The Facts. Miriam Regalado and her fiance, Eric Thompson, both worked for North American Stainless (“NAS”). Ms. Regalado filed a charge of sex discrimination against NAS, and in February 2003 the Equal Employment Opportunity Commission notified NAS. Three weeks later, NAS fired Mr. Thompson.

The Case. Thompson brought a Title VII retaliation suit against NAS claiming NAS fired him in retaliation for Regalado filing her discrimination complaint. NAS claimed Thompson could not bring a retaliation claim under Title VII because Regalado, not Thompson, had filed the underlying complaint of discrimination. NAS contended Title VII only protected from retaliation the person who filed a complaint of discrimination, not third parties.

The Ruling. The Supreme Court, in a brief and direct opinion written by Justice Scalia, held NAS’s alleged conduct was a violation of Title VII’s anti-retaliation provision because the conduct might well have dissuaded a reasonable person from making a complaint if that person knew her fiance would be fired in retaliation. That still left the important question of whether Thompson, who had not filed the underlying sex discrimination complaint, could bring a case for retaliation. The Supreme Court said he could because he was an employee working for the same employer and was in the “zone of interest” sought to be protected by Title VII’s anti-retaliation provision.

Why The Case is Important. The decision in this case means employers cannot retaliate or threaten retaliation against relatives, fiances and others in close relationship with the victim of discrimination to scare her or others into not filing complaints of discrimination. I’ve had clients and potential clients ask me this very question in the past and I’ve had to tell them their employer was free to retaliate against the employee’s relatives. Fortunately, I will now be able to give a different answer. GSF

Section 402 of the Act provides broad whistleblower protection for employees engaged in the manufacture, processing, packing, transporting, distribution, reception, holding or importation of food.

Protected Conduct. Whistleblowers may not be discharged or otherwise suffer adverse employment actions for engaging in certain protected activity such as when an employee:

1. provides information regarding conduct the employee reasonably believes to be a violation of, any provision of the Federal Food, Drug and Cosmetic Act (“FDCA”) or any order, rule, regulation, standard, or ban under the FDCA;
2. testifies, or is about to testify, in a proceeding concerning such violation;
3. assists or participates, or is about to assist or participate, in such a proceeding; or
4. objects to, or refuses to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believes to be in violation of any provision of the FDCA, or any order, rule, regulation, standard, or ban under the FDCA.

Good Faith Belief. An employee need not disclose an actual violation of food safety laws so long as he has a reasonable belief one is occurring and he suffers discrimination as a result.  In other words, even if an employee is mistaken in his belief the conduct is protected.

Standard of Proof. These protections are typical of many whistleblower protections, and are nearly identical to Title X of the Dodd-Frank Consumer Protection Act signed by President Obama last July and previously discussed here.  Like the Consumer Protection Act, an aggrieved whistleblower only need show the protected activity was a contributing factor in the employer’s decision to discriminate.  Thus, even if an employer has legitimate reasons for the adverse employment action, as long as the employer was influenced at least in part by a retaliatory motive, its conduct is illegal.  However, it is a defense if the employer is able to show by clear and convincing evidence they would have terminated (or demoted or taken other such similar actions) against an employer even had the employer not blown the whistle.

Remedies. The Act provides remedies to employees including reinstatement of the employee to his prior position (or prior conditions of employment such as hourly rate seniority status or other benefits), back pay, compensatory damages, costs and reasonable attorneys fees.

Deadlines. A whistleblower must file a complaint of retaliation under the Act with the Department of Labor (“DOL”) within 180 day of the retaliatory act. If the DOL has not issued a final decision within 210 day after the complaint is filed, the whistleblower may file a lawsuit and have the case heard by a jury.

The Act suffers from a major infirmity of much of the whistleblower and anti-discrimination legislation and that is the requirement the whistleblower file an administrative complaint with the government. Under many laws this is the only avenue available to the whistleblower. At least the Act provides a jury trial when the DOL does not reach a timely decision. GSF

In 2008, the Texas Supreme Court decided a case called Igal v. Brightstar Information Technology Group, Inc., 250 S.W.3d 78 (Tex. 2008).  In that case, the employee (Mr. Igal) filed a Payday Law claim with the Texas Workforce Commission (“TWC”), who decided the claim had not been timely filed. Claims filed under the Texas Payday Law must be filed with the TWC within 180 days from the date the wages become due.

Mr. Igal then filed a lawsuit against his former employer for breach of contract.  The deadline in Texas for filing a breach of contract claim  for wages is 4 years from the date the wages became due. The Supreme Court held that because Mr. Igal had chosen to file the wage claim with the Texas Workforce Commission, after the TWC ruled against him, he could no longer pursue a claim in court for breach of contract.

What this means is if you have a wage claim for a significant amount of money, you should seek legal advice before filing a Payday Law claim with the TWC. Some claims are better suited for a judge or jury than an administrative determination by the TWC. Conversely, some claims have a better chance to prevail at the TWC than in court.

It’s unfortunate a law intended to simplify the collection of wages has, because the Texas Supreme Court’s decision, complicated it. It increases the price of justice, and no one, except lawyers, benefit from that.

Bottom line: if you have a significant wage claim, and have time before the statute of limitations deadline, talk to a lawyer before you file it. GSF

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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”).  I have addressed here in previous posts the employment law provisions of the WSRCPA.  For easier reference I have summarized those provisions here with links to the posts.

1.  Amendments to the Commodity Exchange Act. Section 748 of the WSRCPA amends the Commodity Exchange Act by providing a financial award for whistleblowers and protecting them from retaliation.

2.  Amendments to the Securities Exchange Act. Section 922 of the WSRCPA amends the Securities Exchange Act by providing a financial award for whistleblowers and protection from retaliation.

3.  Amendments to the Sarbanes-Oxley Act. Section 929A of the WSRCPA amends the Sarbanes-Oxley Act of 2002 (“SOX”) by prohibiting retaliation against those employed by subsidiary and affiliates of publicly traded companies, extending the statute of limitations on SOX retaliation claims from 90 to 180 days, providing for a jury trial and making pre-dispute SOX claim waivers and arbitration agreements unenforceable.

4.  The Consumer Financial Protection Act of 2010. The WSRCPA includes the new Consumer Financial Protection Act of 2010 (“CFPA”).  The CFPA creates a Bureau of Consumer Financial Protection that regulates the consumer financial products and services industry. Section 1057 of the WSRCPA is the anti-retaliation provision of the CFPA that protects whistleblowers in the financial products and services industry and provides them with a private cause of action.

5.  Amendments to the False Claims Act. Section 1079A of the WSRCPA amends the False Claims Act to broaden the protections afforded whistleblowers involved in qui tam actions to include those “associated with” the whistleblower.  It also adds a three year statute of limitations.

The WSRCPA is consistent in its attempts to protect whistleblowers with more favorable procedures, broader protections and damages and a disdain for employer-mandated arbitration.  GSF

]]> http://www.fiddlerlaw.com/employment-law-provisions-of-dodd-frank-wall-street-reform-and-consumer-protection-act.php/feed 0 http://www.fiddlerlaw.com/dodd-frank-wall-street-reform-and-consumer-protection-act-part-v.php http://www.fiddlerlaw.com/dodd-frank-wall-street-reform-and-consumer-protection-act-part-v.php#comments Thu, 29 Jul 2010 12:00:30 +0000 G. Scott Fiddler http://www.fiddlerlaw.com/?p=841

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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”). This post is the fifth in a five-part series on the employment law provisions of the WSRCPA. This post examines Section 1079A of the WSRCPA, which amends the False Claims Act.

The False Claims Act. The False Claims Act (“FCA”) permits whistleblowers to bring a lawsuit (“a qui tam action”) on behalf of the federal government against federal contractors who have committed fraud against the federal government.

Whistleblower Reward Under The FCA. The whistleblower can recover between 15% and 25% of the monies collected by the government as a result of the qui tam action. Popular targets for FCA lawsuits have been defense contractors and those involved in healthcare fraud.

FCA Protects Whistleblowers. The FCA protects employees, contractors and agents from threats, harassment, discrimination, demotion, suspension and discharge resulting from their attempts to stop violations of the FCA.

Amendments To The FCA. Section 1079A of the WSRCPA amends the FCA to broaden the protections afforded whistleblowers involved in qui tam actions to include those “associated with” the whistleblower.  It also adds a three year statute of limitations.

The Takeaway. Section 1079 is consistent with the other employment provisions of the WSRCPA which strengthen the protections of whistleblowers in the workplace.  GSF

Photo courtesy of ©iStockphoto/DNY59

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”).

This post is the fourth in a five-part series on the employment law provisions of the WSRCPA. This post examines employment-related provisions Section 1057 of the WSRCPA, which is part of the new Consumer Financial Protection Act of 2010 (“CFPA”).  The CFPA creates a Bureau of Consumer Financial Protection (“Bureau”) that regulates the consumer financial products and services industry.

Which Employers Are Affected. The CFPA prohibits a “covered person or service provider” (anyone that offers or provides a “consumer financial product or service”) from engaging in certain types of discrimination against employees.  The definition of “financial product or service” found in Section 1002(15) of the WSRCPA is key because it determines who is a covered person or service provider.  This definition is long–too long to list here–and the coverage is broad.

Who Is Protected. “Covered employee[s]” are protected.  A covered employee is any individual performing tasks related to the offering or provision of a consumer financial product or service.  This apparently includes anyone from the receptionist to the CEO of the institution.

What Is Protected. Covered employees are protected against discrimination or termination on the basis of: (1) having provided, or been about to provide, information to the employer, the Bureau, or any other government authority or law enforcement agency relating to any act or omission the employee reasonably believes is a violation of the CFPA or any conduct prescribed by the Bureau;  (2) participating in a Bureau proceeding; (3) instituting a proceeding under any Federal consumer financial law; or (4) having objected to, or refused to participate in, any activity reasonably believed to be in violation of any law, regulation or standard of or under the jurisdiction of the Bureau.

Procedure. Unfortunately the procedure set up for adjudicating these claims is a Byzantine combination of an administrative review by the Department of Labor (“DOL”), with an appeal to the local circuit Court of Appeals, or, if the DOL does not act in a timely fashion in adjudicating the claim, a jury trial in a federal district court.  A claim must be filed with the DOL within 180 days of the violation.

Remedies. The remedies available to a claimant include reinstatement, back pay with interest, compensatory damages, costs and attorney’s fees.  Like the other employment laws in the WSRCPA, pre-dispute waivers and arbitration agreements are not enforceable. GSF

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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”). This post is the third in a five-part series on the employment law provisions of the WSRCPA.

Sarbanes-Oxley Amendments. This post examines those provisions of the WSRCPA which amend the Sarbanes-Oxley Act of 2002 (“SOX”).

SOX Failed To Protect Whistleblowers. In terms of protecting whistleblowers from retaliation, SOX has been a big disappointment.  SOX cost American businesses a lot of money and created lots of work for accounting firms, but it fell well short of protecting employees who valued obedience to law and conscience over a paycheck.

The SOX Numbers. Since SOX became law, the United States Department of Labor (“DOL”), who investigates SOX whistleblower claims, has found in favor of whistleblowers only 25 times out of the 1,066 claims filed through June 30, 2010. If you like percentages, that means the DOL finds in favor of whistleblowers only 2% of the time.

Why SOX Claims Fail. The reasons whistleblowers don’t prevail in SOX claims are essentially three.  First, the DOL is, like most government agencies, understaffed.  They don’t have the manpower to thoroughly investigate claims.  Second, retaliation is a matter of intent and DOL investigators don’t like resolving cases over issues of intent.  Juries are much better at determining questions of intent. Third, the combination of a ridiculously short statute of limitations (90 days), narrow reading of the law defining protected conduct and who is protected led to the DOL dismissing many cases as a matter of law before even reaching the question of whether there was any retaliation. The WSRCPA takes serious steps toward addressing some of these deficiencies.

The Amendments. The WSRCPA amends SOX by changing the statute of limitations from 90 days to 180 days after the employee became aware of the violation. The WSRCPA also extends the anti-retaliation protections to employees of any subsidiary or affiliate whose financial information is included in the consolidated financial statements of a publicly traded company. Lastly, the WSRCPA provides for a trial by jury of SOX claim appealed from the DOL and makes any pre-dispute arbitration or waiver agreement of a SOX claim unenforceable.

The Takeaway. The WSRCPA takes some major steps toward helping SOX fulfill one of its major goals of protecting whistleblowers. GSF

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On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”).

This post is the second in a five-part series on the employment law provisions of the WSRCPA. This post examines Section 922 of the WSRCPA, which amends the Securities Exchange Act by providing a financial award for whistleblowers and protection from retaliation.

Whistleblower award. Section 922 provides an award for whistleblowers who voluntarily provide original information to the Securities and Exchange Commission (“Commission”) that leads to the successful enforcement of an action brought by the Commission and results in monetary sanctions of more than $1,000,000.  The amount of the award to the whistleblower will range between 10% and 30% of the monetary sanctions collected by the Commission. The award is not available to, among others, a person convicted of a crime related to the unlawful action made the basis of the whistleblower report, employees of a self-regulatory agency, the Department of Justice or other law enforcement organization.  An applicant for an award has 30 days to appeal a determination made by the Commission, and the appeal must be filed in the appropriate court of appeals of the United States. There is also a confidentiality provision in Section 922 designed to protect the identity of the whistleblower during the investigation.

Anti-Retaliation Provision. No employer may threaten, harass, discriminate against or discharge a whistleblower for having provided information to the Commission or for assisting in an investigation or proceeding initiated by the Commission related to such information.  An aggrieved whistleblower must file a lawsuit in federal district court within three years of when he knew or should have known of the facts “material to the cause of action” but not more than six years after the violation occurred.  The remedies available to a prevailing whistleblower include reinstatement with bridged seniority, two times the amount of back pay and interest owed to the whistleblower, and including attorney’s fees, costs and expert witness fees. The Commission is given authority to prohibit by regulation the enforceability of pre-dispute arbitration agreements for such claims, and there is a provision prohibiting the preemption of other claims the whistleblower has under state or federal law.

The takeaway. Section 922′s amendments to the Securities Exchange Act are almost identical to Section 748′s amendments to the Commodity Exchange Act previously discussed here, with a few exceptions.  The remedies under Section 922 include double back pay and the statute of limitations are longer than those under Section 748.  However, agreements for pre-dispute arbitration are not prohibited under Section 922, although the Commission has the authority to prohibit them in the future.  GSF

Photo courtesy of ©iStockphoto/DNY59

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“WSRCPA”).

This post is the first in a five-part series on the employment law provisions of the WSRCPA. This post examines Section 748 of the WSRCPA, which amends the Commodity Exchange Act by providing a financial award for whistleblowers and protecting them from retaliation.

Whistleblower award. Section 748 provides an award for whistleblowers who voluntarily provide original information to the Commodities Future Trading Commission (“Commission”) that leads to the successful enforcement of an action brought by the Commission and results in monetary sanctions of more than $1,000,000.  The amount of the award to the whistleblower will range between 10% and 30% of the monetary sanctions collected by the Commission. The award is not available to, among others, a person convicted of a crime related to the unlawful action made the basis of the whistleblower report, employees of an appropriate regulatory agency, futures association, the Department of Justice or other law enforcement organization.  An applicant for an award has 30 days to appeal a determination made by the Commission, and the appeal must be filed in the appropriate court of appeals of the United States. There is also a confidentiality provision in Section 748 designed to protect the identity of the whistleblower during the investigation.

Anti-Retaliation Provision. No employer may threaten, harass, discriminate against or discharge a whistleblower for having provided information to the Commission or for assisting in an investigation or proceeding initiated by the Commission related to such information.  An aggrieved whistleblower must file a lawsuit in federal district court within two years of the wrongful act (although federal employees must follow a separate administrative procedure).  The remedies available to a prevailing whistleblower include reinstatement with bridged seniority, back pay and interest, and any other special damages, including attorney’s fees, costs and expert witness fees.   Two other provisions are of note.  One makes pre-dispute arbitration agreements covering such claims unenforceable.  Another provision prevents the preemption of other claims the whistleblower has under state or federal law.

The takeaway. The confluence of a potential financial award plus protection against retaliation should help loosen fear’s grip on those reluctant to reveal incriminating information, though I suspect the $1,000,000 requirement will make the award something better known in the promise than reality.  GSF

1.     Retaliation

2.     Race

3.     Sex

4.     Age

5.     Disability

6.     National Origin

7.     Religion

8.     Equal Pay Act

Significant trends for 2009 include retaliation claims overtaking race discrimination claims as the most popular charge of discrimination and the sharp increase in disability claims, which was an expected result of the amendments to the American’s with Disabilities Act.  GSF