2018 WRONGFUL DISCHARGE & RETALIATION UPDATE

First Run Broadcast: May 17, 2018

1:00 p.m. E.T./12:00 p.m. C.T./11:00 a.m. M.T./10:00 a.m. P.T. (60 minutes)

Retaliations claims are commonplace in employment litigation and on the rise. Whether alleged

as a standalone claim or when a substantive claim of harassment or discrimination fails,

employers frequently confront claims of retaliation. But the scope of an employee’s protected

conduct – whistleblower activity, requests for accommodation, and many other forms of activity

– is not limitless. There are also complicated questions of what exactly constitutes an adverse

action by an employer and the causal connection between the employee’s protected activity and

the adverse action. This program will provide you with a practical review of recent case law and

other developments impacting each of the elements of an actionable retaliation claim and best

practices to avoid liability.

• Review of case law developments impacting elements of retaliation claims – protected

conduct, adverse action, and causation

• Developments related to the scope of “protected conduct,” including requests for

reasonable accommodation

• Determining what constitutes adverse action by the employer – and when action must be

taken

• Knowledge standards for establishing causal link between protected conduct and adverse

action

• Relationship of harassment, discrimination and ADA claims to retaliation claim

Speaker:

Ryan Derry is the Los Angeles and Orange County offices of Paul Hastings, LLP. His practice

includes all aspects of employment litigation and counseling, including employment

discrimination, retaliation, harassment, and wage and hour claims. He represents employers in

multiple jurisdictions in state and federal courts as well as in administrative proceedings against

individual and class claims. He has been named as a California Super Lawyer Rising Star for

multiple years. Mr. Derry received his B.S., summa cum laude, from the University of

Massachusetts Amherst and his J.D. from The George Washington University Law School, with

honors, in 2006.

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2018 Wrongful Discharge & Retaliation Update Teleseminar May 17, 2018 1:00PM – 2:00PM

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2018 RETALIATION CLAIMS UPDATE

Ryan D. Derry

Paul Hastings LLP – Los Angeles

(213) 683-6292

ryanderry@paulhastings.com

2 AGENDA

Background

Recent developments in the law

Who is protected?

What is protected?

What is an adverse action?

What proof of causation is necessary?

Practical tip on mitigating whistleblower risks

3 AN ALREADY CHALLENGING PARADIGM

Retaliation claims arise from:

Disagreement/dispute over compliance issue;

An adverse employment action; and

A perception that one caused the other.

Person asserting the claim does not have to be legally correct

about the compliance issue, just reasonable in his/her

perception

4 THE CURRENT ENVIRONMENT

Government continues to rely on whistleblowers

Broad (and expanding) statutory protection VA Accountability and Whistleblower Protection Act of 2017

Codified an executive order—to look into claims by whistleblowers and protect from retaliation

June 2017 – January 2018: Office received 1,000+ calls

Labor Code Section 98.7, effective January 1, 2018

Authorizes labor commissioner to seek injunctive relief on a showing of reasonable cause

More to come?

Increasing publicity for significant economic incentives—“bounties” Dodd-Frank whistleblower awards

False Claims Act cases

Among fastest growing category of claims Retaliation claims were 48.8% of all EEOC charges in FY ‘17

SEC Office of Whistleblower received 4,400 tips in FY ‘17 (more than 50% increase over FY ‘12)

5 THE EMPLOYER’S CHALLENGE

Whistleblowers almost always are employees or former employees

Some are motivated by money, some by principle, and some have ulterior motives

All whistleblowers should be taken seriously, regardless of motivation

Retaliation cases are among most difficult to defend

Personnel challenges abound

Performance management

Expectations management

Confidentiality

Risk to be managed is two-fold

Understanding and, if necessary, mitigating the risk in the matter complained-of

Understanding and, if necessary, mitigating the risk of potential retaliation claims from the whistleblower

6 RECENT DEVELOPMENTS IN THE LAW

Is the person protected?

Dodd-Frank:

Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767 (2018)

Question: Does the anti-retaliation provision protect people who only complain internally and do not go to the SEC?

Background:

Second Circuit and Ninth Circuit had held that the anti-retaliation provisions applied to those who made both internal and external complaints: found the term “whistleblower” ambiguous and deferred to SEC’s definition (under Chevron doctrine)

Fifth Circuit had held that they only apply to those who complained to the SEC: found term “whistleblower” unambiguous

Supreme Court held:

Term “whistleblower” is unambiguous

Dodd-Frank retaliation provision applies only to those who make complaints to the SEC—not internal complaints

7 RECENT DEVELOPMENTS IN THE LAW

Is the person protected? (Cont’d)

SOX:

Applies to all “employees” who report misconduct to the SEC or Commission, any other federal agency, Congress, or an internal supervisor

18 U.S.C. § 1514A(a)(1)

FCA:

United States ex rel. Carson v. Manor Care, Inc., 851 F.3d 293, 307 (4th Cir. 2017)

“First to file” rule does not apply to claims brought under anti-retaliation provision

FCA retaliation claims stand independent of qui tam claims

United States ex re. Petras v. Simparel, Inc., 857 F. 3d 497, 503-04 (3rd Cir. 2017)

Held: “[a] governmental entity acting in its capacity as [a] receiver . . . does not necessarily qualify as the ‘Government’ for purposes of the FCA.”

“As a general matter, when a federally chartered—but private—entity is placed into receivership . . the agency usually ‘steps into the private status of the entity’ and does not retain any federal authority.”

SBA did not qualify as “the Government” under FCA, when it “temporarily ‘stepped into’” a firm’s “private shoes” to wind up business

8 RECENT DEVELOPMENTS IN THE LAW

Is the activity protected?

SOX:

Compare Grimm v. Target Corp., No. 16-2564(DSD/KMM), 2017 U.S. Dist. LEXIS 17123, at *4 (D. Minn. Feb. 6, 2017) (granting judgment on the pleadings on contractor’s claim that he was discharged in violation of the Sarbanes-Oxley Act and Dodd-Frank Act; plaintiff was discharged one business day after he sent an e-mail questioning whether “sharing [certain] information with parties outside [the company] is moral, legal, and [] wise”; he failed to establish a reasonable belief that the company was engaged in fraud against shareholders)

with

Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797 (6th Cir. 2015) (affirming jury verdict for plaintiff who complained of unsuitability fraud; adopting “the employee’s reasonable belief is a simple factual question requiring no subset of findings that the employee had a justifiable belief as to each of the legally-defined elements of the suspected fraud.”) (emphasis added)

9 RECENT DEVELOPMENTS IN THE LAW

Is the activity protected?

FLSA:

Greathouse v. JHS Sec. Inc., 784 F.3d 105, 106-07 (2d Cir.

2015) (holding that the Supreme Court in Kasten overturned

Lambert v. Genesee Hosp., 10 F.3d 46, 56 (2d Cir. 1993), which

had held that internal oral complaints to a supervisor were not

protected activity under the FLSA; remanded to determine

whether complaints were "sufficiently clear and detailed for a

reasonable employer to understand it" as an assertion of rights

under statute).

Richard v. Carson Tahoe Reg’l Healthcare, 635 F. App’x 371, 372

(9th Cir. 2016) (affirming summary judgment; FLSA does not

guarantee meal breaks to adults, so complaining about lack of

meal breaks is not FLSA-protected activity).

10 RECENT DEVELOPMENTS IN THE LAW

Has there been a sufficiently adverse employment action?

Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006)

Halliburton, Inc. v. Admin. Review Bd., 771 F.3d 254 (5th Cir.

2014) (applying Burlington standard under Title VII to SOX,

holding that disclosure of SOX whistleblower identity to

coworkers is adverse action)

Implications for investigations and litigation holds?

11 RECENT DEVELOPMENTS IN THE LAW

No adverse action found

Duren v. URS Corp., 676 F. App’x 620, 621 (8th Cir. 2017) (affirming summary judgment against employee who alleged that he was denied a prestigious yearly company award because of his race and because he had successfully sued the employer’s predecessor for discrimination; denial of the award was not an adverse employment action given that its receipt made the winner potentially eligible for larger pay raise, but did not guarantee one).

Cabral v. Brennan, 853 F.3d 763, 765-66 (5th Cir. 2017) (2-1 decision affirming dismissal of suit; plaintiff, a postal worker, was suspended for two days after he hit one of his supervisors with a mail truck and was unable to produce a valid driver’s license or occupational license after the incident; he failed to show that his suspension amounted to a materially adverse employment action).

12 RECENT DEVELOPMENTS IN THE LAW

Finding adverse action

Ammons v. Brantley Cty. Bd. of Comm’rs., No. 5:16-CV-78, 2017

U.S. Dist. LEXIS 16434, at *5-6 (S.D. Ga. Feb. 6, 2017) (giving a

negative job reference about a former employee can constitute

retaliation, even if it consists of only true information—if negative

reference would not have been given but for the exercise of the

employee’s statutory rights).

13 RECENT DEVELOPMENTS IN THE LAW

Is there a requisite causal connection between the protected

activity and the adverse employment action?

Carvalho-Grevious v. Del. State Univ., 851 F.3d 249, 262 (3d Cir.

2017) (reversing summary judgment; Title VII retaliation plaintiff

need not prove that a bias complaint or some other protected

activity was the “but for” cause of an adverse employment action

at the initial, prima facie case stage; rather, but-for cause only

needs to be shown at the pretext stage of the summary judgment

analysis).

Germanowski v. Harris, 854 F.3d 68, 75 (1st Cir. 2017) (affirming

dismissal of FMLA retaliation claim even though plaintiff was

discharged three days after sending an e-mail to her boss saying

she would be out sick for the week and would be seeing her

doctor; her boss already had set discharge in motion before

receiving that e-mail).

14 RECENT DEVELOPMENTS IN THE LAW

Is there a requisite causal connection between the protected activity and the adverse employment action? (Cont’d)

Duncan v. Chester Cty. Hosp., 677 F. App’x 58, 61 (3d Cir. 2017) (affirming summary judgment on FMLA interference and retaliation claims; employee’s right to reinstatement never ripened because he canceled surgery for which he requested leave and thus never commenced approved leave; there also was no triable question of retaliation because disciplinary actions occurred or were tied to incidents that occurred before plaintiff requested leave, and the co-worker who informed managers of later incidents involving plaintiff was not aware of plaintiff’s request for leave).

Eppinger v. Caterpillar Inc., 682 F. App’x 479 (7th Cir. 2017) (affirming summary judgment on former employee’s claim that her discharge for poor attendance was retaliation for her race-discrimination complaint; she had incurred five documented attendance violations before filing an EEOC charge, five months elapsed between that charge and her discharge, and she failed to identify any comparators with similar attendance issues who did not lose their jobs).

15 RECENT DEVELOPMENTS IN THE LAW

Is there a requisite causal connection between the protected

activity and the adverse employment action? (Cont’d)

Alkhawaldeh v. Dow Chem. Co., 851 F.3d 422, 430 (5th Cir.

2017) (affirming summary judgment; plaintiff already had been

placed on a performance improvement plan before he

complained to his supervisor about alleged discriminatory

remarks by his co-workers; as a result, plaintiff’s bias complaint

could not have triggered the supervisor’s negative rating of his

performance, which ultimately led to plaintiff’s discharge; “Poor

performance is not an activity protected by Title VII.”).

16 RECENT VERDICTS

Mitchell v. SEIU Local 721, et al., L.A. County Sup. Ct. (Nov. 2017)

Employee claimed discrimination for medical leave and retaliation for “blowing the whistle” about arbitration backlog

Jury awarded $8,461,1391 (including $6.1 million in punitives)

Yu v. Grifols Biologicals, Inc., L.A. County Sup. Ct. (Jan. 2018)

Employee claimed he was terminated for making internal complaints re: falsifying documents and misrepresentations to FDA

Jury awarded $1,230,335

Harris v. Queens Med. Ctr., U.S.D.C. Haw. (Feb. 2018)

Nurse reported patient safety issues for year and a half

Claims received racist note and a photocopy of a noose in locker, causing her to quit

Jury awarded $3,830,000

17 WHAT VENUE?

Arbitration?

Daly v. Citigroup Inc., No. 16-cv-9183 (RJS), 2018 WL 741414

(S.D. N.Y. Feb. 6, 2018)

Held: Dodd-Frank anti-retaliation provisions are arbitrable

Court noted that Congress affirmatively made Sarbanes-

Oxley anti-retaliation provisions unarbitrable, but did not do

the same for Dodd-Frank provisions

18 MITIGATING AND BALANCING THE RISKS

Managing investigation of the underlying complaint

Protecting the privilege, if applicable, and

Protecting confidential information

Without interfering with employee rights

Understanding the facts and, if necessary, correcting/disclosing

the problem

Simultaneously, assessing and managing the retaliation risk

Is the person “protected”?

Is her activity “protected”?

Has there been a sufficiently adverse employment action?

Is there a requisite causal connection between the protected

activity and the employment action?

Regardless of whether there is an underlying problem, there

may still be retaliation risk

19 MITIGATING AND BALANCING THE RISKS

Engaging outside counsel to conduct investigation

Pros

Cons

Protect privilege and confidentiality

Upjohn warnings

Exchange Act Rule 21F-17

NLRB Rulings on employer confidentiality rules

Litigation hold

Assess whistleblower’s relationship to alleged wrongdoers

Impact on credibility of witnesses

Impact on possible interim reassignment of whistleblower

Be mindful—what you do, writes the story

20

Ryan Derry | Employment Law Department

Los Angeles

515 S. Flower St., 25th Floor

Los Angeles, CA 90071

T: 213.683.6292

F: 213.996.3292

ryanderry@paulhastings.com | www.paulhastings.com

Ryan Derry is an associate in the Employment Law practice of the firm’s Los Angeles office. Mr. Derry’s practice includes various aspects of employment litigation and counseling, including employment discrimination, retaliation, harassment, and wage and hour issues. He has represented employers in multiple jurisdictions in state and federal courts as well as in California administrative proceedings against individual and class claims. Mr. Derry has successfully defended clients in both trial and arbitration forums against single-plaintiff, multi-plaintiff, and class action claims of disability, gender, and religious discrimination, breach of contract, retaliation, and wage and hour violations. He has conducted wage and hour audits across industries and handled class action wage and hour litigation from inception and factual investigation through favorable resolution, class settlement, or trial. He has also served as outside employment counsel for clients, providing advice and counseling regarding personnel and policy decisions and corresponding risk.

Mr. Derry has been named as a California Super Lawyer Rising Star for multiple years. He is admitted to practice law in California.