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Retaliating Against Whistleblower Employees Can Be Costly

July 15, 2016
Employers should follow these steps to prepare for the inevitable employee retaliation complaints.

With more workplaces coming under the weight of government regulations inspiring more employees to file whistleblower complaints, the question that employers face isn’t whether you will be sued for illegal retaliation against employees, but when.

“Numbers do not lie,” says attorney Robert Kilgore of the law firm of Fisher & Phillips. “Take a discrimination complaint—whether it is before an agency or a court—and more often than not a retaliation claim is also involved in the mix.”

From the standpoint of regulators and legislators who have adopted a steady stream of new whistleblower protections over the last several years, employees need to be protected from employers who retaliate against them for filing complaints.

But to many employers it looks like employees they fire for good reason are given cover by simply filing a retaliation complaint, even in those cases when it is patently unjustified.

Laws regulating business are now laden with whistleblower protections ranging from multi-million-dollar judgments arising from securities and financial laws like Sarbanes-Oxley and Dodd-Frank, to fines originating from employee complaints about alleged workplace discrimination, safety and labor law violations.

Among the most common involve the Equal Employment Opportunity Commission, Occupational Safety and Health Administration and National Labor Relations Board.

In recent months EEOC expanded its reach to include discrimination against gay and transgender employees, and announced it will pursue cases involving Muslims and other previously unidentified religious and ethnic groups.

OSHA—which now considers the failure to provide bathroom facilities for transgender workers a safety violation—in April issued a new rule for handling retaliation complaints regarding employee reports of food safety concerns. (OSHA will also substantially increase employer penalties for all of its violations as of August 1).

The NLRB has steadily expanded legal protections for nonunion as well as union employees if they can argue—sometimes implausibly so—that they were fired for complaining about wages and working conditions.

“The more we encourage employees to report alleged misconduct and file complaints, the more inevitable it becomes that there will be an increase in the number of people who use that mechanism,” attorney Kilgore observes.

How to Protect Yourself

Kilgore suggests several steps employers can take to prepare for the inevitable employee retaliation complaint:

Suspend first, terminate later. When a whistleblower allegedly engages in wrongdoing, don’t jump to the conclusion that he or she actually did something wrong. Take time to conduct a thorough investigation. If the conduct is so egregious you don’t want that person on premises, or their presence can compromise an investigation, suspend the employee pending the investigation’s outcome.

Let time pass. The amount of time between an employee filing a complaint and an employer’s adverse action may not determine liability, but the shorter it is the more likely someone will conclude one event caused the other, and the more time that passes the less likely it is that this will occur.

Consider past practices. If the whistleblower is accused of doing something wrong, and the investigation supports taking corrective action, you should review how past situations have been handled and ensure consistency in your approach.

Create a culture that encourages questioning and reporting. Create a policy stating that retaliation will not be taken against employees who ask questions and report violations, and emphasize that their employment won’t be at peril when they report negative information.

“The more employees see the employer’s interests are aligned with theirs, the more likely they will be forthcoming with needed information,” Kilgore notes. “After all, Enron had a lengthy code of ethics, but reading it and knowing what happened there are two entirely different things.”

Offer an explanation. If you are taking adverse action against an employee, you should be able to explain the reasoning. Make sure the adverse action makes sense and is unrelated to the protected activity. Also develop a thoughtful response to the inevitable question, “Why is this happening?”

Kilgore warns, “If you do not tackle this question head on, the fertile minds of the employee and the jury will take hold and start making assumptions and leaping to conclusions” that the employer’s actions are illegally motivated and simply a cover-up.

“And remember, the employee is going to have to prove ‘but for’ engaging in the protected activity, the adverse action would not have taken place. How does your explanation stand up against that?” he adds.

Keep the story consistent. Remember to keep the story consistent, especially if a case is brought to trial claiming retaliation. “A jury will assume the inconsistent storyteller is lying,” Kilgore warns.

Have a witness at all interviews. In most cases employers have the right to insist that a witness of their choice be present during interviews. The employee does not get a say about who the witness will be. However, make sure the witness does more than just sit there, Kilgore suggests, such as taking notes, something that can be invaluable in rebutting allegations the employer was bullying or intimidating the employee who is being questioned.

“Modern business owners can no longer ignore the fact that retaliation claims are part and parcel of the employment law mosaic with which they must deal,” Kilgore stresses. “Just because their numbers are rising does not mean they should be feared. Instead, recognize employees have this additional avenue for contesting the employer’s adverse action against them. Even if the underlying discrimination claim has no merit, retaliation claims can have a life of their own.”

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