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Expect More Whistleblower Claims

October 18, 2016

The Pennsylvania courts are giving more favorable treatment to employees who “blow the whistle” on their employer by reporting wrongdoing and waste.

Prior to being amended in 2014, the Pennsylvania Whistleblower statute applied only to employees of public or governmental entities.  The new law now covers employees who work for any public body or any private, for-profit or nonprofit organization that “receives money from a public body to perform work or provide services,” and protects them if they make “a good faith report of wrongdoing or waste.”  If a whistleblower can show a termination caused by a report of wrongdoing, he or she may receive an order of reinstatement or compensatory damages and an award of attorney’s fees.  The statute further provides that the employer may face a fine of $10,000 for wrongful retaliation. 

While the amended statute provides that “[a]n employer is not barred from taking disciplinary action against [an] employee … if the employee’s report was submitted in bad faith,” recent decisions suggest that such a determination may need to await trial. 

For example, in one recent, well-publicized decision, the Supreme Court of Pennsylvania in Bailets v. Pennsylvania Turnpike Commission, reversed a summary judgment order against an employee of the Turnpike Commission who had complained about a contractor’s bidding irregularities.  The Supreme Court held that there was sufficient evidence to go to trial on the whistleblower’s claims.  After holding a nonjury trial earlier this year, a Commonwealth Court judge found in favor of the whistleblower and ruled that the whistleblower was entitled to significant damages, including an award of front pay for several years.

In addition to the Pennsylvania statute, there are over two dozen federal statutes containing whistleblower provisions covering a wide range of areas, such as government contractor fraud, environmental, health and safety, consumer financial protection, securities and tax fraud.  Many corporations in these sectors are hiring full-time compliance managers to help them navigate the issues that can result in whistleblower claims and federal and state prosecution.  In fact, many of the federal government’s most significant civil and criminal prosecutions in these areas arose only after a whistleblower’s concerns were ignored by the employer, and the company then responded by terminating the employee.

The old adage “an ounce of prevention” is particularly apt here – and could have saved these companies millions of dollars. 

If you have any questions about whistleblower claims or how they might affect your company, please contact David McComb (dfmccomb@zarwin.com) or Zachary Silverstein (zsilverstein@zarwin.com)  in Zarwin Baum’s Employment Law group.


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