On July 29, 2009 the Senate Committee on Homeland Security and Governmental Affairs unanimously reported out of committee S. 372, the Whistleblower Protection Enhancement Act of 2009. Unfortunately, this bill contains many significant differences from the House Bill (H.R. 1507), which the National Whistleblowers Center (NWC) fully supports.
Over the next two weeks I will present the NWC analysis of the Senate Bill. Hopefully, this will explain why the Senate needs to adopt important provisions included in the House legislation.
This is the first in a series of twelve posts examining specific weaknesses in the Senate Bill. Each installment will examine a crucial issue of whistleblower rights compromised by the Senate’s version of the bill.
I. THE DEFINITION OF PROTECTED ACTIVITY: SMALL LOOPHOLE OR LARGE NOOSE?
The Senate Bill added a dangerous clause within the definition of “protected disclosure.” Under this new definition, federal employees who disclose any violation of law are protected, unless their disclosure was “a minor, inadvertent violation that occurs during the conscientious carrying out of the violator’s assigned duties.” See Section 101.
This new exception to protected activity is devastating to the law.
Its existence is without precedent, and runs counter to every whistleblower law ever enacted in the United States. It also runs counter to the conclusions of every respected analysis of whistleblower protection.
Why is this provision so harmful?
First, what exactly is a “minor” or “inadvertent violation?” Whistleblower laws are supposed to encourage the disclosure of any violation. In fact, most major violations are first discovered through the disclosure of something we might initially consider minor. Rarely does an employee stumble upon a violation she immediately recognizes as a national scandal. More often employees disclose a minor violation (or even a potential violation). Upon investigation such a minor violation may provide the first information about a major case of fraud, waste, abuse or injustice – or it may not. However, every whistleblower law in the United States is designed to protect and encourage the disclosure of any potential violation. The supervisory authority to which the disclosure is made then has the duty to investigate the claim.
This new standard is completely unworkable. If the employee uncovers a violation, but it turns out the violation was “minor” or was caused by an “inadvertent” mistake, the employee can be fired for making an unprotected disclosure! Obviously, few employees would ever come forward with any disclosure under these chilling conditions.
Any employee who has the courage to report a potential violation places himself or herself at risk. If the managers involved in the violation can prove that the violation was “minor” or “inadvertent,” then the law says the employee has not engaged in lawfully protected activity by disclosing it. As a result, the whistleblower case will be automatically dismissed and the employee will have no protection under the law.
There is no other whistleblower law in any jurisdiction in the entire United States that places this burden on an employee. In fact, every whistleblower law in the United States protects employees who make “good faith” disclosures of any suspected violations, even if it turns out that there was no actual violation.
This provision will create a dream defense that will undermine any whistleblower case. It will make the whistleblower claim extremely expensive to litigate at best and very hard to win, even if the underlying violation was indeed a major violation. It will add to the litigation costs and burden every case by creating what is essentially an additional trial of fact.
Every defendant will claim that what the employee disclosed was not a protected disclosure because, at best, it only revealed a “minor, inadvertent” violation. The burden will shift to the employee to prove the alleged violation is now a “major” violation. That employee will have to do so without benefit of a full investigation into his or her initial disclosure. Even if that disclosure could lead to a major violation, when investigated.
Of course, an employee who has to prove that the disclosed violation is major, the employee will have to undergo significant litigation expenses. Worse there is no current legal precedent as to how to demonstrate that a violation is a major one.
This new provision also contradicts the findings of every major modern study concerning fraud detection and prevention. Respected auditing firms such as PricewaterhouseCoopers, the Association of Certified Fraud Examiners, and the Ethics Resource Center have all studied fraud detection programs in both the public and private sectors. Their conclusions are all similar:
• Employee whistleblowers are key to any successful fraud detection program;
• Agencies must create programs which encourage and reward employees who report potential violations of law or ethics; and
• Strict prohibitions against retaliation must be instituted.
Each study recognizes the value and importance of encouraging employees to disclosure any instances of misconduct as quickly as possible. The requirement to determine if a violation is “major” or not can only delay detection of real fraud.
The language in the Senate Bill runs counter to this teaching, and contradicts years of legal precedent. It will create a chilling effect on employee disclosures, and result in numerous otherwise meritorious cases being dismissed.
No Senator should vote for a law that establishes this burden on an employee. At a time when trillions of dollars are being added to the federal budget why would we want to make it more difficult to detect fraud?