March 18, 2009

Blowing the Whistle Just Got Easier

With the passage of the American Recovery and Reinvestment Act of 2009 (ARRA), commonly known as the Stimulus Act, $500,000,000,000 (sorry I just wanted to type all those zeros) is now being moved into employers across a wide spectrum of industries to stimulate our economy.

If you work for or run an organization that is in defense, education, energy, environmental cleanup, government technology, healthcare, housing, hunger assistance, infrastructure projects, scientific research or transportation you are first in line for these funds.

That is the good news. The bad news is that within the Act is the McCaskill amendment which significantly broadens the scope of whistleblowing and puts EVERY EMPLOYER at serious risk.

The Amendment to the Act does not cover Federal Employees (they have the Whistleblower Protection Act), but is extended to all private employers and state and local governments, including their contractors and subcontractors, who receive Stimulus funds. This means if I get ARRA funds and I hire you as my contractor, and you hire a sub-contractor(s) to complete the project – every organization in this chain is accountable to the McCaskill amendment.

The Act significantly expands the whistleblowing provisions defined under SOX includes “internal disclosures, including disclosures made by employees in the ordinary course of performing their job duties.” Attorneys Allen Roberts and Frank Morris of EpsteinBeckerGreen did a great job of detailing this act and I encourage you to review their whitepaper.

I hope you are listening. This means that not only should every employer have a methodology to support anonymous reporting, but they need a methodology to document, classify, escalate and otherwise track issues brought forward which would be considered relevant information through an “open door policy.” Here are the “violation types” or talk tracks specifically identified:


  • Gross mismanagement of an agency contract or grant relating to Stimulus funds,
  • Gross waste of Stimulus funds,
  • Substantial and specific danger to public health or safety related to the implementation or use of Stimulus funds,
  • Abuse of authority related to the implementation or use of Stimulus funds, or
  • Violation of law, rule, or regulation related to an agency contract or grant awarded or issued to Stimulus funds.

This law puts the responsibility firmly on the employer as there does not need to be a preponderance of evidence of retaliation, in fact it can be circumstantial. Therefore, the employers should implement and consistently follow procedures that document their actions during and post receipt of any disclosure.

Should employers retaliate against the "whistleblower," the action is swift and significant. The Office of the Inspector General is bound by the Act to review and make a determination within 30 days of the validity of the claim. If the claim is deemed valid, the Act requires the IG’s office to make a determination within 180 days. The complainant is entitled to reinstatement, back pay, compensatory damages, attorneys’ fees, and if warranted exemplary damages. If it goes to trial the complainant is entitled to a jury trial and the Act specifically removes any employer right to arbitration.

Finally there is no preemption to this Act, so States have the option to add to this Act if they feel it “necessary.” So over time this could be become very messy.

The bad news isn’t over yet. Everyone is waiting for Health and Human Services to promulgate the Act’s requirements for changes in HIPAA privacy regulations. When they do I will let you know the risks and requirements.

Full Disclosure – EthicsPoint is a market leader in Hotline/Helpline & Issue Management market. We will no doubt benefit from the passage of this legislation, but my intent is not to encourage or scare you into purchasing products and services from our company. My concern is one of big government, that in my opinion, just got a lot bigger and the downstream risks to smaller private employers in the Stimulus Act are significant.

Comments

1 Response to "Blowing the Whistle Just Got Easier"

Anonymous said... March 19, 2013 at 7:13 PM



My website :: cordyceps

Post a Comment

About Me


David Childers
President
& CEO
of EthicsPoint


View David Childer's profile on LinkedIn contact david Email Me

ethicspointCEO@gmail.com

Favorite Quotes:

Ronald Reagan
There are no easy answers, but there are simple answers. We must have the courage to do what we know is morally right.

John Quincy Adams
If your actions inspire others to dream more, learn more, do more and become more, you are a leader.

Aristotle
We are what we repeatedly do. Excellence, therefore, is not an act but a habit.

Ray Kroc
The quality of a leader is reflected in the standards they set for themselves.

John Maxwell
The first step to leadership is servanthood.