," he says.

Budget worries facing courts and administrative agencies only compound the issue, adds Mark Spring, a Sacramento, Calif.-based partner in the employment law firm of Carothers DiSante and Freudenberger.

"They're dealing with reduced budgets. As a result, all civil cases in the court system are taking longer to resolve," says Spring, noting that his firm has been experiencing slower response times from federal and state administrative agencies "across the board."

With regard to retaliation-based claims, "there is a general reluctance on the part of judges to award summary judgment to the employer when there is any type of temporal proximity between the whistleblowing report and the termination or adverse action. This makes these cases more challenging to resolve than other types of employment cases."

And, as long as the economy remains shaky and unemployment rates stay high, the number of whistleblower claims involving retaliation will likely continue climbing, he says. This ongoing trend could create an uncomfortable environment for employers on the wrong end of a retaliation suit, with many of these employees still on the job while their claims await resolution.

"Because retaliation and whistleblowing claims are generally among the most difficult to resolve by dispositive motion, plaintiffs' attorneys and union advocates will continue to encourage the filing of these types of complaints when there is any evidence supporting a connection between the whistleblowing activity and the adverse action, even if there is nothing present beyond the mere timing [of an adverse action against an employee]."

In the event that a whistleblowing employee must be disciplined or even terminated -- for poor performance or any number of issues not related to his or her role in earlier whistleblowing activities -- HR leaders must be careful to shield the organization from claims of retaliation, says Spring. Managers and supervisors must also understand the importance of documenting employees' misconduct and poor performance at the time it occurs, he adds.

"When an employer sends me a file where all or most of the documentation of poor conduct occurred after the employer had noticed the whistleblowing, it's always going to be difficult to defend such a case, he says.


"However, documentation of misconduct or poor performance or emails demonstrating that termination was being considered prior to notice of the whistleblowing activity can serve as powerful evidence in defending whistleblower claims."

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Most HR professionals have policies in place to ensure that terminations aren't crossing the line with regard to age, race or religion, for example, says Curtis. "But they don't often think about whistleblowers. Maybe it's time to include them."

To illustrate his point, Curtis recalls a case in which a client manufacturing company was about to terminate an employee as part of a reduction in force.

"The HR folks didn't realize [the employee] had been involved with raising complaints about safety on the shop floor," he says. "When those complaints were made, [HR] didn't think to check that box, so to speak. Then we had to go through an investigation with OSHA and show them the process we went through to justify the employee being let go. It's time-consuming and expensive, and a little bit of forethought can save a lot of money and aggravation on the back end."

Ultimately, organizations must focus on having work-related reasons for any potential adverse employment decision and documentation to support it, says Moberly, adding that a whistleblower disclosure doesn't have to be unsettling for the employee or the organization.

Indeed, the appropriate response to issues raised by a whistleblower may prevent the employee's claim from ever reaching the costly, time-consuming and contentious litigation stage, he says.

"Whistleblowers rarely start out [as being] antagonistic toward the employer. The vast majority report internally and up the ladder. They typically only become disgruntled and report externally when they are ignored or face reprisals."

Whistleblowers "almost always" report to their supervisor rather than a hotline, he says, which underscores the need for HR leaders to train managers and supervisors on how to receive whistleblower disclosures and how to treat whistleblowers after they disclose.

"The key is to actually ask for and embrace whistleblower disclosures," says Curtis. "If the whistleblowers are right about the misconduct they report, then the company should want to correct the wrongdoing. If the whistleblowers are wrong, then the company should investigate and report back to the employee why they are wrong."

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