Can Employees Sue for Whistleblower Retaliation?
Understanding Your Legal Rights as a Whistleblower and How to Protect Them
All employers are prohibited from retaliating against employees who report legal violations, safety concerns, or other wrongdoing. This “whistleblower protection” is an essential component of the legal system—it ensures that those who see wrongdoing and speak up are not punished, and that companies cannot hide illegal activity by intimidating employees into silence.
Despite these protections, many whistleblowers still face retaliation of various forms. When this happens, they may file a retaliation claim for additional compensation on top of any whistleblower award they may receive. In this guide, our experienced legal team runs through the key considerations of whistleblower retaliation claims, including who is protected, what constitutes retaliation, and how to take action if it happens to you.
What Is Whistleblower Retaliation?
Retaliation is any “adverse employment action” taken against an employee in response to their protected whistleblowing activity. The most common forms of retaliation include:
- Termination (Firing): The most blatant and common form. An employee is dismissed because they raised complaints or participated in an investigation.
- Demotion: The employee is moved to a lower position with less responsibility or lower pay.
- Denial of Promotion: The employee is passed over for advancement as a direct result of their whistleblowing.
- Salary Reduction: The employee’s pay is cut, either explicitly or through manipulation of hours or commissions.
- Negative Performance Reviews: The employee receives unjustified poor reviews as a pretext for discipline or dismissal.
- Isolation or Exclusion: The employee is intentionally excluded from meetings, projects, or other professional opportunities.
- Harassment and Hostile Work Environment: The employee is subjected to increased scrutiny, verbal abuse, or other forms of intimidation.
- Reassignment: The employee is moved to a less desirable or dead-end job function.
Importantly, retaliation does not have to be overt or direct. Often, it is subtle and disguised as legitimate business decisions. For example, an employer may claim that a position was eliminated for “budgetary reasons” when in reality the motive was to punish the whistleblower. Courts look at the timing and circumstances to determine if retaliation occurred.
Who Is Protected from Retaliation?
Virtually all employees are protected from retaliation in some form. The exact protections depend on the employment setting and the type of whistleblowing:
- Private Sector Employees: Protected by a patchwork of federal and state laws, including the Sarbanes-Oxley Act, Dodd-Frank Act, False Claims Act, and numerous others. Private employees who report corporate fraud, securities violations, safety violations, environmental violations, or other misconduct are protected.
- Federal Employees: Protected primarily by the Whistleblower Protection Act (WPA) and Whistleblower Protection Enhancement Act (WPEA). These cover employees who disclose violations of law, gross mismanagement, gross waste of funds, abuse of authority, or substantial dangers to public health or safety.
- Contractors and Subcontractors: Under certain laws (such as Sarbanes-Oxley and the Defense Contractor Whistleblower Protection Act), government contractors and their employees are protected.
- State and Local Government Employees: Protected by state whistleblower laws, which vary but generally prohibit retaliation for reporting violations of state or local law.
In all these scenarios, the whistleblower must show that:
- They engaged in protected activity
- The employer knew about this activity
- The employer took an adverse action (like firing or demotion)
- There was a causal connection between the protected activity and the adverse action
What Are the Protected Activities?
To trigger retaliation protections, an employee must engage in a “protected activity.” This generally includes:
- Reporting Violations Internally: Complaining to a supervisor, manager, compliance officer, or HR department about a legal violation or unsafe practice.
- Reporting Violations Externally: Filing complaints with government agencies (such as the SEC, OSHA, EEOC, EPA, or DOJ).
- Testifying or Participating in an Investigation: Providing information, cooperating with, or testifying in an official investigation or proceeding.
Importantly, the employee does not have to be correct about the alleged violation. They simply must have a reasonable and good-faith belief that a violation occurred, and they must report it through proper channels.
Top 5 Steps to Take If You Suspect Retaliation
If you believe you are experiencing retaliation after blowing the whistle, here are the most important steps to protect your rights:
- Document Everything: Keep records of all communications, performance reviews, disciplinary actions, and any adverse employment actions taken against you. Save emails, memos, and meeting notes.
- Report the Retaliation Internally: If safe to do so, formally report the retaliation to your HR department or ethics officer. This creates a record and gives the employer a chance to correct the situation.
- File a Formal Complaint: Most whistleblower retaliation statutes have procedures for filing a complaint with a government agency. For example, OSHA investigates many types of whistleblower complaints, while the Office of Special Counsel (OSC) handles federal employee cases.
- Contact an Attorney: Whistleblower retaliation cases are complex. An experienced attorney can help you navigate the process, file the right paperwork, and protect your rights.
- Act Quickly: Many whistleblower retaliation claims have strict deadlines (statutes of limitations). In some cases, the deadline is as short as 30 or 90 days from the adverse action. Don’t wait.
How Employees Can Sue for Retaliation: Private Sector Cases
The process for suing for retaliation depends on the law that was violated. The steps generally involve:
- Filing a Complaint with the Appropriate Agency: Before going to court, you generally must file a complaint with a federal agency, such as OSHA (under Sarbanes-Oxley) or the SEC (under Dodd-Frank). The agency will investigate and attempt to resolve the matter.
- “Exhaustion of Administrative Remedies”: In many cases, you must allow the agency a certain period (e.g., 180 days) to resolve the complaint before you can file a lawsuit.
- Filing a Lawsuit in Federal Court: If the agency does not resolve the matter, you may file a lawsuit in federal court. The lawsuit will seek to remedy the retaliation, such as reinstatement, backpay, and possibly double damages.
If you win a retaliation lawsuit, you may be awarded:
- Reinstatement: Getting your job back.
- Back Pay: Lost wages from the date of the adverse action.
- Front Pay: Future lost earnings if reinstatement is not possible.
- Compensatory Damages: For emotional distress and reputational harm.
- Punitive Damages: In some cases, to punish the employer.
- Attorney’s Fees and Costs: The employer pays your legal fees.
How Employees Can Sue for Retaliation: Federal Employees
Federal employees must follow a specific process under the Whistleblower Protection Act:
- File a Complaint with the OSC: The Office of Special Counsel (OSC) investigates retaliation complaints for federal employees.
- Investigation and OSC Decision: The OSC will investigate and may order corrective action if it finds retaliation.
- MSPB Appeal: If you disagree with the OSC’s outcome, you can appeal to the Merit Systems Protection Board (MSPB).
- Judicial Review: If you are unsatisfied with the MSPB, you can appeal to the U.S. Court of Appeals for the Federal Circuit.
Common Defenses to Retaliation Claims
Employers will often assert defenses to a retaliation claim, such as:
- Legitimate Non-Retaliatory Reason: The employer may claim that the adverse action was taken for a legitimate business reason (e.g., performance issues, layoffs, budget cuts) unrelated to whistleblowing.
- No Causal Connection: The employer may argue that the whistleblowing and adverse action are not connected. Timing and documentation are crucial here.
- Pre-Existing Plan: The adverse action was planned before the employee blew the whistle.
A skilled attorney will help gather evidence to counter these defenses. For example, evidence that the adverse action happened immediately after the protected activity, or that the reasons given by the employer are inconsistent, can show retaliation.
What Is the Statute of Limitations for Retaliation Claims?
The deadline to file a retaliation claim varies by statute. Here are some examples:
- Sarbanes-Oxley: 180 days from when the employee knew or should have known of the employer’s retaliatory action.
- False Claims Act: 3 years from the date the retaliation occurred.
- Whistleblower Protection Act (Federal Employees): 60 days to file with the OSC.
- OSHA Whistleblower Statutes: Vary by program from 30 days to 180 days.
Because the deadlines are often short, it is always best to speak with an attorney as soon as possible after suspecting retaliation.
Whistleblower Retaliation: Key Takeaways
- All employees are protected from retaliation after reporting legal violations.
- Retaliation can be subtle, such as poor reviews, demotion, or ostracism.
- You must act quickly and file with the proper agency or court.
- You must document everything and often prove a causal connection.
- You should contact an attorney, as retaliation cases are complex.
