Retaliation continues to be the most common claim filed with the EEOC – a trend that is unlikely to change if the past twelve years of rising claims are any indication. Recently-enacted provisions of the U.S. Dodd-Frank Act increase protections for whistleblowers and raise the penalties for retaliation against them. However, employers are still struggling to understand the basic components of retaliation and often silo these complaints in the compliance or legal department without seeking HR input. Andrew Foose, Vice President, Advisory Services, NAVEX Global and Greg Keating, Partner, Littler, provide an overview of the latest whistleblower protection laws, recent cases that have changed the breadth and scope of retaliation and end with practical strategies to mitigate skyrocketing whistleblower and retaliation risk.

1. VIRTUAL CONFERENCE
NAVEX Global November 2013 Virtual Conference
The Retaliation Juggernaut:
Why Retaliation Risk is Everywhere & What
You Should Do About it
VIRTUAL CONFERENCE

2. VIRTUAL CONFERENCE
Today’s Speakers
2
Gregory Keating, Shareholder
Littler Mendelson
Andy Foose, Vice President
Advisory Services
NAVEX Global

3. VIRTUAL CONFERENCE
Retaliation

4. VIRTUAL CONFERENCE
The Rising Tide
15.7%
17.4%
19.5%
20.6%
22.6%
24.0%
25.4%
27.1%
27.5%
27.0%
27.9%
28.6%
29.5%
29.8%
32.3%
34.3%
36.0%
36.3%
37.4%
38.1%
14% 19% 24% 29% 34% 39%
FY 1993
FY 1994
FY 1995
FY 1996
FY 1997
FY 1998
FY 1999
FY 2000
FY 2001
FY 2002
FY 2003
FY 2004
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012

5. VIRTUAL CONFERENCE
Anti-Retaliation Protections are Everywhere
 ACA
 OSHA
 ADA
 False Claims Act
 Equal Pay Act (FLSA)
 FLSA
 Immigration Reform and Control Act
(IRCA)
 ADEA
 FLSA
 NLRA
 Workers Compensation Acts
 The Rehabilitation Act
 USERRA

6. VIRTUAL CONFERENCE
What is Retaliation?
Employers cannot take:
• “adverse action” against their
employees
• for “participating” in “protected
activity”
• or “opposing” unlawful
employment practices.

7. VIRTUAL CONFERENCE
Proving a Retaliation Claim
 I engaged in “protected activity.”
 I was subject to “adverse action.”
 There is a “causal connection” between 1 and 2.
o 3 strikes – You’re Out
7

8. VIRTUAL CONFERENCE
Key Concepts To Understand
 “Protected Activity”
o How to define it?
o What are the limits, and when can you curb it?
 “Adverse Action”
 A “Causal Connection”
8

9. VIRTUAL CONFERENCE
Protected Activity
 Participation
 Opposition
9

10. VIRTUAL CONFERENCE
Protected Activity? Maybe.
Employee most complain about some potentially unlawful conduct or
activity.
 “Mr. Smith is not treating me right.”
• Protected?
 “I noticed something doesn’t look quite right on last quarter’s sales reports.”
• Protected?
 “I told my supervisor that we are omitting required information from our
10-K reports, but he just told me the reports are fine and not to worry about
it.”
• Protected?
10

11. VIRTUAL CONFERENCE
What Counts as an Adverse Action?
U.S. Supreme Court: One standard that has been applied in
whistleblower cases says that an employer’s action will be deemed
“materially adverse” if it “well might have dissuaded a reasonable
worker from making or supporting” a protected complaint.
o Giving a negative reference or job evaluation?
o Demoting the employee’s spouse?
o Changing job assignments?
o Allowing name-calling?

12. VIRTUAL CONFERENCE
Materially Adverse Standard
 Does not protect against:
o “petty slights, minor annoyances, and simple lack of good manners.”
o “snubbing.”
 But...“context matters.”

13. VIRTUAL CONFERENCE
Adverse Action: Retaliatory Harassment
 Employers face liability for coworker harassment or retaliation if
the employer knows of the conduct and fails to address it
 Claim may exist even without a showing of a hostile work
environment
 Court focuses on actions of the ultimate decision maker

14. VIRTUAL CONFERENCE
Outside Of Employment
Incidents outside the employment context can constitute an adverse
action:
 The following actions were considered sufficient to constitute an
adverse action in the discrimination context:
o A false report to a government agency about the complainant’s
immigration status
o Accosting a complainant outside of work with a hostile tone and
manner and foul language
o Defaming a complainant in the news, the news media alleging that she
misappropriated state funds

15. VIRTUAL CONFERENCE
Adverse Action: Third-Party Retaliation
Thompson v. North American Stainless, LP 131 S. Ct. 863 (2011):
Complainant filed a sex discrimination charge with the EEOC. Three
weeks later, her fiancé was fired.
 In a unanimous decision, the U.S. Supreme Court held that a reasonable
worker obviously might be dissuaded from engaging in protected activity
if she knew that her fiancé would be fired.
 Where is the line? It depends:
o “We expect that firing a close family member will almost always meet the Burlington
standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so,
but beyond that we are reluctant to generalize.”

16. VIRTUAL CONFERENCE
Whistleblowing

17. VIRTUAL CONFERENCE
How are they Related?
Whistleblowing ↔ Retaliation

18. VIRTUAL CONFERENCE
Whistleblowers
 Make good faith reports of suspected misconduct
o For example:
• Non-compliance with accepted accounting practices
• Bribery in foreign transactions
• Violations of health and safety laws
• Securities violations, such as insider trading
 Are protected from retaliation for blowing the whistle
 May be entitled to rewards from the government for blowing the
whistle on certain misconduct

19. VIRTUAL CONFERENCE
Whistleblowers – Two Variations
1. Employees who alert outside authorities (e.g., SEC, DOL)
• Negative
2. Employees who raise concerns internally (who “speak
up”)
• Positive
 For the next few slides, we’ll be addressing external
whistleblowers

20. VIRTUAL CONFERENCE
How We Got Here
July 2002
Corporate Scandal
Leads to SOX
2002-2007
Years of Minimal
SOX Enforcement
2007-2009
The Tide Turns
2010-2013
Dodd-Frank and
the New Age of the
Whistleblower
July 2002
Corporate Scandal
Leads to SOX

21. VIRTUAL CONFERENCE
In a Time of Public Mistrust...
ENRON
TYCO WORLDCOM

22. VIRTUAL CONFERENCE
Whistleblowers Emerge as Ethical Heroes

23. VIRTUAL CONFERENCE
Robust External Whistleblowing
 Number of tips received
by SEC in first year of
Dodd-Frank program
 Number of tips received
per week by SEC
 Percent of those who made
external reports who say they
tried to report internally first
12/9/2013NAVEX Global Advisory Council 2013 23
3,001
58
84%

24. VIRTUAL CONFERENCE
Increased Government
Enforcement Efforts

25. VIRTUAL CONFERENCE
Eye-Popping Whistleblower Numbers
DOJ collected more than $5 billion
during FY 2012 in FCA settlements
and judgments
GlaxoSmithKline settles substantial
suit to lone whistleblower:
$600 million to state and
federal governments
$96 million to former
quality-assurance manager

26. VIRTUAL CONFERENCE
Bounties Abound
 SEC issues first bounty on August 21, 2012:
o $50,000; statutory maximum (30%) of amount collected in enforcement action
o Whistleblower remains anonymous
o Thousands of cases are pending at the SEC
 IRS issues record $104 million reward on Sept. 10, 2012
o Whistleblower collects record bounty despite also being sentenced to 40
months in prison for his role in tax evasion scheme
 SEC issues $14 million bounty on October 1, 2013

27. VIRTUAL CONFERENCE
Addressing Retaliation and
Whistleblowing
What You Can Do About It

28. VIRTUAL CONFERENCE
Make Culture a Strategic
Priority
Recommendation #1

29. VIRTUAL CONFERENCE
We Want Employees to Speak Up
(internally)

30. VIRTUAL CONFERENCE
Why Don’t Employees Report Internally?
27.5% 14.1% 14.0% 10.0% 8.6% 7.7% 7.7% 7.3% 5.5% 4.8% 4.2% 4.2% 2.8% 2.6% 1.9% 1.6% 1.1%
Source: CEB Compliance and Ethics Leadership Council
Employee Reason for Not Reporting
Percentage of Explanations, 2012

31. VIRTUAL CONFERENCE
Employee Mistrust of Management:
Survey Says…
2011 Maritz Employee Engagement
Survey finds:
25% of employees report less trust in
management than 2010
Only 10% say they trust management to
make the right decision
in times of uncertainty
Only 14% believe their company’s leaders
are ethical and honest
Only 7% believe senior management’s
actions are consistent with their words

32. VIRTUAL CONFERENCE
Employee Mistrust of Management:
Survey Says…
2010 Deloitte Ethics and
Workplace Survey:
One third of employed Americans
plan to look for a new job when the
economy improves. Among their top
reasons for leaving:
48% cite loss of trust in employer
46% cite lack of transparent
communication from company
leadership

33. VIRTUAL CONFERENCE
The Power of an Ethical Culture
 Percentage of employees who
believe their company rewards
ethical conduct who reported
wrongdoing (internally)
(ERC 2012)
 Percentage of employees who
believe their company does not
reward ethical conduct who
reported wrongdoing internally
12/9/2013NAVEX Global Advisory Council 2013 33
72%
57%

34. VIRTUAL CONFERENCE
Reporting Rates Rise When Ethical Commitment
is Perceived to be Stronger
55.3%
76.6%
70.7%
50.6%
50.6%
65.3%
89.3%
76.9%
54.3%
56.9%
Overall
Senior
Executiv
es
Manager
s
Professi
onals
Non-
Manager
s
Top Quartile Companies (n = 4,382)
Bottom Quartile Companies (n = 12,539)
Employee Reporting Rates
Percent of Employees Reporting Observed Misconduct, 2012
Source: CEB Compliance and Ethics Leadership Council

35. VIRTUAL CONFERENCE
The Disconnect
“Senior Executives consistently have a higher perception of their companies’ culture
than other employees”
5.35
5.55
5.86
6.15
Non-Managers (n = 116,882)
Professionals (n = 95,882)
Managers (n = 63,560)
Senior Executives (n = 5,293)
Perceptions of Corporate Integrity
Integrity Index1 Scores by Employee Level,
2012

36. VIRTUAL CONFERENCE
Assess Your Culture
 Cultural surveys
 Benchmark reporting
 Conduct a program review
 Determine stakeholder
communication
preferences and
expectations
 Identify opportunities to
drive program awareness:
training, communication
and internal marketing

37. VIRTUAL CONFERENCE
Integrated System for
Incident or Complaint
Management
Recommendation #2

38. VIRTUAL CONFERENCE
1. Effective
report and
intake
procedures
2. “Speak up”
training for
manager &
employees
3. Notification
protocol
4. Effective
investigation
protocol – including
training for
investigators
5. Effective remedial
measures and
appropriate way to
track and
communicate
discipline
6. Reporting
and
communication

39. VIRTUAL CONFERENCE
Managers Receive Majority of Allegations
66.0% 24.7% 20.1% 7.3% 5.4% 2.5% 2.1% 1.4% 1.3% 0.8% 0.8% 0.4%
ToDirect
Manager
ToHuman
Resources
ToSuperior
ToCompliance
andEthics
Department
To
Hotline/Helpline
ToLegal
Department
ToSecurity
Department
ToWorks
CouncilorUnion
Rep
ToAudit
Department
ToCompany
Website
To
Ombudsperson
ToGovernment
Agency
Method for Reporting Business Misconduct
Percentage of Information Flowing to a Given Channel1, 2012
1) Multiple Responses Allowed
Source: CEB Compliance and Ethics Leadership Council

40. VIRTUAL CONFERENCE
MANUAL AUTOMATED INTEGRATED
The (R)evolution of Ethics & Compliance Programs
Reactive
 Take a hotline call
 Push remedial training
 Update a policy
Proactive
 Software based workflow
management
 Automated delivery of content
and information
 Scheduled reviews
and updates
Predictive/Preventive
 Internal and external
data flows
 Data modeling and quantitative
insight
 Proactive identification of future
enterprise risk

41. VIRTUAL CONFERENCE
Implement Annual Training
for Employees and
Managers
Recommendation #3

42. VIRTUAL CONFERENCE
Trend: 2011 National Business
Ethics Survey
o 65% of employees reported
observed misconduct, up from
53% in 2007
o 22% who reported misconduct
say they experienced retaliation,
up from 12% in 2007
o 42% reported weak “ethics
cultures,” up from 35% two years
ago

43. VIRTUAL CONFERENCE
Does Your Workforce Understand the Rule
Against Retaliation?

44. VIRTUAL CONFERENCE
 People didn’t know how to report, or
 People were afraid to report, or
 Managers didn’t know how
to properly handle the report
Attacking the Problem at Its Core
Misconduct that
grew out of control

45. VIRTUAL CONFERENCE
What Should Training Cover?
• The Duty to Report
• Benefits of Reporting
• Policies & Expectations
• How to Report
• Protections against Retaliation
• Guidance for Managers

46. VIRTUAL CONFERENCE
Recommendation #4
Investigations protocol

47. VIRTUAL CONFERENCE
What To Do With Whistleblower Allegations?
• Investigate
• Evaluate
• Take remedial action
• Disclose?
• Negotiate from the best position

48. VIRTUAL CONFERENCE
“The only way to deal with a whistleblower’s accusations – again,
every single time and often against your own instincts – is with a
hyper-bias toward believing that the informant is onto something big.
Such a bias must impel you to investigate every claim ferociously. You
may think it’s a waste of time and money, and will go nowhere; you
should be so lucky. And for goodness’ sake, don’t let the investigation
be conducted by the boss who’s been accused of wrongdoing! Bring in
an outside agency to do the sleuthing, or at the very least, executives
outside the scope of the alleged problem, with no relationship to the
people involved. Yes, you may hate the whole mishegaas and so might
everyone it touches. But it’s the only way to overcompensate for the
propensity to wish whistleblowers away with the perfunctory spot
check or the “Everything O.K.?” kind of look-see that usually occurs.”
-- Jack and Suzy Welch, Reuters, May 1, 2012
Investigate Every Time

49. VIRTUAL CONFERENCE
Make Sure Allegations are Taken Seriously
Percent of those who made
external reports who say they
tried to report internally first
12/9/2013NAVEX Global Advisory Council 2013 49
84%

50. Survey Question:
Would you like a NAVEX Global representative to
contact you to discuss solutions?
A. Yes, please
B. No, thank you
50

51. Questions…

52. VIRTUAL CONFERENCE
Thank You
Please be sure to visit the Exhibit Hall &
Social Networking Lounge to speak with Industry Experts!