Labor Department’s Ruling in “Whistleblower” Cases Could Implicate Employers’ Ability to Enforce Workplace Standards

December 18, 2013

The Department of Labor issued a decision last month holding that an employer may be held liable for "whistleblower" retaliation when it terminates an employee for surreptitiously recording a meeting with management.  The decision in Benjamin v. CitationShares Management, LLC, DOL ARB, No. 12-029 (Nov. 5, 2013), is the latest in a series of decisions by the Department’s Administrative Review Board ("ARB") suggesting that the actions by whistleblowers that may be protected, and the actions by employers that may be considered retaliatory, are broader than even experienced managers might expect.    

Background

Robert Benjamin, a pilot for CitationAir, filed a complaint against the company under the "whistleblower" protection provision of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ("AIR 21"), claiming that he suffered adverse treatment because he reported aircraft-safety concerns, and that he was terminated because he attempted to record a meeting with management where those concerns were discussed.   

Benjamin had discovered what he considered a problem with a plane’s landing equipment during a pre-flight inspection, which he reported to a manager.  In response, Benjamin was removed from the plane’s flight crew and told to meet with management to discuss his report.  Fearing what might happen in the meeting, Benjamin attempted to secretly record it, but in the midst of the meeting his recorder began to audibly malfunction.  Benjamin was escorted from the meeting and terminated several days later.

The ARB’s Decision

An Administrative Law Judge ("ALJ") concluded that Benjamin’s safety reports had not been protected activity under the Act and, additionally, that the taping was not protected because Benjamin had not "expected or intended to preserve evidence of a compromise of safety."    

On appeal, the ARB reversed and remanded.  The ARB held that Benjamin had engaged in protected acts under AIR 21, including his initial safety report and his attempted recording of the management meeting.  Order at 6-9.  With regard to the tape recording, the ARB reasoned that "an employee engages in protected activity if he attempts to provide information of retaliation that violates AIR 21," and that in taping a meeting that he feared might involve "intimidating and threatening conduct," Benjamin was taking steps that he reasonably believed necessary to "provide information" regarding retaliation, since taping potentially retaliatory statements would help "provide [that] information" to the government or others.  Id. at 8, 11. 

Noting that CitationAir had "unequivocally acknowledged" that Benjamin’s attempted recording was "the decisive factor" in his termination, the ARB remanded to the ALJ to give CitationAir the opportunity to show that it would have taken the same personnel actions for legitimate, non-retaliatory reasons (although it did not articulate what those reasons could be).  Id. 

Potential Implications

Benjamin is the latest in a series of decisions where the Board has defined the employee actions that are protected–and the employer actions that are prohibited–more broadly than employers might expect.  Many employers and human resources managers would regard secretly taping a meeting with managers as unprotected, inappropriate conduct that can justify termination.  But the ARB held that doing so was protected by law, because it would help Benjamin "provide information" to others within the meaning of Air 21’s whistleblower protection provision.  Similarly, in Vannoy v. Celanese Corp., DOL ARB, No. 09-118 (Sept. 29, 2011), the ARB held that the company violated the Sarbanes-Oxley Act ("SOX") when it terminated an employee for sending personal information regarding 1,600 employees–including Social Security numbers and credit card numbers–to his roommate’s personal email address, since (unbeknownst to the company) the employee intended to then provide the information to the Internal Revenue Service in furtherance of a whistleblowing complaint.  And in Menendez v. Halliburton, Inc., ARB Nos. 09-002, 09-003 (Sept. 13, 2011), the ARB held that a company retaliated under SOX when it issued a document hold notice during an SEC investigation, because the notice identified by name the employee who had complained to the company audit committee.

Similar concerns are also presented by the SEC rules implementing the Dodd-Frank whistleblower "bounty" program; the rules contain a provision that purports to prevent employers from enforcing employee confidentiality agreements when whistleblower employees provide confidential and proprietary information to the SEC. 17 C.F.R. § 240.21F-17(a).   

The Labor Department’s "whistleblower" decisions are ultimately reviewable in the federal courts of appeals, which could well disagree with the positions taken by the ARB in Benjamin, Vannoy, and Menendez.  The decision in Menendez, in fact, is currently under consideration by the U.S. Court of Appeals for the Fifth Circuit.  The SEC’s ability to obtain unfettered access to proprietary company information through whistleblowers is also subject to question.  These legal developments serve as a reminder, however, that the Labor Department is strictly scrutinizing employers’ conduct in whistleblower cases, and extra precautions may be warranted before taking seemingly reasonable employment actions toward employees who claim to have "blown the whistle." 

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