The Challenging Landscape of the Employment Relationship – Is your Company Ready for the Adjustments?
Keeping abreast of ever-changing employment laws, both on the federal and state level, can be difficult for companies, especially those with employees in multiple states. Today, companies face even more challenges in managing their workforce including the rise in COVID-19 related lawsuits, an increase in whistleblower bounties and nonunion employees walking off the job because they disagree with, among other things, the company’s public position. Understanding how these situations may arise is important, but being prepared to respond to them will be critical.
Rising COVID-19 Lawsuits
According to Law360, COVID-19 related employment lawsuits doubled over the 2021 summer when compared to last summer and most of those cases stem from remote work, leave, discrimination, retaliation and whistleblower claims.[1] According to James F. Glunt of Fisher Phillips, the firm that has been tracking COVID-19 litigation, there is a trend of workers who “do not want to work in the workplace where they used to work,” and file remote work claims after their request to work remotely is denied, which they consider to be an adverse employment action.[2] There may be good reasons to deny the request, but the message and the manner in which you communicate the reason for the denial will be important. If the denial is related to poor performance, employers should develop clear and measurable performance metrics and determine how best to communicate the performance concerns to the employee. Ensuring fair improvement plans will be critical to help avoid potential retaliation lawsuits.
One Billion Dollars in Bounty Awards
In addition to an increase in COVID-19 related lawsuits, the U.S. Securities and Exchange Commission (“SEC”) announced this week that it has paid over $1 billion dollars in whistleblower bounty awards to employees and others considered “tipsters” who help the SEC detect, investigate and prosecute potential violations of securities laws.[3] The bounty paid to whistleblowers has doubled over the last 14 months from $500 million to over $1 billion and may be attributed to the SEC taking a “renewed pro-whistleblower stance” under the current SEC Chair Gary Gensler.[4]
Dodd-Frank improved the legal protections from retaliation for employee whistleblowers[5] who report financial misconduct to certain entities, including the SEC,[6] and provides for a bounty to those who provide original information to the SEC that leads to a successful enforcement action.[7] Employers, especially those in the financial industry, should understand that although the bounty program has existed for a number of years, the SEC’s pro-whistleblower position and the increased bounty awards may encourage employees to be more diligent in seeking internal company information about possible SEC violations with the hope of gaining a hefty bounty.
Non-Union Employee Walkout
Besides potential lawsuits, employers must also be prepared for employees walking off the job in protest of corporate policies or public positions the corporation may have taken.[8] Unionized companies are familiar with union strikes by their employees, but non-union companies are now facing similar types of organized walkout – from non-union employees. “Over the past two years, workers have walked off the job at Facebook, Amazon, Wayfair, and Uber, protesting a range of company policies and actions.”[9] Recently, employees of Activision Blizzard walked off the job “protesting their perception of the company’s ‘tone-deaf’ response to a state lawsuit charging it with discrimination and harassment against women in the workplace.”[10] According to Angela Reddock-Wright, “the new employee activism is not simply about wages and working conditions,” but about the impact corporations have on society and workers expecting their employers to be good corporate citizens.[11]
Takeaway
Employers must understand the changing trends of the employment relationship occurring within (and outside) the workplace. Communication with employees, both one-on-one and as a workforce through corporate communication, is important to help employees understand a corporation’s new policy or position on particular matters, which in turn may help prevent employee walkouts, protest or potential lawsuits. If employment lawsuits occur, the company must be prepared to defend its position through its employment counsel. Campbell Litigation will continue to monitor the various changes in the employment workplace.
[1] Amanda Ottaway, https://law360.com/employment/articles/1419830/covid-19-litigation-winter-is-coming-attys-forecast
[2] Ibid.
[3] Al Barbarino, http://www.law360.com/employment/articles/1422136 (last visited Sept.16, 2021).
[4] Ibid.
[5] The first whistleblower protection law in United States history was enacted in 1777, months after signing the Declaration of Independence. (Congressional Bill 202 (1778)) The purpose of this law was to encourage whistleblowers to disclose any misconduct in the military. Later, the False Claims Act of 1863 became a vital tool for the federal government since it authorized private citizens to bring lawsuits on behalf of the federal government against companies and individuals engaged in fraudulent activities defrauding the government. (31 U.S.C §§3729-3733; see also 31 U.S.C. §3729, et. seq.) The term whistleblower became popular in the Watergate scandal in the 970. (Visit: https://www.history.com/topics/1970s/watergat). In 1989, the Whistleblower Protection Act was enacted to protect federal employees from retaliation for disclosing fraud or any government misconduct. In 2012, the Whistleblower Protection Enhancement Act extended the protection to federal employees in the intelligence community. §743 – 112th Congress (2011-2012) Whistleblower Protection Enhancement Act of 2012).
[6] Digital Realty, 138 S.Ct. at 773 (citing 18 U.S.C. §1514A(a)(a)); see also Midwest New Media, L. (n.d.). Workplace Fairness. Retrieved September 16, 2021, from https://www.workplacefairness.org/general-whistleblowing
7 Office of the whistleblower. (2017, April 04). Retrieved September 16, 2021, from https://www.sec.gov/whistleblower/frequently-asked-questions
[8] Angela Reddock-Wright, https://news.bloomberglaw.com/daily-labor-report/welcome-to-the-new-age-of-employee-activism (last visited Sept.16, 2021).
[9] Ibid.
[10] Ibid.
[11] Ibid.