by Stephen Kohn
This warning to company attorneys in McKennon is of critical importance to employees. Assuming that an employee did engage in some workplace misconduct that the company does not know about, the employee should not freely admit to engaging in such violations. It is up to the company to learn these facts through legitimate and relevant discovery. Questions by employers such as, “Did you rummage through your supervisor’s office?” or “Did you improperly remove company documents before you were fired?” should be objected to, and if necessary should be the focus of a motion for protective order or sanctions.
Self Help
GUNTHER V. DELTEK: CASE STUDY IN TAPING AND REMOVING DOCUMENTS
Dinah Gunther worked as a financial analyst for a technology company, Deltek, Inc. She was fired after reporting suspected financial frauds to her bosses and the SEC. She fought Deltek for years and eventually prevailed in a showdown at the U.S. Court of Appeals for the Fourth Circuit. Hers is a textbook case on why employees have to tape conversations and obtain documents to win their cases.
The central dispute concerned a meeting between Gunther, the company’s director of Human Resources, and another management employee. Deltek accused Gunther of being “confrontational,” “demanding,” and “challenging” toward the director at the meeting and used her so-called unprofessional conduct as the main justification for firing her. Thus, what happened at that meeting was the key to whether Gunther’s termination would be sustained.
The company had the word of its HR director and a witness who would attest to her aggressive and inappropriate behavior. Two against one; alone, Gunther did not stand a chance. But Gunther had a secret weapon. She had surreptitiously taped the meeting (which is legal in the state of Virginia, where she was employed).
The tape was proof that the meeting didn’t go as Deltek claimed. The judge listened to what actually happened during that meeting and ruled in Gunther’s favor: “Based upon my listening to the recording, I find there was no basis for asserting that [Gunther] was confrontational. . . . Having listened to the tape more than once, I do not agree with [the HR director’s] characterization of [Gunther’s] actions. . . . At all times [Gunther] was calm, quiet, and polite.”
The judge also explained that Gunther’s taping was reasonable in the context of her employment. The taping “was done in furtherance of [Gunther’s] case, and it was these tapes which revealed that [Deltek’s] reasons for terminating [Gunther] were pretext. . . . [Gunther’s] recordings were all made in furtherance of her whistleblower claims and therefore constitute protected activity.”
Without that tape, it is almost certain Gunther would have lost her case. But with the tape she could demonstrate that the company lacked credibility, was doctoring testimony, that a witness apparently lied on the stand, and that the reasons given for her termination were a pretext. The tape ensured that Gunther would eventually win her case, and obtain more than $500,000 in back pay, front pay, and damages.
The company also attacked Gunther for removing company documents (i.e., sending company information to her home e-mail account) in contravention of her confidentiality agreement and company policy. They sought to use the “after-acquired evidence” defense to deny damages to Gunther. Under that defense, Deltek could argue that once it learned Gunther had removed documents in violation of company policy, it had the right to deny her reinstatement and cut off her ability to collect damages. Deltek cited cases holding that “Sarbanes-Oxley is not a license to steal documents or break contracts.”
The Department of Labor judge carefully reviewed the law on document removal, recognizing “the inherent tension between a company’s legitimate business policies that protect confidential information and the whistleblower programs created by Congress.” The cases cited by Deltek were not black and white. None of them prohibited the removal of documents under all circumstances. An employee’s conduct had to be reviewed on a case-by-case basis. The judge concluded that Gunther “forwarded these documents in an effort to support her Sarbanes-Oxley Act [SOX] allegations.” She also noted that Gunther “only took documents relevant to her SOX complaint and did so for fear that they would be shredded,” and that there were “strong policy reasons for permitting whistleblowers in SOX cases to take necessary actions to protect relevant documents from being destroyed, as long as the employee’s actions are necessary, reasonable, and not overbroad.”
The judge also understood that the legality of an employee’s removal of confidential business documents in violation of company policy “would depend on the facts of each case” and that the “indiscriminate misappropriation of proprietary documents would not be protected.” But in this case, Gunther “took these documents for the sole purpose of preserving evidence relevant to her whistleblower complaint and alleged violations under SOX.” Thus Gunther’s actions were not only permitted but also constituted protected activity; “her collection, retention and forwarding of the documents constitute protected activity.”
Gunther’s case is a lesson learned. If you are careful using self-help tactics, you can prevail. But if you indiscriminately take company documents or engage in other unprofessional activity, you may find yourself out of luck.
Be Careful
Employees sometimes make mistakes when they are trying to collect evidence to support their claims. Thus, when responding to company discovery questions, it is important to ask whether this question is material to the whistle-blower case, or whether the company is engaging in a “fishing expedition” to dig up dirt on the whistleblower. If the company learns of an employee’s mistakes through legitimate means, that is fair game. But if the company uses the civil discovery process to obtain after-acquired evidence of employee misconduct (including self-help tactics that may have gone over the line), such questioning must be vigorously opposed.
PRACTICE TIP
• The Supreme Court decision on the after-acquired evidence rule: McKennon v. Nashville Banner Publishing, 513 U.S. 352 (1995).
• The Department of Labor case of Gunther v. Deltek, Inc., 2010-SOX-49, affirmed Deltek v. Department of Labor, 2016 U.S. App. LEXIS 9274 (4th Cir. 2016), provides analysis of both document removal and one-party taping.
• The best one-party taping case is Mosbaugh v. Georgia Power Co., 91-ERA-1/11 (November 20, 1995), where the Secretary of Labor ruled that one-party taping constituted a protected activity for which an employee could not be fired. See www.oalj.dol.gov (DOL whistleblower cases are published on this site).
RULE 21Be Prepared for the Lid to Blow
“Our President has gone on a rampage about news leaks on Watergate. He told the appropriate people, ‘go to any length to stop them’ . . . Internal investigations, plus he wants to use the courts . . . Nixon was wild, shouting and hollering that ‘we can’t have it and we’re going to stop it, I don’t care how much it costs . . .’”
Bob Woodward, quoting the whistleblower “Deep Throat”
Whistleblowers need to be prepared. If they think blowing the whistle will automatically win them a grand prize, they should think again. They need to understand the serious nature of whistleblowing, the impact it may have on their career and family, and the necessary steps that they may take to protect themselves.
One of the biggest mistakes shared by most whistleblowers at the onset of a case is the belief that somehow doing the “right thing” will be rewarded, and that the system will naturally work. Although a nice thought, that is the exception, not the rule. Regardless of the reputation of one’s boss, it is simply not possible to predict how a company will respond to a report of wrongdoing by one of its own employees.
The company’s reaction to disclosures may be very subtle, but it may also reflect emotion. In rare cases employers go far overboard, beyond the pale of acceptable conduct—so much so that even the Supreme Court held that outrageous conduct, such as turning in employees who engage in protected activity to the immigration authorities, constitutes an unfair labor practice.
It is absolu
tely critical that whistleblowers know what steps to take to protect their job. If an employee is tagged as a whistleblower for trying to fix a problem in-house, there is no choice but to prepare a defense for his or her career and reputation. If an employee is so lucky, in that he or she understands the potential for retaliation before blowing the whistle, following are some questions that must be carefully considered:
• Have I accepted the whistleblower label? Am I prepared for a fight?
• Are there laws that would let me blow the whistle confidentially?
• Does my family support me? If so, how much do they support me?
• Do I have the resources necessary for either hiring a lawyer or weathering a termination? If I don’t, do I have an alternative plan?
• Is the concern I am raising worth the risks that I will potentially face? Do the benefits outweigh the costs?
• How good is my employment record? Could I win a wrongful discharge suit or are there enough past problems within the workplace to make my case questionable to a judge or jury? Whistleblowers have to be prepared to defend their performance and conduct at work. There is a strong likelihood that a company will defend its adverse action by pointing to so-called performance problems. The company cannot admit that the reason it wants to get rid of an employee is because he or she blew the whistle. The company must therefore find an excuse, and it will dig deep.
• Am I prepared to be treated poorly? Whistleblowers should not think they will be treated like other employees or as they were treated in the past. One of the most common issues in a whistleblower case is “disparate treatment.” The concept is self-explanatory. Whistleblowers may be treated differently than others and held to a higher standard.
• Is there anything in my background that my employer could use to smear me? Whistleblowers must think of all of the little things that they could be nabbed for.
• What evidence do I have to support my allegations that the company or agency engaged in misconduct? Do I have tapes, written documents, or pictures? It is also important to obtain expert advice before making a final decision as to whether or not to blow the whistle.
• If I risk my job, can I qualify for a reward? Can I file an anonymous claim under laws such as the Dodd-Frank Act?
Depending on the state and situation, some whistleblower laws are very powerful while others are weak and virtually nonexistent. Each whistleblower must understand where his or her situation falls, and an expert can help with that.
One of the tragedies in whistleblower cases is having to tell an employee who “did the right thing,” who saved lives or saved consumers millions of dollars, that there are not any good laws to protect him or her, or that a deadline was missed. These employees are in the unfortunate position of having put their jobs and careers at risk to help the public interest, yet finding themselves deserted by the courts due to their failure to comply with vagaries of the law. Given the numerous options now available to employees under state and federal laws, if an employee takes the time to ensure that his or her disclosures are fully protected, this tragic pitfall usually can be avoided. Whistleblowers must do due diligence.
Collecting evidence while still an employee is critical. If you are considering filing a False Claims Act, the law requires that you file, with the Attorney General, “substantially” all of the evidence you have proving your allegations of contractor fraud. Hence it is to your advantage to make this disclosure as comprehensive as possible. The better your evidence, the greater the probability that the Justice Department will join your team and join in your False Claims Act case, significantly increasing the likelihood that you will win the claim.
Employees with the foresight to legally collect e-mails, reports, and other internal documents before the first incident of retaliation are better prepared to defend a case, should it arise.
An employee who is contemplating blowing the whistle should understand that his or her social standing at work may change radically. For example, prior management tolerance for minor workplace infractions have the potential to end and may suddenly become grounds for attacking an employee’s performance. Management may scrutinize an employee’s conduct with a fine-tuned microscope, searching for any justifications to downgrade, transfer, or even terminate the employee. One government agency notorious for retaliating against whistleblowers coined a phrase for these practices: “keeping book.” When asked under oath, the agency’s top manager frankly admitted that “keeping book” was a method of documenting minor infractions, in order to build a paper trail that could be used against an employee. In this particular case, the supervisor’s “keeping book” included documenting derogatory work-place gossip, without any attempt to verify its truthfulness, monitoring whom an employee ate lunch with, and carefully noting typographical errors in interoffice memoranda prepared by the whistleblower. All of the minor issues were eventually bundled together to paint a highly negative and completely misleading picture of the employee.
Employees make a mistake if they embark on a yellow brick road to whistleblowing, initially expecting that their employer will reward them for helping identify and fix major problems. They believe that someone at the top will “see the light” and recognize the exemplary contributions the employee made to safety, the public interest, or the company’s long-term best interest. But you aren’t in Kansas anymore. No company presents an annual “whistleblower award” for the employee who filed the most effective complaint with a federal law enforcement agency.
Rather than praise and acknowledgement, the usual scenario is as follows: An employee’s careful attention to detail is re-interpreted as “nitpicking,” the act of raising safety concerns is characterized as “disrupting” overall production and threatening jobs within the company, and identifying illegal work practices becomes an automatic mark of disloyalty. In the end, it is far more realistic to expect a pink termination slip for failure to be a “team player” than a gold embossed plaque for “employee of year.”
To reiterate, it is essential for any employee who is considering blowing the whistle to understand that these types of changes in the workplace are very likely to occur. Perhaps management will welcome the information. Perhaps the culture of the company is such that whistleblowing is welcomed. The aforementioned are rare. Most likely, your manager simply cannot live up to the laudatory goals of the company. It is essential to determine whether you are covered under a reward law and thus can avoid many of the pitfalls that whistleblowers have endured over the years.
Some employees will be pigeonholed as “whistleblowers” simply because they did their job honestly or aggressively. Other workers may be forced into becoming “whistleblowers” because they either answered a government investigator truthfully or refused to sign-off on shoddy work. These employees may have no choice but to accept that they are now “whistleblowers,” even if they never intended to be. Other workers do have a clear decision to make.
Regardless of how you are confronted with the reality of whistleblowing, the worst mistake you can make is to brush it under the carpet and to simply ignore the issue. The ostrich approach does not work, especially when reputations, careers, money, and jobs are on the line. Weigh the pros and cons, the benefits and the costs. Carefully consider whether you can blow the whistle anonymously. Search your conscience. Seek out advice. Know your rights. Follow the law. Do not lie. Be prepared.
PRACTICE TIP
An excellent book discussing what employees face after they blow the whistle: Myron and Penina Glazer, The Whistleblowers: Exposing Corruption in Government and Industry (New York: Basic Books, 1989).
• Aaron Kesselheim, et al., “Whistle-Blowers’ Experiences in Fraud Litigation against Pharmaceutical Companies,” New England Journal of Medicine (2010) (“Special Report”).
• Ernesto Reuben and Matt Stephenson, “Nobody likes a rat: On the willingness to report lies and the consequences thereof,” 93 Journal of Economic Behavior & Organization 384 (Sept. 2013).
RULE 22Delay Is Deadly
Delay is deadly. Don’t miss the deadline for filing the case!
As explained in Rule 2, there is no single comprehensive national whistleblower protection law. The laws vary from state to state, and the federal government has enacted numerous other laws and regulations that offer protection for whistleblowers. Each law has its own unique statutes of limitation (i.e., filing deadline) and its own unique procedure for properly filing a claim or lawsuit.
Some laws require claims to be filed within thirty days, while others permit years to pass before a case is filed. Other laws are filed with an administrative agency, such as the Department of Labor, while several are filed directly in court. Once an employee identifies the best legal protections that apply to his or her case, compliance with each and every technical requirement of the law is absolutely required. The strictest of these requirements is known as the “statute of limitations,” which sets forth the deadline for filing a claim. Miss the deadline, lose the case. It is that simple. Figure 11 is a summary of the filing deadlines for cases that must be originally filed in federal court. Figure 12 summarizes the deadlines for filing complaints under major DOL laws.
Complying with the statute of limitations is particularly relevant in whistleblower cases. First, some of the limitations periods are very short. The periods are measured in days, not years. For example, the federal environmental and occupational safety whistleblower laws say claims must be filed within thirty days of the adverse action. Also the Sarbanes-Oxley corporate whistle-blower law requires that claims be filed within 180 days of the adverse action. The deadlines start running on the day an employee is given notice of the termination or discipline, not the last day of work. With very few exceptions, the failure to comply with these statutes of limitation spells doom.
