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Law Offices of Elizabeth “Booka” Smith, LLC Blog

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July 9, 2018: Tenth Circuit Rules Medical Judgment Is Subject to FCA Scrutiny


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February 21, 2018: US Supreme Court Narrows Dodd-Frank Whistleblower Protection


On February 21, 2018, the United States Supreme Court issued its written opinion in the matter of Digital Realty Trust, Inc. v. Paul Somers, holding that the anti-retaliation provision of the Dodd-Frank Act does not protect whistleblowers unless they report allegations of corporate wrongdoing to the Securities Exchange Commission (SEC). The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) defines a “whistle-blower” as “any individual who provides … information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.” 15 U.S.C. §78u-6(a)(6). Dodd-Frank’s anti-retaliation provision prohibits companies from terminating whistleblowers for reporting securities laws violations. Dodd-Frank also has a “bounty” program that is designed to reward money to employees who report securities laws violations to the SEC. Digital Realty Trust, Inc. is a real estate investment trust that owns, acquires, and develops data centers. Paul Somers is a former Vice President of Digital Realty who was fired shortly after he reported to senior management suspected securities laws violations by the Company. Mr. Somers filed a lawsuit against Digital Realty in California, claiming that the Company fired him in violation of Dodd-Frank’s anti-retaliation provision. Digital Realty moved to dismiss Mr. Somers’ Dodd-Frank anti-retaliation claim on the grounds that Mr. Somers failed to report the alleged securities fraud to the SEC. The California federal district court denied Digital Realty’s motion, which denial was subsequently affirmed by the Ninth Circuit Court of Appeals. The US Supreme Court then granted certiorari to resolve a split between the Fifth and Ninth Circuits on the issue. The US Supreme Court declined Mr. Somers’ argument that only the Dodd-Frank bounty program requires SEC reporting. The US Supreme Court agreed with Digital Realty that in order to be protected by Dodd-Frank’s anti-retaliation provision, Mr. Somers needed to report the securities violations to the SEC. In so ruling, the US Supreme Court noted that Dodd-Frank’s “core objective” is to prompt reporting to the SEC. In the wake of this important Supreme Court decision, corporate employees with knowledge of potential securities laws violations must carefully weigh their options in blowing-the-whistle and decide what avenue is best to protect their employment and economic status. The Law Offices of Elizabeth “Booka” Smith, LLC has experience representing and advising Dodd-Frank whistleblowers. If you are a corporate employee who suspects that your Company may be violating securities laws, CONTACT US to schedule an appointment for advice on your best course of action.

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October 26, 2017: Recent Washington Post/ABC Poll Confirms Most Women Decline to Report Workplace Sexual Harassment


Recent complaints lodged against Harvey Weinstein have sparked substantial discussion about sexual harassment. On FaceBook, an alarming number of females have posted “Me Too” indicating that they have been the victim of unwanted sexual advances. A large majority of the unwanted sexual advances arise in workplace settings, in cases where the harasser has influence over the victim’s employment. A poll recently conducted by The Washington Post and ABC revealed that 30% of women surveyed stated that they had experienced unwanted sexual advances from a man at the place they worked. The poll further showed that 58% of these victims never reported the incident of harassment to anyone in a supervisory position. The reasons sexual harassment often goes unreported are no mystery. Victims of harassment fear retaliation for waging accusations against the harasser. Victims of sexual harassment also experience shame and humiliation that they fear will be exacerbated if they report harassment. The silence is unfortunate, insofar as workplace sexual harassment is prohibited by Title VII of the Civil Rights Act of 1964 and by the Colorado Anti-Discrimination Act (CADA). Title VII applies to employers with more than 15 workers, while the CADA covers employers who have fewer than 15 employees. Title VII and the CADA also prohibit employers from retaliating against employees who report that they are victims of sexual harassment. Sexual harassment takes many forms and can include: inappropriate comments about appearance; questions about love life or sexual preferences; sexually explicit jokes or comments; sexist and demeaning comments about women; requests for sexual favors or sexual contact; and unwanted touching, amongst other things. Both men and women can be victims of sexual harassment. Many companies have detailed written policies in place that provide examples of sexual harassment and also provide instructions to victims of sexual harassment about how to report the harassment. Victims of sexual harassment should follow their Company’s reporting policies to a tee in order to preserve legal claims down the road. Victims should also document the harassment to the full extent possible by keeping a detailed journal with dates and incidents of what was said or done. Legal claims for workplace sexual harassment and retaliation route through the Equal Employment Opportunity Commission (EEOC) and/or the Colorado Civil Rights Division (CCRD). Victims must file a Charge with the EEOC/CCRD in order to ultimately pursue their claims in court. The Law Offices of Elizabeth “Booka” Smith, LLC has significant experience representing victims of workplace sexual harassment before the EEOC, the CCRD, and in State and federal courts. If you have experienced workplace sexual harassment, and/or if you have suffered an adverse employment action (e.g. termination, demotion, suspension) because you complained about workplace sexual harassment, CONTACT US to schedule an appointment for advice on your best course of action.

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July 31, 2017: SOX's 15 Year Anniversary Marks Success for Wells Fargo Whistleblowers


July 31, 2017 marked the fifteen (15) year anniversary of the enactment of the Sarbanes-Oxley Act of 2002 (SOX). In the wake of the Enron and WorldCom financial fraud scandals, SOX introduced strict reforms to improve corporate financial disclosures and prevent accounting fraud. SOX includes an anti-retaliation provision, Section 806 (18 U.S.C. § 1514A), which prohibits publicly traded companies, their subsidiaries and their employees from retaliating against any employee who engages in “protected activity.” “Protected activity” under Section 806 includes, but is not limited to, providing information, causing information to be provided, or otherwise blowing the whistle on bank fraud. The US Department of Justice (DOJ), the US Securities and Exchange Commission (SEC), and private attorneys are successfully utilizing SOX to prosecute Wells Fargo in connection with a “phantom account” scandal which rivals the Enron/WorldCom scandals SOX was enacted to prevent. Wells Fargo’s “phantom account scandal” (which was revealed to the public in November, 2016) was predicated on large numbers of Wells Fargo employees opening accounts on retail customers’ behalf without their knowledge or permission. This practice (which Wells Fargo internally labeled a “best practice”) was the result of a highly pressurized sales culture at Wells Fargo that tacitly encouraged bank employees to make undisclosed and unauthorized sales of secondary accounts to customers in order to achieve sales goals. To date, the SEC has identified as many as two million (2,000,000) unauthorized (“phantom”) accounts. It is widely anticipated that Wells Fargo is on the verge of self-reporting that there are hundreds of thousands of additional “phantom accounts” beyond the 2M already discovered by the SEC. SOX Section 806 has been successfully utilized by private attorneys to secure reinstatement and monetary damages for Wells Fargo employees who spoke out against or otherwise blew-the-whistle on the widespread bank fraud. On July 29, 2017, the Occupational Health and Safety Administration (OSHA)(the federal agency where SOX Section 806 claims must initially be filed) awarded a former Wells Fargo Bank Manager $5.4M pursuant to SOX Section 806. The Bank Manager was terminated almost immediately after he called the Wells Fargo “hotline” and reported several instances of his direct reports committing bank fraud. The damages awarded to the former Wells Fargo Bank Manager by OSHA included substantial back pay (due to the employee being blackballed in the banking industry), compensatory damages, and attorney fees. The OSHA further ordered Wells Fargo to reinstate the Bank Manager to his former position and clear the employee’s personnel file of all references to alleged wrongdoing. This case is just one of many examples of private attorneys using SOX Section 806 to redress some of the wrongs created by the Wells Fargo “phantom account scandal.” The Law Offices of Elizabeth “Booka” Smith, LLC has significant experience representing executive employees in whistleblower retaliation cases, including cases arising under SOX Section 806. Booka Smith has successfully fought and is aggressively fighting prominent US corporations (including Wells Fargo) in whistleblower retaliation cases. If you are a current or former employee of a publicly traded company and are either contemplating blowing the whistle on your company for what you reasonably believe are SOX violations, or if you have and have been retaliated against because of your whistleblowing activities, CONTACT US to schedule an appointment for advice on your best course of action.

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February 6, 2017: Former Bio-Rad General Counsel Awarded Over $10M in Whistleblower Retaliation Case


 

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November 21, 2016: EEOC Issues Guidance on National Origin Discrimination


On Monday, November 21, 2016, the U.S. Equal Opportunity Commission (EEOC) issued an updated guidance on national origin discrimination. This new Guidance replaces the 2002 version of Section 13 of the EEOC’s Compliance Manual. The new Guidance defines national origin discrimination as “discrimination because an individual (or his or her ancestors) is from a certain place or has the physical, cultural, or linguistic characteristics of a particular national origin group.” The EEOC further made clear in the new Guidance that discriminating against an individual based on a belief that they are a member of a certain group, because of their association with someone of a particular national origin, or because of their citizenship also constitutes national origin discrimination which is prohibited under Title VII of the Civil Rights Act of 1964. The new Guidance further reminds employers that harassment on the basis of national origin is likewise prohibited by Title VII. In addition to the new Guidance, the EEOC issued a short question-and-answer sheet and a small business fact sheet that highlight the major points of the new Guidance in plain language. The purpose of the new Guidance is to update the EEOC’s Compliance Manual to reflect important legal developments over the past fourteen (14) years on issues relating to workplace discrimination and harassment. The EEOC was motivated to issue the new Guidance because of the increasing number of national origin discrimination and harassment charges filed. In FY2015, about eleven percent (11%) of the near 90,000 private sector charges filed with the EEOC alleged national origin discrimination. Thirty-seven percent (37%) of those charges alleged national origin harassment. National origin harassment occurs when workplace harassment predicated on membership or association with a particular ethnic group becomes so “severe or pervasive that it alters the terms and conditions of the individual’s employment” by creating a hostile working environment. In the new Guidance the EEOC cites that repeatedly calling a Pakistani employee a “camel jockey” or “the local terrorist” may constitute national origin harassment under Title VII. The Law Offices of Elizabeth “Booka” Smith, LLC has significant experience representing employees before the EEOC and the Colorado Civil Rights Division (CCRD) in national origin discrimination and harassment cases. If you believe you are the victim of illegal workplace national origin discrimination or harassment, CONTACT US to schedule an appointment to discuss potential legal representation.

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September 2, 2016: EEOC Issues Final Guidance on Workplace Retaliation


The U.S. Equal Opportunity Commission (EEOC) recently issued its Final Guidance on Workplace Retaliation. The EEOC’s Guidance (which had not been updated since 1998) aims to bring the EEOC’s stance on retaliation in line with several recent United States Supreme Court decisions in retaliation cases. Workplace retaliation takes place when an employer takes a “materially adverse” action against an employee because the employee has engaged, or may engage in “protected activity.” The EEOC’s Guidance clarifies the government’s stance on what is considered “materially adverse” and also what constitutes “protected activity.” The EEOC Guidance lists the following examples of “protected activity”: taking part in an internal or external investigation of employment discrimination or harassment; filing or being a witness in a charge, complaint, or lawsuit alleging discrimination; communicating with a supervisor or a manager about employment discrimination or harassment; refusing to follow orders that would result in discrimination; resisting sexual advances, or intervening to protect others; reporting an instance of sexual harassment to a supervisor; requesting accommodation of a disability or for a religious practice; or, asking managers or co-workers about salary information to uncover potentially discriminatory wages. The EEOC Guidance further reaffirms that denial of promotion, refusal to hire, denial of job benefits, demotion, discharge, and suspension are all considered “materially adverse” employment actions. The EEOC Guidance also sets out some less obvious examples of “materially adverse” actions, including: reprimanding an employee or giving a performance evaluation that is lower than it should be; transferring an employee to a less desirable position; engaging in verbal or physical abuse; threatening to make or actually making reports to authorities (such as reporting immigration status or contacting the police); increasing scrutiny of the employee’s work performance; spreading false rumors, or treating a family member negatively (for example, cancelling a contract with the employee’s spouse); or, taking action that makes the employee’s work more difficult (for example, punishing an employee for an EEO complaint by purposefully changing his or her work schedule to conflict with family responsibilities). The EEOC’s Guidance on Retaliation is now in line with U.S. case law which has in the recent past broadened employees’ protections against workplace retaliation. This broadening is reflected in the fact that retaliation has become the most common complaint amongst employees, accounting for 44.5% of all Charges the EEOC received in FY2015. The Law Offices of Elizabeth “Booka” Smith, LLC has significant experience representing employees before the EEOC and the Colorado Civil Rights Division (CCRD) in retaliation cases. If you believe you are the victim of illegal workplace retaliation, CONTACT US to schedule an appointment for advice on your best course of action.

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August 23, 2016: In-House/General Counsel as Whistleblower


Sean McKessy, the former chief of the U.S. Securities and Exchange Commission’s Office of the Whistleblower, recently acknowledged that in-house/general counsel have a unique perspective that often make them effective whistleblowers. This unique perspective is a by-product of deep insight into both the company’s affairs and the bounds of the law. More than any other employee of the company, it is often the in-house/general counsel that is best poised to blow the whistle on corporate malfeasance. However, more often than not, in-house/general counsel who blow the whistle on corporate wrongdoing become victims of workplace retaliation. In the past few years, there have been several notable cases where in-house/general counsel have been terminated in retaliation for engaging in whistleblowing activities. Howard Dorfman, former GC of Turing Pharmaceuticals, was fired less than a month after internally objecting to the company hiking the price of the drug Daraprim from $13.50 per pill to $750. David Cohen, former GC of DHB (now Point Blank Solutions, Inc.), faced retaliation after he blew the whistle on a proposed settlement of a shareholder derivative suit which released the company’s upper level executives from liability, in violation of the Sarbanes-Oxley Act (SOX). Sanford Wadler, former GC of Bio-Rad Laboratories, Inc., was summarily terminated after he internally raised complaints about rampant bribery of public officials in China (i.e. multiple violations of the Foreign Corrupt Practices Act (FCPA)). Once terminated, in-house/general counsel have to be very cautious in deciding whether and how to pursue a claim for wrongful termination against the company. Because the company is considered a former client of the terminated in-house/general counsel, the terminated lawyer has ethical obligations arising under their state’s Ethical Code of Professional Liability for Lawyers to protect client confidences. Courts across the country are divided in deciding whether in-house/general counsel can use evidence of client confidences to prove their case for wrongful termination. Because it is nearly impossible for a whistleblower lawyer to prove a case of wrongful discharge without disclosing client confidences, understanding these court opinions is critical. Courts throughout the US have largely rejected a per se bar on retaliation claims by in-house attorney whistleblowers. The growing trend is for courts to look to American Bar Association Model Rule of Professional Conduct 1.6, which permits disclosure of client information if the disclosure is necessary “to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client,” and allow limited disclosure. Given the legal landscape and nuances in how various jurisdictions respond to cases brought by lawyers for wrongful discharge, in-house/general counsel should give careful thought in deciding whether and how to blow the whistle on corporate misconduct. While every case is different, there are some standard precautions that in-house/general counsel can and should take in order to accomplish their goal of correcting the corporation’s behavior, while simultaneously protecting their legal career. The Law Offices of Elizabeth “Booka” Smith, LLC has significant experience advising in-house/general counsel as to whether and how to blow the whistle in the first instance. Ms. Smith also has experience representing in-house/general counsel in wrongful termination litigation. If you are a current or former in-house/general counsel and are either contemplating blowing the whistle on your company, or if you have and have been retaliated against because of your whistleblowing activities, CONTACT US to schedule an appointment for advice on your best course of action.

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June 16, 2016: US Supreme Court Recognizes "Implied Certification" Theory of FCA Liability


On June 16, 2016, the United States Supreme Court handed down a major victory to False Claims Act (FCA) whistleblowers by unanimously ruling (in Universal Health Services, Inc. v. U.S. et al. ex rel. Escobar et al.) that FCA liability can be predicated on a theory of “implied certification.” The Supreme Court’s decision means that FCA whistleblowers do not have to prove that the government contractor actually billed the federal government for non-existent services or unnecessary services in order to prevail in an FCA qui tam action. Rather, FCA whistleblowers can prevail by simply proving that the government contractor failed to comply with the “material” term(s) and requirement(s) of the government contract. Specifically, the Supreme Court weighed in on the First Circuit Court of Appeals’ decision in United States ex rel. Escobar v. United Health Services, Inc. While the Supreme Court agreed with the First Circuit’s decision that “implied certification” is a viable theory of FCA liability, the Supreme Court ultimately vacated the First Circuit’s decision in Escobar citing that the “materiality” standard articulated by the First Circuit is too broad. The Supreme Court clarified that in order to prevail on an implied certification theory of FCA liability, an FCA whistleblower is behooved to allege that the government contractor’s implicit certification was false to the point where had the government known about the non-compliance, it would not have paid the claim. In Escobar, the relators alleged that a mental health center’s grossly inadequate staff supervision and patient care lead to the death of their daughter. In considering the allegations presented, the Supreme Court suggested that if the government contract with United Health Services (UHS) mental health center made clear that proper staffing was a condition of payment, and if UHS falsely implied to the government that it was complicit with the contract’s staffing requirements in order to get paid, then UHS is exposed to a viable FCA qui tam action. Counsel for the relators in the Escobar case expressed confidence that the FCA whistleblowers will ultimately prevail because the requirements UHS violated were “material” under the Supreme Court’s definition. The Supreme Court’s ruling in UHS v. Escobar confirms that the FCA is arguably the most effective whistleblower law in the US to prevent fraud against the federal government. Since 2009, US taxpayers have recovered over $29.5 billion from government contractors committing fraud. The Law Offices of Elizabeth “Booka” Smith, LLC represents FCA whistleblowers. If you have knowledge or information about a company submitting fraudulent claims for payment on a government contract, CONTACT US to schedule an appointment to discuss potential FCA liability and your best course of action.

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May 27, 2016: SOX Whistleblower Retaliation Claims Bolstered by Recent DOL Decision


On March 30, 2016, the U.S. Department of Labor’s Administration Review Board (ARB) entered its decision in the case of Dietz v. Cypress Semiconductor Corp. (ARB No. 15-017), ruling in favor of Timothy Dietz, a Sarbanes-Oxley (SOX) Act whistleblower who alleged that he was given unfavorable performance reviews and was ultimately forced to resign his employment because he internally protested that the company’s bonus plan was bogus. Mr. Dietz complained about the company’s bonus plan because the plan failed to disclose in offer letters to its employees that the “bonus” plan actually required compulsory salary reductions. The Dietz decision is favorable to SOX whistleblowers in at least two respects. First, the ARB’s decision in Dietz bolsters prior court and agency decisions holding that SOX whistleblowers are not required to explicitly use the words “fraud” or “fraudulent” or to specifically connect the fraudulent scheme to the use of mails or wires, in order to be protected by SOX. Second, the ARB’s decision in Dietz states that a SOX whistleblower who resigns because it is clear to him or her that firing is imminent may be considered to have been constructively discharged and thus protected by SOX. The ARB explained that in cases where the employer has communicated to the whistleblower employee that he or she is about to be terminated, i.e. “the writing is on the wall and the axe is about to fall,” the employee is free to resign and file a SOX retaliation claim – the employee does not have to be fired. The Law Offices of Elizabeth “Booka” Smith, LLC represents executive employees of publicly held companies that are privy to SOX violations by the company and either wish to expose the violations, or have already done so. If you are a current or former employee of a publicly held company and have been retaliated against by your company for complaining about or reporting potential SOX violations, or if you are simply privy to information suggesting that your company is in violation of SOX and are wondering what you should do with that information, CONTACT US to schedule an initial consultation to evaluate potential representation.

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April 27, 2016: Federal "Defend Trade Secret Act" Passes U.S. House Vote 410-2


On April 27, 2016, the U.S. House of Representatives voted 410-2 in favor of passing the “Defend Trade Secrets Act,” which amends the federal Economic Espionage Act and allows employers to file civil lawsuits for theft of trade secrets under federal law. The U.S. Senate previously approved this legislation and it has been forecasted that the bill will be signed into law by President Obama. Enactment of the Defend Trade Secrets Act (DTSA), which specifically states that it does not pre-empt state trade secret statutes, means that employers who believe that they are a victim of trade secrets misappropriation may be able to file lawsuits in State and/or federal court alleging violations of the federal Defend Trade Secrets Act and/or violations of the applicable state’s trade secret misappropriation statute. Previously, employers had no federal misappropriation statute to work with and were often restricted to filing their lawsuits in state court. Although the DTSA drew a rare level of bipartisan support, it contains one controversial provision that in “extraordinary circumstances” allows employers to secure an ex parte seizure order from the court to prevent the dissemination of trade secrets. Ex parte seizure is a dramatic and potentially harsh remedy which is currently not available under state law. The Law Offices of Elizabeth “Booka” Smith, LLC represents executive employees accused of misappropriating trade secrets. The most common representation involves a scenario where an executive leaves their current employer to compete in the same industry either with another existing company, or by starting a new company. If you are an executive who has been accused of misappropriating trade secrets, or if you have questions about what information may be considered untouchable “trade secret” information, CONTACT US to schedule a consultation and/or to discuss potential legal representation.

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March 16, 2016: OHSA Issues Final Procedural Rules for Dodd-Frank Whistleblowers


On March 16, 2016, the Occupational Safety and HealthAdministration (OSHA) issued final procedural rules for Dodd-FrankWhistleblowers. OSHA is the agency responsible for processing Dodd-Frank whistleblower retaliation claims filed under the Consumer Financial Protection Act (CFPA). The OSHA’s final regulations provide that acomplaining employee is protected under the CFPA whistleblower provisions aslong as the employee has both a subjective, good faith belief and an objectivelyreasonable belief that he or she has been fired or otherwise retaliated againstin violation of the CFPA. The final regulations state that the complainant mustfile their complaint within 180 days after the retaliatory decision has beenboth made and communicated to the employee. The OSHA’s final regulationsprovide specific time-frames within which the complaint must be investigated,decided, reported and reviewed. The final regulations also note that in theevent 210 days pass and there is still no final administrative decision, thenthe complainant may file his or her claim in federal district court. Theregulations also note that the complainant may file his or her claim in federaldistrict court within 90 days of receiving an initial agency written decisionon their complaint, as long as no final decision has been issued. The LawOffices of Elizabeth “Booka” Smith, LLC handles Dodd-Frank whistleblowerretaliation complaints before the OSHA and USDOL and also in federal districtcourt. If you are an employee who has been retaliated against by your employerfor blowing the whistle on what you reasonably believe are violations of theCFPA, CONTACT US to schedule an initial consultation to evaluate your case andto discuss potential legal representation.

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February 11, 2016: EEOC Releases FY2015 Data on Workplace Discrimination & Retaliation


On February 11, 2016, the U.S. Equal Opportunity Commission (EEOC) issued data tables providingstatistics and information regarding EEOC Charges filed in fiscal year 2015 (October1, 2014 through September 30, 2015). The tables reveal that about 600 morecharges were filed in FY2015 than in FY2014 (89,385 Charges were filed inFY2015, up from 88,778 in FY2014). The tables also show that retaliation claimsunder EEOC enforced statutes (such as Title VII of the Civil Rights Act of1964, which prohibits discrimination in the workplace) made up 44.5% of all FY2015Charges. This data confirms that for several years in a row, retaliationagainst whistleblowers is the most frequently cited basis for EEOC Charges. Thetables further show that in FY2015 the EEOC recovered $356.6M in administrativeenforcement efforts and $63.5M in litigation recoveries. These figures aresubstantially higher than FY2014 recoveries. This EEOC data confirms the badnews that retaliation against employees who blow-the-whistle on unlawfulworkplace discrimination is still fairly common. But the data also confirms thegood news that employers are being punished for this illegal conduct. TheLaw Offices of Elizabeth “Booka” Smith, LLC routinely represents executiveemployees who face workplace discrimination and retaliation before the EEOC andin court. If you are facing retaliation ordiscrimination in the workplace, CONTACT US to schedule an initialconsultation and to evaluate potential representation.

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January 28, 2016: Jury Awards Wal-Mart Pharmacist $31M in Whistleblower Retaliation/Sex Bias Lawsuit


On January 28, 2016, a jury awarded more than $31M indamages to Maureen McPadden, a former Wal-Mart pharmacist who claimed she wasillegally fired because she reported safety concerns about co-workersdispensing prescription medication. McPadden, who is 51 years old and had beenemployed by WalMart for 13 years, was fired in 2012 after losing her pharmacykey. McPadden filed her lawsuit in 2014, alleging that losing the key was apretext for the firing and the firing was harsher than the progressivediscipline policy her male colleagues were afforded. In the few years beforeher termination, McPadden began to notice that high turnover, understaffing andinexperienced staff in the pharmacy posed a serious threat to the privacy andsafety of patients. In 2011, she reported her concerns to the New HampshireBoard of Pharmacy. The New Hampshire jury awarded most of the $31M onMcPadden’s gender discrimination claims, but also found that the terminationwas in retaliation for her whistleblowing activities. McPadden reported to thepress she felt in her soul that it was her duty to keep her patients safe andcited that as a motivating factor in enduring the lengthy battle againstWalMart, which lasted over three years. McPadden told the press she observedthe jurors listening very intently at trial, and she felt the jurors wanted tosend a message to WalMart that it did something wrong. Attorneys for WalMartindicate they will ask the New Hampshire federal court to set aside the verdictor reduce the damages. The verdict in McPadden’s case against WalMart isrepresentative of a trend in the US of intolerance for retaliatory terminationsof employees who blow-the-whistle on health and safety concerns. The LawOffices of Elizabeth “Booka” Smith, LLC represents plaintiffs in whistleblowerretaliation lawsuits. If you are a current or former employee who is or hasbeen subjected to adverse employment actions for whistleblowing, CONTACT US to schedulean appointment to discuss the viability of legal claims and potentialrepresentation.

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December 4, 2015: Supreme Court Slated to Consider "Implied Certification" Theory of FCA Liability


On December 4, 2015, the United States Supreme Court agreed to weigh in on theissue of whether companies that have contracts with the federal government canbe held liable under the federal False Claims Act for failing to comply withthe terms and requirements of the contract. This theory of FCA liability hascome to be known as the “implied certification,” and it differs fromtraditional FCA liability which exists when companies bill the federalgovernment for non-existent services or unnecessary services. To date, thecircuit courts are split on the issue of whether and how a plaintiff can proveFCA liability based on a theory of “implied certification.” The Seventh CircuitCourt of Appeals has basically rejected the theory, while most of the othercircuits have accepted the theory subject to rules which are inconsistent courtto court. In weighing in on the issue of implied certification, the UnitedStates Supreme Court will review the First Circuit’s decision in United States ex rel. Escobar v. UnitedHealth Services, Inc., 780 F.3d 504 (1st Cir. Ct. App., March 17, 2015, as amended April 14, 2015). In Escobar, the First Circuit reversed the trial court’s dismissal of the plaintiff’s FCA claim which was predicated on a theory of implied certification. The First Circuit noted that Universal Healthmental health center is required as a condition of payment under its governmentcontract to properly supervise its staff and properly care for all patients.The First Circuit ruled that the relator’s allegations that grossly inadequatecare lead to the death of the relator’s daughter sufficiently alleged a viabletheory of FCA liability. It is anticipated by both the plaintiff’s and defensebar that in considering the First Circuit’s ruling in Escobar, the Supreme Court is likely to accept the theory of implied certification and establish a set of clear rules governing proof of thetheory. Until the Supreme Court rules, whistleblowers need to carefullyevaluate whether any FCA qui tam or Section H retaliation case can be supported by a theory of impliedcertification. The Law Offices of Elizabeth “Booka” Smith, LLC representsplaintiffs in FCA lawsuits. If you believe your employer may be violating theFCA, but are not certain, CONTACT US to schedule an appointment to discusspotential FCA liability.

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November 16, 2015: SEC Annual Report Reveals $37M in Bounty Awarded to SEC Whistleblowers in FY Ending 9/30/2015


On November 16, 2015, the U.S. Securities and ExchangeCommission released its Annual Report revealing that in the last fiscal year(ending 9/30/2015) SEC Dodd-Frank Whistleblowers were paid out roughly $37M inbounty awards. The SEC bounty program, which was created by the Dodd-Frank Actof 2010, requires the SEC to pay bounties to eligible whistleblowers who providethe SEC with information that leads to an enforcement action resulting in over$1M in combined sanctions. Under Dodd-Frank, the SEC is required to awardsuccessful whistleblowers a minimum bounty of 10% of the total sanctions collected.The SEC is allowed to exercise its discretion to award up to 30% in bounty incases where the whistleblower more substantially enhanced the enforcementaction. The SEC Annual Report notes that 3,900 reports were filed this pastfiscal year, and 120 whistleblowers requested bounty awards. The SEC confirmedthat not all bounty seekers received awards and added that “[i]n general, themore specific, credible and timely a whistleblower tip, the more likely it isthat the tip will be forwarded to the [SEC] enforcement staff.” The number ofreports is up 8% from the prior fiscal year. The SEC attributes the increase intips to an upswing in complaints about corporate disclosures and financials, aswell as trading and pricing issues on unregistered securities. If you believeyour employer may be violating the SEC rules and regulations, and/or theForeign Corrupt Practices Act, CONTACT US to schedule an initial consultationto evaluate the likelihood of receipt of a bounty award and to discuss legalrepresentation designed to maximize the amount of any bounty award.

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October 19, 2015: Texas Court Denies Fluor's Motion to Dismiss FCA Whistleblower Retaliation Lawsuit


On October 19, 2015, the U.S. District Court for theSouthern District of Texas denied government defense contractor FluorIntercontinental Inc.’s motion to dismiss a Section H False Claims Act (FCA) whistleblowerretaliation lawsuit filed by three former Fluor employees. The threeplaintiffs, who worked for Fluor in Afghanistan, allege that they werewrongfully terminated after internally reporting a fraudulent scheme designedto conceal and cover up lost or stolen government property inorder to avoid liability under a property services contract with the U.S. Army.In the written court decision denying dismissal of the lawsuit, Judge KennethHoyt cited a 2011 Fifth Circuit decision (U.S.ex. rel. Patton v. Shaw Servs., L.L.C.) for the proposition that an FCASection H retaliation plaintiff must show that: (1) he or she engaged in“protected activity” under the FCA; (2) the employer knew the employee engagedin protected activity; and (3) the employer took adverse action because of it. JudgeHoyt concluded that the former Fluor employees sufficiently pleaded all threeelements in their legal complaint against Fluor. Specifically, Judge Hoyt ruledthat: (1) by internally reporting their concerns that Fluor was lying to thegovernment in order to escape liability on a government contract the plaintiffsdid engage in protected activity; (2) by threatening Fluor that they wouldreport any losses “as required by the Government,” the plaintiffs put Fluor onnotice that they were engaging in protected activity; and (3) the plaintiff’sallegations that Fluor threatened to sue them for slander, subjected to them toa hostile work environment, denied them the proper resources to do their jobs, deniedthem promotions and instead demoted them, and ultimately terminated them, metthe final causation element of the three part Section H test. If these formeremployees prevail in their Section H case, they will be entitled toreinstatement to their jobs. They will also recover double back pay withinterest plus special damages including recovery of litigation costs and attorneys’fees. The Law Offices of Elizabeth “Booka” Smith, LLC represents plaintiffs inSection H FCA lawsuits. If you believe your employer may be violating the FCAand are wondering how best to report your concerns and also secure your legalrights, or if you have already reported your concerns and as a result areexperiencing retaliation in the workplace, CONTACT US to schedule an initialconsultation to evaluate potential representation.

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October 14, 2015: ACC Census data suggests that Female In-House Lawyers still earn less than their Male Counterparts


Statistics published in the 2015 Association of CorporateCounsel Global Census suggest that female in-house lawyers still earn less thantheir male counterparts, and have titles of lower prestige. The ACC Censussurveyed more than 5,000 in-house counsels in 73 countries. Survey participantswere questioned about their annual salaries and other compensation, their jobtitles, their job responsibilities, and their work hours, amongst other things.The compensation data was then adjusted using purchasing power parity to enableaccurate global comparisons. Although the presence of women in-house improvedsignificantly from the last Global Census report in 2011 (up from 41% in 2011up to nearly 50% in 2015), the data strongly points toward the conclusion thatmany female in-house attorneys continue to receive unequal pay for equal work.In the United States, the federal Equal Pay Act requires all employers toprovide employees whose jobs require “substantially equal skill, effort andresponsibility” equal salary, bonuses, and other monetary compensation. Unequalcompensation cannot be justified unless the employer shows that the paydifferential is based on fair seniority, merit or incentive system, or a factorother than sex. The “Paycheck Fairness Act,” which was introduced in 2005 bythen Senator Hillary Rodham Clinton, and reintroduced to the federallegislature in March, 2015, if passed, will further curtail justification forunequal pay and will provide women with additional tools to fight paydiscrimination in the workplace. The Law Offices of Elizabeth “Booka” Smith,LLC represents and advises female executives, including in-house attorneys andprivate firm lawyers, who experience gender inequity in the workplace. CONTACTUS to schedule an initial consultation and to evaluate potentialrepresentation.

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720 Hits

September 15, 2015: Settlement discussions afoot in S.D.N.Y. FCA Qui Tam lawsuit over failure to repay Medicaid overpayments within 60 Days

In 2011, Robert Kane, a former employee of Continuum HealthPartners, Inc., filed an FCA qui tam lawsuit under seal in the Federal District Court for the Southern District Court of New York alleging that he was fired after he internally reportedConituum’s failure to reimburse the government for Medicaid overpayments within60 days as required by the Affordable Health Care Act. As a Relator, Kane namedother entities, including Healthfirst, Inc., a non-profit insurance programwhich caused a network of New York City non-profit hospitals operated andcoordinated by Continuum to submit improper Medicaid claims for payment to thegovernment. The DOJ investigated the allegations, and the case was unsealed inJune of 2014 when the DOJ intervened. On August 3, 2015, Judge Ramos of theS.D.N.Y. denied the defendants’ motion to dismiss the lawsuit, finding that assoon as the defendants were put on notice of the possible overpayments, the 60 dayACA clock started ticking. Judge Ramos ruled that the defendants will need topresent solid proof of good-faith efforts to investigate and address theproblem in order to avoid FCA liability. The DOJ is seeking treble damages,penalties of $11,000 for each overpayment retained beyond the 60 days, andcosts of suit. The total damages could well exceed $100M. On September 15,2015, the DOJ notified Judge Ramos that serious settlement discussions in thecase were underway. As a Relator, Kane stands to recover a substantial portionof any settlement. The Law Offices ofElizabeth “Booka” Smith, LLC investigates potential FCA qui tam lawsuits and advises potential relators how to presenttheir case to the DOJ such that the DOJ will opt to intervene, therebymaximizing the likelihood of success for the relator. If you have informationthat a company is in violation of the FCA for defrauding the government and areconsidering becoming a relator in a potential qui tam lawsuit, CONTACT US to schedule an initial consultation andto evaluate potential representation.

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889 Hits

September 10, 2015: Second Circuit Agrees with the SEC that Internal Whistleblowing is protected under the Dodd-Frank Act

On September 10, 2015, the Second Circuit Court of Appeals issuedits decision in the case of Berman v.Neo@Ogilvy LLC, ruling (2-1) that the Dodd-Frank Actwhistleblower protection provision applies to employees who blow-the-whistleinternally (i.e. to their employer as opposed to an external complaint to theSEC). The majority of the Second Circuit panel concluded that the SEC’s recent interpretiverule on this issue (see www.bookalaw.com 9-9-2015 blog post) shouldbe given deference. Accordingly, the Second Circuit reversed the lower court’sdecision to dismiss Mr. Berman’s Dodd-Frank whistleblower retaliation lawsuiton the grounds that he only informed his employer (and not the SEC) of accountingfraud. The dissenting opinion in Bermanattacks the majority opinion on several grounds, including criticism that theSEC’s interpretive rule altered Dodd-Frank by deleting “[report] to theCommission” from the definition of “whistleblower,” effectively broadeningDodd-Frank’s intended protections. The Second Circuit opinion in Berman is at odds with the FifthCircuit’s 2013 decision in Asadi v. G.E.Energy (USA), LLC. Although Asadipredates the SEC’s interpretive rule, the circuit split on this issue mightultimately have to be resolved by the U.S. Supreme Court. The Law Offices ofElizabeth “Booka” Smith, LLC routinely represents executives in whistleblowerretaliation cases. If you harbor concerns that your employer may be violatingSEC rules and regulations and are debating whether and how to report yourconcerns, or, if you previously reported your concerns and as a resultexperienced retaliation in the workplace, CONTACT US to schedule an initialconsultation to evaluate potential representation.

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679 Hits
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