Articles Posted in Whistleblower Law

Today, the U.S. Department of Labor Wage and Hour Division released three new fact sheets addressing the topic of retaliation under the Fair Labor Standards Act (FLSA), Family Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

Each of these statutes contain provisions prohibiting an employer from retaliating against an employee for asserting rights covered by each of the statutes.

Fact Sheet #77A, Prohibiting Retaliation Under the FLSA, provides general information concerning the FLSA’s prohibition of retaliating against any employee who has filed a complaint or cooperated in an investigation and is available on the WHD website at

Earlier this week, Senators Patrick Leahy of Vermont and Charles Grassley of Iowa submitted a letter to the Department of Labor accusing it of violating the “spirit and goals” of the Sarbanes-Oxley Act of 2002 (“SOX”). The whistleblower provisions of SOX protect employees who report corporate wrongdoing.

According to the letter, the senators were displeased over the Department of Labor’s narrow interpretation of SOX’s whistleblower provisions, which has resulted in the dismissal of the majority of complaints filed with the Department of Labor. According to Department records, the government has only ruled in favor of whistleblowers 17 times out of 1,273 complaints since 2002. An additional 841 claims have been dismissed based upon a finding that the employee-claimants of the subsidiaries of publicly traded companies (or companies required to file reports with the Securities and Exchange Commission) are simply not covered under the law.

SOX’s whistleblower provisions expressly prohibit publicly traded companies or “any other officer, employee, contractor, subcontractor, or agent of such company” from retaliating against any employees who blow the whistle on corporate fraud. The Department of Labor has been dismissing claims of employees who work for nonpublicly traded companies, despite that those companies are subsidiaries of publicly traded companies. An example of such a situation is a nonpublic investment banking subsidiary of a publicly traded bank. Under the Department of Labor’s interpretation of SOX, the employees of the bank would be protected under the law, while those employed by the investment subsidiary would not.

Last week Congress enacted the Consumer Product Safety Improvement Act of 2008. Among other things, the Act contains a new protection for employees of manufacturers and retailers who do any of the following: (1) provide information to the employer, federal government or attorney general of a state, relating to any violation of the Act or any statutes enforced by the Consumer Product Safety Commission; (2) testify or are about to testify in a proceeding concerning such a violation; (3) assist or participate (or seek to) in such a proceeding; or (4) object to participating in any such activity.

Critically, the employee engaging in whistleblower activity need only have a reasonable belief that a violation has taken place. Under the Act, a whistleblower claim must be filed with the Occupational Health and Safey Administration (“OSHA”) within 180 days of the retaliatory act. Either party can request a hearing before a Department of Labor administrative law judge. If the Department of Labor does not render a final decision within 210 days of the complaint’s filing, the employee can obtain a dismissal of the complaint and file a civil action. In addition to reinstatement, backpay and compensatory costs, a prevailing employee is entitled to attorneys’ fees and costs.

The Act differs from New York’s general whistleblower law in several respects, but mainly in that an employee complaining under the Act need not be certain that there was an actual violation of law. As long as the employee has a good faith or reasonable belief that a violation has occurred, the Act’s whistleblower protection will apply. Under New York law, however, an employee is only protected if he or she complain about an “actual” violation of law that poses a threat to the public health and safety. Consequently, protection under New York law is limited.

Last month, New York’s high court in Reddington v. Staten Island University Hospital limited the scope of New York’s Health Care Whistleblower law in response to a question concerning its scope certified by the United States Court of Appeals for the Second Circuit.

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