MSG-August Interview Part I.wmv

[Music] welcome to forensic perspectives the legal community's online resource for the latest in forensic accounting business valuation and financial litigation support your host for this podcast is Mark gotle in addition to being a certified public accountant Mark has also obtained many professional accreditations in forensic accounting and business valuation as one of the tri-state's leading Financial experts Mark is also a frequent lecturer and writer without any further Ado please welcome the host of forensic prospectives mark gotle thank you and welcome to today's program the term whistleblower is derived from the practice of police officers in England who would blow their whistles when they noticed the commission of a crime the whistle would alert other law enforcement officials and the general public of an eminent danger today the term whistleblower has a slightly different connotation a whistleblower is commonly referred to as an individual who reports the misconduct of a cooworker or another individual or entity The Whistleblower May notify this act to an outside person frequently we see the dis notifications reported to an attorney the media law enforcement and even a watch dog agency there have been a number of interesting cases that have been brought to the Public's attention as a result of a whistleblowers actions to provide us with a better understanding of the subject we welcome attorney Ellen August Ellen is a partner in The Firm gets Fitzpatrick LLP get Fitzpatrick is a prominent law firm with specific experience in construction dispute resolution intellectual property technology labor law trust in Estates and real estate Ellen Works in their New York City offices however the firm maintains offices in minola New York White Plains New York and Glenrock New Jersey Miss August is a commercial litigator whose work focuses on professional malpractice business disputes and employment litigation she was formerly chief of the Manhattan trial unit for the New York City Law Department and she litigates a wide range of matters in federal and state courts Ellen who has also litigated whistleblower cases is fluent with all its nuances Ellen welcome and thank you for appearing on Forensic perspectives thank you Mark first before we talk about some specific cases I'd like to get a general working definition of what is a whistleblower and could you tell us if there are any federal and state statutes that address this concept well Mark a whistleblower is someone who reports an illegal leg Al activity either internally to his or her employer or externally to a government agency or the media there are many statutes that protect whistleblowers today uh on the federal level you have the Whistleblower protection act you also have certain topic specific statutes such as sarban Oxley and the Clean Water Act on the state level you have the state whistleblower cases and you also have state common law that protects whistleblowers in some situations it should be pointed out that in today's environment uh the media and the public have come to appreciate the role of the Whistleblower for example recently we heard about Harry maropoulos who tried to alert the SEC to possible fraud by Bernard moff and the SEC ignored those warnings think of how many people maropis could have helped if someone at the SEC had listened to him so the fact that people within a company or a government agency can speak up about fraud for example and are protected from retaliation gives the public another level of protection that they welcome could you tell us if there's anything that started the concept of whistleblowing as we know it today well generally the desire to protect employees from retaliation uh for speaking up about illegal activities and in some cases activities that implicate the public interest and also the desire to prevent employers from retaliating against such individuals who are acting in the public interest from your experience do you find that most whistleblowers are in fact employees or are there instances in which the Whistleblower is some other unrelated person I would say that most of the time The Whistleblower is an employee but there certainly are instances such as uh the one I just mentioned where someone external to the SEC reported what he believed were fraudulent activities on the part of Bernard maid off to the SEC is it common that The Whistleblower be part of this misconduct or is it someone that maybe was working or involved in an environment and they observed this activity I would say that usually The Whistleblower is not the bad actor The Whistleblower has observed the activity about which he or she complains in passing the 2002 sings Oxley act the senate committee found that whistleblowers protections were dependent upon a variety of State statutes still what sort of protection do employees currently have when they call attention these viol ations that help the enforcement proceedings well as I said earlier they have state whistleblower statutes that afford them protections they also have state Tor law that in some instances protects employees from retaliatory actions that are against the public interest federal employees have protection under the Whistleblower protection acts which protects employees who disclose illegal or improper government activ ities and they have statutes with subject specific protections such as sarbanes Oxley which protects employees of publicly traded companies who disclose violations of the federal Securities laws and such as the Clean Water Act that protects individuals who report violations of that particular statute the US Supreme Court dealt with what many considered to be a major blow to the government whistleblowers in a case I believe was entitled maretti versus cabales can you share with us a little about that case and how it led to the Whistleblower protection act of 2007 in Garcetti against sabalos the plaintiff was a deputy district attorney in Los Angeles who learned from a defense attorney in a pending criminal case that an affidavit in support of a critical search warrant was based on inaccurate information sabalos determined that the affidavit contained serious misrepresentations and he wrote two memos to his supervisors in which he expressed his concerns he recommended dismissal of the case but he and his supervisors attended a meeting in which he was criticized he then allegedly experienced retaliation at his job and claimed that the retaliation violated his First Amendment right to free speech the United States Supreme Court held that where a government employee speaks in the course of His official duties and not as a private citizen the government has a right to regulate his speech and the First Amendment does not protect the employee from discipline by the employer so this was a narrowing of the protections afforded to employees and not viewed very favorably for people who are interested in extending those protections but the one of the interesting things about the case was it was not brought under one of the Whistleblower statutes and sabalos as a state employee would not have received any protection from the federal whistleblower act on a more local note I think it's the common understanding that New Jersey has the strongest whistleblower Statute in the country and this law is known as the sea law could you tell us what sea stands for and what are the motivating factors of the passage of this law and how does it help the whistleblowers well the SE law is the conscientious employee protection act it helps whistleblowers because it protects them from retaliation for disclosures of what they believe to be violations of law or rule or uh rule promulgated pursuant to law the purpose is to afford employees that protection and also to prevent employers from retaliation against employees who engage in that conduct well how does it do that how does it provide this protection the way it provides the protection is by protecting an employee who first discloses or threatens to disclose an activity a policy or practice that the employee reasonably believes violates a law rule or regulation promulgated pursue into a law and the employee doesn't have to be right that the practice does violate the law he he or she simply has to have an objectively reasonable belief that there's a violation of law uh the statute also protects employees who provide information to or who testify before a public body investigating a violation of law and the statute uh protects employees who refuse to particip participate in an activity a policy or a practice which the employee reasonably believes is either in violation of a law is fraudulent or criminal or is incompatible with a clear Mandate of public policy Ellen from your experience what steps would you take to build a strong and persuasive whistleblower case of an employer's alleged fraud in order to survive dismissal you would have to show that the employee reasonably believed that he his or her employer's conduct was violating either a law or a rule or regulation promulgated pursuant to law you would have to show that the employee performed a whistleblowing activity that an adverse employment action was taken against the employee and that a causal connection exists between the whistleblowing activity and the adverse employment action one of the biggest challenges in any employment case is overcoming EV by the employer that the employer had a legitimate business reason for a termination or an adverse employment action other than um retaliating against the employee who was engaging in a protected activity as an employee your evidence of retaliation is usually circumstantial because your employer will not admit that he or she took an action against you because you participated in a protected activity so the attorney representing the employee has to focus on developing evidence uh to overcome the evidence of the supposed legitimate business Reason proferred by the employer