Text     Print    Bookmark

Whistleblower Protections: What Employers Need to Know

The Occupational Safety and Health Act (OSH Act) is designed to regulate employment conditions relating to occupational safety and health and to achieve safer workplaces throughout the United States. The Act provides a wide range of substantive and procedure rights for employees and representatives of employees, and recognizes that effective implementation and achievement of its goals depends upon the active and orderly participation of employees.

To help ensure that employees are free to participate in safety and health activities, Section 11(c) of the Act prohibits any person from discharging or retaliating against any employee because he/she has exercised rights protected under the Act. These rights include complaining to OSHA and seeking an OSHA inspection, participating in an OSHA inspection and participating or testifying in any proceeding related to an OSHA inspection. Along with these whistleblowing provisions of the OSH Act, OSHA also administers 16 other statutes protecting employees who report violations in various industries, such as trucking, airline, nuclear power, pipeline, environmental, rail, consumer product and securities law.

As an employer, it is necessary for you to know and understand the whistleblowing provisions of the law. Not only must you understand the rights of your employees, but it is also imperative that you recognize how you can protect yourself against litigation for violating whistleblowing provisions.

Employee Complaints: Understanding the Process
An employee filing a complaint of discrimination or retaliation will be required to show that he/she engaged in protected activity, the employer knew about that activity, the employer subjected him/her to adverse employment action and the protected activity contributed to adverse action. Adverse employment action is generally defined as a material change in the terms of the conditions of employment, and can include the following:

• Firing or laying off
• Blacklisting
• Demoting
• Denying overtime or promotion
• Disciplining
• Denial of benefits
• Failure to hire or rehire
• Intimidation
• Reassignment affecting prospects for promotion
• Reducing pay or hours

If an employee believes that his/her employer has discriminated against him/her, they can contact the local OSHA office. Under the OSH Act, employees only have 30 days from the date of the incident to report it. (NOTE: Some other regulations have complaint-filing deadlines that differ from OSHA and may have longer deadlines).

After receiving a complaint, OSHA conducts an in-depth interview with each complainant to determine if there is a further need for an investigation. If evidence supports the worker’s claim of discrimination, OSHA will ask the employer to restore the worker’s job, earnings and benefits. If the employer objects, OSHA may take the employer to court to seek relief on behalf of the employee.

Sarbanes-Oxley Act
In addition to the OSH Act, workers may file complaints under the Sarbanes-Oxley Act of 2002 (SOX) for financial improprieties. Employees who work for publically-traded companies or organizations that are required to file certain reports with the Securities and Exchange Commission (SEC) are protected from retaliation for reporting alleged violations of mail, wire, bank or securities fraud; violations of rules or regulations of the SEC; or federal laws relating to fraud against shareholders.

Employers are covered under section 806 of SOX if it has a class of securities registered under Section 12 of the Securities Exchange Act, or is required to file reports under Section 15(d) of that Act. If employers are covered under SOX, it may not discharge or retaliate against an employee because he/she did the following:

• Provided information;
• Caused information to be provided or
• Assisted in an investigation by a federal agency, member or committee of Congress or an internal investigation by the company relating to alleged violation of mail fraud, wire fraud, bank fraud, securities fraud or violating SEC rules or federal laws relating to fraud against shareholders.

Employers may not also discharge or retaliate against an employee because he/she filed, caused to be filed, participated in or assisted in a proceeding under of these laws or regulations. Should an employer take retaliatory action, the employee can file a complaint with OSHA.

Under SOX, complaints must be filed within 90 days after an alleged violation occurs. When OSHA receives the complaint, they will review it to determine whether to conduct an investigation in accordance with SOX’s requirements. Should evidence support an employee’s claim and settlement cannot be reached, OSHA will issue an order requiring the employer to reinstate the employee, pay back wages, restore benefits and any other possible relief to make the employee whole.

After OSHA issues its findings, either party may request a full hearing before an administrative judge of the Department of Labor (DOL). His/her decision and order may then be appealed to the Department’s Administrative Review Board for further review. If a final agency order is not issued within 180 days from the date that the employee’s complaint was filed, then the employee may file it with the appropriate U.S. district court.

Limiting Whistleblowing Liabilities
There are many ways for employers to limit their whistle blowing liabilities and avoid whistleblower lawsuits, including eliminating underlying illegal or inappropriate conduct in the workplace and treating employees properly if and when improper conduct is alleged. Here are some other ways to limit your liabilities:

• Establish a company-wide ethics policy outlining that the company complies with all legal duties applied to it. This policy should also include a complaint reporting procedure for employees and a statement encouraging employees to report misconduct with punishment outlined for those that fail to do so. An ethics policy should also assure employees that complaints will be taken seriously, investigated appropriately and that they will not receive retaliation for bringing concerns to the employer’s attention.
• Establish a clearly outlined complaint reporting procedure with various outlets for employees to utilize, such as an anonymous phone number, third-party website or company representative.
• Train employees on the ethics policy and all other applicable laws that relate to your industry with regard to health and safety.
• Provide training for management staff so they are completely clear on your ethics policy and are compliant with any federal, state and local laws for your industry. You should also train supervisory staff on how to respond to whistleblower complaints appropriately and legally.
• Document any performance or inappropriate conduct by employees that may be grounds for dismissal or discipline.
• Handle all whistleblowing claims in the same manner as sexual harassment or discrimination claims – with immediacy and take them seriously.
• Appoint an ethics administrator to investigate all whistleblowing claims.
• Document all whistleblowing claims in the event that there are disputes down the road.

Disciplining Whistleblowers
Before taking any disciplinary action towards whistleblowers, recognize that they are entitled to protection for filing a complaint. That does not mean, however, that they are completely void of discipline. As a general rule, it is wise to tread lightly when considering disciplining an employee who files a complaint. Instead, conduct a careful investigation of the situation before proceeding to determine if the employee’s allegations had factual grounds.

Source: OSHA. For more information on whistleblowing protections, visit www.osha.gov and click on the link for “Whistleblower Program.”

To learn more about the WARN Act and how Gregory & Appel Insurance can help protect your business against liabilities, please contact us below or at 317-634-7491.