Department of Labor Issues Interim Final Employee Whistleblower Rule Under the Consumer Financial Protection Act

by Eversheds Sutherland (US) LLP

On April 4, 2014, the Department of Labor (DOL) issued an Interim Final Rule establishing procedures concerning the manner in which the Occupational Safety and Health Administration (OSHA) will address employee whistleblower complaints under the Consumer Financial Protection Act of 2010 (CFPA).1 The Consumer Financial Protection Bureau (CFPB) enforces the CFPA and 18 other federal consumer protection statutes. Although the Interim Final Rule is effective immediately, the DOL will accept comments on the Interim Final Rule until June 2, 2014. For Sutherland’s earlier coverage of the CFPA whistleblower provision, please see this legal alert.

Which Employees Are Covered by the Interim Final Rule?

The Interim Final Rule applies to all “covered employees.”2 A covered employee is “any individual performing tasks related to the offering or provision of a consumer financial product or service.”3 A covered employee includes current, former and prospective employees.4 A covered employee also includes any person “whose employment could be affected by a covered person [under the CFPA] or service provider where such individual was performing tasks related to the offering or provision of a consumer financial product or service at the time that the individual engaged in protected activity under the CFPA.”5 Thus, unlike the Sarbanes-Oxley Act’s whistleblower provisions, the CFPA’s whistleblower rule applies to both public and private companies that fall within the CFPA’s definition of “covered person” or “service provider.”6

What Acts Fall Within the Scope of Protected Whistleblower Activity?

A “covered employee” may file a complaint with OSHA if the employee believes that an employer retaliated against the employee for any of the following reasons:

  • Reporting violations of any law that the CFPB enforces to his or her employer or to a government agency;
  • Reporting what the employee “reasonably believes” to be a violation of a law that the CFPB enforces to his or her employer or to a government agency;
  • Participating in an investigation of potential violations of a law that the CFPB enforces; or
  • Refusing to participate in acts that the employee believes to be violations of a law that the CFPB enforces.7

When Must an Employee File a Whistleblower Complaint and What Happens After the Filing?

A covered employee must file a complaint with OSHA within 180 days of the adverse action giving rise to the complaint.8 OSHA will proceed with a CFPA whistleblower investigation if the employee makes a showing that he or she is a covered employee who incurred retaliation.9 OSHA must dismiss a CFPA whistleblower complaint if the employee fails to make the required showing or if the employer “rebuts that showing by clear and convincing evidence that it would have taken the same adverse action absent the protected [whistleblowing] activity.”10

If OSHA does not dismiss the whistleblower complaint after the initial stage, OSHA must “determine whether there is reasonable cause to believe that protected activity was a contributing factor in the alleged adverse action.”11 A contributing factor is “‘any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision.’”12 Even if OSHA determines that there is “reasonable cause” that “the alleged protected activity was a contributing factor in the adverse action, OSHA may not order relief if the employer demonstrates by ‘clear and convincing evidence’ that it would have taken the same action in the absence of the protected activity.”13

OSHA must issue findings as to whether “there is reasonable cause to believe that the complaint has merit” within 60 days of the filing of the whistleblower complaint.14 OSHA must also order appropriate relief, if any, within this 60-day period.15  The relief may include preliminary reinstatement (or salary and benefits without returning to work “in appropriate circumstances”), affirmative action to abate the violation, back pay with interest, and compensatory damages.16 Other than the foregoing relief, as well as attorneys’ fees and other costs, the Interim Final Rule does not provide for any other monetary relief for an employee, such as a cash reward independent of salary and benefits. (This stands in contrast to the Sarbanes-Oxley Act’s whistleblower rules, under which a whistleblower may receive a bounty for his or her tip.) OSHA’s findings will be final unless either party files objections. If a party objects, there will be a hearing before an administrative law judge (ALJ), and appellate relief is available after the ALJ’s decision.17 If “there has been no final decision . . . within 210 days after the date of the filing of the complaint, or within 90 days after the receipt of a written determination” following OSHA’s investigation, the employee may file a de novo action in U.S. District Court.18        

1 Procedures for Handling Retaliation Complaints Under the Employee Protection Provision of the Consumer Financial Protection Act of 2010, 79 Fed. Reg. 18,630 (April 3, 2014) (to be codified at 29 C.F.R. pt. 1985).

2 Id. at 18,633.

3 12 U.S.C. § 5567(b).

4 79 Fed. Reg. at 18,633.

5 Id.

6 Id.

7 Id.

8 Id.

9 Id. at 18,633-634.

10 Id. at 18,634.

11  Id. (emphasis added).

12 Id. (quoting Marano v. Dep’t of Justice, 2 F.3d 1137, 1140 (Fed. Cir. 1993).

13 Id. (quoting 12 U.S.C. § 5567(c)(3)(C)) (emphasis added).

14 Id.

15 Id.

16 Id. at 18,636-37.

17 Id. at 18,636-637.

18 Id. at 18,367.  See also 12 U.S.C. § 5567(c)(4)(D)(i).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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