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New Whistleblower Protections Under the Stimulus Bill: The McCaskill Amendment

Published by on March 24, 2009

The recent stimulus package contains new protections for whistleblowers.  Any organization receiving stimulus funds should be aware of these provisions because, among other things, they contain posting requirements.  More after the break. The amendment proposed by Senator Clair McCaskill to the American Recovery and Reinvestment Act, termed the “McCaskill Amendment,” expands the scope of whistleblower protection […]

The recent stimulus package contains new protections for whistleblowers.  Any organization receiving stimulus funds should be aware of these provisions because, among other things, they contain posting requirements.  More after the break.

The amendment proposed by Senator Clair McCaskill to the American Recovery and Reinvestment Act, termed the “McCaskill Amendment,” expands the scope of whistleblower protection to employees of private contractors and state and local governments who receive stimulus funds from the federal government.  The amendment is in addition to, and not intended to preempt or limit, any state whistleblower statutes.  Under the amendment, employers are prohibited from retaliating against employees who make certain disclosures concerning stimulus funds.  A copy of the McCaskill Amendment can be found here.

To receive whistleblower protection, the disclosure must be made to the Recovery Accountability and Transparency Board (“Board”), an inspector general, the Comptroller General, a member of Congress, a state or federal regulatory or law enforcement agency, a person with supervisory authority over the employee, a court or grand jury, or the head of a federal agency.  Further, the disclosure must concern one of the following:

1) Gross mismanagement of an agency contract or grant related to stimulus funds;

2) Gross waste of stimulus funds;

3) Substantial and specific public health or safety danger related to the use or implementation of stimulus funds;

4) Abuse of authority related to the use or implementation of stimulus funds; or

5) Violation of a law, rule, or regulation of an agency contract or grant related to stimulus funds.

To qualify for protection, the employee must have a “reasonable belief” that the disclosure provides evidence of a covered issue.  The employee can then submit a complaint to the inspector general, who may proceed to investigate the claim and report his findings to the employee, the employer, the head of the appropriate federal agency, and to the Board.  The inspector general will normally have 180 days from when he receives the complaint to report his findings, or else to make a determination that the complaint is frivolous, does not relate to stimulus funds, or is already being investigated by another government entity.  If the inspector general decides not to investigate a particular complaint for other reasons, he must submit a written explanation of those reasons to the employee and the employer.  In this situation, the employee will automatically have the right to pursue a civil remedy.

An employee pursuing a claim for retaliation under the amendment must show that the disclosure was a “contributing factor” in the alleged retaliation.  Such proof may consist of circumstantial evidence that the employer knew of the disclosure, or that the retaliation occurred shortly after the disclosure was made.  The burden then shifts to the employer to rebut with clear and convincing evidence that the employment action would have occurred regardless of the disclosure. 

Within 30 days of receiving the inspector general’s findings, the appropriate agency will issue an order either granting or denying relief.  Relief may consist of compensatory damages, back pay, reinstatement, and attorneys’ fees.  Denial of relief or failure of an agency to issue an order within 30 days will constitute exhaustion of administrative remedies and allow the employee to pursue a civil remedy through a jury trial.  An employee who is denied relief in whole or in part may appeal the agency’s order in a U.S. Circuit Court of Appeals within 60 days after issuance of the order.

An employee’s rights and remedies under the McCaskill Amendment cannot be waived through any employment agreement or policy, including an arbitration agreement (unless it is part of a collective bargaining agreement).  Further, employers receiving stimulus funds are required to post a notice of employees’ rights and remedies under the amendment.

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