Wyatt Employment Law Report


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Do Your Severance Agreements Violate Federal Law?

By Michelle Wyrick

Resume near laptop --- Image by © Kate Kunz/Corbis

In light of the enforcement positions taken recently by the Securities and Exchange Commission (“SEC”) and the Occupational Safety and Health Administration (“OSHA”), which administer several whistleblower statutes, employers (and especially publicly-traded companies) should review the release provisions in their severance agreements and update them if needed.

For many years, the Equal Employment Opportunity Commission (“EEOC”) has taken the position that employers may not require employees who sign severance and release agreements to waive their rights to file charges with the EEOC or to participate in EEOC investigations.  The EEOC, however, has permitted employers to require employees to waive any right to monetary recovery in connection with any EEOC charges filed.  See EEOC Enforcement Guidance Non-Waivable Employee Rights under Equal Employment Opportunity Commission (EEOC) Enforced Statutes.

Now, the SEC has taken a more restrictive position.  Last month, the SEC fined two companies for using severance agreements that restricted Continue reading


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Whistleblowers Can Now File Complaints Online With OSHA

By Edwin S. Hopson

The U.S. Department of Labor’s Occupational Safety and Health Administration recently announced that whistleblowers covered by any one of 22 statutes administered by OSHA can now file complaints with the agency online.

“The ability of workers to speak out and exercise their rights without fear of retaliation provides the backbone for some of American workers’ most essential protections,” said OSHA Director Dr. David Michaels in an agency press release. “Whistleblower laws protect not only workers, but also the public at large and now workers will have an additional avenue available to file a complaint with OSHA.”

Currently, employees can make complaints to OSHA by filing a written complaint or by calling the agency’s 800 number or by calling an OSHA regional or area office. With this change, employees can now electronically submit a whistleblower complaint to OSHA by visiting www.osha.gov/whistleblower/WBComplaint.html.

The new online form prompts the worker to include basic whistleblower complaint information so they can be easily contacted for follow-up. Complaints are automatically routed to the appropriate regional whistleblower investigators. In addition, the complaint form can also be downloaded and submitted to the agency in hard-copy format by fax, mail or hand-delivery. The paper version is identical to the electronic version and requests the same information necessary to initiate a whistleblower investigation.

The whistleblower provisions of 22 statutes protect employees who report violations of various securities laws, trucking, airline, nuclear power, pipeline, environmental, rail, public transportation, workplace safety and health, and consumer protection laws.


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Secretary of Labor-Designate Thomas Perez Faces Questioning at His Confirmation Hearing Over Deal Made in Whistleblower Case

By Edwin S. Hopson

On April 18, 2013, the U.S. Senate Health, Education, Labor and Pensions Committee held a hearing on the nomination of Thomas Perez to be the U.S. Secretary of Labor.  The ranking Republican on the committee, Senator Lamar Alexander (R-Tenn.), questioned Perez regarding his role in the Justice Department’s deciding not to intervene in a whistleblower case pending in Minnesota during the time Perez has been in charge of the Civil Rights Division at the Department of Justice.  Under the federal False Claims Act, if a recipient of federal funds misuses or misappropriates federal funds, it can be prosecuted under that law and any person (relator) who pursues that case can receive a portion of the recovery.  At the outset of such cases, the federal government is permitted time to consider whether it wants to intervene as a party to the case.

Senator Alexander asked Perez if there had been an agreement with city officials in St. Paul, Minnesota that they would not appeal a specific case to the Supreme Court that could have resulted in a decision unfavorable to the Civil Rights Division’s position on discrimination law in exchange for not intervening in the pending whistleblower case against St. Paul. Perez indicated that while he had requested the St. Paul officials to not appeal the discrimination case, it was not his decision as to whether the government would intervene in a whistleblower case. Perez testified that that was a decision to be made by a colleague—the head of the Justice Department’s Civil Division.  Perez did indicate that such an agreement was ultimately reached, however, but that it had been initially proposed by St. Paul officials and the decision not to intervene had been made by the Civil Division not his Division . Perez further testified that it was his understanding that the Civil Division had concluded that the St. Paul case lacked merit.

Alexander contended that by not intervening in the whistleblower case in Minnesota, the federal government had in fact missed out on a $200,000,000 recovery that ultimately resulted in the St. Paul False Claims Act litigation.

During the hearing, Alexander stated:

“Here is the way it looks to me: You are in one division of the Department of Justice. You see St. Paul in the Supreme Court with a case that you are afraid would produce the wrong result. To me it is an extraordinary thing that you would then become involved with the city of St. Paul – with another division of the Department of Justice and with the Department of Housing and Urban Development which had originally recommended that the whistleblower case be taken by the Department of Justice. And the end result after you’re involved with all this is that the Department of Justice declines to become involved in the whistleblower case.  We know that 90 percent of the time, when the Justice Department does get involved, the case succeeds. So it declines to become involved, the case doesn’t collect the money. St. Paul agrees to withdraw the lawsuit that might produce the result that you don’t like. That seems to me to be an extraordinary amount of wheeling and dealing outside the normal responsibilities of the Assistant Attorney General for Civil Rights.  It seems you have a duty to the government to collect the money [owed to taxpayers], a duty to protect the whistleblower who is left hanging in the wind, and at the same time it seems to me that you are manipulating the legal process to try to get the result you want in the Supreme Court in a way that seems inappropriate for the Assistant Attorney General of the US.”

Alexander also called on Perez to provide emails and other documents for which there is an outstanding subpoena.  Additionally, Alexander has requested copies of transcribed interviews obtained during the Department of Justice Inspector General’s earlier investigation of these allegations.


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New Health Care Bill Includes Whistleblower Protection

By Kim Koratsky

Ongoing review of the Patient Protection and Affordable Care Act (“PPACA”) is much like a long hike through an unfamiliar forest; each time we go around a turn, we find something that we have not seen before.  Included in its many provisions, the PPACA contains whistleblower protection for persons who report abuses or fraudulent conduct in the delivery of health care.

The PPACA whistleblower provisions amend the Fair Labor Standards Act (FLSA).  The amendment provides protection to employees who report fraud waste and other violations under Title I of the PPACA, which applies to “conventional” medical care settings (i.e., hospitals, clinics and physician offices), and other violations in individual and group health plans covered by Title I of the PPACA.   The amendment does not, apparently, extend to violations of Titles II through X of the PPACA.  Thus, unprotected employees would include those working in administration of Medicare and Children’s Health Insurance Program (CHIP) expansion, Medicaid, Medicare and CHIP program integrity, nursing home care for the elderly, innovative treatment and therapies, payments and reimbursements, prescription drugs and preventative care, house-call visits, expansion and increasing training for the health care workforce, and grants for expansion of health care to under-served populations.  Protected activity under the PPACA provisions includes situations where an employee:

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