Stimulus Package Provides for Employee Whistleblower Protection

Employers will be impacted by the Stimulus Package.  We’ve previously addressed the impact the $787 billion Economic Stimulus Package (a.k.a. the American Recovery & Reinvestment Act (the “Recovery Act”)), will have on employers’ obligations with respect to COBRA, the Children’s Health Insurance Program Reauthorization Act (CHIPRA), as well as the potential impact on available state unemployment-insurance benefits and tax implications.   This post highlights the McCaskill Amendment – the Act’s whistleblower-protection provision.

The amendment, introduced by Claire McCaskill (D-MO), includes several provisions.  First, the amendment proposes to permit inspector-general investigations.  Second, it proposes to gives employees rights to jury trials.  Third, it requires employers that receive Stimulus funds to inform employees of their new whistleblower rights.whistle

That’s right employers, the Act imposes yet another obligation.

Under the Amendment, an employee of any non-federal employer receiving Stimulus funds may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing, including a disclosure made in the ordinary course of an employee’s duties, to the Board, an inspector general, the Comptroller General, a member of Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee, a court or grand jury, the head of a Federal agency (yes, the list is that long!) information that the employee reasonably believes is evidence of:

  • gross mismanagement of an agency contract or grant relating to Stimulus funds,
  • a gross waste of Stimulus funds,
  • a substantial and specific danger to public health or safety related to the implementation or use of Stimulus funds,
  • an abuse of authority related to the implementation or use of Stimulus funds, or
  • a violation of law, rule, or regulation related to an agency contract or grant awarded or issued to Stimulus funds.

Whew.

Not only is the list of potential topics quite broad, but the threshold for an employee complaint is quite low.  The standard is simply what the employee reasonably believes. A person alleging reprisal under the amendment is deemed to have affirmatively established the occurrence of the reprisal if he can demonstrate that his whistle blowing was a contributing factor in the reprisal.

A whistleblower can premise his case on circumstantial evidence, including: evidence that the official undertaking the reprisal knew of the disclosure, evidence that the reprisal occurred within a period of time after the disclosure such that a reasonable (there’s that word again!) person could conclude that the disclosure was a contributing factor in the reprisal.

Employers, if you want to rebut the whistleblower’s case, you need to do so under the rigor of clear and convincing evidence. An employer needs to show that it would have taken the action constituting the reprisal in the absence of the disclosure.

Finally, the McCaskill Amendment does not preempt, preclude, or limit state law. The amendment provides rights in addition to existing whistleblower laws.

The bottom line is that the amendment gives employees the right to act as watchdogs for how an entity spends its Stimulus funds, which is not entirely a bad thing. In fact, we can all be watchdogs and use the federal government’s website, www.recovery.gov, which has been set up to allow taxpayers to figure out where Recovery Act money is going. Nonetheless, the amendment, like the other portions of the Act previously highlighted, burdens employers with one more responsibility.

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