Employees have whistleblower claims when their employer fires, demotes or otherwise punishes them for disclosing, objecting to or refusing to participate in illegal conduct by the employer or by co-employees. While these claims can be brought in New Jersey state court for damages incurred as a result of the retaliatory termination, there are also various laws and regulations that allow a whistleblower to recover a reward from either the State of New Jersey or the federal government where individuals, entities or companies attempt to defraud the government or engage in securities fraud or tax fraud.
Litigating whistleblower retaliation claims can be very complex. They are usually very hard fought and take a long time to get to trial or settle. However, the attorneys at Green Savits have represented numerous whistleblowers over the years against both private employers and governmental entities and have a successful track record doing so.
In fact, the very first case under New Jersey’s whistleblower statute to be decided by the New Jersey Supreme Court in the whistleblower’s favor, Abbamont v. Piscataway Bd. Of Education, was tried and litigated all the way to the New Jersey Supreme Court by Green Savits partner, Glen Savits. And partners Savits and Jon Green (who orally argued) were amicus brief advocates in Green v. Jersey City Bd. Of Educ. where the New Jersey Supreme Court held that a whistleblower may collect punitive damages against a state or municipal governmental entity.
Below is a brief description of various whistleblower laws that are designed to protect whistleblowers. If you are a worker who suffered retaliation or termination for exposing your wrongdoing by an employer, please call Green Savits, LLC today at (973) 695-7777.
1. New Jersey Conscientious Employee Protection Act
New Jersey’s whistleblower statute, the Conscientious Employee Protection Act (“CEPA”) is one of the most favorable whistleblower laws in the country. CEPA protects whistleblowers from retaliation in the workplace for their complaints, regardless of whether the conduct they complained of violates anti-discrimination statutes, other laws, or public policies such as those that protect consumers, investors, patient safety or the environment.
Under the New Jersey statute, whistleblowers who succeed in proving their case in court may be awarded back wages, lost future earnings, emotional distress damages, and attorney’s fees. If a jury decides that an employer’s retaliation is especially egregious, then additional damages to punish the employer may be awarded, even if the claim is against a public entity.
2. Sarbanes-Oxley Act/Dodd-Frank Act
The Sarbanes Oxley Act (“SOX”) and the Dodd-Frank Act are federal laws that protect whistleblowers who disclose, object to or refuse to participate in conduct they reasonably believe violates securities laws. SOX originally became law in 2002 because of the Enron and World-Com securities fraud scandals that were brought to light by whistleblowing employees who were retaliated against and fired. In 2010, SOX’s whistleblower protections were strengthened and expanded with the passage of the Dodd-Frank Act resulting in a variety of paths to justice for employees who were illegally retaliated against.
Whistleblowers in Publicly Traded Companies under SOX, as amended by Dodd-Frank
Under Section 806 of SOX, employees of publicly traded companies and their subsidiaries are considered “whistleblowers” and protected from retaliation when they provide information or otherwise assist in investigations regarding conduct they reasonably believe violates the criminal provisions of SOX, any Securities and Exchange Commission (“SEC”) rule or regulation, or any federal law relating to fraud against shareholders.
Employees who have been retaliated against in violation of this section of SOX must file an administrative complaint with the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) within 180 days from the date they became aware that they were retaliated against. After investigating the claim, OSHA decides whether there is probable cause to believe that the employee was illegally retaliated against.
If OSHA does not make a determination within 180 days from the filing of the complaint, the whistleblower may then file their case to be decided by the federal courts after providing 15 days’ written notice of his/her intention to do so to OSHA and all other parties. The whistleblowing employee has four (4) years from the date that he/she became aware of the employer’s retaliatory conduct to file such a claim in federal court.
In order to prove illegal retaliation, whistleblowers under section 806 must show that they experienced an unfavorable personnel action and that their whistleblowing activity was a contributing factor to this retaliation. Then, unless the employer shows by “clear and convincing evidence” (a very high burden!) that it would have taken the same action regardless of the whistleblowing activity, the employee wins and may be awarded reinstatement with seniority (if appropriate), back pay with interest, and compensation for any “special damages” including attorneys’ fees and costs. Depending on the court, employees whose whistleblower actions under SOX are successful might also be awarded future lost earnings and emotional distress damages.
Whistleblowers in Consumer Financial Services Organizations under Dodd-Frank
In addition to amending SOX, Dodd-Frank also created separate whistleblower protections for employees of consumer financial services organizations, which is defined broadly to include companies that, among other things, take deposits, extend credit, broker loans, provide property appraisals, or provide financial advisory, debt management, or credit counseling services. Under Dodd-Frank, an employee is considered a whistleblower because he/she:
- Provided or is about to provide information to his/her employer, the Bureau of Consumer Financial Protection (“CFPB”), or any government authority or law enforcement agent about conduct the employee reasonably believes is a violation of Dodd-Frank or any law or rule of the CFPB;
- Testified or will testify in any proceeding resulting from the administration or enforcement of Dodd Frank or any law or rule of the CFPB;
- Filed any proceeding under any Federal consumer financial law; or
- Objected to or refused to participate in conduct the employee reasonably believed to be a violation of any law or rule of the CFPB.
Under this provision of Dodd-Frank, a whistleblower must still file a charge with the Department of Labor (“DOL”) within 180 days of the retaliatory conduct. However, if the DOL fails to decide whether there is probably cause to believe illegal retaliation occurred within 210 days after the employee filed the complaint or within 120 days after the DOL makes a preliminary determination, either party may file the case in Federal court and has the right to a jury trial.
An employee who prevails (using very similar standards of proof as whistleblowers under SOX, section 806, discussed above), shall be awarded back pay, compensatory damages, attorneys’ fees and expert witness costs.
Securities Law Whistleblowers under Dodd-Frank
In Section 922(h) of the statute, Dodd-Frank further expands whistleblower protections to cover employees of any employer (not just publicly traded companies) who
- Provide information to, assist in an investigation by, or testify at the SEC; or
- Make any disclosure (including complaints internally to the employer) required or protected by SOX, the Securities Exchange Act of 1934, or any law or rule of the SEC.
Because of this section of Dodd Frank, a SOX whistleblower also has the option to bypass filing with OSHA and instead file directly in federal court within six (6) years from the date of the violation or within three (3) years from when the employee knew or reasonably should have known about the facts leading to their claim. If a whistleblower wins in federal court, he/she may be reinstated (if appropriate) and/or awarded double back pay with interest, and attorney’s fees and other litigation costs. Unlike CEPA, SOX whistleblowers filing directly in federal court under Dodd-Frank are not entitled to future lost earnings, emotional distress, or punitive damages.
Bounty Rewards for Whistleblower Under Dodd-Frank
Dodd-Frank also provides whistleblowers who voluntarily report violations of securities laws to the Securities and Exchange Commission (“SEC”) with a monetary reward for their reporting. To collect a reward, the whistleblower must be the original source of the information to the SEC and the information must result in a recovery by the SEC of greater than $1 million. The whistleblower may then be awarded anywhere from 10%-30% of the total amount recovered by the SEC, depending on the circumstances.
However, employees of the federal government or self-regulatory agencies, members of law enforcement, employees employed by the accused company’s independent auditor, or employees who have been convicted of a crime related to the information given to the SEC are not permitted to receive an award under Dodd-Frank.
After reviewing the reward claim form submitted through the SEC’s website, the SEC will investigate and determine if a reward is warranted based on the information given, whether the whistleblower has another legal proceeding pending for illegal retaliation by the employer, whether the whistleblower is represented by counsel (which is permitted) and the interest of the SEC to deter the conduct at issue in the complaint filed with the SEC.
3. Federal False Claims Act
The False Claims Act (also known as “Qui Tam”), originally enacted in 1863 to stop massive frauds perpetrated by large military contractors during the Civil War, It punishes individuals and entities who intentionally make fraudulent claims to the federal government and awards individuals who discover and report those fraudulent acts.
An example of fraud resulting in False Claims Act lawsuits and awards in recent years is the submission of fraudulent reimbursement claims to Medicare and Medicaid. Similarly, pharmaceutical companies who have marketed prescription drugs for off-label uses that have not been approved by the Food and Drug Administration (“FDA”) are often subject to False Claims Act lawsuits.
Those individuals or entities who have been found to have intentionally defrauded the federal government can be forced to pay triple damages and penalties of up to $10,000 per instance of fraud.
An individual who discovers this intentional fraud on the federal government may bring an action on behalf of the United States to recover monies that the federal government lost because of the fraud. This type of whistleblower is referred to as a “relator.”
To collect an award, the relator must be the original source of the information and be the first to file a lawsuit about it in federal court. Then, the relator must send a letter to the Justice Department describing the claims of fraud and damages along with evidence that supports the allegations. The Justice Department and the Federal Bureau of Investigations will then investigate the allegations of fraud and damages to determine if the Federal Government wants to join the case, which they do in only a small percentage of qui tam lawsuits. The relator and his/her attorney often assist the government in their investigation.
If the government joins in the case and recovers funds from the individual or company who defrauded the government through a settlement or a trial, the relator is entitled to between 15 and 25 percent of the recovery. If the government doesn’t join in the case, the relator and his attorney may choose to pursue the case and, if they recover funds, can receive a reward between 25 and 30 percent of the recovery. Although relators have the option under the False Claims Act to continue the case on their own if the government decides not to intervene, the chances of success are much higher when the government joins the lawsuit.
4. New Jersey False Claims Act
In 2008, New Jersey enacted the New Jersey False Claims Act, which is very similar to the federal False Claims Act in its enforcement and procedures. Like the federal act, individuals or entities found to have defrauded the New Jersey government may be required to pay triple damages plus penalties of up to $10,000 per instance of fraud on the State.
However, in certain circumstances, damages to be paid by the guilty parties may be reduced to double damages. In addition, under New Jersey’s False Claims Act, a relator may be awarded attorneys’ fees and litigation costs. In addition, if the relator is retaliated against by her/his employer, he/she may also bring a retaliation claim and be awarded lost earnings, compensatory damages, attorneys’ fees and punitive damages if the retaliatory conduct particularly egregious.
5. Other Federal Whistleblower Statutes
The IRS Whistleblower Reward Program
Under the IRS whistleblower reward program, whistleblowers who provide the IRS with information about tax fraud or tax underpayments may receive a reward of between 15 and 30 percent of the amount the IRS collects as a result of information provided. After receiving information from whistleblowers (whose identity remains confidential), the IRS investigates the tax fraud or tax underpayments. Once all amounts owed in the case have been collected and the matter is officially closed, the IRS will issue a reward. To qualify for a reward:
- Whistleblowers must provide information about tax fraud or tax underpayments that exceeds $2 million including tax, penalties and interest; and
- The annual income of the individuals alleged to have cheated on their taxes must exceed $200,000.
A reward under this program maybe denied or reduced if:
- The whistleblower initiated or planned the tax fraud; or
- The whistleblower’s allegations had been previously disclosed to the IRS.
If the IRS fails to recognize the whistleblower’s contribution in determining a reward, the whistleblower may appeal the reward amount to the U.S. Tax Court.
In addition to the whistleblower protections discussed above, there are more than twenty different federal statutes that are enforced through OSHA that protect whistleblowers in the areas of Occupational, Environmental, and Nuclear Safety, Transportation, and Consumer and Investor Protection. The time to file retaliation claims with OSHA under these statutes ranges from 30 to 180 days, so it is critical that you contact an attorney as soon as you think you have experienced retaliation in violation of one.
Occupational, Environmental, and Nuclear Safety Whistleblower Statutes
- Section 11(c) of the Occupational Safety & Health Act (OSHA), 29 U.S.C. §660(c): Prohibits retaliation against employees who file safety and health complaints with OSHA, participate in an OSHA inspection, or exercise other rights under OSHA. Whistleblowers have 30 days from the retaliation to file a claim under this section.
- Asbestos Hazard Emergency Response Act (AHERA), 15 U.S.C. §2651: Prohibits retaliation against employees who report violations of laws relating to asbestos in schools. Whistleblowers have 90 days from the retaliation to file a claim under this statute.
- Clean Air Act (CAA), 42 U.S.C. §7622: Prohibits retaliation against employees who report illegal air emissions. Whistleblowers have 30 days from the retaliation to file a claim under this statute.
- Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §9610: Prohibits retaliation against employees who report violations related to the cleanup of hazardous waste sites, accidents, spills, and other emergency releases of pollutants and contaminants. Whistleblowers have 30 days from the retaliation to file a claim under this statute.
- Energy Reorganization Act (ERA), 42 U.S.C. §5851: Prohibits retaliation against nuclear plant employees or those working under an Atomic Energy Act contract who report violations or refuses to engage in violations of the ERA or the Atomic Energy Act. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Federal Water Pollution Control Act (FWPCA), 33 U.S.C. §1367: Prohibits retaliation against employees who report violations relating to discharge of pollutants into water. Whistleblowers have 30 days from the retaliation to file a claim under this statute.
- Safe Drinking Water Act (SDWA), 42 U. S. C. §300j-9(i): Prohibits retaliation against employees who report violations relating to drinking water. Whistleblowers have 30 days from the retaliation to file a claim under this statute.
- Solid Waste Disposal Act (SWDA), 42 U.S.C. §6971: Prohibits retaliation against employees who report violations relating to solid and hazardous waste disposal. Whistleblowers have 30 days from the retaliation to file a claim under this statute.
- Toxic Substances Control Act (TSCA), 15 U.S.C. §2622: Prohibits retaliation against employees who report violations relating to industrial chemicals produced or imported into the United States. Whistleblowers have 30 days from the retaliation to file a claim under this statute.
Transportation Industry Whistleblower Statutes
- Federal Railroad Safety Act (FRSA), 49 U.S.C §20109: Prohibits retaliation against employees of railroad carriers who report or refuse to work in hazardous safety or security conditions or who report violations of federal law relating to railroad safety or security or abuses of public funds for railroad safety. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- International Safe Container Act (ISCA), 46 U.S.C. §80507: Prohibits retaliation against employees involved in international shipping who report unsafe cargo or other violations of the Act to the Coast Guard. Whistleblowers have 60 days from the retaliation to file a claim under this statute.
- Moving Ahead for Progress in the 21st Century Act (MAP-21): Prohibits retaliation against employees of car manufacturers, part suppliers and dealerships who provide information to the employer or Department of Transportation about defects, noncompliance, or violations of notification and reporting requirements of the National Highway Traffic Safety Administration. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- National Transit Systems Security Act (NTSSA), 6 U.S.C. §1142: Prohibits retaliation against transit employees who report or refuse to work in hazardous safety or security conditions or who report violations of federal law relating to public transportation safety or abuses of public funds for public transportation. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Pipeline Safety Improvement Act (PSIA), 49 U.S.C. §60129: Prohibits retaliation against employees who report or refuse to participate in violations of federal laws related to pipeline safety and security. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Seaman's Protection Act (SPA), 46 U.S.C. §2114: Prohibits retaliation against employees who report violations of maritime safety laws to the Coast Guard or federal agencies or who refuse to work when they reasonably believe doing so would result in serious injury or health impairment to themselves or others. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Surface Transportation Assistance Act (STAA), 49 U.S.C §31105: Prohibits retaliation against truck drivers who report or refuse to violate regulations related to the safety of commercial vehicles. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR21), 49 U.S.C. §42121: Prohibits retaliation against air carrier employees who report violations of laws related to aviation safety. Whistleblowers have 90 days from the retaliation to file a claim under this statute.
Consumer and Investor Protection Laws
- Affordable Care Act (ACA), 29 U.S.C. §218C: Prohibits retaliation against employees who report violations of the ACA related to discrimination based on receipt of health insurance subsidies, denial of coverage based on pre-existing conditions, or insurers’ failure to rebate portions of excess premiums, among other violations. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Consumer Financial Protection Act (CFPA), 12 U.S.C. §5567: Prohibits retaliation against employees who report violations of Title X of Dodd Frank, the Consumer Protection Act, or any other law or rule of the Bureau of Consumer Financial Protection. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- Consumer Product Safety Improvement Act (CPSIA), 15 U.S.C. §2087: Prohibits retaliation against employees who report violations of statutes or regulations of the Consumer Product Safety Commission (CPSC) to their employer, the federal government, or a state attorney general. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
- FDA Food Safety Modernization Act (FSMA), 21 U.S.C. 399d: Prohibits retaliation against employees of food manufacturers, distributors, packers, and transporters who report or refuse to participate in violations of the Food, Drug, and Cosmetic Act. Whistleblowers have 180 days from the retaliation to file a claim under this statute.
DISCLAIMER: While this information provides an overview of rights and processes under whistleblower retaliation law, there are many legal intricacies and strategic decisions that must be made in pursuing a legal claim. Contact an attorney from Green Savits, LLC at (973) 695-7777 for a full assessment of your potential claims.