Employment Law Resources

Employee Briefcase

Oct 10 2013

Whistleblower Case Study: Defending a State Employee Doing the Right Thing

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An employee discovers practices that appear to be improper if not unlawful. A state employee of the Office of Vocation Rehabilitation (“State Office”) turned to us in connection with their discovery of several practices of their employer that appeared to be improper if not unlawful. The discovery occurred in connection with their review of the use of monies granted by the federal government to the State Office. These monies were granted to the State Office for the purpose of paying rehabilitation facilities for services handicap persons referred to the rehabilitation facility from the State Office.

What were the practices that appeared improper if not unlawful? To the employee, it appeared that there were overcharges and duplicative billing and that an effort had been made by the State Office to code the billings in a way that would mask the improprieties. For example, there appeared to be three voucher payments for the placement of one individual; the amount of the voucher payments were higher that what the State Office would usually pay; and the voucher payments were coded as requests for reimbursement for training when the recipient organization was not a training facility but rather an employment agency. The employee reported the findings to their supervisor but corrective action was taken.

Oh no, what did I discover? The Hornets’ Nest. The employee was fearful of being personally implicated in a cover-up of the apparent improprieties due the conviction of past employees in kick-back type schemes and was concerned that their supervisor might be involved in the wrongdoing because of the supervisor’s relationship with the private facilities involved. In fact, the employee commented to us that they knew they had “walked into a hornets’ nest and that [they] were going to get stung.”

Doing the right thing. After weighing the advice of employment counsel on various available options, and despite the employee’s fear of being in trouble for reporting a problem of monies that involved the bosses’ friends within a politically powerful rehabilitation facility, the employee decided that they “wanted to do the right thing” and take action by reporting the wrongdoing to the Federal Bureau of Investigation (FBI). The FBI, in connection with the U.S. Attorney’s office, opened an investigation and advised the employee to inform their supervisor of the disclosure made to the FBI.

Wrongful retaliation against an employee that exercised integrity. Within six months of the employee informing their supervisor of the reporting to the FBI, the employee was stripped of their duties and the State Office extended the probationary period of the position that the employee had recently been promoted to. In addition, the employee was issued a probationary evaluation report that the characterized the employee’s performance as “average” or “satisfactory” despite many prior years of performance reports that characterized the employee as “exception,” “consistently exceed[ing] the requirements for all…tasks,” and making “exceptional contributions.”

The FBI and the U.S. Attorney’s office ultimately concluded their investigation and issued a written letter determining that there was no prosecutable case. Nine days following this determination, and after the employee devoted their entire professional career of 20-odd years to improving employment opportunities for handicapped persons, the State Office terminated the employee from their current position and demoted them. The termination notice stated that the employee did not satisfactorily complete the probationary period (which was not scheduled to end for several months) and the employee would be returned to their prior position with a decreased salary.

As a result, the employee suffered trauma caused by the events leading to the demotion and after the demotion the employee suffered years of pain and sleepless nights. The employee was essentially ostracized by former colleagues and the employee felt that their reputation had been destroyed.

We took action on behalf of this employee. We sued the State Office on behalf of the employee alleging that a violation of civil right for retaliation against the employee for exercising First Amendment rights in reporting suspicious of unlawful activity practices to the FBI. The complaint alleged the retaliation took the form of giving the employee a false and damaging performance review, systematically stripping the employee of their responsibilities, and finally demoting the employee from their employment position.

At trial, we were able to establish these allegations through evidence and pierce through the general principal that state officials cannot be sued on the exception that the actions of the State Office violate clearly established statutory or constitutional rights. Part of our evidence included the FBI agent’s testimony that the FBI’s determination did not mean that no wrongdoing occurred just that the prosecutor’s assessment was that they did not believe a successful prosecution could be obtained.

The jury found in our favor on all measures and awarded the employee with a substantial amount of damages including back pay, emotional distress, punitive damages and attorneys’ fees.

For more information on whistleblower laws or to contact an employment attorney, you may visit the Employee’s Briefcase.