Sweeping New Protections for Employees Who Blow the Whistle on Product Safety
November 24, 2008
Steven L. "Steve" Gillman- Chicago
In August, President Bush signed the Consumer Product Safety Improvement Act of 2008 (the Act) into law. The Act is Congress’ response to a flurry of product recalls in recent years, such as the highly publicized recall of imported toys containing lead paint. It expands the authority and resources of the Consumer Products Safety Commission, and gives the Commission powerful new tools to enforce the Act’s requirements. The Act has received fanfare, but the nature and extent of the protections afforded employee whistleblowers has received little attention. These protections may have the broadest sweep of any federal law protecting whistleblowers.
Which Employers Are Covered?
Employers who make, import or export consumer products,1 including manufacturers, private labelers, distributors and retailers are affected. Employees of those entities are protected by the Act’s whistleblower protections. Thus, a large number of workers – estimated at 20 million – are protected against retaliation for their whistleblowing and related activities.
What Types of Whistleblowing Activities Are Protected?
The Act extends well beyond employees who blow the whistle by contacting the authorities regarding a hazardous product. It also protects an employee who, in the ordinary course of the workday, reports information to management relating to any violation of – or any act or omission the employee “reasonably believes” to be a violation of – any provision of the Act, or any other law enforced by the Consumer Product Safety Commission. In short, an employee is protected if he or she speaks out at work about a product safety issue or the sufficiency of a label. Apart from protecting employees who report potential hazards in the ordinary course of the workday, the Act also protects employees who testify in proceedings, assist or participate in proceedings, or object to or refuse to participate in any assigned task that the employee reasonably believes to be a violation of the Act or another law enforced by the Commission.
Essentially, the Act protects from discrimination or retaliation the employee who speaks out about any aspect of a product’s safety. The employee does not need to be right about what he or she says about the product, and need only report information that he or she “reasonably believes” to be a violation of a provision of the Act or any other law enforced by the Commission.
What Types of Employer Retaliation Are Prohibited?
The Act prohibits an employer from discharging an employee or discriminating against an employee with respect to compensation, terms, conditions or privileges of employment. It does not appear that an employee must show a tangible job detriment to establish liability. On its face, the Act prohibits any type of retaliatory behavior affecting terms or conditions of employment.
How Are the Whistleblower Protections Enforced?
The enforcement provisions track other federal whistleblower laws enforced by OSHA. A person who believes that he or she has been discriminated against may, not later than 180 days after an alleged violation occurs, file a complaint with the appropriate OSHA office, which will investigate the complaint on behalf of the Secretary of Labor. After affording the employer an opportunity to submit a written response, including statements from witnesses, OSHA will initiate an investigation and determine whether there is “reasonable cause” to believe that the complaint has merit. Following the investigation, OSHA will give the parties written notification of its findings, and if the OSHA investigator concludes that there is reasonable cause, the findings will include a “preliminary order” providing relief, including possible reinstatement. Other remedies include back pay, compensatory damages, and all costs and expenses, including attorneys’ and expert witness fees, reasonably incurred. So without a hearing, the employee can be restored to his or her job.
If the Secretary finds a complaint is frivolous or brought in bad faith, the employer may be awarded a reasonable attorneys’ fee not to exceed a token amount: $1,000. While a party can file objections within 30 days to force a hearing, the filing of such objections does not stay any reinstatement remedy contained in the preliminary order. If objections are filed, the hearing is conducted “expeditiously.” If objections are not filed, the preliminary order becomes final. After a hearing before an administrative law judge, the parties can seek review before the Department of Labor Administrative Review Board.
A troubling feature of the Act is that it allows plaintiffs to bring a new lawsuit in federal court even after forcing the employer to respond to the claim before OSHA. A plaintiff may opt out of the administrative process and sue in federal court if, as is likely, the full administrative process of hearings and decisions has not concluded with the issuance of a final decision by the Secretary of Labor within 210 days after the employee files the administrative complaint. And, although it is not entirely clear, it appears that an employee may be able to sue in federal court even after OSHA makes a preliminary determination that the employee’s claim is without merit. In a federal court proceeding, the employee’s case is addressed de novo, without regard to the outcome of the administrative proceedings. Furthermore, the Act expressly authorizes trial by jury once a lawsuit has been filed in federal court.
Legal Burdens of Proof
Before the Secretary of Labor can investigate the allegations in a complaint, the complainant must make a prima facie showing that the whistleblowing activity was “a contributing factor” in the unfavorable personnel action alleged in the complaint. Thus, the complainant need only show that his or her protected activity – e.g., a complaint about the safety of a product, or participation in a proceeding, or a refusal to participate in an assigned task – was a factor that contributed to an adverse employment action, even if it was not the sole or primary factor. The burden then shifts to the employer to demonstrate by “clear and convincing” evidence that the employer would have taken the same unfavorable personnel action in the absence of that behavior. Thus, the evidentiary threshold for a prima facie showing is quite low, and the threshold the employer must then meet to avoid a full-blown investigation is quite high.
Summary
The Act’s whistleblowing protections are not limited to specified industries or to publicly traded companies (see Sarbanes-Oxley). The protections affect any manufacturer, private labeler, distributor, or retailer of a consumer product. They apply so long as the employee reasonably believes there may be a violation of the Act. An employee can be reinstated based solely upon an investigation finding reasonable cause to believe that the complaint has merit. Other relief includes back pay, compensatory damages, and attorneys’ and expert witness fees. Employers that have employees who handle consumer products must be mindful of these substantial new rights for whistleblowers.
For more information, contact:
Steven L. Gillman
312.578.6538
steven.gillman@hklaw.com
Francesco M. Nardulli
312.578.6570
francesco.nardulli@hklaw.com
toll free: 1.888.688.8500
1 The Act applies to most consumer products. Consumer products are defined as any article or component part produced or distributed for sale to a consumer for use in or around a household, residence or school, or in recreation. They do not include tobacco products, motor vehicles or motor vehicle equipment, pesticides, firearms and ammunition, aircraft, boats, drugs, medical devices, cosmetics or food. 15 USC 2052.
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