New Whistleblower Protections Enacted As Part of Stimulus Bill

Amid the many issues of taxes and spending in the economic stimulus bill, you may have missed that it contains Section 1553, which is full of new protections for whistleblowers who work for state and local governments or who work for private contractors receiving monies under the bill.

The idea behind the provision is that whistleblower protections will improve accountability and transparency in the way the public's monies are spent. And there is support for this proposition.  According to a recent article by the National Employment Lawyers' Association, PriceWaterhouseCoopers recently surveyed more than 5,000 corporations worldwide and found that whistleblowers, by far, were the most effective means for the initial detection of corporate fraud, besting internal auditors and law enforcement. Additionally, the U.S. Department of Justice recently reported that whistleblowers were responsible for returning over $1 billion to the U.S. Treasury in 2008 alone.

Here are some of the provisions in the bill designed to ensure protections from reprisal when employees blow the whistle on government and corporate wrongdoing:

  • Protected disclosures include those "made in the ordinary course of an employee's duties" to any of a long list of officials, including to Members of Congress.
  • After exhaustion of administrative remedies or 210 days from the filing of a complaint, a de novo trial in federal district court to a jury is available.
  • Compensatory damages, as well as economic damages and injunctive relief, are authorized.
  • A showing that a disclosure was "a contributing factor" to the reprisal - including a showing by circumstantial evidence - is sufficient proof unless the employer shows "by clear and convincing evidence" that it would have taken the same action anyway.
  • Pre-dispute arbitration clauses are explicitly made unenforceable as to these disputes, with the exception of disputes arising under a collective bargaining agreement.

The one glaring absence from the bill is the lack of any protection for federal employees.  Obviously, federal employees are uniquely positioned to observe and report on funds that are mishandled. In my opinion, it doesn't make any sense to protect the employees of recipients of stimulus spending, while not doing so for the federal employees who oversee that spending.

If you are looking for a copy of the entire stimulus bill, you can currently find it here.