Insights

Update on the Coronavirus Oversight and Recovery Ethics Act of 2020

What You Need to Know

On June 15, 2020, lawmakers in the United States Senate introduced the Coronavirus Oversight and Recovery Ethics Act of 2020 (CORE Act).  This legislation contains provisions that would protect whistleblowers who are retaliated against for raising concerns related to the misuse of federal funds in COVID-19 relief programs and reports of danger to public health or safety.  The bill comes in the wake of a demonstrable surge in whistleblower claims during the pendency of the COVID-19 pandemic.

This proposed legislation illustrates that around the world lawmakers are taking steps to encourage whistleblowers to come forward and to ensure they are protected from reprisals should they do so in good faith.

Protecting Whistleblowers

The proposed law would protect any employee, former employee, or person seeking employment who raises reasonable concerns of misconduct with respect to funds provided under federal coronavirus relief acts, such as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and other similar legislation.  Such concerns include:  gross mismanagement and waste of covered funds, abuse of authority related to the distribution, implementation, or use of covered funds, and violations of any statute, rule, or regulation related to covered funds.  In addition, the bill would also protect employees who raise a “substantial and specific danger to public health and safety” in relation to federally-funded COVID-19 relief programs.

Under the bill, whistleblowers would be protected if they report misconduct to a broad range of authorities, including their workplace supervisor, state and federal law enforcement or regulatory agencies, and Congress.  The bill provides for a Department of Labor investigation of all complaints brought within the three year statute of limitations.  In addition, whistleblowers would have the right to a jury trial after exhausting their administrative remedies, they cannot be subject to mandatory arbitration clauses, and they may keep their identities confidential.  Notably, the bill also provides for recovery of compensatory and exemplary damages, plus attorney’s fees in the event the whistleblower establishes actionable retaliation. 

Rise in Whistleblower Complaints

As employers navigate the uncharted waters of workplace and workforce management during a pandemic, new waves of whistleblower claims are cresting.  Employees, whether spurred directly by the circumstances of COVID-19 or emboldened by the shield of working from home, have raised an increasingly high number of complaints.  Whistleblower retaliation claims have dramatically spiked at the Securities and Exchange Commission (SEC) and the Occupational Safety & Health Administration (OSHA) during the COVID-19 pandemic.  The SEC oversees whistleblower complaints under the Dodd Frank Act.  It has experienced a 35% uptick in complaints from March – May 2020 as compared to the same period in 2019.  Similarly, OSHA, which handles complaints under 22 whistleblower statutes including the Sarbanes Oxley Act, received 386 new complaints in the month of March alone.  As employers prepare to return to work, it is likely that the frequency of these complaints will increase.

What You Need to Do

Now more than ever is the time for employers to develop strong compliance programs and to commit to best practices on handling whistleblower concerns.  This includes training workers and managers on whistleblower rights and anti-retaliation, auditing existing reporting channels to ensure effectiveness, revising investigation protocols to demonstrate leadership commitment and accountability, and rolling out new policies to encourage “speaking up.” 

For additional guidance on the recent rise in whistleblower claims and what employers can do now to mitigate this threat, please view our recent eBook on the topic by clicking here