105
edits
Difference between revisions of "CFTC Whistleblower Program"
→Private Right of Action under Section 23(h)(1)(A) of the Commodity Exchange Act
| (2 intermediate revisions by the same user not shown) | |||
| Line 107: | Line 107: | ||
| [https://www.cftc.gov/PressRoom/PressReleases/7767-18 $240,000] || May 20, 2014 || On May 20, 2014, the CFTC announced its first-ever whistleblower award of $240,000 for providing “specific, timely and credible information.” | | [https://www.cftc.gov/PressRoom/PressReleases/7767-18 $240,000] || May 20, 2014 || On May 20, 2014, the CFTC announced its first-ever whistleblower award of $240,000 for providing “specific, timely and credible information.” | ||
|} | |} | ||
== '''Protections Against Whistleblower Retaliation'''== | |||
Whistleblowers are also afforded substantial protection against retaliation. Specifically, '''an employer may not “discharge, demote, suspend, threaten, harass, directly or indirectly, or in any manner discriminates against, a whistleblower” for legally reporting wrongdoing.''' In the event that an employer retaliates against a whistleblower, the law provides for substantial relief. This may include reinstatement, back pay, and compensation for related expenses such as litigation costs and reasonable attorneys’ fees. | |||
A whistleblower is entitled to this protection even if they do not receive a reward. The anti-retaliation provision applies to any whistleblower who possesses “a reasonable belief that the information the whistleblower is providing relates to a possible violation of the Commodity Exchange Act (CEA), or the rules or regulations thereunder, that has occurred, is ongoing, or is about to occur.” | |||
The CFTC can take enforcement action against an employer that “retaliates against a whistleblower by discharge, demotion, suspension, direct or indirect threats or harassment, or any other manner of discrimination” because the whistleblower provided “information to the Commission after reporting the information through internal whistleblower, legal or compliance procedures.” 17 C.F.R. 165.20(b). | |||
==='''Acts of Retaliation are Prohibited by the CFTC Whistleblower Protection Law'''=== | |||
The CEA prohibits an employer from discharging, demoting, suspending, threatening or harassing, or in any other manner discriminating against, a whistleblower in the terms and conditions of employment because of any protected whistleblowing. | |||
==='''The Burden to Prevail in a CFTC Whistleblower Retaliation Claim'''=== | |||
To prevail, a whistleblower must prove “but-for” causation, which is not tantamount to “sole factor” causation. In Bostock v. Clayton Cty., the Supreme Court clarified the burden of proving “but for” causation: | |||
Title VII’s ‘because of’ test incorporates the "simple" and "traditional" standard of but-for causation. Nassar, 570 U. S., at 346, 360, 133 S. Ct. 2517. That form of causation is established whenever a particular outcome would not have happened ‘but for’ the purported cause. See Gross, 557 U. S. at 176, 129 S. Ct. 2343. In other words, a but-for test directs us to change one thing at a time and see if the outcome changes. If it does, we have found a but-for cause. | |||
==='''Private Right of Action under Section 23(h)(1)(A) of the Commodity Exchange Act'''=== | |||
The CEA authorizes a whistleblower to bring a CFTC whistleblower retaliation claim in federal court. | |||
==='''Statute of Limitations for a CFTC Whistleblower Retaliation Claim'''=== | |||
The statue of limitations for a CFTC whistleblower retaliation claim is two years after the date on which the act of retaliation is committed. | |||
==='''Arbitration of a CFTC Whistleblower Retaliation'''=== | |||
An employer can not require arbitration of a CFTC whistleblower retaliation claim. The Dodd-Frank Act expressly provides that CFTC whistleblower retaliation claims are not subject to pre-dispute arbitration agreements. See 7 U.S.C. § 26(n). | |||
==='''Other Whistleblower Protection Laws May Provide a Remedy for Retaliation for Corporate Whistleblowers'''=== | |||
Other federal and state whistleblower protection laws may provide an additional remedy, including New York’s recently amended whistleblower protection law. | |||
=='''CFTC Prohibits “Gag Clauses” in Confidentiality and Employment Agreements'''== | |||
The rules implementing the CFTC whistleblower program '''prohibit employers from taking steps to impede whistleblowers from communicating with the CFTC staff.''' In particular, 17 C.F.R. § 165.19(b) provides: | |||
No person may take any action to impede an individual from communicating directly with the Commission’s staff about a possible violation of the Commodity Exchange Act, including by enforcing, or threatening to enforce, a confidentiality agreement or predispute arbitration agreement with respect to such communications. | |||
This prohibition is critical to the success of any whistleblower program because '''companies often use overly broad confidentiality agreements to silence and punish whistleblowers.''' | |||