Companies retaliate against whistleblowers, ordered to pay damages
Whistleblowers who report wrongdoing sometimes face retaliation. However, two recent cases show that sometimes justice prevails.
Ethic Alliance can help whistleblowers navigate the risk of potential retaliation, says CEO Scott Williams.
“Retaliation can be a misnomer, as companies will often take pre-emptive action to quash potential whistleblowers before they have a chance to say anything. They do this by firing the employee, cite confidentiality provisions buried in employment agreements, and take other actions such as threatening lawsuits to pre-emptively discredit employees,” says Williams. “Potential whistleblowers need to be smart, speak with an attorney to understand their rights and when legal protections against retaliation attach before they do anything. Whistleblowers do have protection under the law, and there are a network of professionals available to help them.”
Ethic Alliance is a for-profit corporation and law firm whose purpose is to empower, educate and protect whistleblowers, ensuring they receive the protection they need and the rewards they are entitled to under US law (the US government will typically reward whistleblowers 10%-30% of the amount recovered or sanctioned under various whistleblower laws). Ethic Alliance protects whistleblowers through a secure, encrypted reporting and messaging platform, attaching the strong legal protection of attorney-client privilege from the moment a report is filed with us, and access to a network of specialty attorneys that have made careers protecting and supporting whistleblowers, and working with the US government to win whistleblower lawsuits.
In one recent case, a California business aviation company will pay nearly $1 million in back wages and associated costs for retaliating against a former employee whistleblower.
The former employee of Pegasus Elite Aviation Inc. in Calabasas, Calif., reported flight safety issues that led to an onsite inspection of the company, the U.S. Department of Labor reported in March 2022. The report led the company to terminate the employee, who was not identified publicly.
The company further retaliated against the former employee by sending a falsified and negative Pilot Records Improvement Act report to the worker's new employer. The report led to the employee's termination by the new employer, the Labor Department said.
Pegasus Elite Aviation also sent falsified information to the Federal Aviation Administration that contributed to the agency's decision to suspend the former employee's pilot certificates, the Labor Department said.
Investigators with the Occupational Safety and Health Administration looked into the matter, however, and found that the company’s retaliation violated federal whistleblower provisions, the Labor Department said.
The investigation compelled OSHA to order Pegasus Elite Aviation to pay more than $898,000 in back wages and associated costs, $50,000 in emotional damages and $10,000 in attorney's fees.
In addition to the monetary penalties, Pegasus Elite Aviation must send a letter of correction to the FAA and other employers who received the falsified report about the former employee, removing the derogatory information.
“No matter the industry, every worker has the right to report safety concerns of any kind without fearing retaliation,” said James D. Wulff, OSHA's Regional Administrator in San Francisco, in a statement.
In the second recent case, a Scottsdale, Arizona-based ammunition manufacturer forced an employee from its board of directors after the employee reported potentially illegal stock transactions, the Department of Labor reported in March 2022.
Investigators with the department’s Occupational Safety and Health Administration found Ammo Inc. removed the employee from the board of directors after they voiced concerns that the transactions violated U.S. Security and Exchange Commission regulations. After being removed from the board, the employee resigned.
Following a whistleblower investigation, OSHA ordered Ammo Inc. to reinstate the employee preliminarily to their previous position. The company was also ordered to pay the employee $485,000 in compensatory damages, more than $61,000 in back wages and $51,000 in attorney’s fees. The company has appealed the order to the department’s Office of Administrative Law Judges.
Contact Ethic Alliance at info@ethicalliance.com
Related links: https://www.osha.gov/news/newsreleases/region9/03022022 ; https://www.osha.gov/news/newsreleases/national/03142022
Photo by Екатерина Мещерякова on Unsplash