Difference between revisions of "Whistleblower Protection Laws"

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*[https://www.zuckermanlaw.com/jp-morgan-sox-whistleblower-wins-1-13m-trial/ JP Morgan SOX Whistleblower [Wins $1.13M at Trial]
*[https://www.zuckermanlaw.com/jp-morgan-sox-whistleblower-wins-1-13m-trial/ JP Morgan SOX Whistleblower [Wins $1.13M at Trial]
*[https://www.zuckermanlaw.com/ubs-whistleblower-prevails-trial-sox-whistleblower-case/ UBS Whistleblower Prevails at Trial] in SOX Whistleblower Case
*[https://www.zuckermanlaw.com/ubs-whistleblower-prevails-trial-sox-whistleblower-case/ UBS Whistleblower Prevails at Trial] in SOX Whistleblower Case
=='''Remedies in Whistleblower Retaliation Cases'''==
Whistleblower retaliation can exact a serious toll, including lost pay and benefits, reputational harm, and emotional distress.  Indeed, whistleblower retaliation can derail a career and deprive the whistleblower of millions of dollars in lost future earnings.
Whistleblowers should be rewarded for doing the right thing, but all too often they suffer retaliation and find themselves marginalized and ostracized.  Federal and state whistleblower laws provide several remedies to compensate whistleblowers that have suffered retaliation, including:
*back pay (lost wages and benefits);
*emotional distress damages;
*damages for reputational harm;
*reinstatement or front pay in lieu thereof;
*lost future earnings; and
*punitive damages.
Click here for examples of substantial verdicts and settlements in whistleblower retaliation cases.  Recently, the Pennsylvania Supreme Court affirmed an award of approximately $3.2 million in a whistleblower protection case.
==='''Back Pay in Whistleblower Retaliation Cases'''===
Back pay is compensation for lost wages and benefits that the whistleblower would have earned absent the adverse employment action, offset by interim earnings.  A back pay award may include all promotions and salary increases the complainant would have received in the absence of retaliation.  See, e.g., Welch v. Cardinal Bankshares Corp., 2003-SOX-15, at 17 (ALJ Feb. 15, 2005) (holding that a prevailing complainant “is entitled to all promotions and salary increases that he would have obtained but for the illegal discharge”) rev’d on other grounds, 536 F.3d 269 (4th Cir. 2008). The value of stock options is recoverable in SOX whistleblower cases.  Hagman v. Washington Mutual Bank, Inc., 2005-SOX-73, 2006 WL 6105301, *32 (Dec. 19, 2006). 
In addition to back pay, a prevailing whistleblower is entitled to prejudgment interest under certain whistleblower protection laws.  Prejudgment interest accrues from the time of the whistleblower’s termination to the time that the court entered judgment.
Under the False Claims Act whistleblower protection law and Dodd-Frank anti-retaliation provision, a prevailing whistleblower is entitled to recover double back pay.  In Mooney v. Americare, the court held that back pay is doubled before the court offsets the value of interim earnings (also known as mitigation).
Back pay can also include contracted severance pay to which he would be entitled in the event of discharge without cause when reinstatement was not appropriate. See Loftus v. Horizon Lines, Inc., ARB No. 16-082, ALJ No. 2014-SPA-004 (ARB May 24, 2018).
==='''Front Pay in Lieu of Reinstatement in Whistleblower Retaliation Cases'''===
Reinstatement is the “presumptive and preferred remedy,” but where pronounced animosity between the parties leads both of them to advocate against reinstatement, front pay may be an appropriate substitute.  Front pay is designed to compensate the plaintiff for the time it would take to secure comparable employment. See, e.g., Hagman v. Washington Mutual Bank, Inc., ALJ Case No. 2005-SOX-00073, at 26–30 (ARB Dec. 19, 2006), appeal dismissed, ARB Case No. 07-039 (ARB May 23, 2007) (awarding $640,000 in front pay to a banker whose supervisor became verbally and physically threatening when the banker disclosed concerns about the short funding of construction loans).
Where a whistleblower demonstrates that he planned to continue working for the employer until he or she reached normal retirement age and demonstrates sufficient efforts to mitigate damages (find comparable employment), the whistleblower can been entitled to expected earnings to the date of retirement.  For example in the Perez v. Progenics Pharmaceuticals SOX whistleblower case, the court awarded approximately $2.7 in front pay.  That case is discussed in an article in Corporate Counsel titled How to Help a Whistleblower.
Front pay is an appropriate remedy in lieu of reinstatement in SOX whistleblower cases. See Jones v. SouthPeak Interactive Corp., 986 F. Supp. 2d 680 (E.D. Va. 2013), aff’d, 777 F.3d 658 (4th Cir. 2015). Andrea Jones worked at SouthPeak Interactive Corp. (“SouthPeak”) as its chief financial officer, and SouthPeak terminated her employment two days after she disclosed accounting irregularities to the SEC. Following a four-day trial, a jury found for Jones and awarded nearly $700,000 in damages. Jones then filed a motion seeking front pay in lieu of reinstatement and in addition to compensatory damages. Judge Payne awarded front pay, and noted the following:
Front pay also has been more precisely defined as “a lump sum … representing the discounted present value of the difference between the earnings [an employee] would have received in his old employment and the earnings he can be expected to receive in his present and future, and by hypothesis, inferior, employment.” McKnight v. Gen. Motors Corp., 908 F.2d 104, 116 (7th Cir.1990), cert. denied, 499 U.S. 919, 111 S.Ct. 1306, 113 L.Ed.2d 241 (1991), partially superseded by Civil Rights Act of 1991, Pub.L. 102-166, 105 Stat. 1071 (codified at 42 U.S.C. 1981 et seq.). If a plaintiff has been diverted onto a less profitable career path through the unlawful actions of his former employer, an award of front pay to compensate the plaintiff until such time as he can regain his former career track is not a windfall.
SouthPeak appealed Judge Payne’s decision. The DOL filed an amicus curiae brief arguing that front pay is an appropriate remedy under SOX, and the Fourth Circuit affirmed. See 777 F.3d at 663.
In calculating front pay, courts should apply the following guiding principles:
“It is well settled that `the risk of lack of certainty with respect to projections of lost income must be borne by the wrongdoer, not the victim.” Bartek v. Urban Redevelop ent Authority, 882 F.2d 739, 746 (3d Cir. 1989).
The Court should “assume, absent evidence to the contrary, that the illegally discharged employee would have continued working for the employer until he or she reached normal retirement age.”  See Perez v. Progenics Pharmaceuticals, Inc., 204 F. Supp. 3d 528 (S.D.N.Y. 2016).
==='''Compensatory Damages in Whistleblower Retaliation Cases'''===
The SOX whistleblower protection law and similar corporate whistleblower protection laws authorize the award of not only economic damages, but also “special damages” which includes damages for emotional distress, mental anguish, humiliation and injury to reputation.  See, e.g., Lockheed Martin Corp. v. Admin. Rev. Bd., 717 F.3d 1121, 1138 (10th Cir. 2013) (upholding an award of “noneconomic compensatory damages” for “emotional pain and suffering, mental anguish, and humiliation”).  As a federal judge held in Hanna v. WCI Communities, Inc., 348 F.Supp.2d 1332 (S.D.Fla.2004), a SOX whistleblower case, “[w]hen reputational injury caused by an employer’s unlawful discrimination diminishes a plaintiff’s future earnings capacity, [he] cannot be made whole without compensation for the lost future earnings [he] would have received absent the employer’s unlawful activity.”
“[A] plaintiff’s testimony, standing alone, can support an award of compensatory damages, [but] the evidence of the emotional distress must be demonstrable, genuine, and adequately explained.”  Price v. City of Charlotte, N.C., 93 F.3d 1241, 1251-52 (4th Cir. 1996).  The whistleblower’s testimony “must indicate with specificity how the plaintiff’s alleged distress manifested itself.” Bryant v. Aiken Reg’l Med. Ctrs., 333 F.3d 536, 547 (4th Cir. 2003) (internal quotation marks and alterations omitted).
==='''Attorney Fees and Litigation Costs in Whistleblower Retaliation Cases'''===
Legal fees and costs in whistleblower retaliation cases can also be significant.  In the Wadler v. Bio Rad SOX whistleblower retaliation case, Bio-Rad stipulated to $3M in attorney fees for the whistleblower’s counsel.  In March 2020, Magistrate Judge Michael E. Hegarty awarded $2,719,225.50 in lodestar fees on the whistleblower’s recovery of $620,105.00 in an NDAA whistleblower retaliation case.  See Cejka v. Vectrus Systems Corp., 2019 WL 8198090 (D. Colo. Feb. 21, 2019).


=='''Litigating Sarbanes-Oxley Whistleblower Cases'''==
=='''Litigating Sarbanes-Oxley Whistleblower Cases'''==