Articles Posted in Whistleblowers

rasha-zeyadehDallas Lonestar works for the city of Palestine. Dallas Lonestar discovers that several city officials are misusing city funds. Dallas reports his discovery to the Palestine Police Department (“PPD”). The PPD notifies Palestine city officials of Dallas Lonestar’s report and begins investigating the claim.   A few days later, Dallas Lonestar’s supervisor fires him. The city alleged Dallas Lonestar was fired because of poor performance. Dallas Lonestar was never reprimanded for performance related issues and had no reason to believe his performance was lacking. In fact, shortly before being fired, he was given a glowing performance rating. Hence, Dallas Lonestar believes he was fired because he filed a report with the PPD regarding city officials’ misuse of city funds. Dallas Lonestar is angry, without a job, and wants to sue the city of Palestine. What are his rights?

The Texas Whistleblower Act prohibits a state or local government entity from taking adverse personnel action against an employee “who in good faith reports a violation of law by the employing governmental entity or another public employee to an appropriate law enforcement authority.” The two most important considerations when determining whether a violation of the Texas Whistleblower Act occurred are: (1) whether you acted in “good faith” which means that you believed the conduct you reported was a violation of law and your belief was reasonable; and (2) whether you reported the violation to an appropriate law enforcement agency which is a government entity you believed is authorized to either enforce the laws or investigate or prosecute a violation of criminal law. For instance, an internal report of illegal activity to someone else within the public entity (supervisor/HR) is not typically a report made to an appropriate law enforcement authority. 

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deontae-wherryThe False Claims Act (FCA) is a longstanding federal statute that was originally enacted to combat defense contractors who committed fraud against the federal government during the Civil War. Since the 1860s, the FCA has been revised and has become an authoritative tool to prevent fraud committed against the federal government. Understanding the federal government cannot know every individual or company who knowingly submit fraudulent claims, the FCA’s whistleblower provision allows individuals and employees to bring a qui tam action on behalf of the government.

Since 1986, after Congress strengthened the FCA, the government has recovered more than $62 billion in civil false claims. According to the Department of Justice, the government collected more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year 2019. Moreover, during the 2019 fiscal year, the government paid out more than $265 million to individuals, like you, who exposed fraud and filed qui tam actions. With these significant payouts, there is no reason to remain silent if you know your employer is defrauding the federal government.

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fadi-yousefCongress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 shortly after the financial crisis, commonly known as the Great Recession. The Act’s aim was to “promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”

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fadi-yousefThe Sarbanes-Oxley Act of 2002 (“SOX”) is a federal law that established new standards for public companies and created whistleblower protection for employees who disclose information that could show a violation of federal securities law, SEC rules, or any federal law related to fraud against the shareholders. Given its diverse civil, criminal and administrative provisions, SOX could be considered one of the most important whistleblower protection laws.

Unlike most whistleblower laws, SOX’s whistleblower protection provisions are not limited to providing a legal remedy for wrongfully terminated employees. In addition to containing employment-based protections for employee whistleblowers, the law contains other provisions directly relevant to whistleblower protection:

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austin-campbellOver 1.6 million Texans were employed in the healthcare and social assistance industry by 2019, and that number is expected to grow steadily over the next decade.  Nursing in particular is one of the top five occupations in the state by number of online “help wanted” ads.  Because of that, it is all the more important that healthcare workers here are well-trained and competent, and also are empowered to say something when they see something that puts patient health or safety at risk.

Fortunately, the Texas Health & Safety Code provides some powerful whistleblower protections that are unique to the healthcare industry.  Unfortunately, figuring out if you fall within those protections is not always simple because the Code has so many different components.  Making things harder, Texas courts have interpreted relatively few parts of the Texas Health & Safety Code compared to other employment laws.  This article is meant to provide the reader with some basic information about some of the protections that healthcare workers (and others) have under this law, as well as limitations in the Code.

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austin-campbellGenerally, you have the burden of proving if your employer’s actions toward you violate the law. Of course, sophisticated employers seldom admit to doing something that breaks the law, and often employment cases turn on a “he-said/she-said” moment, where the employee claims something was said and the employer later denies it. One way, we sometimes see employees try to even the playing field by secretly recording conversations in the workplace to have proof of illegal activity beyond their own word.

This article answers some key questions employees often have about recording in the workplace. Is it legal for you to do it? Can your employer order you not to? Can your employer punish you for recording? Is it a good idea?

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austin-campbellThe Occupational Safety and Health Administration (OSHA) is part of the Department of Labor and administers the Occupational Safety and Health Act (OSH Act), as well as numerous other safety and whistleblower laws.  OSHA also sets safety standards for various industries.  Because of OSHA, many employers have a general duty to prevent working conditions that pose a risk of serious and recognized harm.

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Over the past few decades, government regulators have begun to keep a much closer eye on the conduct of those in charge at large corporations. However, regulators may not be privy to all the inner-workings of a corporation, and given the number of corporations and lack of available resources to ferret out the wrongdoers, corporate misconduct flew under the radar for years. More recently, however, the Securities and Exchange Commission (SEC) started the SEC whistleblower program, which relies on employee whistleblowers to report violations of U.S. securities laws.

Under the SEC whistleblower program, an employee who voluntarily reports information that assists the SEC in recovering amounts of more than $1 million is eligible for a financial award. The amount of the award ranges between 10% to 30% of the monetary sanctions collected by the government. These funds are paid out of a separate fund called the Investor Protection Fund, rather than with company proceeds.

To be eligible for a reward through the SEC Whistleblower program, a reporting employee must be able to show the following:

  • The information provided relates to a violation of U.S. securities law or relates to the bribery of a foreign official;
  • The information was provided voluntarily, and not in response to questioning or an investigation;
  • The information was based on personal knowledge, and not publicly available records; and
  • The information must result in a new investigation or significantly contribute to an existing investigation.

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The federal government has certain laws ultimately designed to prevent the misuse or waste of federal funds. Thus, to encourage federal employees to “blow the whistle” on those engaging in misconduct, lawmakers passed the Whistleblower Protection Act (WPA). Under the WPA, government employees who report certain acts of misconduct are protected from an employer’s retaliation.

For decades, the federal government has relied upon non-government private contractors to perform certain government functions. However, the WPA only applies to government employees. Thus, to extend the whistleblower protections of the WPA to private government contractors, Congress included certain protections in the National Defense Authorization Act (NDAA).

As noted above, the NDAA provides protections to private contractors hired by the federal government when they report waste, fraud, or abuse in federal government contracts and grants. The NDAA also covers whistleblowers who are employees of private contractors, as well as subcontractors and anyone else working on a government contract or grant.

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Employees of organizations are privy to all sorts of information that is not available to the public. Thus, it is not uncommon for an employee to discover that their employer is defrauding the government. When an employee discovers their employer is engaging in fraud, they can blow the whistle on their employer’s illegal conduct by filing a Texas qui tam lawsuit.

A qui tam lawsuit is essentially a whistleblower claim. The term qui tam is short for the Latin term, “qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which roughly translates to “he who brings the action for the king as well as himself.” The idea behind a qui tam lawsuit is to incentivize those with knowledge that an organization is defrauding the government to come forward.

An employee who has knowledge of an employer’s fraud can file a civil lawsuit under the False Claims Act seeking to recover compensation for the employer’s fraud on behalf of the government. Once a qui tam lawsuit is filed, it is kept under seal while the Justice Department investigates the claim. During this period, the subject is not made aware they are under investigation.

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