April 24, 2017

April 24, 2017

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GAO Report Calls for Improvements in Government Contractor Whistleblower Protections

In a report entitled “Contractor Whistleblower Protections Pilot Program: Improvements Needed to Ensure Effective Implementation,” the U.S. Government Accountability Office (GAO) identifies deficiencies in the implementation of the NDAA whistleblower protection provisions and makes recommendations to improve these vital protections for employees of government contractors and grantees.  The report identified the following flaws in the implementation of the NDAA contractor whistleblower protections:

  • Of the 127 reprisal complaints, the OIG investigated only about one-third (44) and none of the investigations completed thus far resulted in findings that substantiated reprisal and many of these findings were not forwarded to the agency head (as required by a provision in the pilot program);

  • 32 reprisal complaints were submitted but not investigated as OIGs determined that the complaints were one of the following: frivolous, previously decided by another federal or state judicial proceeding, to be referred to another investigative body, or to receive an “other disposition”; and

  • 51 reprisal complaints were determined to be not covered by the pilot program.

Further, the GAO’s report found that that the pilot program has not been implemented consistently across federal agencies, and some agencies have not yet fully implemented the program.  Finally, the GAO report notes that many new federal contracts omitted the required FAR clause that informs contractor employees about their whistleblower rights.

GAO Recommendations

The GAO report recommends that Inspectors General develop or clarify existing guidance on the NDAA whistleblower protections, and develop policies and processes to help ensure that:

  • Contract employees are aware of their protections against reprisal;

  • OIGs report their investigation findings to the agency head;

  • Departments officials understand their responsibilities under the pilot program; and

  • The necessary FAR clause is included in all required contracts.

NDAA Whistleblower Protection Law for Employees of Federal Government Contractors and Grantees

The whistleblower protection provision of the NDAA provide substantial protections to employees of federal contractors, subcontractors and grantees who report waste, fraud, abuse and mismanagement of government funds. It also extends these protections to personal services contractors working on defense or civilian contracts or grants.

The scope of coverage is broad and includes all individuals performing work on a government contract or grant, including personal services contractors and employees of a contractor, subcontractor, grantee or subgrantee. The NDAA whistleblower provisions do not apply, however, to work performed for intelligence agencies, including the Federal Bureau of Investigation, the Central Intelligence Agency, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the National Security Agency, the Office of the Director of National Intelligence, and the National Reconnaissance Office.

Protected Whistleblowing under the NDAA

The NDAA anti-retaliation provisions protect disclosures about:

  • Gross mismanagement of a federal contract or grant, which is “a management action or inaction which creates a substantial risk of significant adverse impact upon the agency’s ability to accomplish its mission.” Kavanagh v. Merit Systems Protection Board, 176 F. App’x 133, 135 (Fed. Cir. April 10, 2006) (citing White v. Department of the Air Force, 63 M.S.P.R. 90, 95 (1994));

  • A gross waste of federal funds, which is “more than [a] debatable expenditure that is significantly out of proportion to the benefit reasonably expected to accrue to the government.” Chambers v. Department of the Interior, 515 F.3d 1362, 1366 (Fed. Cir. 2008) (quoting Van Ee v. Environmental Protection Agency, 64 M.S.P.R. 693, 698 (1994));

  • An abuse of authority relating to a federal contract or grant, which is “an arbitrary or capricious exercise of power … that adversely affects the rights of any person or that results in personal gain or advantage to … preferred other persons.” Doyle v. Department of Veterans Affairs, 273 F. App’x 961, 964 (Fed. Cir. April 11, 2008) (quoting Embree v. Department of the Treasury, 70 M.S.P.R. 79, 85 (1996)); or

  • A “substantial and specific danger to public health or safety” (alleging the nature and likelihood of the harm, as well as when the harm may occur), or a “violation of law, rule or regulation” related to a federal contract. See Chambers, 515 F.3d at 1367, 1369.

To be protected, a disclosure must be made to a member of Congress or a congressional committee; an inspector general; the Government Accountability Office; a federal employee responsible for contract or grant oversight or management at the relevant agency; an authorized official of the U.S. Department of Justice or other law enforcement agency; a court or grand jury; or a management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover or address misconduct.

Retaliation Prohibited by the NDAA

The NDAA whistleblower-protection provisions bar a broad range of retaliatory acts, including discharging, demoting or “otherwise discriminat[ing] against a whistleblower.” The latter, catchall category of retaliatory adverse employment actions will likely be construed to encompass the Burlington Northern material-adversity standard — i.e., prohibited retaliation likely includes actions that well might have dissuaded a reasonable worker from engaging in protected conduct. See Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 67–68 (2006).

Favorable Causation Standard for NDAA Whistleblowers

The NDAA applies the burden-shifting framework and causation standard where a complainant prevails merely by demonstrating that the protected disclosure was a contributing factor in a personnel action, which can be accomplished by using the knowledge-timing test (i.e., by showing that the person taking the personnel action knew of the disclosure and that the personnel action occurred within a period of time such that a reasonable person may conclude that the disclosure was a contributing factor in the personnel action). A whistleblower need not demonstrate the existence of a retaliatory motive to establish that protected conduct was a contributing factor in a personnel action. Marano v. Department of Justice, 2 F.3d 1137, 1141 (Fed. Cir. 1993).

Once a whistleblower has proved contributing-factor causation by a preponderance of the evidence, his or her employer can defeat the NDAA claim only by showing by clear and convincing evidence that it would have taken the same challenged action in the absence of the protected disclosure. Under the Whistleblower Protection Act, the law upon which the NDAA anti-retaliation provision is modeled, courts consider three factors in determining whether an agency meets this onerous burden:

  1. “The strength of the agency’s evidence in support of its personnel action”;

  2. “The existence and strength of any motive to retaliate on the part of the agency officials who were involved in the decision”; and

  3. “Any evidence that the agency takes similar actions against employees who are not whistleblowers but who are otherwise similarly situated.”

Carr v. Social Security Administration, 185 F.3d 1318, 1323 (Fed. Cir. 1999).

Remedies for NDAA Whistleblower Retaliation

Remedies include reinstatement, backpay, uncapped compensatory damages (emotional distress damages) and attorney’s fees and costs.

© 2017 Zuckerman Law

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About this Author

Jason Zuckerman, Whistleblower Litigation Attorney, Washington DC  Law Firm
Principal

Jason Zuckerman is Principal of Zuckerman Law and litigates whistleblower retaliation, wrongful discharge, non-compete, and other employment-related claims.  Zuckerman serves as Plaintiff Co-Chair of the Whistleblower Subcommittee of the ABA Labor and Employment Section’s Employee Rights and Responsibilities Committee, and in 2012, the Secretary of Labor appointed Zuckerman to serve on the Whistleblower Protection Advisory Committee. 

Prior to founding Zuckerman Law, Zuckerman served as Senior Legal Advisor to the Special Counsel at the U.S...

(202) 262-8959
Matthew Stock, CPA, Auditor, Zuckerman Law Firm
Certified Public Accountant

Matthew Stock is an associate at Zuckerman Law, where his practice focuses on representing whistleblowers in whistleblower rewards and whistleblower retaliation cases. He is also a Certified Public Accountant, Certified Fraud Examiner, and former KPMG external auditor.

As an auditor, Mr. Stock developed an expertise in financial statement analysis, internal controls testing, and fraud recognition. At Zuckerman Law, Mr. Stock uses his auditing experience to help whistleblowers investigate and disclose to the government complex financial frauds. In addition, Mr. Stock routinely assists whistleblowers in Sarbanes-Oxley whistleblower retaliation cases analyze a wide range of accounting issues, including revenue recognition, earnings management, and financial statement fraud.

(314) 814-6617