Protection for Employees Who Blow the Whistle on Employers’ COVID-19-Related Wrongdoing

April 21, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act released $2 trillion into the economy in an effort to help stabilize families and businesses. Although it did not include new protections for employees who are retaliated against for reporting corporate wrongdoing, existing laws still protect some kinds of workplace whistleblowing.

The False Claims Act (FCA) bars employers from retaliating against employees, contractors, and agents who report company conduct that would result in a fraud on the government. Traditionally, FCA retaliation claims are brought by employees who report Medicare overbilling, or military procurement fraud, for example. If a business takes a Paycheck Protection Program loan under the CARES Act but fails to adhere to the loan terms, an employee who blows the whistle on that conduct may also be protected under the FCA.

The Sarbanes-Oxley Act (SOX) and Dodd-Frank Act (DFA) provide protections for employees who report shareholder fraud, securities fraud, a violation of rules and regulations enforced by the Securities Exchange Commission, or mail fraud, wire fraud, or bank fraud. That can include a company’s failure to report cybersecurity failures to investors. If a company is cutting corners on data-privacy or other cybersecurity considerations during this transition, and an employee is retaliated against for raising concerns, SOX or DFA may provide some protections. Both SOX and DFA have specific procedural requirements, so contacting a lawyer early on is especially important for employees who may have these claims.

The Occupational Health and Safety Act of 1970 (OSHA) requires employers to provide safe workplaces. For employees whose workplaces have not become virtual in this time, OSHA may protect employees who raise concerns about how their employers are safeguarding employee health against the virus.

Each of these laws, and many others, have reporting and filing requirements. If you think you may have a whistleblower retaliation claim, contact an attorney immediately so you can take steps to make sure you are protected.

Lastly, there are several statutes that have separate “bounty” provisions that are designed to encourage people to alert the government to wrongdoing so the appropriate agency can take any necessary enforcement actions. If a business is cheating the IRS or engaging in fraud on shareholders or defrauding the government and the whistleblower provides the government with information that leads to a recovery, the whistleblower may be eligible to receive a financial reward.

A whistleblower with a bounty claim need not be an employee of the company engaging in fraudulent conduct. Although bounty claims are legally separate from whistleblower retaliation claims brought by employees, the process of reporting the wrongdoing impacts both claims, so contacting an attorney early on is critical.

Associate attorney Amy Biegelson contributed to this article.

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