Whistleblowers who report perceived illegal activity by an individual, agency, or organization have long been heralded as heroes, serving both the public and private sectors by producing evidence of wrongdoing despite great personal risk. Accordingly, whistleblowers are afforded heightened protections that prohibit an employer from retaliating against an employee for reporting alleged wrongdoing. However, a recent decision from the D.C. Circuit demonstrates that whistleblowers are not shielded by a super power of invincibility.
Any adverse action taken by an employer against employees after they have “blown the whistle” is subject to intense scrutiny, sometimes requiring an employer to establish by clear and convincing evidence (a more stringent burden of proof than the general standard) that it had a legitimate reason for taking the adverse action. Naturally, this poses several challenges for an employer in terms of its continued management and supervision of a reporting employee. This oversight may be further complicated when the reporting employee engages in some form of misconduct or demonstrates a history of poor performance. This often leaves many employers in the precarious position of having to decide whether or not to discipline—or terminate—the employee.
The Marcato Decision
In Marcato vs. United States Agency for International Aid, former employee, Rachel Marcato, appealed a decision from the Merit Systems Protection Board (the MSPB), upholding her termination by USAID. Marcato began her employment as a management analyst with the Office of the Inspector General (the OIG), USAID’s oversight arm, in 2012. During her tenure, she reported to the OIG and Senate staffers that several high-ranking USAID officials had engaged in misconduct, including allegedly doctoring various documents sent to Congress.
However, Marcato herself had likewise engaged in a well-documented pattern of misconduct during this time, including sharing sensitive information about an ongoing investigation, repeatedly seeking to be involved in that investigation despite being instructed not to, willfully violating the protocol meant to screen her from the investigation, using her cellphone to record a conversation about the protocol with management in violation of a USAID security policy, and lying to investigators conducting a probe into her conduct. After an investigation into her conduct by an outside agency, Marcato was terminated.
In reviewing Mercato’s termination, the MSPB found that although circumstantial evidence existed indicating that retaliation was a contributing factor in the termination decision, clear and convincing evidence existed to demonstrate that the OIG would have removed Marcato in the absence of any protected whistleblower disclosures. Marcato appealed. The Court of Appeals for the D.C. Circuit affirmed the MSPB ruling. Of particular importance to the court’s decision was the strength of the evidence presented by USAID and the OIG in support of its termination of Marcato, which included an email evidencing her misconduct, contemporaneous notes taken by one of her supervisors, and the evidence collected, and findings issued, during the investigation into her misconduct. In light of the wealth of evidence substantiating the legitimate grounds for her termination, the court held that substantial evidence existed to affirm the MSPB’s ruling regarding Marcato’s termination.
Developing Employer Powers
Marcato serves as a reminder that whistleblowers don’t have blanket workplace immunity. Employers can discipline an offending employee and can prevail in a subsequent retaliation suit or whistleblower claim, so long as they have the necessary documentation to substantiate their actions. In light of those considerations, employers should be mindful to:
- Maintain Documentation Regarding any Employee Misconduct: As demonstrated in Marcato, having an arsenal of documents evidencing employee misconduct is extremely valuable to justify any subsequent adverse employment action.
- Maintain a Consistent Performance Review Schedule: While the effects of the COVID-19 pandemic on the workplace have caused many employers to fall behind with regularly scheduled human resources procedures, employers should maintain and/or reintroduce a regular practice of conducting employee performance reviews to accurately document any issues or deficiencies in an employee’s performance.
- Ensure Compliance with Legal Requirements Governing the Workplace: Undoubtedly, the best measure an employer can take to protect against a whistleblower complaint is to ensure compliance with the various legal requirements governing not only whistleblower claims, but all aspects of its workplace to prevent any grounds for a whistleblower complaint.
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