Whistle While You Work: Recent OSHA Actions Reinforce the Importance of Carefully Handling Whistleblower Allegations

September 8, 2017

The Temple 10-Q

The Occupational Safety and Health Administration’s (“OSHA”) Whistleblower Protection Program enforces the whistleblower provisions of 22 statutes protecting employees who report violations of various federal laws. Examples of the types of conduct that these laws protect include (1) participating in safety and health activities; (2) reporting a work-related injury or fatality; or (3) reporting a statutory violation. Employers are prohibited from discriminating against their employees for exercising such rights; employers cannot retaliate against employees for engaging in protected whistleblowing activity.

Similarly, under the False Claims Act (Act), any employee who is discharged, demoted, harassed, or otherwise discriminated against because of lawful acts in furtherance of an action under the Act is entitled to all relief necessary to make the employee whole, which may include reinstatement, double back pay, and compensation for special damages like litigation costs and attorneys’ fees.

Recent OSHA Developments and Activities

Earlier this year, OSHA issued an advisory, Recommended Practices for Anti-Retaliation Programs, for public and private sector employers covered by the 22 whistleblower protection laws that it enforces. It outlines five elements of an effective anti-retaliation program: (1) management leadership, commitment, and accountability; (2) a system for listening to and resolving employees’ concerns; (3) a system for receiving and responding to reports of retaliation; (4) anti-retaliation training; and (5) program oversight.

Employees who believe in good faith that they have been retaliated against can file a complaint with OSHA to request an investigation. In July, OSHA revised its online whistleblower complaint form to ensure whistleblowers file their complaints with the appropriate federal agency for prompt action. OSHA also reviews settlement agreements between complainants and their employers to ensure that they are knowing, voluntary, fair, and in the public interest. At the end of last summer, OSHA issued updated criteria to evaluate whether settlement agreements impermissibly restrict or discourage protected activity. OSHA advised that it reserves the right not to approve settlements with liquidated damages provisions. Also, OSHA will not approve a “gag” provision that prohibits, restricts, or discourages protected activity, such as filing a complaint with a government agency, participating in an investigation, testifying in proceedings, or otherwise providing information to the government. In addition to the OSHA criteria, criminal statutes, such as the Federal Blackmail Statute and New Jersey’s prohibition against Compounding (providing a benefit to keep someone from reporting a crime or giving information during a criminal investigation), would likely prohibit such “gag” provisions.

In the past year, OSHA has engaged in a number of whistleblower-protection enforcement activities that should caution employers about how to respond to a whistleblower complaint. Regarding some of these enforcement actions, OSHA has stated that it “will continue to hold companies accountable that violate . . . whistleblower provisions,” and “[t]he department will do everything in its power to prevent retaliation against workers who report unsafe working conditions.”

Most recently, in July, OSHA ordered Wells Fargo to reinstate and pay $577,500 in back wages, damages, and other fees to a former branch manager who was terminated after she reported that several “private bankers” working under her were opening customer accounts and enrolling customers in bank products without their knowledge, consent, or appropriate disclosures—conduct which the terminated employee reasonably believed to be bank, wire, and mail fraud. OSHA determined the terminated employee’s reports to Wells Fargo were protected whistleblower activity under the Sarbanes-Oxley Act and the Consumer Financial Protection Act of 2010, and the reports were at least a contributing factor in her termination.

Compliance Policies and Recommendations

To avoid costly enforcement actions, companies should have clear compliance policies requiring employees to report, in good faith, violations of law or policy, and companies must be prepared for whistleblower and retaliation complaints before any such complaints are received. Companies should consider using anonymous complaint and retaliation hotlines, and have written policies and procedures outlining the proper reporting chains for whistleblower complaints and allegations of retaliation. This will help route whistleblower and retaliation complaints to the appropriate individual(s) within a company to ensure such allegations are handled properly.

Companies should also have clear policies in place explaining that employees will not be retaliated against for making good faith whistleblower complaints or engaging in any protected activity. Anti-retaliation training should be conducted regularly. Further, companies should have a system to protect the employment status of a whistleblower or employee who engages in any protected activity from demotion, pay decreases, or termination until the complaint is fully investigated and found to be without merit.

Once a whistleblower complaint is received, employers must carefully investigate the complaint to mitigate the risk of enforcement action. Upon receipt of such a complaint, companies should begin an investigation into the merits of the complaint. Companies should seek legal advice and, if appropriate, hire independent outside counsel to conduct the investigation.

Given OSHA’s recent focus on protecting whistleblowers and the costs that companies incur when faced with an OSHA enforcement action, companies should promptly reevaluate their compliance policies and procedures for handling such protected activity.

“Whistle While You Work: Recent OSHA Actions Reinforce the Importance of Carefully Handling Whistleblower Allegations,” by Lauren E. O’Donnell was published September 8, 2017, in The Temple 10-Q, Temple University’s Business Law Magazine. To read this article online, please click here.