Washington D.C. Employment Law Update : Washington D.C. Employment Lawyer & Attorney : Littler Mendelson Law Firm : Virginia, Tyson's Corner

On Monday the U.S. Supreme Court agreed to consider the scope of the Sarbanes-Oxley Act of 2002 (SOX) whistleblower protections. Specifically, in Lawson v. FMR LLC, the Court will decide whether an employee of a privately held contractor or subcontractor of a public company is protected from retaliation under SOX.

The two plaintiffs in this case worked for privately held companies that operated a family of mutual funds. Mutual funds generally do not have their own employees, but rather contract with “investment advisors” that manage the funds, including “making day to day investment decisions, performing a range of management and administrative tasks, and preparing reports for shareholders and the SEC. Employees in the mutual fund industry ordinarily work for mutual fund adviser or sub-advisers, not for a mutual fund itself.”

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Rep. George Miller (D-CA) has reintroduced a bill that would provide whistleblower protections for employees in the offshore oil and gas industries. The Offshore Oil and Gas Worker Whistleblower Protection Act (H.R. 1649) would prohibit employers from retaliating against offshore oil and gas workers who provide information to their employer or a government official regarding any “reasonable belief” that there has been a violation of the Outer Continental Shelf Lands Act (OCSLA). The bill would also protect employees who exercise their rights under the OCSLA; report injuries or unsafe conditions to their employer or a government official; or refuse to perform work based on a good faith belief that doing so would cause injury, impairment, or an oil spill. In addition, as discussed in a fact sheet, the legislation would establish a procedure for filing complaints with the Department of Labor – which enforces whistleblower provisions in 22 separate statutes – and would allow for awards of back pay, exemplary damages, attorneys’ fees, and remedies to address whistleblower “blacklisting.”

In 2010 the House of Representatives approved an earlier version of the Offshore Oil and Gas Worker Whistleblower Protection Act, but the bill failed to progress in the Senate.

The bill’s reintroduction reflects Congress and the Administration’s continued focus on expanding whistleblower protections. Notably, the Department of Labor has requested $22 million for the agency’s whistleblower protection program for Fiscal Year 2014, a $6 million increase from current levels.

Photo credit: Devonyu

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President Obama’s much-anticipated Fiscal Year 2014 budget proposal would fund several federal agency employment initiatives and enforcement efforts. Among other programs that would affect employers, the FY 2014 budget would provide a 10% income tax credit for small businesses that hire new employees or increase wages. Links to various portions of the budget can be found on the Office of Management and Budget’s webpage. The President’s budget proposal is subject to Congressional approval, where it will likely face opposition. The budget is, nonetheless, an important signal of the Administration’s priorities, and the proposal indicates that employers should prepare for greater enforcement and regulatory activity. A summary of key agency budget levels and the programs to be funded are as follows:

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The Occupational Safety and Health Administration (OSHA) has issued an interim final rule and request for comments implementing the whistleblower provisions of the Affordable Care Act (ACA). OSHA enforces the whistleblower provisions in 22 statutes, including § 1558 of the ACA. This ACA provision added § 18C to the Fair Labor Standards Act (FLSA) that expressly prohibits an employer from retaliating against an employee for, among other things, receiving a federal tax credit or subsidy to purchase insurance through the employer or a future health insurance exchange; reporting a potential violation of ACA’s consumer protection provisions, such as the prohibition on denying health coverage to individuals with pre-existing conditions and imposing lifetime limits on coverage; and assisting or participating in a proceeding under this whistleblower law. The interim final rule sets forth the procedures and timeframes for handling retaliation complaints under §18C, including the agency’s investigation, hearing, and appeals procedures.

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The Occupational Safety and Health Administration (OSHA) has issued an interim final rule and request for comments on regulations implementing the whistleblower protection provisions set forth in the Seaman’s Protection Act (SPA) as amended by Section 611 of the Coast Guard Authorization Act of 2010. Section 611 gave OSHA the authority to administer the SPA’s whistleblower protections. OSHA enforces the whistleblower provisions in 22 statutes, including the SPA. The whistleblower provisions in the SPA protect a seaman from retaliation because the seaman has “engaged in protected activity pertaining to compliance with maritime safety laws and accompanying regulations.”

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In the week following President Obama’s inauguration, lawmakers reintroduced familiar legislation dealing with equal pay, whistleblower protections, immigration reform, and retirement security in bankruptcy protection.

Equal Pay

On January 23, 2013, Sen. Barbara Mikulski (D-MD) and Rep. Rosa DeLauro (D-CT) reintroduced a bill that would amend the Fair Labor Standards Act (FLSA) to, among other things, provide for potentially unlimited compensatory and punitive damages in gender-based wage discrimination cases and weaken an employer’s affirmative defense against such claims. The latest version of the Paycheck Fairness Act (S. 84, H.R. 377) was introduced with 27 cosponsors in the Senate and 150 cosponsors in the House. Among other provisions, this bill would do the following:

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In fiscal year 2012 a total of 2,787 whistleblower complaints – the largest number to date – were filed with the Occupational Safety and Health Administration (OSHA), according to newly released data published on the agency’s Whistleblower Protection Program webpage. OSHA enforces the whistleblower provisions in 22 statutes, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Sarbanes-Oxley Act (SOX), Affordable Care Act, and the Occupational Safety and Health (OSH) Act.

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Updated: December 26, 2012 and January 3, 2013

On Tuesday the conference report (pdf) resolving differences between the House and Senate versions of the National Defense Authorization Act for Fiscal Year 2013 (H.R. 4310) was submitted to Congress. The final draft legislation includes provisions enhancing whistleblower protections for Department of Defense (DoD) and National Aeronautics and Space Administration (NASA) contractor and subcontractor employees, and establishing a four-year pilot program enhancing whistleblower protections applicable to all civilian federal agency contractors.

As explained in the Joint Statement of Managers (pdf) accompanying the conference report, the Senate version of the authorization bill contained these whistleblower provisions, while the House version did not. The compromise measure retains the whistleblower protection clauses, with some modifications.

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On Thursday Labor Secretary Hilda Solis announced the first appointees to the newly established Whistleblower Protection Advisory Committee (WPAC), a 15-member panel charged with determining and recommending ways to improve the fairness, efficiency, effectiveness and transparency of the Occupational Safety and Health Administration's whistleblower protection program. Included among the inaugural committee members is Gregory Keating, Littler shareholder and co-chair of the firm’s Whistleblowing and Retaliation Practice Group. Keating was nominated for the position by Senator Mike Enzi, Ranking Member of the Committee on Health, Education, Labor and Pensions, and Johnny Isakson, Ranking Member of the Subcommittee on Employment and Workplace Safety.

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The Department of Labor (DOL) has issued a proposed rule (pdf) that seeks to revise and restructure the agency’s rules of practice and procedure for conducting administrative hearings before the Office of Administrative Law Judges (OALJ), the “trial court” that presides over many employment-related claims filed with the DOL. According to the OALJ, the purpose of the changes is to “provide clarity through the use of consistent terminology, structure and formatting so that parties have clear direction when pursuing or defending against a claim.”

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