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Washington Labor & Employment Wire » Whistleblower Protection

Stimulus Package Omits E-Verify, Includes Whistleblower Provisions

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act, the well-publicized $787 billion stimulus package designed to promote economic recovery and minimize unemployment (H.R. 1). The Senate and the House passed a joint version of the bill on February 13, 2009.

The final version of the Act omitted the controversial E-Verify requirements included in prior House versions of the bill.  The provisions would have prohibited certain federal contractors from receiving any stimulus funding unless they used the E-Verify system, an internet-based system that allows employers to verify employees’ work eligibility and is jointly administered by the Department of Homeland Security’s U.S. Citizenship and Immigration Services and the Social Security Administration. Opponents of E-Verify had criticized its error rate.    

The final version of the Act provides whistleblower protections to employees of any private, state, or local government entity that receives a contract, grant, or other payment from the stimulus’s funds. Under the whistleblower provisions, an employer cannot discharge, demote, or take any adverse employment action against an employee who reports evidence of: (1) gross mismanagement of a contract or grant, (2) a gross waste of covered funds, (3) a substantial and specific danger to public health or safety related to the implementation of stimulus funds, (4) an abuse of authority related to the implementation of stimulus funds, or (5) a violation of law, rule, or regulation related to a contract awarded as part of the stimulus. 

A person alleging a violation of these provisions shall submit a complaint to the inspector general of the agency administering the contract.  If the inspector general denies the employee relief or fails to issue a decision within 210 days of the filing of the complaint, the employee has the right to bring a complaint for a jury trial in federal court.  Preexisting mandatory arbitration clauses, except for those negotiated in the context of a collective bargaining agreement, are not binding on claims arising out of the stimulus’s whistleblower provisions.


CPSC Reform Act (H.R.4040, S.2663)

Core Provisions: H.R.4040 and S.2663 reform and strengthen the Consumer Product Safety Commission (CPSC). S. 2663 includes a whistleblower provision that provides employees with a procedure for bringing whistleblower complaints about consumer products to the attention of the DOL. After a specified period of time, either 90 days from a DOL determination or 210 days from the filing of the complaint (where the DOL fails to make a timely determination), employees may bring suit in federal court. Prevailing plaintiffs may receive compensatory and consequential damages, fees and costs, including reasonable attorneys’ and expert fees and up to $250,000 in punitive damages. Courts may also issue injunctive relief.

The bill contains a fee-shifting mechanism, under which the employer is fined all fees and costs when an adverse determination is made against it by the DOL. The legislation discourages bad faith or frivolous claims brought by disgruntled employees, providing for a mechanism by which DOL may award reasonable attorneys fees up to $1,000 when finding such an unmeritorious claim exists.

H.R.4040 does not contain a comparable whistleblower provision.

Status: S.2663 was introduced in the Senate by Sen. Pryor (D-AR) on February 25, 2008, and was passed by the Senate by a vote of 79-13 on March 6, 2008. H.R.4040 was introduced by Rep. Rush (D-IL) on November 1, 2007, and passed unanimously on December 19, 2007. S.2663 and H.R.4040 await conference committee action.


Whistleblower Protection Enhancement Act (H.R.985)

Core Provisions: This legislation would expand protected disclosures to include “any” lawful communication of misconduct, and would expand protections for those paid with federal funds, including contractors. The bill would also give United States district courts jurisdiction for appellate review from the Merit Systems Protection Board, which is currently only within the jurisdiction of the Federal Circuit Court of Appeals.

Status: H.R.985 was introduced by Rep. Waxman (D-CA) on February 12, 2007 and passed in the House on March 14, 2007 by a veto-proof tally of 331 to 94. The bill was referred to the Senate Committee on Homeland Security and Governmental Affairs, and is currently in the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia. The White House has indicated that President Bush would veto the bill should it pass in the Senate.


Private Sector Whistleblower Protection Streamlining Act (H.R.4047)

Core Provisions: Modeled after the whistleblower protections available for federal employees, this Act would prohibit discrimination or retaliation against employees who report misconduct, cooperate with an investigation, refuse to act, or assist another in asserting their rights under applicable federal or state laws or regulations. The legislation provides for an administrative complaint process under a newly established office within the Employment Standards Administration at the Department of Labor or an alternative federal court route.

Status: H.R.4047 was introduced by Rep. Woolsey (D-CA) on November 1, 2007 and referred to the House Committee on Education and Labor. The legislation currently has 13 co-sponsors.