OSHA Makes It Easier to File a Whistleblower Claim

Companies will have to use even more caution when handling employees who have filed whistleblower claims.

That's because the Occupational Safety and Health Administration (OSHA) updated its Whistleblower Investigations Manual to include new protections for whistleblowers. The update also makes it easier for employees to file whistleblower claims, requires investigators to follow new procedures when examining those claims, and increases the penalties for companies that violate the rules.

In a statement, the agency said the updated rules reflect OSHA commitment to ensure that workers are free to blow the whistle on corrupt corporate practices without fear of retaliation. “OSHA is committed to protecting the rights of those workers to speak out,” it said.

OSHA's whistleblower protection program handles cases of possible violation of safety-related issues. It enforces the whistleblower provisions of 21 statutes, including the FDA Food Safety Modernization Act, the Consumer Product Safety Improvement Act, the Affordable Care Act, the Consumer Financial Protection Act, and others.

The update outlines three main areas of changes to be incorporated by the agency on dealing with whistleblower complaints. First, complainants can file their claims electronically, in any language, orally, or in writing. Second, OSHA imposed stricter procedures on its investigators when handling and dismissing cases. And third, the update outlines a procedural shift that will place a higher burden of proof on employers and give more leeway for OSHA to award monetary reimbursement to whistleblowers.

Lawyers familiar with the issue say the overall changes in the manual are meant to ease the filing process for whistleblowers and will result in a heavier volume of claims. “I expect there to be more complaints because it is now easier to file, and there are new covered employers under the Dodd-Frank Act, but I also think that complaints that are filed will get more attention,” says Denise Keyser, a partner at law firm Ballard Spahr.

The updated manual reflects changes to some of the SOX whistleblower provisions implemented by OSHA that were included in the Dodd-Frank Act. Those changes include added protections to cover employees against retaliation at nationally recognized statistical rating organizations, and subsidiaries and affiliates of listed companies. They also extend the statutory filing period from 90 days to 180 days, provide claimants with rights to seek jury trials in district court if no action is taken on their complaints after 180 days of filing, and deter employees from waiving their SOX Whistleblower rights even if they enter into a pre-dispute arbitration agreement.  

OSHA says it is determined to offer workers easier access to whistleblower protections. In addition to allowing complaints to be filed orally and in any language, complainants can also opt to have representatives file on their behalf. According to the manual, the agency will eventually accept electronic submission of these complaints through its Whistleblower Protection Program Website.

The manual also includes a new requirement on all its investigators that they make every attempt to interview the complainant in all cases and determine in preliminary findings if there is reasonable cause to believe violations have occurred. In the updated rules, OSHA has also eliminated the requirement for investigators to obtain signed testimonials from witnesses interviewed during their investigations. OSHA investigators are also now required to issue detailed written findings if they choose to dismiss a case after careful evaluation.

“What this means for employers in the context of whistleblower complaints in which the standard is applicable is that they will need to offer unmistakable and highly persuasive evidence of non-retaliation.”

—Curtis Summers,

Associate,

Husch Blackwell

Procedural Changes

The latest update also includes new guidance on handling uncooperative respondents and issuing administrative subpoenas during whistleblower investigations. New rules included in the manual create a higher burden of proof for employers when defending themselves against retaliation claims made by employees. The new rules state that employers must be able to produce “clear and convincing” evidence to prove that certain actions taken against employees are not out of retaliation. OSHA said the new standard is much higher than the previous “preponderance of the evidence” standard. “What this means for employers in the context of whistleblower complaints in which the standard is applicable is that they will need to offer unmistakable and highly persuasive evidence of non-retaliation,” says Curtis Summers, an associate at law firm Husch Blackwell. 

“Employers should be prepared to show that no legitimate question exists as to their intent in taking adverse action against an employee who engaged in protected activity,” says Summers. The heightened standard only increases the importance of an employer supporting its employment decisions with documentation, he adds. Depending on the case, the types of evidence that might meet that standard could include evidence that the adverse employment action was already in process before the protected activity, the decision maker's lack of knowledge regarding the protected activity, prior disclosure of the issue underlying the alleged whistleblower's complaint, and strong evidence of similar treatment of comparable employees who did not engage in protected activity.

The new manual contains changes for procedures on reinstating whistleblowers.  Primarily, it omits a statement that reinstatement will not be appropriate if the respondent established that the complainant is a security risk. In the revised provision, OSHA said a determination whether reinstatement is appropriate or not, is best made on a case-by-case basis, and that it is not necessary to define the circumstances on which to apply the remedy.

SIGNIFICANT CHANGES

In the excerpt below, OSHA outlines significant changes to the Whistleblower Investigations Manual:

Three chapters are added and various other chapters updated to provide guidance

for the processing and investigation of whistleblower complaints under the

Federal Railroad Safety Act, the National Transit Systems Security Act, and the

Consumer Product Safety Improvement Act.

In order to achieve greater consistency among the various statutes, this instruction

adopts the approach of including “global” sample letters, with prompts that can

easily be modified for use in whistleblower investigations under any statute

within OSHA's jurisdiction.

This instruction incorporates changes in procedures for handling Privacy Act files

and Freedom of Information Act requests, that have been previously transmitted

to the field and posted on OSHA's public website, and provides that throughout

the investigation, OSHA will provide to the complainant a copy of the

respondent's submissions to OSHA, redacted if necessary, in accordance with

applicable confidentiality laws.

This instruction clarifies that whistleblower complaints under any statute may be

filed orally or in writing, and in any language, and that OSHA will be accepting

electronically-filed complaints on its Whistleblower Protection Program Website,http://www.whistleblowers.gov.

This instruction requires that as a part of the intake process, the Supervisor will

verify that applicable coverage requirements have been met and that the prima

facie elements of the allegation have been properly identified.

This instruction contains an expanded discussion of causation, burdens of proof,

and the elements of a violation.

This instruction specifies that the investigator must attempt to interview the

complainant in all cases.

This instruction renames the Final Investigation Report (FIR) to the Report of

Investigation (ROI), to be consistent with the terminology for internal

investigation reports used by several other DOL agencies, and streamlines the

report-writing process to eliminate redundancy in report-writing.

This instruction specifies that interest on back pay and other damages shall be

computed by compounding daily the IRS interest rate for the underpayment of

taxes.

This instruction requires that Secretary's Findings be issued in all dismissals of

complaints investigated under Section 11(c) of the Occupational Safety and

Health Act, the Asbestos Hazard Emergency Response Act, and the International

Safe Container Act.

Source: OSHA's Interim Rule on Whistleblower Manual Updates.

The new guidance also makes it clear that front pay should be ordered if reinstatement is inappropriate. Awarding attorney's fees when authorized by applicable statute is now mandatory.  “In my judgment, this will allow OSHA greater leeway in deciding whether to order reinstatement, and I would expect it will be ordered in fewer cases now. However, the front pay will become more prevalent,” says Keyser. 

Given all the monetary rewards offered by the rule, Summers expects complaints to increase as word spreads through the media that whistleblowers may recover money. “Whether it is an employee seeking redress for retaliation or an employee receiving a damage award for exposing a company's illegal practices, money motivates people and prompts complaints,” he says.

OSHA also revised its calculation of interest on back pay and other damages. The Internal Revenue Service's formula to determine an interest rate for underpayment of taxes is still applicable. However, the agency said the interest calculation will be compounded daily instead of quarterly.

OSHA also made some small changes in terminology used by the agency. Some of the changes include using the term “retaliation” instead of “discrimination,” “respondents” to replace “named persons,” and “unfavorable personnel action” to switch to “adverse action.”OSHA said the minor changes will create consistency with languages used in other programs while reducing possible confusion.

The over-reaching message underlying the new changes is that OSHA is responding to its critics and will be taking on its investigations with increased fervor, says Summers. The best approach for employers is to take any employees' complaints of illegal activities seriously. “Employers' best defense is always prevention,” he says. Given the significant exposure a whistleblower complaint brings, employers should develop proper complaint and investigation procedures to deal with potential whistleblower issues.

Timing of a termination or discipline can be an issue in many wrongful discharge cases, says Keyser. “It is always a good idea for employers to build a paper trail documenting the reasons for each discharge or discipline action in the event it is later challenged,” she says.

Employers must be vigilant at the mere appearance of causal connection if disciplinary action is unavoidable. “That vigilance can alert an employer to the opportunity to stem an employee's impression if the action is taken for retaliatory purpose,” says Summers. Companies can submit comments on the revised rule to OSHA before Jan. 3, 2012.