RULE 32

Your Disclosures Must be Protected Under Law

Your Disclosures Must be Protected under Law

Introduction

Whistleblowing is a fundamental aspect of free speech that allows individuals to expose wrongdoing. However, not all disclosures are legally protected, and it’s important to ensure that yours are before proceeding.

To do this, it’s crucial to know the specific mandatory filing procedures outlined in various laws such as the False Claims Act, the Motor Vehicle Safety Act, the Anti-Money Laundering Act, the Internal Revenue Code, the Securities Exchange Act, Foreign Corrupt Practices Act, and the Commodity Exchange Act.

Furthermore, it’s essential to understand the different ways you can report misconduct, including under Dodd-Frank and the Sarbanes-Oxley Act, to Congress, federal law enforcement, the U.S. Attorney General, internal compliance, the media, or as an attorney.

Each reporting method may have its own set of rules, so it’s important to read and understand them thoroughly to ensure your disclosure is protected.

Resources

Under the public policy exception most (if not all) state courts protect the disclosure of a “statutory violation for the public’s benefit”:

  • Gantt v. Sentry, 824 P.2d 680 (Calif. 1992) (cases interpreting state public policy exception) or an employee’s exercise of a statutory or constitutional right. Gantt v. Sentry, 824 P.2d 680 (Calif. 1992)
  • Thompson v. St. Regis Paper Co., 685 P.2d 1081 (Wash. 1984) (cases interpreting state public policy exception).

Also, most (if not all) states that recognize the public policy exception also protect disclosures that are required under law (such as giving truthful testimony in court), see:

Court decisions that provide a good explanation of the various interpretations of “public policy” include:

Most state courts protect internal complaints to management. However, caution must be exercised when making internal disclosures, as under federal law these types of disclosures most likely will not be protected unless specifically covered under federal law, see:

Some state laws require, under some circumstances, that an employee make an initial complaint to his or her management:

Other states protect internal disclosures, even if not covered under federal law:

Other types of conduct protected under the public policy exception have included:

Testimony before city council:

Threat to make protected disclosure:

Unsafe employer practices:

Violation of criminal laws:

Broad interpretation of scope of protected activity under federal laws:

See also definition of protected activity in the EEOC Compliance Manual, § 8-II(B)(2).

The Lloyd-LaFollette Act of 1912 provides that “the right of employees” to “petition Congress or a Member of Congress” and to “furnish information” to Congress “may not be interfered with”:

  • H. Rep. 388, 62nd Cong., 2nd Sess. (1912)

The congressional debates on this early whistleblower law are at 48 Congressional Record 671–77, 4513, 4654, 10728–10733, 10792–10804, and 10676 (1912). Congress also enacted anti-gag rules as part of the appropriations process (i.e., prohibiting federal agencies from spending any money on gag orders that restrict employee communications with Congress), see:

Most whistleblower statutes explicitly protect these contacts. The federal obstruction of justice statute makes it a criminal offense to harm any person in their livelihood who provides truthful information to federal law enforcement:

Disclosing allegations though an attorney:

Failure to raise concerns through the chain of command or by using mandatory procedures:

Internal reports “before plaintiff puts together all the pieces of the puzzle”:

The most important cases on this issue come from the Supreme Court, which cautions employees that if a statute does not explicitly protect internal disclosures, most likely they will not be protected:

  • In Digital Realty Trust v. Somers, 138 S.Ct. 767 (2018), the High Court found that only contacts with the SEC were protected.
  • In Garcetti v. Ceballos, 547 U.S. 410 (2006), the High Court held that internal complaints were not protected in employment cases under the First Amendment.

A number of well-reasoned older cases take a more expansive view of internal protected disclosures, including Munsey v. Morton, 507 F.2d 1202 (D.C. Cir. 1974):

  • Pickering v. Board of Education, 391 U.S. 563 (1968), and Andrew v. Clark, 561 F.3d 261 (4th Cir. 2009) (First Amendment)
  • Dep’t of Homeland Sec. v. MacLean, 135 S.Ct. 913 (2015) (contacting news media protected under Whistleblower Protection Act)
  • Donovan v. R.D. Anderson, 552 F.Supp. 249 (D. Kan. 1982) (contacting news media protected under OSHA)
  • Chambers v. Dept. of Interior, 602 F.3d 1370, 1379 (Fed. Cir. 2010) (media contacts protected under Whistleblower Protection Act)
  • Haney v. North American Car Corp., 81-SWDA-1, Recommended Decision and Order of Labor Department Administrative Law Judge (Aug. 10, 1981), affirmed, Secretary of Labor (June 30, 1982) (under environmental whistleblower laws)
  • Diaz-Robainas v. Florida Power & Light Co., 92-ERA-10, Order of Secretary of Labor (Jan. 10, 1996) (Atomic Energy Act)
  • Wrighten v. Metropolitan Hosp., Inc., 726 F.2d 1346, 1355 (9th Cir. 1984) (holding a press conference is protected under Title VII)
  • Huffman v. Office of Personnel Management, 263 F.3d 1341, 1351 (Fed. Cir. 2001) (citing Horton, 66 F.3d at 282, holding that media disclosures are an indirect way of disclosing information of wrongdoing to a person in a position to provide a remedy) (Whistleblower Protection Act case)

In a 2011 decision, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit broke with most precedent and found that employee contacts with the press were not protected under 18 U.S.C. section 1514A(a)(1) of the Sarbanes-Oxley Act.

However, the court left open the issue as to whether contacts with the press were protected under another clause of the act, section 1514A(a)(2):

Even if a contact with the news media is protected under federal law, whistleblowers who use a state law as the basis for a complaint risk losing their case:

  • Pacheco v. Waldrop, 84 F.3d 606 (W.D. Ky. 2015) (media disclosure not protected under state whistleblower statute)

The significant impact of whistleblower disclosures to the news media is well documented in U.S. history, see:

Opposing conduct made illegal under federal law:

Oral complaints

Participating in legal or administrative proceedings:

Public interest organization:

  • Nunn v. Duke Power Co., 84-ERA-27, Decision and Order of Deputy Undersecretary of Labor (July 30, 1987) (Atomic Energy Act).

Quality control inspectors or compliance officials reporting violations:

Refusing to accept a “hush money” settlement agreement:

  • CL&P v. Secretary of Labor, 85 F.3d 89 (2nd Cir. 1996)

Refusing to perform dangerous work:

Statements made to employer during internal investigation:

Under Department of Labor precedent, one-party taping for the purpose of gathering evidence of retaliation or violations of law (if permitted under state law), see:

  • Benjamin v. Citationshares Management, 2010-AIR-1 (DOL Administrative Review Board, Nov. 5, 2013)
  • Mosbaugh v. Georgia Power Co., 91-ERA-1/11 (Secretary of Labor, Nov. 20, 1995)

Testimony in court or deposition:

  • Merritt v. Dillard Paper Co., 120 F.3d 1181 (11th Cir. 1997) (protected under Title VII’s anti-retaliation provision)
  • Karl v. City of Mountlake, 678 F.3d 1062 (9th Cir. 2012)
  • Alpha Energy Savers Inc. v. Hansen, 381 F.3d 917 (9th Cir. 2004)
  • Haddle v. Garrison, 525 U.S. 121 (1998) (under 42 U.S.C. § 1985)

Threat to make protected disclosure:

  • Macktal v. DOL, 171 F.3d 323 (5th Cir. 1999) (Atomic Energy Act)
  • Thomas v. City of Blanchard, 548 F.3d 1317 (10th Cir. 2008) (First Amendment)

Union safety committee:

  • Cotter v. Consolidated Edison, 81-ERA-6 (Department of Labor, July 7, 1987), affirmed, Consolidated Edison v. Donovan, 673 F.2d 61 (2nd Cir. 1982).

Attorneys can file retaliation suits under federal law:

  • Van Asdale v. Int’l Game Tech., 577 F.3d 989 (9th Cir. 2009)
  • Willy v. ARB, 423 F.3d 483 (5th Cir. 2005)
  • Kachmar v. SunGard, 109 F.3d (3rd Cir. 1997)

17 Code of Federal Regulations Part 205 (SEC rules on attorney reporting).

Lawrence West, “Can Attorneys be Award-Seeking SEC Whistleblowers,” Harvard Law School Forum on Corporate Governance and Financial Regulation (2013)

Protected disclosures can lose their protection and become an independent justification for disciplining an employee if the activities are illegal, insubordinate, or unjustifiable:

  • Dunham v. Brock, 794 F.2d 1037 (5th Cir. 1986) (“abusive or profane language coupled with defiant conduct” stripped employee of protection, even though disclosure was safety related)
  • Pettway v. American Cast Iron, 411 F.2d 998 (5th Cir. 1969) (libelous complaint filed with EEOC may be protected)
  • Linn v. United Plant Guard, 383 U.S. 53 (1966) (applying New York Times v. Sullivan standard in evaluating protected speech under NLRA)
  • O’Day v. McDonnell Douglas, 79 F.3d 756 (9th Cir. 1996) (engaging in protected activity “is not” a “license to flaunt company rules”).

However, courts have recognized that employees filing a protected complaint “may well engender disruption, controversy, and adverse publicity” but “nevertheless” are fully protected because “Congress has elected to protect employees who file such charges from retaliation . . . allegations of disruption and injury to close working relationships become irrelevant”:

  • Curl v. Leroy Reavis and Iredell County, 740 F.2d 1323 (4th Cir. 1984).

  • 17 C.F.R. Part 205, Rules of Professional Responsibility for Attorneys under the Securities and Exchange Commission
  • Scope of protected activity is based on law for which you are filing a claim. This is explained in Rules 4 – 15, 16-19

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