Congress Proposes Vital Protections for Whistleblowers as Workplaces Reopen

April 7, 2021

  COVID-19 has devastated countless individuals and businesses, both economically and personally. Local, state, and federal agencies have hastily authorized economic relief programs to help ease the impact on families, communities, and the national economy. To address community needs, many agencies quickly distributed funds with minimal oversight. Although this helped expedite relief payments, it also opened the door for improper distribution of these funds. To prevent fraud and misuse of federal benefits, members of Congress have introduced proposed legislation called the Coronavirus Oversight and Recovery Ethics (CORE) Act, which also includes critical whistleblower protection provisions.

Implementing Federal Oversight and Expanding Whistleblower Protection

Many small businesses need federal grants and loans to continue operations and reopen workplaces successfully. Some will use Coronavirus Aid, Relief, and Economic Security (CARES) Act programs, like the $500 billion corporate bailout fund and the Paycheck Protection Program. As the pandemic continues, Congress may pass additional legislation enabling other loan and grant programs to help avoid economic disaster for businesses and individuals. To reduce profiteering and ensure that CARES Act benefits and other federal aid funds are fairly and lawfully distributed, the CORE Act proposes a multi-faceted approach, tackling potential fraud from many angles, that:

  • Empowers and funds the Office of Government Ethics to take steps to reduce conflicts of interest in the selection or hiring of contractors or advisors and the distribution of relief grants and loans, including prohibiting receipt of bailout funds by companies closely connected to government officials.
  • Protects Inspectors General from retaliation by requiring them to be removed only for cause, requiring Congress to be notified of their removal, and providing Inspector Generals a means to bring suit to challenge the firing.
  • Strengthens the authority of the Congressional Oversight Commission by expanding their jurisdiction to all COVID-19 relief funding and providing them with subpoena authority, as well as the oversight entities and Executive Branch accountability requirements of the CARES Act, including requiring a weekly reporting of instances in which they were unreasonably denied information from the executive branch.
  • Restricts lobbying and political spending by bailout recipient companies by requiring monthly reporting to prevent “quid pro quo” handouts.
  • Improves transparency about the disbursal of bailout funding by requiring public reporting detailing the use of the funds, the recipients, employee compensation data – including bonuses, and whether the company has been charged with violations of federal law.
  • Establishes strong whistleblower protections for government employees, government contractors, and private-sector workers who witness and report waste, fraud, or abuse or are victims of misconduct.
  • Creates individual causes of action for individuals harmed by the prohibited misconduct, allowing private lawsuits, and establishes personal responsibility for senior executives for their corporate wrongdoing.

Fleshing Out Employee Whistleblower Protections

Several laws are already in effect to protect employees who blow the whistle on misuse or theft of federal funds during the coronavirus pandemic. The federal False Claims Act (FCA), for example, protects and even provides incentives for workers who report employers misusing, misappropriating, or improperly obtaining government funds. Properly making a claim under the FCA, however, can be complicated, and the law contains numerous restrictions and exclusions limiting who can file a suit. The CORE Act would protect most workers who reasonably believe their employer is misusing economic aid related to COVID-19, allowing them to report alleged improprieties without fear of reprisal or retaliation. It would also protect workers from retaliation after reporting conduct they “reasonably believe[] would require the employee to violate th[e] Act . . . with respect to any Coronavirus pandemic-related program, project, or activity.” The proposed Act leaves it to the Secretary of Labor to establish the rules and procedures for administrative investigation and hearings, appeals, and relief, indicating that – as much as possible, it should mirror the Taxpayer First Act.  As more organizations apply for and receive these vital federal benefits and use them to reopen, returning workers will play a critical role in preventing employers’ unscrupulous behavior. Employees who know of or suspect their employers of fraud or who have concerns about the safety of their workplace should consult an attorney immediately. Numerous state and federal statutes protect whistleblowers, but every situation is unique. An experienced attorney – like the lawyers in Outten & Golden’s Whistleblower-Retaliation Practice Group – can help you chart the best course of action for your situation.

(*Prior results do not guarantee a similar outcome.)