Poster for The Stimulus Bill Whistleblower Provision

In an earlier post, I mentioned that after it came out of the conference committee, section 1553(e) of the Stimulus Bill (the "American Recovery and Reinvestment Act of 2009") included a provision that requires employers who receive stimulus funds ("covered funds") to "post notice of the rights and remedies provided under this section.

Congress often requires employers to post notices of rights under various employment statutes but those statutes are almost always enforced by the United States Department of Labor. The DOL, however, has no authority under the Stimulus Bill whistleblower statute, (even to draft a poster) so I thought I would try to fill the void. I take the posting requirement at its word, that is, the poster must state the rights and remedies under section 1553.

NOTICE OF RIGHTS PURSUANT TO SECTION 1553 OF THE

American Recovery and Reinvestment Act of 2009

Section 1553 of the American Recovery and Reinvestment Act of 2009 ("Recovery Act") prohibits employers from retaliating against any employee because the employee provided information to Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct), a court or grand jury, the head of a Federal agency, or their representatives, information that the employee reasonably believes is evidence of—

(1) gross mismanagement of an agency contract or grant relating to covered funds;

(2) a gross waste of covered funds;

(3) a substantial and specific danger to public health or safety related to the implementation or use of covered funds;

(4) an abuse of authority related to the implementation or use of covered funds; or

(5) a violation of law, rule, or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant, awarded or issued relating to covered funds.

The term "covered funds" means any contract, grant, or other payment received by any non-Federal employer if the Federal Government provides any portion of the money or property that is provided, requested, or demanded at least some of the funds are appropriated or otherwise made available by the Recovery Act.

If you believe you have been retaliated against because you provided information regarding covered funds, you should promptly seek relief by submitting a complaint to the inspector general of the agency for whom the work was performed or the agency that funded the work.

The Inspector General investigates your complaint and submits a report to the Agency. If the Agency finds in your favor it may:

(A) Order the employer to take affirmative action to abate the reprisal.

(B) Order the employer to reinstate the person to the position that the person held before the reprisal, together with the compensation (including back pay), compensatory damages, employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken.

(C) Order the employer to pay the complainant an amount equal to the aggregate amount of all costs and expenses (including attorneys' fees and expert witnesses' fees) that were reasonably incurred by the complainant for, or in connection with, bringing the complaint regarding the reprisal, as determined by the head of the agency or a court of competent jurisdiction.

If the Agency denies your complaint or if it has not rendered a final decision within 210 days or if it declines to render a decision, you have bring a civil action against the employer to seek compensatory damages and other relief available in the appropriate district court of the United States.

Your rights under Section 1553 of the Recovery Act are in addition to any other rights you may have under any other federal, state or local law.

Stimulus Bill Whistleblower Provision - Conference Version

I previously posted about the different versions of the whistleblower provision in the stimulus bill.

The stimulus bill whistleblower statute finally adopted by the conference committee (where members of both houses of Congress meet to resolve difference in bills both have passed), is quite different, better in some ways, worse in others, and still ambiguous (Congress gift to lawyers?) in troubling ways.

The link above is to the pages of the stimulus bill (this link is to Congress' website where I obtained the stimulus bill).

Here is a quite and dirty summary of the changes and a short commentary about them.

Protected activity is now tied to complaints about mismanagement, waste, and abusive spending of stimulus (what the statute calls "covered" funds). The bill stills protects complaints about public health but now those complaints must be about "a substantial and specific danger to public health or safety related to the implementation or use of covered funds." My concern with the provision as it came out of the Senate and House was that neither version specified that complaints must be related to stimulus spending. That ambiguity has been resolved.

I originally said neither version of the bill expressly covered "internal" complaints, that is, complaints by employees to supervisors. It now does. Complaints to "a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct)" are protected even if the employee's "disclosure [was] made in the ordinary course of an employee's duties."

It also means that if you do not receive stimulus money (directly or indirectly), complaints by your employees about your spending are not covered by the whistleblower provision. (They may be covered by other whistleblower statutes, however, depending on whether or not your company does business with the government.) The provision still covers state and local governments that receive stimulus money as well as the contractors and subcontractors who perform work for the state or local government using stimulus money.

Complaints must still be submitted to the inspector general ("I.G.") of the respective agency. My concerns about the I.G. and whether it has employees qualified to investigate retaliation claims still stands.

The conference added a section that addresses who has to establish what. The employee must show the protected activity "was a contributing factor" in the retaliatory action (don't get tied up about causation levels, there is no difference between a "because of" or "motivation" or "contributing" factor as humans are not capable of understanding these degrees of motive).

The provision goes on, however, to add that "circumstantial evidence" can be used to establish a contributing factor" and that includes "evidence that the official undertaking the reprisal knew of the disclosure" or that the reprisal occurred within a "period of time after the disclosure such that a reasonable person could conclude that the disclosure was a contributing factor." This is, of course, based upon the illogical "temporal proximity" causality. The irony is that a "reasonable" person (that is, a person who relies on "reason") would not, by definition, rely upon temporal proximity because it is an illogical doctrine.

Note that the statute does not say either knowledge alone or temporal proximity alone automatically satisfies the contribution factor test. It simply says either "may demonstrate" causation. That leaves it open for employers to argue other factors show there is no causation.

Employers may also defeat causation by showing with clear and convincing evidence that they would have made the same decision regardless of the even if the employee had not made the protected disclosure. Unlike the Title VII version of this defense, this is an absolute defense.

The I.G. still does not have to make a decision on the record so there is no requirement for a hearing at the agency level. The stimulus bill gives the parties the right to obtain a copy of the agency file (with limited exceptions) if the claim goes to litigation in federal court.

The conference committee added a new provision (not found in either version) that prohibits "any agreement" that would waive the "rights and remedies" in the statute. This includes a prohibition on arbitration unless the arbitration is authorized by a collective bargaining agreement. What Congress seems to be trying to do is prohibit predispute waivers of rights but read literally, this provision would make unenforceable any settlement of a stimulus bill whistleblower claim.

Because the provision still fails to include a statute of limitations, the prohibition against "any agreement" waiving rights or remedies is particularly troubling. Presumably, a court or agency approved settlement would be enforable but the provision does not authorize any agency or court to approve settlements. Without authorization, agencies and courts are unlikely to act (though a court could enter a "final" judgment). What employer (or employee) wants to wait some three to four years before knowing if a settlement is enforcable.

Finally, covered employers must post a notice about the "rights and remedies" under the whistleblower provision.