Employment Law and the Protection of Whistleblowers

Employers, repeat after me: It's illegal to require employees to waive the right to financial rewards for reporting misconduct to regulators. Yesterday, 7 companies settled SEC claims that they required employees to sign separation and employment agreements agreeing, among other things to waive their rights to possible financial compensation for reporting SEC violations to regulators. Such a requirement blatantly violates what is known as Rule 21F-17(a) of the whistleblower protection program. The grand total of penalties to be collected against all 7 companies is more than $3m. In theory, almost anything in a contract is negotiable -- except certain employee rights. By definition certain employee rights, such as these or, for example, wage and hour rights under the FLSA are not waivable. At best that means that provisions that seek to act as a waiver of such rights are not enforceable against the employee. One of the 7 companies allegedly entered into 56 separation agreements that, in addition to requiring waiver of possible financial compensation, required employees to waive the right to file a complaint with any government agency. Under the Dodd-Frank Act, to boost enforcement efforts, the SEC may provide monetary awards to whistleblowers who report timely and credible information that results in a successful enforcement case. Hint Number 1: If a contract clause is likely to render a law meaningless it's probably illegal. Hint Number 2: If you feel a need to have such a clause, in your employment and separation agreements, it behooves you to rethink your practices. Such a clause, most likely, is effectively an admission that you are doing something illegal. Now, you have the right to roll the dice and take the risk, as these companies clearly did. You also have a right to live with the consequences. You don't have a right to stop employees from reporting illegal or unethical conduct. But let's zoom out just a bit (as I often do). If you're willing to behave in such a way toward the public and toward your employees, are you willing to tolerate it when the same conduct is directed at your company? If your company is going to game the system for its benefit, should you really be surprised when one of its own employees does so for their own benefit -- and to your company's detriment? Should you be surprised if you cannot inspire employee loyalty or even have trouble attracting good employees in the first place? The choice is yours. Thoughts? Share below.

🚨𝐑𝐮𝐥𝐢𝐧𝐠 𝐨𝐧 𝐖𝐡𝐢𝐬𝐭𝐥𝐞𝐛𝐥𝐨𝐰𝐞𝐫 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐄𝐔 𝐆𝐞𝐧𝐞𝐫𝐚𝐥 𝐂𝐨𝐮𝐫𝐭 – Case T-793/22 🚨 On September 11, 2024, the EU General Court handed down an important decision in Case T-793/22, addressing the 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐏𝐚𝐫𝐥𝐢𝐚𝐦𝐞𝐧𝐭’𝐬 𝐡𝐚𝐧𝐝𝐥𝐢𝐧𝐠 𝐨𝐟 𝐰𝐡𝐢𝐬𝐭𝐥𝐞𝐛𝐥𝐨𝐰𝐞𝐫 𝐩𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐚𝐧 𝐀𝐜𝐜𝐫𝐞𝐝𝐢𝐭𝐞𝐝 𝐏𝐚𝐫𝐥𝐢𝐚𝐦𝐞𝐧𝐭𝐚𝐫𝐲 𝐀𝐬𝐬𝐢𝐬𝐭𝐚𝐧𝐭 (APA). The case involved allegations of financial irregularities and harassment, with the APA seeking recognition and protection under Articles 22 of the EU Staff Regulations. Some key points from the ruling: 𝑾𝒉𝒊𝒔𝒕𝒍𝒆𝒃𝒍𝒐𝒘𝒆𝒓 𝑺𝒕𝒂𝒕𝒖𝒔 – The Court clarified that whistleblower protection is automatically granted when an individual informs the appropriate authority about illegal activity or serious misconduct. The whistleblower status does not require formal recognition by the administration (Paragraphs 82-84). Protection begins as soon as the institution or OLAF is informed of such allegations. 𝑭𝒂𝒊𝒍𝒖𝒓𝒆 𝒕𝒐 𝑷𝒓𝒐𝒕𝒆𝒄𝒕 – While the Parliament had provided some measures, such as relieving the APA of duties, the Court found these were insufficient. The ruling emphasized that whistleblowers must be adequately protected from any retaliatory actions, and the institution failed in this regard (Paragraphs 32-102). 𝑪𝒐𝒏𝒇𝒊𝒅𝒆𝒏𝒕𝒊𝒂𝒍𝒊𝒕𝒚 𝑩𝒓𝒆𝒂𝒄𝒉 – The Court also ruled that the Parliament violated the whistleblower’s confidentiality by informing individuals involved in the complaint about the APA’s whistleblower status without explicit authorization, violating internal rules (Paragraphs 173-181). 𝑪𝒐𝒎𝒑𝒆𝒏𝒔𝒂𝒕𝒊𝒐𝒏 – Although the Court upheld the Parliament’s decision not to renew the APA’s contract (citing procedural grounds), it awarded €10,000 in compensation for the Parliament’s failure to properly protect the whistleblower (Paragraphs 232-248). This ruling is a critical reminder of the need for rigorous adherence to 𝐰𝐡𝐢𝐬𝐭𝐥𝐞𝐛𝐥𝐨𝐰𝐞𝐫 𝐩𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐰𝐢𝐭𝐡𝐢𝐧 𝐭𝐡𝐞 𝐄𝐔’𝐬 𝐢𝐧𝐬𝐭𝐢𝐭𝐮𝐭𝐢𝐨𝐧𝐬. It underscores the nature of such protections once an individual reports suspected wrongdoing and the importance of safeguarding whistleblowers from retaliation and breaches of confidentiality. Case here: https://lnkd.in/ebmf9KvN #WhistleblowerProtection #EUGeneralCourt #WhistleblowerRights #Transparency #EUInstitutions #LegalRuling #Accountability

Dr. Carla Campbell-Jackson, a Black woman with 30 flawless years working at State Farm, found herself out of a job after raising concerns about systemic discrimination within the company against minority customers and employees. When she spoke up, she claimed her stellar performance reviews dropped, and soon after, State Farm terminated her for allegedly violating company policy by sending an email with sensitive information defending her performance. Campbell-Jackson believed her termination wasn't about the email—it was retaliation for her complaints. She sued, and the 6th Circuit revived her case. The court relied heavily on the fact that State Farm sat on Campbell-Jackson's alleged confidentiality violation for months, and did not take any action until only a few weeks after her final complaint about discrimination, at which point it fired her. The close timing raised enough suspicion to question State Farm's explanation. Was the email incident a pretext for retaliation? The court thought a jury might find so. This decision is a warning to employers: handling whistleblower complaints improperly can have serious consequences. Here's what you should take away: 1. Avoid Retaliation Traps: Retaliation claims are among the most common workplace lawsuits for a reason. Even if an employee breaks a rule, timing matters. When discipline follows closely on the heels of a protected complaint, it raises red flags. 2. Document everything. If you're going to discipline or terminate an employee with a history of complaints, your documentation better be airtight. 3. Listen to your employees and create a safe reporting culture. Brushing off employee concerns—especially those tied to systemic discrimination—doesn’t just hurt morale; it can lead to a courtroom. Employees need to feel safe raising concerns without fear of retribution. A whistleblower policy is only as good as its implementation. Retaliation claims can be among the hardest to defend. Timing and intent are everything, and even well-meaning employers (note: I'm not convinced State Farm was "well-meaning" here) can stumble without strong policies and careful implementation.

UK to Ban the Misuse of NDAs Covering Up Misconduct The UK government is set to introduce a landmark reform banning the use of non-disclosure agreements to silence victims of workplace harassment, discrimination and abuse. Under amendments to the Employment Rights Bill, confidentiality clauses that prevent employees or witnesses from speaking out about misconduct will be rendered null and void. This move forms part of what ministers are calling the most significant overhaul of workers’ rights in a generation. The ban comes in response to years of campaigning by organisations such as Can’t Buy My Silence, co-founded by Zelda Perkins, who described this as a “huge milestone” positioning the UK as a world leader in protecting employees from the misuse of NDAs. Deputy Prime Minister Angela Rayner stated this reform would help to “stamp out” a culture where silence was enforced through fear of legal repercussions. Similar initiatives have already been implemented in Ireland, Canada and parts of the US, but the UK’s approach is among the most comprehensive globally. For businesses, the implications are far-reaching. While NDAs will remain valid for protecting commercially sensitive information and intellectual property, their misuse to cover up wrongdoing will become unlawful. This is an opportunity for employers to review HR policies, settlement agreements and workplace culture to ensure they uphold transparency and trust. The Financial Conduct Authority is also moving towards tougher cultural standards, indicating that expectations of accountability will extend beyond legal compliance into broader industry practice. For employees, especially those in lower-paid or insecure roles who are most vulnerable to the misuse of NDAs, this reform provides critical reassurance. It signals that raising concerns is a right, not a risk, and that the law will stand on the side of those who speak up against harassment or discrimination. Ultimately, this change reinforces that ethical leadership and psychologically safe workplaces are not merely moral imperatives; they are fundamental to resilient, high-performing organisations in the modern economy.

From complaint to termination in 48 hours? That's not a timeline—that's a case study. A recent state Appellate Court decision is worth a read for anyone in food service or hospitality. The facts are straightforward: An employee emailed the local health district about alleged violations at a pizza restaurant—rodents, improper food storage, the usual nightmare fuel for any restaurateur. An inspector showed up the next day. She was fired the day after that. April 11 → April 12 → April 13. That's about as tight as temporal proximity gets. The employer tried to dismiss the case, arguing the employee should have gone through OSHA first. The Appellate Court disagreed. Because her complaint focused on public health (customer safety) rather than occupational safety (her own working conditions), she could proceed directly to court. This isn't new law—state law has protected employees who report public health concerns for years. But the case is a useful reminder: Complaints about violations affecting the public are protected activity. Timing matters enormously in retaliation cases. And the best defense is prevention—investigate complaints seriously, document everything, and never let retaliation become a plausible explanation for a termination. The case goes back for trial. The employer may still win on the merits. But "winning after expensive litigation" is a different outcome than "never getting sued in the first place." Food for thought. (And you know the pun is intended.) #EmploymentLaw #HR #Whistleblower

The Abu Dhabi Global Market (ADGM) has introduced new Whistleblower Protection Regulations to foster transparency and accountability. Here’s a quick breakdown of the proposed changes: - Protected disclosures include suspected violations of ADGM laws, financial crimes, fraud, or money laundering. - Whistleblowers can report to designated persons within their company, regulatory bodies, or law enforcement. - Individuals making good-faith disclosures are protected from termination, civil liability, or any detriment due to their disclosure. Employers must have written policies for disclosures if they: - Employ more than 35 people, or - Have over $13.5M in annual turnover. Effective arrangements must be in place by 31 May 2025, including systems to assess and escalate concerns and protect whistleblowers' identities. What Should Employers Do? - Review policies: Ensure your policies align with the new regulations. - Set up systems: Implement robust mechanisms for handling disclosures. - Educate your teams: Make sure employees understand their rights and protections. Remember, creating a culture of accountability goes beyond compliance—it builds trust. I’ve seen companies transform employee confidence by making whistleblowing safe and supported. #Leadership #Accountability #HRInsights #WorkplaceCulture #Compliance #Transparency #WhistleblowerProtection

Whistleblower cases don’t start with proof. They start with allegations. If those allegations are plausible, early dismissal is usually off the table. 𝗧𝗵𝗲 𝗟𝗼𝘄 𝗕𝗮𝗿 𝗳𝗼𝗿 𝗪𝗵𝗶𝘀𝘁𝗹𝗲𝗯𝗹𝗼𝘄𝗲𝗿 𝗖𝗹𝗮𝗶𝗺𝘀 𝗶𝗻 𝗡𝗲𝘄 𝗝𝗲𝗿𝘀𝗲𝘆 A new federal decision is a reminder of just how employer-unfriendly CEPA can be at the earliest stage of a case. The court wasn’t deciding who was right. It wasn’t deciding whether any law was actually violated. It was deciding one thing only: are the allegations plausible? Under the New Jersey Conscientious Employee Protection Act, that bar is very low. In this case, the complaint alleged: A reasonable belief that something illegal was happening An internal report to HR A negative performance review and role elimination shortly afterward That was enough to get the case into discovery. And here’s the part many employers still underestimate: CEPA is built on reasonable belief, not proof of an actual violation, from pleading through trial. You can investigate. You can conclude nothing unlawful occurred. You can be right on the compliance issue. And still face a whistleblower retaliation case if the timing and circumstances suggest a connection. If you see these four things together, there is CEPA litigation risk: Alleged illegality A complaint to HR or a supervisor Any negative employment action Tight timing That combination is usually enough to survive early dismissal. Decision: https://lnkd.in/eHCWd8fS Want future posts like this emailed to you automatically? 📬 👇 Comment SUBSCRIBE and I’ll add you. #TheEmployerHandbook #EmploymentLaw #HumanResources

For those of us who handle investigations and whistleblowing cases at companies there is the reality of a very difficult conversation: can we fire this employee for conduct that is unrelated to their whistleblowing? The Supreme Court last week weighed into this conversation, easing the burden on whistleblowers: "When an employer treats someone worse — whether by firing them, demoting them, or imposing some other unfavorable change in the terms and conditions of employment — 'because of' the employee's protected whistleblowing activity, the employer violates §1514A. . . . It does not matter whether the employer was motivated by retaliatory animus...". The decision is solid, taking us back to the Whistleblower Protection Act and whistleblowing's modern codification in the Sarbanes-Oxley Act as a result of the "corporate code of silence" that enabled massive shareholder fraud by Enron. The case gets into a technical burden-shifting framework but here's what simple according to the Court, an employee's burden is simply to show that their whistleblowing was a “contributing factor" in the action by their employer (firing or demotion, etc). In other contexts, discrimination cases for example, there's a higher bar for the employee, requiring them to show their whistleblowing was a "motivating or substantial" factor in the adverse action. We've seen how corporate codes of silence can have tumultuous effect - on companies and markets. The Court's decision builds on a global trend towards encouraging employees to speak up, and protecting them - see, for example, the EU Whistleblower Directive. Let's be clear - this is a good thing. #whistleblowing #speakup https://lnkd.in/eWqSAgub

2 top performers. Both sexually harassed by the same male coworker. Both complained to management. One was fired. The other forced to quit. Here's what happened: My clients were star Brand Ambassadors at a marketing agency. They joined the company because of its "social justice message." Ironic, right? Both women consistently ranked at the top of the performance leaderboard. Talented. Dedicated. Motivated. Then a male coworker started sexually harassing them. Frequent inappropriate comments. Unwanted sexual advances. The full playbook. They did what you're supposed to do—they reported it to management. Management's response? Nothing. Actually, worse than nothing. After the first client complained, management kept pairing her with the harasser. Against her wishes. Repeatedly. When she finally gave her two-week notice because the environment was intolerable, they fired her the same day. The second client? She was forced to come back and work alongside the harasser. And they cut her pay for two weeks—paying her less than she was entitled to. She resigned for her safety. That's called constructive discharge, and it's illegal. Both women complained about sexual harassment. Both faced retaliation instead of protection. Both lost their jobs because their employer refused to do the right thing. After I drafted a demand letter alleging sexual harassment, retaliation, hostile work environment, and wage violations, we secured a six-figure settlement. Here's what you need to know: If you report sexual harassment and your employer: • Ignores your complaint • Forces you to work in unsafe conditions That's failure to take remedial action. Further, if your employer: • Keeps pairing you with the harasser until you quit • Cuts your pay after you complain • Fires you shortly after you report That's retaliation. And it's illegal. Your employer has a legal duty to stop harassment and protect you—not punish you for speaking up. Document everything. And talk to an employment attorney who will fight for you. *Prior results do not guarantee future outcomes.