Bad Watchdog Season 2 is out.

Holding the Government Accountable

Upcoming Appeals Case Threatens Whistleblower Protections

Whistleblowers are often the first line of defense against waste, fraud, abuse, and corruption inside the government as well in the private sector. When retaliated against, whistleblowers bear the burden of showing they had put their necks out, but then the burden shifts to the employer to show the employee was demoted or fired for some other reason. Since the Whistleblower Protection Act of 1989 (WPA), if not earlier, employers have had an evidentiary burden to support adverse actions against whistleblowers.

However, an upcoming Department of Labor Administrative Review Board (ARB) Case, Palmer v. Canadian National Railway/Illinois Central Railroad Company, threatens to shift the burden of proof onto whistleblowers, making it much more difficult to prove retaliation and chilling future whistleblowers from stepping forward.

“Congress has taken the side of whistleblowers for decades by writing laws to better protect private-sector workers who shine a light on wrongdoing that betrays the public trust. Senator Grassley and Representative Speier and I are urging the Department of Labor to avoid eroding those protections and instead to continue giving whistleblowers a real chance at defending themselves when they are retaliated against,” said Senator Ron Wyden (D-OR) in a press release issued last week.

The gravity of Senator Wyden’s statements epitomizes the stakes in Palmer—a decision that could overturn nearly 40 years of law protecting whistleblowers from employer retaliation. Historically, the intent of Congress and decisions handed down by the ARB have reaffirmed the primacy of whistleblowers’ ability to expose waste, fraud, and abuse without fear of retaliation. To rule in the employers’ favor in Palmer would not only shift the legal burden of proof from the employer to the whistleblower, but is likely to discourage whistleblowers from coming forward at all, removing the teeth of the WPA.

As Senator Charles Grassley (R-IA) explained in the same press release, “It’s like David trying to fight Goliath. Requiring these patriotic people to prove in the first instance that they are the victim of reprisal only adds insult to injury. That’s why Congress placed the burden on the employer to prove that any adverse action it may have taken against a whistleblower was not the result of the disclosure itself.”

Senators Grassley and Wyden and Representative Jackie Speier (D-CA) filed one of the briefs supporting Palmer earlier this month. Their brief supports the two-part burden of proof test used in whistleblower reprisal cases, most recently affirmed by the court in Powers v. Union Pacific Railroad Company and Fordham v. Fannie Mae.

The majority in both Fordham and Powers used the two-part test for burdens of proof established in Mt. Healthy City School District Board of Education v. Doyle, which has been altered and strengthened by the Whistleblower Protection Act and 15 subsequent whistleblower statutes. According to the two-part test, a whistleblower must first prove by a preponderance of the evidence that the protected action (their whistleblowing) was a contributing factor in the alleged retaliatory action. Once the employee has satisfied this requirement, the burden of proof shifts to the employer to prove by a “clear and convincing” evidence standard that the action against the employee would have occurred regardless of the whistleblowing. Following the decision in Powers, Senators Grassley, Wyden, Thom Tillis (R-NC), Tammy Baldwin (D-WI), Mark Kirk (R-IL), and Claire McCaskill (D-MO) wrote to Labor Secretary Thomas Perez supporting the ARB’s findings in Fordham and Powers as being consistent with the intent of Congress.

In Powers, the heightened burden of proof requirement on employers was reaffirmed, although the decision was not handed down without controversy. Judge E. Cooper Brown, who has consistently ruled in support of whistleblower protections, was disqualified from the case for allegedly engaging in ex parte communications. As a result of the disqualification, the Board’s decision was vacated. In a dissenting opinion, Judge Joanne Royce stated that, “Given the evidence of alleged ex parte communications to which I am privy, the communications were not relevant to the merits and would have had no effect on our April 21, 2015 Decision and Order of Remand.”

If the ARB rules in favor of the company in Palmer, employers would have the two-part test reduced to a single step that requires the employee to prove that the protected action was a contributing factor and also disprove the employer’s independent justifications as pretexts. This places a nearly insurmountable burden of proof upon the whistleblower, one that is diametrically opposed to recent legislation and court rulings.

Oral arguments for Palmer will be held August 24, and it is essential that the ARB rule in favor of private sector whistleblowers. If they don’t, the public will lose an indispensable tool in protecting its interests against the misconduct of private employers.