Don’t miss this chance to catch up on recent developments under whistleblower reward and whistleblower protection laws, including developments under the whistleblower provisions of the Dodd-Frank Act, the Sarbanes-Oxley Act, and False Claims Act. Our experienced faculty panel will provide you with practical insights on the following issues: Impact of Supreme Court’s decision in Somers v. Digital Realty Trust on corporate whistleblowers and corporate compliance programs Recent SEC whistleblower awards Trend in DOL Administrative Review Board and federal court decisions on the scope of Sarbanes-Oxley protected conduct The impact of the Supreme Court’s decision in Universal Health Services v. United States ex rel. Escobar on implied certification claims The scope of the False Claims Act’s anti-retaliation provision and the interplay of whistleblower reward and whistleblower protection claims Best practices for investigating and responding to whistleblower disclosures and Tips for representing whistleblowers at the DOJ, SEC, CFTC, and IRS.

1. HANDLING
WHISTLEBLOWER
CLAIMS SERIES
2021 - RIGHTS OF
PRIVATE SECTOR
EMPLOYEES
Jason Zuckerman
Zuckerman Law
www.zuckermanlaw.com

2. SEC WHISTLEBLOWER AMENDMENTS

3. SEC
WHISTLEBLOWER
RULE
AMENDMENTS
• Declined to adopt proposed rule limiting
award amount in enforcement actions above
$100 million
• Authorizes awards based on deferred
prosecution agreements and non-
prosecution agreements entered into by
DOJ

4. SEC
WHISTLEBLOWER
RULE
AMENDMENTS
• Rule 21F-4 Independent Analysis Standard
• Whistleblower’s submission must provide
evaluation, assessment, or insight beyond what
would be reasonably apparent to SEC from
publicly-available information
• SEC considers whether information derived
from sources not readily identified and
accessed by a member of the public without
specialized knowledge, unusual effort, or
substantial cost
• Could the SEC have inferred the information
provided from the facts available in public
sources?

5. SEC WHISTLEBLOWER RULE AMENDMENTS
• Qualifying as “whistleblower”
• Must report information about possible securities laws violations to the Commission
“in writing”
• To be eligible for an award, must submit information on Form TCR
• To engage in protected conduct, must report to SEC before experiencing retaliation

6. SEC
WHISTLEBLOWER
RULE
AMENDMENTS
• Related action awards
• Under the amended Rule 21F-3(b)(3), a law
enforcement action will not qualify as a
related action if the SEC determines that a
law enforcement agency has a separate
whistleblower reward program that more
appropriately applies to the enforcement
action.
• SEC will not provide an award for a potential
related action if another government entity
has already granted the whistleblower an
award.

7. SEC WHISTLEBLOWER RULE AMENDMENTS
• Exchange Act Rule 21F-9 waives TCR requirement for a meritorious
whistleblower who submits Form TCR:
• within 30 days of first reporting violation to SEC; or
• within 30 days of first obtaining actual or constructive notice about those
requirements.

8. SEC WHISTLEBLOWER RULE AMENDMENTS
• Claims Review Process
• Rule 21F-8(e) bars applicants who include materially false, fictitious, or fraudulent
statements in their whistleblower submission.
• Rule 21F-18 affords the SEC summary disposition procedure for certain types of
common denials, such as untimely applications, tips not provided on Form TCR, and
applications where whistleblower’s information not provided to or used by staff
working on investigation.

9. WHISTLEBLOWER PROTECTIONS
UNDER THE SARBANES-OXLEY
ACT AND OTHER FEDERAL
PRIVATE SECTOR
WHISTLEBLOWER PROTECTION
LAWS

10. SOX-PROTECTED CONDUCT
Section 806 of SOX protects a disclosure about any conduct that the whistleblower reasonably believes violates:
• federal criminal prohibitions against securities fraud, bank fraud mail fraud, or wire fraud;
• any rule or regulation of the SEC; or
• any provision of federal law relating to fraud against shareholders.
when the information or assistance is provided to or the investigation is conducted by:
• a federal regulatory or law enforcement agency;
• Congress; or
• a person with supervisory authority over the employee.

11. SOX-PROTECTED CONDUCT
• “Reasonable belief” standard:
• Disclosure of potential violation protected.
• Complainant need not allege shareholder fraud.
• No magic words required (e.g., fraud or misrepresentation).
• Complainant no longer needs to show that their disclosures “definitively and specifically” relate to
the relevant laws.
• Reasonable but mistaken belief protected.

12. SCOPE OF ADVERSE ACTIONS
• DOL construes adverse actions broadly:
• threat of retaliation;
• “outing” a whistleblower;
• constructive discharge;
• harassment.
• Most anti-retaliation laws employ the Burlington Northern materiality standard.

13. “OUTING” A
WHISTLEBLOWER
Halliburton, Inc. v. Admin. Review Bd., 771 F.3d 254,
259 (5th Cir. 2014)
• Merely “outing” a whistleblower is an adverse action
under SOX.
• “[The] targeted creation of an environment in which
the whistleblower is ostracized is . . . in effect, a
potential deprivation of opportunities for future
advancement.”
• Menendez resigned and did not suffer economic
loss.
• ALJ awarded special damages.

14. SOX CONTRIBUTING FACTOR CAUSATION
Palmer v. Canadian National Railway, ARB No. 16-
035, ALJ No. 2014-FRS-154 (ARB Sept. 30, 2016) (en
banc)
• “Contributing factor” = protected activity played
some role—even an insignificant or insubstantial
role—in the adverse action.
• Decision-maker knowledge of the protected
activity and close temporal proximity will suffice
to prove causation in some cases.
• Whistleblower need not prove pretext.

15. CONTRIBUTING FACTOR CAUSATION
• Palmer
• “We want to reemphasize how low the standard is for the employee to meet, how ‘broad and forgiving’ it is. ‘Any’
factor really means any factor. It need not be ‘significant, motivating, substantial or predominant’ — it just needs to
be a factor.”
• Potential forms of proof:
• temporal proximity;
• the falsity of an employer’s explanation for the adverse action;
• inconsistent application of an employer’s policies;
• the employer’s shifting explanations for its actions; or
• animus toward the whistleblower’s protected activity.

16. SAME-DECISION
AFFIRMATIVE
DEFENSE
• In contrast to Title VII, not a burden of
production.
• What is “clear and convincing evidence”?
• Not enough for the employer to show that
it could have taken the same action; it must
show that it would have taken the same
action.
• Quantified, the probabilities might be in
the order of above 70%.

17. SOX OR
DODD-
FRANK?

18. DISTINCTIONS
BETWEEN SECTION
806 OF SOX
AND SECTION 922A
OF DODD-FRANK

19. TAXPAYER FIRST ACT
AND CONSUMER
FINANCIAL
PROTECTION ACT

20. TAXPAYER FIRST
ACT
WHISTLEBLOWER
PROTECTION
• Effective July 1, 2019
• Modeled on SOX and FCA whistleblower
protection provisions
• Broad scope of coverage, prohibiting any
“employer, officer, employee, contractor,
subcontractor, or agent” of an employer
from retaliating against a whistleblower.
• Applies to law firms, accounting firms, public
companies and private companies

21. TAXPAYER FIRST ACT WHISTLEBLOWER
PROTECTION
• Protected Conduct:
• Providing information or assisting in an investigation regarding underpayment of tax or any conduct
which the employee reasonably believes constitutes a violation of the internal revenue laws or any
provision of Federal law relating to tax fraud
• Testifying or participating in any IRS judicial or administrative action regarding tax underpayment or
violation of internal revenue law
• Protects internal disclosures
• Reasonable belief standard

22. TAXPAYER FIRST ACT WHISTLEBLOWER
PROTECTION
• Broad scope of actionable retaliation
• Contributing factor causation
• 180-day statute of limitations
• Must file initially at OSHA
• Option to litigate in federal court 180 days after filing
• Exempt from mandatory arbitration

23. TAXPAYER FIRST ACT WHISTLEBLOWER
PROTECTION
• Remedies
• double back pay with interest;
• reinstatement;
• uncapped special damages (comp damages); and
• attorney fees, litigation costs, and expert witness fees.

24. CONSUMER
FINANCIAL
PROTECTION ACT

25. CFPA WHISTLEBLOWER PROTECTION LAW
• 12 U.S.C. § 5567
• Covers any individual performing tasks related to the offering or provision of a consumer financial
product or service.
• Protects disclosures concerning any act or omission that the employee reasonably believes to be a
violation of any CFPB regulation or any other consumer financial protection law that the Bureau
enforces.
• Burden-shifting framework, remedies and procedures similar to Section 806 of SOX.

26. FALSE CLAIMS ACT
WHISTLEBLOWER
PROTECTION

27. FCA
RETALIATION:
SCOPE OF
COVERAGE
• Protects:
• Employees;
• Contractors; and
• Agents

28. FCA PROTECTED
CONDUCT
• Two forms of protected conduct:
• lawful acts done by the employee contractor,
agent or associated others in furtherance of
an action under this section;
• or other efforts to stop one or more
violations of the FCA

29. FCA PROTECTED CONDUCT
• In furtherance of a qui tam action:
• Investigating a potential FCA violation
• Opposing an FCA violation internally
• Reporting a FCA violation to the government
• Assisting a qui tam relator
• Some courts limit this prong to actions taken in furtherance of a viable False Claims Act case

30. FCA-PROTECTED CONDUCT
• Efforts to stop an FCA violation:
• The focus of the second prong is preventative—stopping “violations” – and it is met if the whistleblower
demonstrates that they took lawful measures to stop or avert what they reasonably believed would be a violation of
the FCA.
• The purpose of second prong is to untether protected efforts from the need to show that a FCA action is in the
offing.
• “[A] layperson should not be burdened with the ‘sometimes impossible task’ of correctly anticipating how a given
court will interpret a particular statute.” Singletary v. Howard Univ., No. 18-7158, 2019 WL 4554535 (D.C. Cir. Sept.
20, 2019).

31. DUTY
SPEECH/“STEP
OUT” DEFENSE
• Malanga v. NYU Langone Med. Ctr., 2015 WL 7019819
(S.D.N.Y. Nov. 12, 2015) (FCA) (duty speech doctrine invalid
post-FERA).
• United States ex rel. Reed v. KeyPoint Government
Solutions, No. 17-1379, (10th Cir. Apr. 30, 2019).
• Senior quality control analyst discovered fraud while
performing job duties and reported it through her
chain of command.
• Not protected because job duties may have required
her to seek remedial action from employees other
than her direct supervisor.

32. FCA-PROHIBITED
RETALIATION
• A prohibited adverse action occurs when an
employee is:
• discharged;
• demoted;
• suspended;
• threatened;
• harassed; or
• in any other manner discriminated against in
the terms and conditions of employment.

33. FCA-PROHIBITED RETALIATION
CONSTRUCTIVE DISCHARGE
• If an employer ignores or fails to remediate a whistleblower’s internal disclosures, does that constitute constructive discharge?
• Smith v. LHC Grp., Inc., 727 F. App'x 100 (6th Cir. 2018).
• Smith raised concerns about employees altering reimbursement paperwork and making false representations about staffing for the
purpose of admitting patients.
• As Director of Nursing, Smith was concerned about potential prosecution and jeopardizing her nursing license.
• Company ignored her disclosures and failed to take remedial action.
• Requiring an employee “to engage in activity she considers illegal and immoral” may create intolerable working conditions sufficient for
constructive discharge.

34. POST-
EMPLOYMENT
RETALIATION
• United States ex rel. Felten v. William
Beaumont Hospital, No. 2:10-cv-13440 (6th
Cir. March 31, 2021).
• Felten bought qui tam alleging kickbacks to
physicians for referrals of Medicare patients.
• After qui tam settled for $84.5M, Felten
pursued retaliation claim alleging he was
terminated and blacklisted, i.e., former
employer disparaged him to nearly 40
prospective employers.

35. POST-
EMPLOYMENT
RETALIATION
• No temporal qualifier accompanying “employee” in
3730(h).
• Half of proscribed retaliatory acts – “threatened,”
“harassed,” and “discriminated” – are not restricted to a
current employment relationship and can refer to
former employees.
• Discrimination in the “terms and conditions of
employment” include conditions of employment that
can persist after an employee’s termination.
• “If employers can simply threaten, harass, and
discriminate against employees without repercussion as
long as they fire them first, potential whistleblowers
could be dissuaded from reporting fraud against the
government.”

36. POST-
EMPLOYMENT
RETALIATION
• Potts v. Center for Excellence in Higher Education,
Inc., 2018 WL 5796963 (10th Cir. Nov. 6, 2018).
• After Potts resigned, operator of for-profit
college sued her for disparaging them to the
Commission of Career Schools and Colleges
concerning alleged deceptions in maintaining
accreditation.
• Potts alleged that the suit against her violated
the FCA’s anti-retaliation provision.
• FCA retaliation proscribes retaliation only
against current employees, not former
employees.

37. FCA: CAUSATION
• Courts require a showing of “but for”
causation.
• The “but for” causation standard "means a
defendant cannot avoid liability just by
citing some other factor that contributed to
its challenged employment
decision." Bostock v. Clayton Cty., 590 U. S.
__ (2020), slip op at *6.
• The plaintiff's protected activity or
characteristic(s) "need not be the sole or
primary cause of the employer’s adverse
action." Id. at *14.

38. FCA: CAUSATION
• Proving Causation:
• Pretext/inconsistent or shifting explanations
• Close temporal proximity
• Retaliatory animus
• Suspicious timing
• Disparate treatment
• Deviation from company policies

39. FCA
RETALIATION
REMEDIES
• Reinstatement
• Two times the amount of back pay
• Uncapped special damages
• Emotional distress
• Reputational harm
• Humiliation

40. FCA
RETALIATION
REMEDIES
• In lieu of reinstatement, a judge can award
front pay to compensate the plaintiff until
such time as they can regain their former
career track.
• Get expert analysis and testimony about
career damage.
• Track mitigation efforts.
• Analyze available comparable positions.
• Document harm to reputation.

41. FCA
RETALIATION
PROCEDURE
• Three-year statute of limitations
• Heightened pleading standard does not
apply
• No exhaustion requirement
• Retaliation claim can be brought under seal
with qui tam action

42. INTERPLAY OF FCA QUI TAM AND FCA
RETALIATION
• Respect the seal (breaching seal can waive relator share)
• If retaliation claim is not under seal, it may open the door for employer
discovery
• Settling a retaliation claim with a global release can waive the right to relator
share if the whistleblower has disclosed the fraud to the government

43. NATIONAL
DEFENSE
AUTHORIZATION
ACT (NDAA)
RETALIATION
PROVISIONS
• DoD, NASA, and Coast Guard Contractors,
10 U.S.C. § 2409
• Contractors of other agencies, 41 U.S.C. §
4712

44. NDAA SCOPE OF
COVERAGE
• Covers employees of nearly all government
contractors, subcontractors and grantees,
and personal services contractors.
• Excludes contractors of Intelligence
agencies.

45. NDAA-PROTECTED CONDUCT
• Broad scope of protected conduct:
• Violation of law, rule, or regulation relating to federal contracts, including
competition for or negotiation of a contract;
• Gross mismanagement, gross waste of federal funds, abuse of authority; or
• Substantial and specific danger to public health or safety.

46. NDAA-
PROHIBITED
RETALIATION
• NDAA whistleblower provisions bar a broad
range of retaliatory acts, including:
• discharging;
• demoting; or
• otherwise discriminating against a
whistleblower.

47. NDAA CAUSATION AND AFFIRMATIVE DEFENSE
• “Contributing factor” causation
• Knowledge and timing suffice
• (WPA standard)
• Same-decision affirmative
defense must be proven by clear
and convincing evidence

48. NDAA REMEDIES
• Reinstatement;
• back pay;
• uncapped compensatory damages
(emotional distress damages); and
• attorneys’ fees and costs.

49. NDAA
PROCEDURE
• Must file initially with OIG.
• Complainant can remove to federal court
210 days after filing.
• OIG investigates and issues report.
• Not later than 30 days after receiving IG
report, agency head required to act on
findings.
• Contractors and grantees have 60 days from
the issuance of an order to appeal to Circuit
Court.

50. FCA OR
NDAA?

51. FCA Anti-Retaliation Provision Sections 827 and 828 of NDAA
Coverage Employee, contractor, or agent Employee of a contractor, subcontractor, or
grantee/personal services contractor
Protected
Conduct
Lawful acts done by the employee, contractor, agent
or associated others 1) in furtherance of an action
under the FCA or 2) other efforts to stop 1 or more
violations
-Violation of law, rule, or regulation related to a
contract
-Gross mismanagement of a federal contract or grant
-Gross waste of federal funds
-Abuse of authority relating to a federal contract or
grant
-Substantial and specific danger to public health or
safety
Administrative
Exhaustion
File directly in federal court Must file initially at OIG; can remove to federal court
after 210 days
Causation Standard “But for” causation (not sole factor) Contributing Factor
Damages Double back pay, reinstatement, special damages
(emotional distress damages and harm to
reputation), attorney fees
Back pay, reinstatement, special damages, attorney
fees
Statute of
Limitations
3 years 3 years

52. PLEADING CONSIDERATIONS
• With the exception of a hostile work environment claim, each adverse action
has its own statute of limitations (although time-barred acts are still evidence).
• Administrative exhaustion requirement for each adverse action.
• Split of authority about pleading standard at administrative agencies.
• Advantages and disadvantages to pleading multiple claims.

53. THE INTERPLAY OF NON-
DISCLOSURE AGREEMENTS
AND WHISTLEBLOWER
REWARDS AND PROTECTION
LAWS

54. INVALID “GAG CLAUSES” BARRING
WHISTLEBLOWING
• Blatant contractual provisions barring whistleblowing to
regulators or law enforcement have always been unlawful.
• Post-Dodd-Frank, there is a sea change in barring
provisions that have the effect of impeding lawful
whistleblowing.

55. INVALID “GAG CLAUSES” BARRING
WHISTLEBLOWING
• Exchange Act Rule 21F-17
• “No person may take any action to impede an individual from
communicating directly with the Commission staff about a
possible securities law violation, including enforcing, or
threatening to enforce, a confidentiality agreement . . . with
respect to such communications.”

56. INVALID “GAG CLAUSES” BARRING
WHISTLEBLOWING
• SEC has taken steps to combat contractual provisions:
• requiring employees to waive possible whistleblower awards;
• prohibiting employees from disclosing the subject of an internal
investigation; and/or
• requiring notice prior to responding to an inquiry from the SEC.

57. FY2021 NDAA
• Section 883 of National Defense Authorization Act (NDAA) for Fiscal Year 2021
amends Defense Contractor Whistleblower Protection Act (DCWPA) by prohibiting
DoD from awarding a contract to a contractor that requires its employees to sign a
confidentiality agreement “that would prohibit or otherwise restrict such employees
from lawfully reporting waste, fraud, or abuse related to the performance of a
Department of Defense contract to a designated investigative or law enforcement
representative of the Department of Defense authorized to receive such information.”
• Section 883 requires DoD contractors to inform their employees of this limitation on
confidentiality agreements, i.e., inform them of their right to lawfully report waste,
fraud, abuse, and other wrongdoing.

58. OSHA 9/15/16 GUIDANCE
OSHA guidelines barring provisions that impede whistleblowing:
• Provisions that require employees to waive the right to receive a
monetary award from a government-administered reward program.
• Provisions that require the employee to advise the employer before
voluntarily communicating with the government.
• Provisions that require the employee to affirm they have not
previously provided information to the government.

59. TIPS FOR WHISTLEBLOWERS

60. WHISTLEBLOWER REWARDS CLAIMS
• Identify specific, original information.
• Establish a material violation.
• Do not delay reporting, but be patient during investigation.
• Provide a roadmap for a successful enforcement action.
• Provide strong investigative leads.
• Don’t provide privileged information.
• Respect the seal in a qui tam.

61. WHISTLEBLOWER RETALIATION CLAIMS
• Investigate before blowing the whistle
• Ideally, engage in written protected conduct and identify the specific facts
evidencing a potential violation
• Identify and plead all retaliatory acts
• Avoid having unclean hands, e.g., be cautious gathering evidence
• Document reputational harm and emotional distress
• Identify all potential claims to maximize damages
• Exhaust administrative remedies