The New Whistleblower's Handbook

by Stephen Kohn

  In 1968, five years after the Lopez decision, Congress enacted the federal wiretapping law governing citizen one-party taping. The law memorialized the rules set forth in Justice Harlan’s and Chief Justice Warren’s opinions. One-party taping by both private citizens and government agents was explicitly permitted under the federal act, but surreptitious taping was outlawed, unless a search warrant was obtained. Thus, under federal law, if you personally tape a conversation for which you are a party, your actions are legal. But if you plant the tape recorder in a room, and taped a conversation for which you are not a party, that conduct is strictly prohibited. This is the critical distinction in the law governing taping of conversations. If you are a party to the conversation, under federal law you can tape. But if you plant a listening device to record conversations for which you are not a party, you are violating the law.

  The fact that your taping may be permitted under federal law does not end the issue. States are also permitted to regulate privacy matters and the legality of one-party taping. Although most states follow the federal model, a number of states specifically outlaw one-party taping and require that all persons participating in a private conversation consent before any one person is permitted to tape. Specifically, twelve states do not permit one-party taping. If an employee’s taping of a conversation violates state law, he or she may be fired and even referred to state prosecutors to face possible criminal charges.

  The Lawyers Committee for Freedom of the Press published a highly useful booklet online entitled, “A Practical Guide to Taping Phone Calls and In-Person Conversations in the 50 States and D.C.” (2008, printed at www.rcfp.org). The committee conducted a careful state-by-state analysis of the law governing one-party taping, and summarized the current status of the law as follows:

  Federal law allows recording of phone calls and other electronic communications with the consent of at least one party to the call. A majority of the states and territories have adopted wiretapping statutes based on the federal law. . . . Thirty-eight states and the District of Columbia permit individuals to record conversations to which they are a party without informing the other parties that they are doing so. . . . Twelve states require, under most circumstances, the consent of all parties to a conversation. Those jurisdictions are California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Michigan, Montana, Nevada, New Hampshire, Pennsylvania and Washington. . . . Regardless of the state, it is almost always illegal to record a conversation to which you are not a party, do not have consent to tape, and could not naturally overhear. Federal law and most state laws also make it illegal to disclose the contents of an illegally intercepted call or communication.

  Ensuring that taping is legal is just the first step in weighing whether or not to surreptitiously record a conversation. Even if a taping is legal, an employee still must be concerned with a variety of questions that could impact the taping, such as:

  • Does the company have a rule that prohibits such conduct?

  • Will a decision to tape appear credible? In the Lopez case no one could doubt the reasonableness of the agent’s decision to tape. He had been offered a bribe, and he wanted to document the next offer, which he reasonably expected would occur during the meeting for which he taped.

  • What if the taped conversation contains no evidence that is helpful to the employee’s case? If the taped conversation contains a “smoking gun,” the decision to tape the conversation will most likely appear reasonable to an objective observer (such as a judge or juror). But what if the supervisor suspects the employee may be “documenting” the conversation and decides to make statements that make the employee look bad? Taping carries risks. Once a record of the conversation is created, for better or worse, that record will have an impact on the outcome of a case.

  • Will the company learn of the taping? Most probably, yes. In civil discovery the company’s attorneys can ask whether or not the employee taped any conversations and can require that the employee produce copies of the tape(s).

  • If an employee tapes conversations, can he or she destroy tapes that do not help the case? No. The failure to preserve evidence (for example, erasing the contents of the tapes) can be considered a serious discovery abuse and result in sanctions.

  • Can an employee take steps to increase the chances that the tapes will be used in evidence? Yes. If an employee is taping, he or she should try to have the case heard in a forum that is most sympathetic to using tapes as evidence. It may be possible to research how courts in the specific jurisdiction have resolved issues related to one-party taping. The U.S. Department of Labor, which has jurisdiction over numerous federal whistleblower laws, has permitted the use of one-party tapes in whistleblower cases, when such taping is legal under state law. In one case the DOL found that taping itself could be a statutorily protected activity, if conducted in order to document safety violations. In other words, the Labor Department ruled that not only was one-party taping permissible, employees had a right to tape conversations if necessary to demonstrate violations of law.

  • What if a government official asks an employee to tape? In such circumstances the taping will almost always be found reasonable. If the government wants the whistleblower to tape, it usually means there is strong evidence of misconduct, which can significantly support the employee’s case.

  • How can an employee demonstrate that a taping was reasonable? In a decision by the U.S. Court of Appeals for the Second Circuit, the court recognized that “a range of factors” could justify taping, including an employee’s “belief that he was gathering evidence” to support his discrimination claim. But there is no better way to demonstrate reasonableness of taping than the contents of the tapes themselves. For example, in a case filed under the Clean Water Act’s whistleblower provision, the employee’s one-party recording of a taped meeting of Eastern Ohio Regional Wastewater Authority, the key manager admitted that the violations committed at the plant could harm his political career. When the court rendered its decision, this taped admission was critical: “The best indication that [the employee’s] dismissal was motivated by his protected activity is contained in the tape recorded comments of the Board members . . . [who were] obviously aghast at [the employee’s] whistleblower letter and were fearful of the effect the disclosure of environmental violations would have on their reputations and careers.”

  One-party taping has been instrumental in exposing government misconduct, protecting the public’s health and safety, and enabling whistleblowers to win their cases. But whether or not to tape always raises complex questions that should be carefully weighed before an employee decides to put a recorder in his or her pocket and have at it.

  Removing Documents from Work

  To prevail in any case, whistleblowers must obtain documentation. Often documents from the employer are the best evidence for proving a case. But employees do not have an unlimited right to obtain documents from work.

  First, an employee cannot sneak into a supervisor’s office and copy information. Courts draw a sharp distinction between information that an employee has access to at work as part of his or her job and confidential or private information that may be in the possession of a supervisor. As one court bluntly stated: “[R]ummaging through his supervisor’s office for confidential documents” is not permitted.

  Second, if a company has a “legitimate and substantial interest” in keeping certain documents confidential, such as “personnel records,” an employee cannot, without very, very good cause, “surreptitiously” copy the data. Courts that have sanctioned employees for copying confidential documents have noted that if an employee can demonstrate that the copied materials would have been “destroyed,” and their conduct was undertaken to “preserve evidence,” its decision may have been different. But outside such circumstances, copying and disseminating otherwise confidential materials may be highly problematic.

  Some employers have become very aggressive in enforcing confidentiality agreements tha
t prohibit employees from removing documents from work, including filing “counterclaims” or seeking injunctions against the employees, demanding the return of information or other sanctions.

  In one case, a registered nurse reported numerous violations, including fraudulent billing, the improper treatment of suicidal patients, and the unlawful discharge of other psychiatric patients. After she filed her whistleblower suit, the medical center filed a counterclaim, alleging illegal “conversion” and “theft” of hospital records. The court threw out the counterclaim, holding that the employee had not taken the documents for illegal purposes, such as using them to “compete” against the medical center. The court recognized that as a registered nurse, the employee was obligated to refer issues of patient care to “licensing authorities.” Also, the court cited an exception to the federal law on medical confidentiality that permitted whistleblowers to disclose “protected health information” to an attorney or “public health authority.” If she had a “good faith belief” that the medical center had violated “professional standards” or had placed patients “at risk,” then her activity was protected.

  In this case the nurse was able to explain to the court why her removal of documents was reasonable. Many employees are not able to meet that level of proof.

  Beware: The Boss Will Monitor E-mails and Computers

  Do not think work e-mails are private. Do not think that any computer or cellphone owned by the company (including laptops they let you bring home) is safe from a complete search of the hard drive, including searches for deleted documents. It is now standard operating procedure for a company to seize a whistleblower’s computer, especially when the employee is about to be fired. It is also becoming standard for the company to aggressively search hard drives and e-mails for any document it can use to impeach the whistleblower.

  The “open season” on employee’s e-mails and hard drives was made easier by a June 17, 2010, Supreme Court case, City of Ontario v. Quon. The case concerned the search of an employee’s text messages, which were sent on a cell phone owned by the city. Because the government conducted the search, the employee challenged it on the basis of the U.S. Constitution’s restrictions on warrantless searches. The Supreme Court held that government agencies can, under certain conditions, search the computer files of its employees without a warrant. The holding was broad: “[W]hen conducted . . . for the investigation of work-related misconduct, a government employer’s warrantless search is reasonable if it is justified at its inception and if the measures adopted are reasonably related to the objectives of the search and not excessively intrusive . . .”

  The authority of private-sector employers to search company-owned computers is even broader. In warning employees of this management power, the Privacy Rights Clearinghouse summarized the current state of the law as follows:

  New technologies make it possible for employers to monitor many aspects of their employees’ jobs, especially on telephones, computer terminals, through electronic and voice mail, and when employees are using the Internet. Such monitoring is virtually unregulated. Therefore, unless company policy specifically states otherwise (and even this is not assured), your employer may listen, watch, and read most of your workplace communications.

  The ability of employers to search company-owned computers is extremely significant in whistleblower cases. First, courts have held that evidence of misconduct obtained during the search of an employee’s computer can be used against that employee in a subsequent discrimination case. Second, employees sometimes include private information on their company-owned computers, including legal documents and communications with counsel. At a minimum, placing these types of materials on company computers can provide the company with a treasure trove of information that would otherwise be unavailable to the company. At worst, the employee will be accused of doing personal business on company time.

  Bottom line: An employee should not use company property to “blow the whistle.” He or she needs to keep protected activities private. Do not give the company the rope it will need for the hanging.

  Do Not Destroy Evidence

  An employee should not destroy documentary evidence. Once evidence is created, an employee cannot destroy it simply because it does not support his or her claim or may be embarrassing. For example, if an employee uses a company-owned computer, he or she cannot simply wipe out the hard drive, especially if he or she is afraid that the computer contains files that the company may use against him or her in an upcoming legal case. The rule is fairly clear and applies in the context of any civil lawsuit, not just whistleblower cases: “A litigant or potential litigant is under a duty to preserve evidence in his possession that he knows or should have known is relevant to the litigation or which might lead to the discovery of admissible evidence.” Stated another way: “Willful spoliation occurs when a party has clear notice of an obligation to preserve evidence and proceeds to intentionally destroy evidence in spite of its obligation not to.”

  In one unfortunate case filed under the False Claims Act and the Sarbanes-Oxley Act, the employee used a “wiping program” to erase data from the “hard drive of his company-issued computer.” When trying to justify the destruction of evidence, the employee’s explanations only made matters worse. He admitted to having highly embarrassing personal materials on the computer. This did nothing to further his claims, except to undercut his credibility even more. The issues of retaliation and corporate wrongdoing were lost in the dispute over the computer files, what he wiped off the hard drive, and how those materials may have helped the company. Because the documents were gone forever, the company was able to speculate as to what “might have” been located in the employee’s “personal directories” and what “could have” been used by the company to bolster its case. As a direct result of the “spoliation” of evidence, the employee lost his case and had to pay the company a sanction.

  Given the new rules on management access to employee information stored on company-owned computers (including e-mails, text messages, and documents stored on hard drives), it is extremely important that employees be aware that they lack basic rights of privacy when using company equipment—even company equipment that they are permitted to take home and use on their own time. Employees should avoid using company property while engaging in protected activities.

  On the other hand, spoliation cuts both ways. There are far more examples of companies and government agencies destroying evidence than there are of employees doing so. The government is under strict obligations to preserve all types of records due to the mandates of various laws, including the Freedom of Information and Privacy Acts. Corporations must maintain accurate records under audit, tax, and government contracting rules. The spoliation rules have been successfully used by employees and have likewise resulted in default judgments in favor of employees, when their employers have willfully destroyed evidence.

  Do Not Let the Boss Abuse the “After-Acquired Evidence” Rule

  What happens in a case where the employee proves that he or she was fired in retaliation for blowing the whistle? In this hypothetical, assume there is no doubt that employee engaged in protected activities and the termination was illegal. But what happens if after the termination, the employer learns that the employee engaged in misconduct that would have resulted in a termination, regardless of the protected activity? For example, what happens if during the course of the employee’s deposition she or he admits to lying on the job application and did not have the professional licensing required for the job? It is under these circumstances that the “after-acquired evidence” rule applies.

  The rule is simple. If the termination was illegal, the employee can still win the case. But damages are cut off, effective the date upon which the company learned of the offensive conduct and can show that it would have fired the employee, even if she or he had not engaged in protected activity.

  Once an employer learns of this disqualifying conduct, the employer no longer is required to
reinstate the employee. Requiring the reinstatement of a worker who could have and should have been fired would be rather odd, and the rules simply do not permit it. Furthermore, under the after-acquired evidence rule, damages are cut off from the date the company learned of the disqualifying misconduct. Thus, if an employee is fired, but thirty days later the company learns of the disqualifying conduct, the employee is only entitled to thirty days’ back pay.

  When debating the merits of the after-acquired evidence defense, there was a three-hundred-pound gorilla in the room. Could an employer use pre-trial discovery to snoop around an employee’s background in order to obtain information about potentially disqualifying conduct? The potential for abusing this practice was evident. If companies could use the fact that an employee filed a whistleblower case to engage in extensive discovery to try to dig up dirt, these tactics would have a strong chilling effect on the willingness of anyone to blow the whistle or file retaliation claims. No one wants to invite such a wide-ranging review of his or her past conduct.

  In permitting the use of after-acquired evidence, the U.S. Supreme Court warned against this type of discovery abuse and prohibited its use. As stated by the Court in McKennon v. Nashville Banner Publishing: “The concern that employers might as a routine matter undertake extensive discovery into an employee’s background or performance on the job to resist claims under the Act is not an insubstantial one, but we think the authority of courts to [sanction discovery abuses] will deter most abuses.”