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» Zulfer v. Playboy Enterprises Inc., No. 12-cv-08263(C.D. Cal. 2014).
» Plaintiff alleged she was discharged in violation ofSarbanes Oxley after refusing the CFO’s demandsto set aside $1 million in executive bonuses thathad not been approved by the board of directors
■ The OSH Act protects workers who complain totheir employer, OSHA or other governmentalagencies about unsafe or unhealthful workingconditions in the workplace or environmentalproblems
■ OSHA administers the employee protection or“whistleblower” provisions of many statutes
» Chapter 301 of Title 49 – gives the National HighwayTraffic Safety Administration (NHTSA) the authority to:
• Issue vehicle safety standards
• Require manufacturers to recall vehicles that have a safety relateddefect or do not meet requirements for motor vehiclemanufacturers and part suppliers
» MAP-21 is a comprehensive federal transportationprogram funding and authorization law which includessome whistleblower protections.
» MAP-21 signed into law in 2012.
Moving Ahead for Progress inthe 21st Century Act (MAP-21)
■ Section 30171 prohibits motor vehiclemanufacturers, part suppliers, anddealerships from retaliating againstemployees for engaging in certain protectedactivities
■ Providing info relating to any motor vehicledefect or violation of NHTSA vehicle safetystandards and the federal reportingrequirements for auto manufacturers to
■ Filing, testifying, assisting or participating in aproceeding concerning any motor vehicle defect oralleged violation of chapter 301 including vehiclesafety standards and federal reporting requirementsfor auto manufacturers
■ Objecting to or refusing to participate in any activitythat he or she reasonably believed to be in violationof chapter 301 or any order, rule, regulation,standard or ban under Chapter 301
■ Landmark consumer product safety law provided theConsumer Product Safety Commission with significantnew regulatory and enforcement tools as part ofamending and enhancing several consumerprotection statutes, including the Consumer ProductSafety Act
■ Under the Act, an employer cannot retaliate against anemployee who
» Provided, or is about to provide to the employer, or the state orfederal government information regarding a violation of the act
» Testified, is about to testify, or assisted or participated (or aboutto assist or participate) in a proceeding concerning suchviolation; or
» Objected to, or refused to participate in, any activity, policy,practice, or assigned task that the employee (or other suchperson) reasonably believed to be in violation of any provision ofthe Act
■ An employer may not discharge, threaten orotherwise discriminate against an employee becausethe employee reports or is about to report a violationor suspected violation of a federal or state statute orregulation to a public body
■ Employees are also protected if a public bodyrequests that the employee participate in a courtaction, investigation or hearing
■ Under the Act, and Employer cannot retaliate against anemployee who:
» Provided information (or caused information to be provided to), orassisted in an investigation by,
• A federal regulatory or law enforcement agency
• A Member or Committee of Congress
• An internal investigation by the company
relating to alleged mail/wire/bank fraud, violations of SEC rules andregulations, or violation of Federal law relating to fraud againstshareholders
OR
» Filed a Charge relating to, or participated or assisted in a proceedingrelating to alleged mail/wire/bank fraud, violations of SEC rules andregulations, or violation of Federal law relating to fraud againstshareholders
■ Collins v. Beazer Homes USA, Inc., - Georgia 2004
■ Collins was hired as Director of Marketing
■ Soon after starting employment, Collins complainedinternally to several people including Human Resources,the VP of Sales, and the company CEO about a variety ofalleged financial and other wrongdoing
■ She alleged:
» an advertiser was being overpaid because of a personalrelationship with the President of the Division
» marketing expenses were being miscategorized
» a cover-up/corruption existed with respect to her complaints
■ Collins met with several executives, but was not satisfied with theresults of her internal complaints
■ At the time, Collins was still within an initial 90 day review period inwhich her employer could terminate her employment without givinga reason
■ About two weeks after she complained, the company terminatedher employment allegedly because she could not get along with herfellow employees (including the employees she accused ofwrongdoing)
■ She filed a Sarbanes Oxley complaint with OSHA
■ Then she filed a lawsuit against the company asserting claimsunder Sarbanes Oxley and the Florida Whistleblower’s Act.
■ The Court held that there was sufficient evidence ofretaliation for her case to move forward to trial because:
» She engaged in protected activity by reporting the allegedfinancial wrongdoing internally
» The employer was aware of her protected activity
» She suffered an adverse employment action when she wasterminated
» The temporal proximity, 14 days, between her complaints andher termination was sufficient to suggest that protected activitywas a contributing factor
» The employer could not show as a matter of law that it wouldhave terminated her in the absence of her protected activity
■ Provides whistleblower incentives and protections foremployees of :
» motor vehicle manufacturers,
» part suppliers,
» dealerships, or
» their contractors
who voluntarily provide the Secretary of Transportation(DOT) information relating to:
- any motor vehicle defect,
- noncompliance, or any violation of any notification or reportingrequirement which is likely to cause unreasonable risk of deathor serious physical injury
■ Whistleblowers can receive up to 30% of totalmonetary sanctions collected pursuant to anadministrative or judicial action resulting inmonetary sanctions exceeding $1 million
■ Policies and Procedures» Develop clear and well publicized anti-retaliation
policies
» Develop and emphasize internal reportingprocedures, for all whistleblower claims:discrimination, product issues, financial and otheractivities protected under Sarbanes Oxley, etc.
» Ensure that the people who are the subject of thecomplaint are not investigating or taking actionagainst the reporting employee