Whistleblower Claims Require Employers to Update Complaint Policies


By Ben Mathis and David Cole
Whether it is Title VII retaliation claims, Sarbanes Oxley complaints, qui tam actions, or other claims, lawsuits by “whistleblowers” continue to increase and now are among the most frequent federal cases.  Indeed, according to statistics released by the EEOC, retaliation for the first time outpaced race discrimination as the most common claim filed by employees in 2010, with over 36% of all charges filed alleging some type of retaliation.  This number will surely rise given the Supreme Court’s recent decision in Thompson v. North American Stainless, LP, which held that even third parties can claim retaliation under Title VII if they suffer an adverse action because of their association with another person who complained.

In addition to these existing forms of whistleblower claims, however, employers should be aware that provisions in both the Dodd-Frank Wall Street Reform Act and the Patient Protection and Affordable Care Act (i.e. healthcare reform legislation) include new whistleblower and anti-retaliation laws.  These laws expand whistleblower protection to new forms of protected activity about matters in the financial and healthcare industries.
Under the Dodd-Frank Act, the Securities and Exchange Commission is now required to pay a reward to individuals who provide “original information” which results in monetary sanctions against a company that exceed $1 million.  Employers are forbidden from retaliating against any employee for providing information to the SEC as part of this so-called “bounty program” or making any other disclosure required by the Sarbanes-Oxley Act or other laws under the SEC’s jurisdiction.
The healthcare reform legislation also contains a new retaliation provision that prohibits employers like hospitals, clinics, physicians, and other care providers from retaliating against employees who:

  • Report or are about to report a suspected violation of Title I of the healthcare reform legislation to their employer, the federal government, or a state attorney general’s office;
  • Participate in an investigation of a suspected violation of Title I; or
  • Refuse to participate in any activity the employee reasonably believes violates Title I of the legislation.

Title I of the healthcare reform legislation contains a wide range of rules governing health insurance, including a prohibition against denying coverage based on preexisting conditions, policy and financial reporting requirements, and prohibitions against discrimination based on an individual’s receipt of health insurance subsidies.
The healthcare reform legislation also includes two provisions that protect employees who work at nursing homes and other long-term care facilities.  Long-term care facilities that receive $10,000 or more in federal funding must notify employees that they are now required to report any reasonable suspicion of a crime committed against one of the facility’s residents to the U.S. Department of Health and Human Services.  As such, the new law prohibits employers from retaliating against any employee who reports suspected crimes with the DHHS.  Employers who violate this anti-retaliation provision may be fined up to $200,000 and may be excluded from federal programs, including social aide programs like Medicaid and Medicare, for up to two years.
The addition of these new claims to the already increasing scope of whistleblower claims under existing laws makes it critical for employers to review and revise their complaint policies.  First, given that employees can complain about much more than just discrimination or harassment, employers should ensure that they have adequate complaint procedures for all types of complaints employees may make.  To accomplish this, employers should consider either broadening their existing EEO policies to cover all types of complaints, or, instead, adopting a separate grievance procedure that is designated for employees to report concerns other than discrimination or harassment, like those matters covered by Sarbanes Oxley, the Dodd-Frank Act, the healthcare reform legislation, or otherwise.
Second, there are basic components that should be included in any complaint procedure under your EEO policy or grievance procedure.  These policies should contain complaint procedures that:

  • Clearly state to employees their obligation to report any concerns of unlawful conduct, whether about discrimination, harassment, or otherwise, and preferably in writing;
  • Allow employees to report concerns to someone other than their supervisor, such a human resources director or corporate governance officer; and
  • Unequivocally prohibit retaliating against any employee for making a complaint.

Third, employers should consider the ways in which these policies are disseminated to employees.  At a minimum, employees should be given separate copies of these policies (in addition to the copies in your employee handbook) at the time they are hired.  The separate versions should contain signature lines for employees to sign an acknowledgment of receipt and then be placed in their personnel files.  In addition, companies should make their policies available to employees online, either through their intranet or possibly their company website.  Finally, to facilitate the complaint process, employers may also want to consider the idea of implementing a telephone hotline for employees to call with complaints.
For more information, contact Ben Mathis at 770.818.1402 or [email protected] or David Cole at 770.818.1287 or [email protected] of the Labor & Employment Law Practice Group.