Depository Institution Employee Protection Remedy (12 U.S. Code § 1831j)

The Depository Institution Employee Protection Remedy, established in 12 U.S. Code § 1831j, safeguards employees of banks, savings institutions, and credit unions from retaliation if they report suspected wrongdoing within their institutions. This protection applies to employees who report violations of federal laws or regulations, as well as potential "gross mismanagement, gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety." The law prohibits employers from taking adverse actions, such as termination, demotion, or harassment, against employees solely for whistleblowing activities. This empowers individuals to raise concerns without fear of retribution, promoting transparency and accountability within financial institutions. If employees believe they have been retaliated against, they can pursue legal remedies through administrative channels or the court system. This legal framework fosters a culture of responsible conduct within depository institutions while protecting employees who speak up against potential misconduct.

(a) In general

(1) Employees of depository institutions

No insured depository institution may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee (or any person acting pursuant to the request of the employee) provided information to any Federal banking agency or to the Attorney General regarding—

(A) a possible violation of any law or regulation; or

(B) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety;

by the depository institution or any director, officer, or employee of the institution.

(2) Employees of banking agencies

No Federal banking agency, Federal home loan bank, Federal reserve bank, or any person who is performing, directly or indirectly, any function or service on behalf of the Corporation may discharge or otherwise discriminate against any employee with respect to compensation, terms, conditions, or privileges of employment because the employee (or any person acting pursuant to the request of the employee) provided information to any such agency or bank or to the Attorney General regarding any possible violation of any law or regulation, gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety by—

(A) any depository institution or any such bank or agency;

(B) any director, officer, or employee of any depository institution or any such bank;

(C) any officer or employee of the agency which employs such employee; or

(D) the person, or any officer or employee of the person, who employs such employee.

(b) Enforcement

Any employee or former employee who believes he has been discharged or discriminated against in violation of subsection (a) may file a civil action in the appropriate United States district court before the close of the 2-year period beginning on the date of such discharge or discrimination. The complainant shall also file a copy of the complaint initiating such action with the appropriate Federal banking agency.

(c) Remedies

If the district court determines that a violation of subsection (a) has occurred, it may order the depository institution, Federal home loan bank, Federal Reserve bank, or Federal banking agency which committed the violation—

(1) to reinstate the employee to his former position;

(2) to pay compensatory damages; or

(3) take other appropriate actions to remedy any past discrimination.

(d) Limitation

The protections of this section shall not apply to any employee who—

(1) deliberately causes or participates in the alleged violation of law or regulation; or

(2) knowingly or recklessly provides substantially false information to such an agency or the Attorney General.

(e) “Federal banking agency” defined

For purposes of subsections (a) and (c), the term “Federal banking agency” means the Corporation, the Board of Governors of the Federal Reserve System, the Federal Housing Finance Agency and the Comptroller of the Currency.

(f) Burdens of proof

The legal burdens of proof that prevail under subchapter III of chapter 12 of title 5 shall govern adjudication of protected activities under this section.

(Sept. 21, 1950, ch. 967, § 2[33], as added Pub. L. 101–73, title IX, § 932(a), Aug. 9, 1989, 103 Stat. 494; amended Pub. L. 102–242, title II, § 251(a)(1)–(3), Dec. 19, 1991, 105 Stat. 2331, 2332; Pub. L. 103–204, § 21(a), Dec. 17, 1993, 107 Stat. 2406; Pub. L. 103–325, title VI, § 602(a)(61), (c), Sept. 23, 1994, 108 Stat. 2291; Pub. L. 111–203, title III, § 363(10), July 21, 2010, 124 Stat. 1555.)