Senator Tammy Baldwin (D-Wis.) and Rep. Elijah Cummings (D-Md.) recently introduced the Whistleblower Augmented Reward and Non-Retaliation Act of 2016 (“WARN Act”), which aims to bolster whistleblower protections under both SOX and Dodd-Frank, increase bounty awards available under certain federal whistleblower statutes, and create whistleblower protections for a new category of employees.
The WARN Act would preclude confidentiality agreements that require an employee to waive the right to report misconduct to a government agency or require the employee to reveal such communications to his or her employer. This is consistent with the SEC’s increased focus on what it views as overly restrictive confidentiality agreements, as discussed in our prior post.
It also provides whistleblowers with additional time to submit a complaint to the SEC (up to 90 days after obtaining knowledge of the disclosed misconduct) and creates a presumption that a complaint is timely filed.
The proposed legislation also seeks to make whistleblower awards available under various statutes consistent with those under Dodd-Frank. It would amend the Financial Institutions Anti-Fraud Enforcement Act (FIAEA) and the Federal Deposit Insurance Act (FDIA) so that whistleblowers would be eligible to receive between 10%-30% of penalties and recoveries imposed as a result of the information they provide. Awards under the FIAEA are subject to diminishing payout percentages as the total amount recovered increases and awards under the FDIA are capped at $100,000.
The proposed legislation also contains an employee-friendly standard of proof: a whistleblower would need to show that his or her actions were a contributing factor in the adverse employment, as opposed to, for example, a but-for causation standard applicable to Title VII retaliation claims.
And the proposed legislation would expand protections to financial whistleblowers at federal banking regulators, including the Federal Deposit Insurance Corporation and the Federal Reserve.
The bill has been referred to the House Committee on Financial Services for a period of time yet to be determined.
[View source.]
