Every employee has the right to file a complaint against their employer, whether that involves submitting an internal complaint within the company or filing a formal complaint with a government agency. When an employee exercises their right to “blow the whistle” in these situations, the company is prohibited from taking adverse action against the employee. Adverse actions (aka retaliation) can include:
- Cutting pay
- Denial of benefits
- Denying a promotion
- Denying requested overtime
- Disciplinary action
- Harassment and/ or intimidation
- Making threats
- Reassignment that negatively affects the employee’s compensation or promotion prospects
- Reducing hours
- Refusing to hire or rehire
- Termination (firing or layoff)
Federal and state laws can’t stop an employer from taking retaliatory action against a whistleblower, but they often provide measures to protect the whistleblower’s identity. Whistleblower laws also offer monetary awards to compensate an employee for the associated risks of being a whistleblower, and they include provisions that allow the employee to seek compensatory and punitive damages to recoup any lost income.
When it comes to submitting a federal whistleblower complaint, there are six major programs that dictate the whistleblower’s level of protection and potential reward:
- Department of Justice (DOJ) whistleblower program
- Securities and Exchange Commission (SEC) whistleblower program
- Commodity Futures Trading Commission (CFTC) whistleblower program
- Internal Revenue Service (IRS) whistleblower program
- Equal Employment Opportunity Commission (EEOC) whistleblower program
- Occupational Safety and Health Administration (OSHA) whistleblower program
DOJ whistleblower program
The federal False Claims Act (FCA) allows a whistleblower to file a qui tam lawsuit against any individual or organization that knowingly defrauds the US government. In a qui tam lawsuit, the whistleblower essentially sues the alleged fraudster for damages on behalf of the government. The DOJ has the right to intervene and take over the lawsuit, but if the DOJ declines to intervene the whistleblower has the right to continue with the lawsuit on their own.
If the DOJ intervenes and the lawsuit is successful, the whistleblower is entitled to 15% to 25% of the awarded damages. If the DOJ declines to intervene and the whistleblower successfully pursues the case on their own, the whistleblower is entitled to 25% – 30% of the awarded damages. In either case, employees who are subject to employer retaliation are typically awarded a larger reward to compensate them for any lost income or lost opportunities.
The great thing about qui tam lawsuits is that they’re filed “under seal” to protect the identity of the whistleblower. As long as the case remains sealed, the employer will not receive notice of the complaint, nor will they be made aware of any investigation by the Department of Justice in response to the complaint. If the DOJ declines to intervene in the case and the whistleblower opts to withdraw the qui tam lawsuit, the employer will have no knowledge of the whistleblower’s activities.
SEC whistleblower program
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), the SEC is empowered to take legal action against employers who retaliate against whistleblowers involved in securities fraud cases. At the conclusion of a successful securities fraud case that results in more than $1 million in sanctions, the whistleblower will be entitled to a reward of 10% to 30% of the final damages.
The Dodd-Frank law also allows whistleblowers who are retaliated against to bring a civil action against their employer in federal court. In a successful retaliation case filed under the Dodd-Frank law, the whistleblower may be entitled to double back-pay, reinstatement, and reimbursement for litigation costs (court fees, attorney fees, expert witness fees, etc.).
Whistleblowers who file a civil lawsuit in federal court aren’t granted anonymity, but whistleblowers who file a complaint with the SEC are allowed to remain anonymous if the complaint is filed by the whistleblower’s attorney. Anonymity is ideal as it significantly lowers the prospects of employer retaliation.
CFTC whistleblower program
When a securities fraud case involves commodities futures, options, or swaps, Dodd-Frank places the matter under the purview of the CFTC. It’s the CFTC’s practice to generally keep a whistleblower’s identity confidential, but the only way to ensure anonymity is to file a complaint with the CFTC through an attorney. If a whistleblower’s employer discovers their involvement and retaliates, the CFTC is empowered to take legal action against the employer, and the whistleblower is allowed to file a civil action in federal court to seek reinstatement, double back-pay, and reimbursement for litigation costs.
IRS whistleblower program
The IRS whistleblower program was created under Section 406 of the Internal Revenue Code. As with the SEC and CFTC whistleblower programs, the whistleblower is only guaranteed anonymity when he or she submits the whistleblower claim through an attorney. If the individual or organization under investigation for tax fraud discovers the whistleblower’s involvement and retaliates, the whistleblower is entitled to an additional monetary reward to compensate for lost income. However, unlike the Dodd-Frank law, Section 406 of the Internal Revenue Code doesn’t allow whistleblowers to file a separate civil suit in federal court.
The whistleblower’s reward under the IRS whistleblower program hinges largely on the value of the collected taxes, penalties, and interest. If the final value is over $2 million, the whistleblower is entitled to a 15% to 30% reward; if the collected taxes, penalties, and interest amount to less than $2 million, the whistleblower can receive a maximum reward of 15%. When the subject of investigation is an individual, the individual’s gross annual income needs to be more than $200,000 for the whistleblower to qualify for the maximum reward category of 15% to 30%.
EEOC whistleblower program
There are a number of federal laws that protect employees and job applicants against discrimination in the workplace. Each law guarantees the right to file a complaint with the EEOC and to file a civil suit against the employer in federal court. In order to file a complaint or a civil suit, however, the whistleblower must be an interested party to the case (in contrast to the DOJ, SEC, CFTC, and IRS programs, where the whistleblower can be anybody). In either case, whistleblowers are not granted anonymity, so the employer will likely know of their involvement early in the investigation. If the employer retaliates against the whistleblower, the employer is entitled to a monetary remedy through the EEOC case and up to three-times their lost income in a civil lawsuit.
OSHA whistleblower program
Last but not least is the OSHA whistleblower program. This program applies when an employee is retaliated against for reporting workplace safety violations, requesting a safety inspection, or taking part in an OSHA investigation. The program is established by the Occupational Safety and Health Act (OSH Act), which allows the OSHA to seek a legal remedy for the whistleblower to recover lost income. The OSH Act also permits whistleblowers who are subject to retaliation to file a civil lawsuit in federal court and may award up to three-times the whistleblower’s lost income.
Need Help With An Employment Law Issue?
The state of Arizona is a great place to live and work, but knowing the employment laws will help you a lot. Whether you are a newcomer to the state or a lifelong resident, understanding your workplace protections is good for your career, and the more you know, the better.
Employment law issues can cause extreme distress and can affect productivity on the job. If you are being harassed at work, or dealing with any other employment issue, consider talking to our AZ employment law team to help you settle your case.
Call our Employment Law team at (480) 464-1111 to discuss your case today.