Source: http://www.nyemployeelaw.com/blog/category/Retaliation
Timestamp: 2019-04-19 18:21:33+00:00

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The Dodd-Frank Act (DFA) potentially makes it very lucrative for an employee to blow the whistle on their employer’s violations of the securities laws, if the Securities and Exchange Commission (SEC) recovers money on behalf of defrauded investors because of the whistleblower’s information. But the DFA’s protections against whistleblower retaliation are equally important - few whistleblowers would come forward if their jobs were not protected. Unfortunately, the DFA is ambiguous on this point. The law defines a “whistleblower” as any individual who provides information relating to a violation of the securities laws to the SEC. 15 U.S.C. §78u-6(a)(6). However, a separate part of the DFA forbids an employer from retaliating against an employee for providing information to the SEC, for participating in an SEC action, or for “making disclosures that are required or protected under the Sarbanes-Oxley Act....” 15 U.S.C. § 78u-6(h)(1)(A). Sarbanes-Oxley, unlike the DFA, explicitly protects employees who provide information about securities law violations not just to the SEC, but to any Federal regulatory or law enforcement agency, or to a supervisor at the employer’s workplace. 18 U.S.C. § 1514A.
So, Dodd-Frank on the one hand limits its definition of “whistleblower” to those providing information to the SEC, and on the other hand protects from retaliation whistleblowers who report wrongdoing under the broader Sarbanes Oxley requirements. The SEC, in a regulation, adopted the broader view, and held that whistleblowers are protected under the DFA even if they report the wrongdoing to another agency, or internally with their employer. The Fifth Circuit Court of Appeals went against the SEC and held that the DFA’s definition of whistleblower controls, and so only whistleblowers who report wrongdoing to the SEC are protected by the DFA. Asadi v. G.E. Energy, 720 F.3d 620 (5th Cir. 2013).
Enter Judge Scheindlin. The plaintiff in Rosenblum v. Thomson Reuters, 13 Civ. 2219, complained about potential securities law violations to the FBI and to his supervisor, and was fired about a month later. Thomson Reuters moved to dismiss his lawsuit, pointing to the Asadi decision and arguing that he was not a whistleblower under Dodd Frank. Judge Scheindlin denied the motion and held that Rosenblum’s FBI and internal complaints protected him from retaliation under Dodd-Frank. Essentially, Judge Schindlin held that SEC was right and the Fifth Circuit was wrong.
Eventually, the Second Circuit will be asked to resolve this question, so stay tuned.
The Court this term has made enforcing Title VII of the Civil Rights Act harder than ever. In one opinion, discussed here, the Court made it harder to bring sexual harassment suits against employers by narrowing the definition of a “supervisor.” In Nassar, the Court also made it harder to prove unlawful retaliation. Federal law makes it unlawful for an employer to retaliate or punish an employee for opposing discrimination or making a complaint of discrimination. Courts have long recognized the importance of this anti-retaliation provision, without which employees would be unable to protest discrimination for fear of being disciplined or fired. The Supreme Court, however, has now given retaliation claims second-class status, watering down this important enforcement provision.
Classically, employment discrimination claims are proved as follows: someone protected by federal law (say, minorities or people who oppose discrimination) suffers an “adverse action” at work – they’re treated worse than others, or they’re fired or demoted. The employer then can give a reason for the different treatment – say ,because the employee was late a lot. The employee could win the case by proving either (1) that the excuse was false (actually, she wasn’t late, or she was as late as everyone else who worked there) or (2) that even though the excuse was true, the employer was also motivated by unlawful reasons (i.e., she was late a lot, but the employer also said he was sick of working with women). The second example is called a “mixed motive” case – where the employer is motivated by two reasons at once, one of which is unlawful (you can’t fire women for being women).
The facts in Nassar constitute a classic example of a “mixed motive” case. The case involved a Muslim doctor working at a University Hospital, who alleged anti-Muslim discrimination by one of his supervisors. To escape his supervisor’s harassment, Dr. Nassar arranged to resign his faculty position at the university to work at a university-affiliated clinic. The university agreed to this, and sent him a formal offer letter. Prior to beginning work at the clinic, Dr. Nassar wrote a letter to the University’s faculty members and the Chair of the Department, explaining that the he was leaving his faculty position was because of his supervisor’s discriminatory treatment of him. The Department Chair, angry about the accusations of discrimination against the supervisor (who worked under him), took matters into his own hands and blocked Dr. Nassar’s appointment at the clinic – for which he had already been made a formal offer. The University claimed that Dr. Nassar wouldn’t have been able to work at the clinic anyway, as University rules require clinical doctors to also hold faculty positions.
That is – there appeared to be two reasons Dr. Nassar lost his appointment: (a) an unlawful one (to retaliate against him for complaining of discrimination); and (b) a lawful one (because the arrangement technically violated university rules).
Had this been a regular discrimination case, that would have been the end of the story. Even if an employer has a perfectly legitimate reason to terminate someone, if they are also motivated by, say, racism or sexism, that still violates federal law. Employees – even ones who would be fired anyway – have a right to be free of unlawful discrimination. It’s one thing to be fired for being late, it’s another thing entirely to be fired for being late and to be told that you – because of your gender or race – are an unfit worker.
The judge – like many other judges around the country– told the jury just that. If you find that Dr. Nassar lost his appointment even in part in retaliation for his complaint of discrimination, then he must be awarded damages. The jury found that retaliation was indeed a factor in the University’s decision and awarded Dr. Nassar substantial damages.
The Supreme Court, however, overturned the verdict. The Court ruled that retaliation is different from discrimination (even though it shows up in the very same statute). The Court then indicated that a “more demanding” standard of proof is required for retaliation cases. The Court ruled that a plaintiff must prove that they suffered an employment action that would not have happened “but for” the retaliatory motive (i.e., “but for” the letter Dr. Nassar wrote, he wouldn’t have lost his appointment).
The “motivating factor,” if not the “but for” cause, behind the Supreme Court’s decision was to reduce the number of retaliation cases that can be heard by juries. The Court cited (without any evidence whatsoever) the fact that too many frivolous retaliation claims were being brought in federal court, and that this new rule would help reduce the number of frivolous retaliation claims – by reducing the total number of retaliation claims across the board.
Of course, the idea of courts trying to stamp out “bad” cases by reducing the total number of cases is problematic – that means that many people whose federal rights have been legitimately violated will be shut out of court just so that courts don’t have to bother dismissing other, worse claims.
The number of retaliation claims brought to the U.S. Equal Employment Opportunity Commission has been increasing. But that is hardly proof that some, or most, of those claims are frivolous. Those same statistics can equally support the argument that employers will do whatever they can to get rid of a whistleblower or someone who claims about unlawful conduct. Given the number of recent, high-profile news articles about leaks and whistleblowers, it would hardly be surprising to find employers cracking down.
The Court’s decision in Nassar makes proving retaliation claims in the federal courts more difficult. How much more difficult depends on how the lower courts interpret the “but for” standard. But it is clear that at least five members of the Supreme Court are determined to limit the rights of victims of workplace injustice – meaning we all are just going to have to work that much harder.
In October 2008, Eugenie Gilmore, of the Law Office of Eugenie Gilmore, and BMBB's John A. Beranbaum, tried a case in the United States District Court for the Southern District of New York, Judge Victor Marrero presiding, on behalf of two former employees of the Department of Information Technology and Telecommunications, a City of New York agency. The plaintiffs claimed that the agency failed to re-hire them during a restructuring in unlawful retaliation for their having previously sued the agency for racial discrimination, or having assisted in such a suit. (One of the plaintiffs also alleged he was not re-hired because of his diabetes). After trying the case for six days, and immediately before summations were to be delivered, the City agreed to pay the plaintiffs $400,000 to settle the case. See Stewart and Kalembwe v. Department of Information Technology and Telecommunications, 04 CV 10179.

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