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Whistleblower Retaliation

Maryland Whistleblower Laws. What is a Whistleblower?

A "whistleblower" can be any person (corporate executive, federal government employee, government contractor, medical worker, etc.) that discovers fraud or corporate wrongdoing and "blows the whistle." "Blowing the whistle" may include: contacting law enforcement, telling corporate executives or superiors, filing a complaint with an administrative agency - or other means of disclosure.

Whistleblower protection laws have become one of the fastest growing issues for Maryland / Washington, D.C. area employers, affecting thousands of Maryland and D.C. employees that identify fraudulent and illegal business activities (within their company or to state and federal regulators) and are retaliated against for making “whistleblower disclosures.”  DK Associates, LLC focuses on protecting the rights of Maryland and Washington, D.C. whistleblowers and exposing corporate fraud, government fraud and securities fraud at some of the largest Washington, D.C. and Maryland employers and corporations.

What are Maryland Whistleblower Laws?

Although the term “whistleblower” is a broad term, the reality is that there are specific statutes and laws that determine which Maryland and Washington D.C. employees qualify as “whistleblowers,” who they may “blow the whistle to” and what the whistleblower may “blow the whistle” about.   Also, each statute and law has different protections for whistleblowers and affects whistleblower damages, recoveries and/or “ whistleblower bounties.”   Some examples of Whistleblower laws in Maryland that may affect private sector Maryland employees and Public Sector Maryland employees include claims under Maryland tort law, Sarbanes Oxley and the Dodd-Frank Wall Street Reform and Consumer Protection Act.

What are Federal Whistleblower Laws? Example 1: Sarbanes Oxley

The Sarbanes Oxley Act of 2002 (which applies to publicly traded companies in Washington, D.C. and Maryland) makes it illegal for a company to retaliate against a Maryland or D.C. employee who reports “potentially unlawful conduct.”  See 18 U.S.C. § 1514A(a).

An employee that is wrongfully terminated for reporting “potentially unlawful conduct” may be entitled under the statute to:

A) reinstatement with the same seniority status that the employee would have had, but for the discrimination;

B) the amount of back pay, with interest; and

(C) compensation for any special damages sustained as a result of the discrimination, including litigation costs, expert witness fees, and reasonable attorney fees

In addition, Maryland courts have held that employees are also entitled to “emotional distress damages” for pain and suffering and harm to reputation.

Maryland and Washington D.C. employees who believe that they have reported potentially illegal activity (or are about to report potentially illegal activity) should be aware of the strict time limitations on whistleblower claims under the Sarbanes Oxley Act.  Sarbanes Oxley (unlike most Maryland Whistleblower laws) requires the employee to file an administrative action prior to filing a lawsuit.   The complaint must be filed “not later than 90 days after the date on which [the] violation occurs.”   49 U.S.C. § 42121(b)(1).

The complaint must initially be filed with the Secretary of Labor and the employee must then (even while still employed) wait 180 days for the Department of Labor to investigate the allegations and issue a decision. See 18 U.S.C. § 1514A(b)(1)(B).

Although the term “whistleblower” may seem simple, under the Sarbanes Oxley Act a Maryland or D.C. Whistleblower faces significant legal challenges and a complex administrative scheme that can cause valid whistleblowers to lose his or her claim against the company.

It is important to contact an attorney immediately if you are a Maryland or D.C. employee contemplating filing a whistleblower action or making a whistleblower disclosure to or about your company.

What are Federal Whistleblower Laws? Example 2: Dodd Frank

As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) 15 U.S.C. §78u-6(h)(1)(A) Congress strengthened whistleblower protections for corporate whistleblowers who “blow the whistle” on violation of U.S. Securities laws to the Securities and Exchange Commission or other entity capable of receiving whistleblower complaints under the law.

Damages Awards for Maryland Whistleblowers. What kind of Damages can I receive as a Whistleblower?

Under Dodd-Frank Maryland or Washington, D.C. whistleblowers may be entitled to recover an award or “bounty” for information that leads to an SEC enforcement action resulting in a collection of over $1million.  Depending on the quality of the information, the involvement of the Maryland whistleblower and the nature of the recovery, Maryland whistleblowers can be compensated 10% to 30% of the total recovery.  Due to the rapid rise in accounting irregularities, failure to fully or accurately disclose quarterly 10-Q or annual 10-K information, off-sheet balance activity and manipulative valuation practices in public and non-publicly traded companies – the awards can be substantial.

For example, on September 22, 2014 the SEC paid out a percentage award based on a $30,000,000.00 recovery a single whistleblower.  It is important to take note that not every whistleblower complaint will lead to a million dollar whistleblower bounty and it is important for the whistleblower to take steps during the process to protect his or her position.

Similar to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Sarbanes Oxley Act of 2002 provides Maryland whistleblowers with legal protections for making corporate whistleblower disclosures.

Notably, employees working for Maryland companies that are publicly traded and employees working for subsidiaries of publicly traded companies are protected for whistleblower disclosures under SOX.

Generally, under SOX and Dodd-Frank, the whistleblower “report” or “disclosure” must relate to potential securities fraud or fraud relating to securities.  This may include, but is not limited to Maryland tax fraud, Maryland wire fraud, Maryland accounting fraud, Maryland false claim fraud, fraudulent reporting of event studies or financial results, fraudulent advertisement or disclosure of product lines,  fraudulent reporting of biotechnical FDA approval, drug testing or a whole host of potentially fraudulent activity related corporate securities.

Again, it is important to contact an attorney to identify (in particular) the fraud that is being disclosed and to discuss where, when and how to disclose the fraud.

Hiring a Maryland Whistleblower Attorney. What should I consider?

Maryland whistleblowers that report financial fraud and manipulation may be entitled to collect whistleblower “bounties” or awards based on his or her disclosure(s). Moreover, in the case where the company has terminated or retaliated against the Maryland whistleblower, the whistleblower can recover damages for loss of salary (back wages), loss of past or future bonuses, loss of overtime or additional wages, loss of equity interest (stock), payment of future wages or equity, prejudgment interest, compensatory damages for pain and suffering (mental anguish, depression, anxiety, etc.) and, in some cases, punitive damages.

Once you have identified a fraud or have reported fraud to your company or government regulator, you should consider obtaining competent employment counsel to guide and assist you with the whistleblower process.

DK Associates has helped many private sector whistleblowers defend against retaliation or “blow the whistle” on fraudulent financial activity.  Please contact info@dkemployment.com for a free whistleblower consultation.

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