By Kenneth Kleinman and Brad Kushner

Law360 (November 18, 2020, 12:33 PM EST) --

Kenneth Kleinman

Brad Kushner

This article addresses strategies for responding to and defending against whistleblower complaints filed under Section 11(c) of the Occupational Safety and Health Act.[1] 

The OSH Act regulates employment conditions relating to occupational safety and health. Every person engaged in a business affecting commerce is required to furnish each employee employment and a place of employment free from recognized hazards that are causing or are likely to cause death or serious physical harm and to comply with the Occupational Safety and Health Administration's standards promulgated under the OSH Act.

This is part one of a two-part article.[2] Part one provides guidance on the following key aspects of OSH Act whistleblower complaints:

• Elements of an OSH Act whistleblower action;
• Coverage of OSH Act whistleblower provisions;
• OSHA's whistleblower complaint process;
• Encouraging settlement;
• Pursuing a Section 11(c) claim in federal court; and
• Remedies available for a Section 11(c) complainant.

Part two of this article will address the following issues concerning OSH Act whistleblower complaints:

• Best practices and strategies for defending OSH Act whistleblowing complaints;
• COVID-19 and OSH Act whistleblowing actions; and
• Considerations concerning Title 29 of the Code of Federal Regulations, Section 1904.35.[3]

Elements of an OSH Act Whistleblower Action

Separate from the substantive safety and health standards, Section 11(c) of the OSH Act provides that no person shall discharge or in any manner discriminate against any employee because the employee has:

• Filed any complaint under or related to the OSH Act;
• Instituted or caused to be instituted any proceeding under or related to the OSH Act;
• Testified or is about to testify in any proceeding under the OSH Act or related to the act; or
• Exercised on their own behalf or on behalf of others any right afforded by the OSH Act.[4]

Coverage of OSH Act Whistleblower Provisions

Any employee of a private sector employer engaged in a business affecting interstate commerce is protected by Section 11(c). Employees of the U.S. Postal Service are also covered by the OSH Act. Other than USPS employees, public sector employees are not covered by Section 11(c).

Persons Prohibited From Discriminating and Retaliating

Section 11(c) states that "no person shall discharge or in any manner discriminate against any employee" because the employee has exercised rights under the OSH Act. The OSH Act defines "person" as "one or more individuals, partnerships, associations, corporations, business trusts, legal representatives, or any group of persons."

Thus, the prohibitions of Section 11(c) are not limited to actions taken by employers against their own employees. Section 11(c) also extends to unions, employment agencies or any other person in a position to discriminate against an employee.[5]

Persons Protected From Discrimination and Retaliation

Section 11(c) protects employees, which are defined as "an employee of an employer who is employed in a business of his employer which affects commerce."[6] The OSH Act does not define the term "employ."

Courts determine the existence of an employment relationship, for purposes of Section 11(c), based upon economic realities.[7] For purposes of Section 11(c), even an applicant for employment may be considered an employee.[8]

OSHA Whistleblower Complaint Process for OSH Act Claims

A complaint under Section 11(c) typically begins when an employee or employee representative files a complaint with OSHA. After an investigation, OSHA determines whether to file an action in federal court on behalf of the aggrieved employee. This process is described below.

Filing the Complaint

Any applicant for employment, employee, former employee, or his or her authorized representative is permitted to file a whistleblower complaint with OSHA. No particular form of complaint is required.

The complaint may be in any language and need not be in writing. OSHA also accepts electronically filed complaints on its whistleblower protection program website.

A complaint must include, at a minimum:

• The complainant's full name, address and phone number;
• The name, address and phone number of the respondent or respondents;
• The date of filing;
• The date of adverse action; and
• A summary of the alleged retaliation addressing the prima facie elements of a violation.[9]

Investigating the Complaint

After a complaint is filed, an investigator is assigned to conduct complaint intake and determine whether the complaint alleges facts sufficient to make a prima facie showing of retaliation. Many complaints are dismissed at this stage.

If the investigator determines that an investigation is warranted, he or she will:

• Interview the complainant and any witnesses.

• Obtain statements and documentary evidence.

• Interview and obtain statements from respondents' officials.

• Review pertinent records.

• Take any other actions necessary to gather evidence and assess the complainant's claims and the respondent's defenses.

As the respondent's legal counsel, you have the right to be present for any management interviews. Ultimately, the investigator will make a recommendation regarding whether the complaint appears to have merit.[10]

During an investigation, OSHA must disclose to the respondent, or the respondent's legal counsel:

• The filing of the complaint;
• The allegations contained in the complaint; and
• The substance of the evidence supporting the complaint.[11]

OSHA will provide to the complainant, or the complainant's legal counsel, the substance of the respondent's response. OSHA will redact any information that may compromise the identity of potential confidential witnesses and other confidential or sensitive information.[12]

Issuing a Determination

OSHA previously instructed investigators that a violation may be found if it was supported by a preponderance of the evidence. It lowered this burden in 2015, and OSHA now takes the position that investigators should determine whether there is reasonable cause to believe that Section 11(c) was violated.[13]

According to OSHA, this means that an investigator should determine whether a reasonable judge could find that a violation occurred, and the "evidence does not need to establish conclusively that a violation did occur."[14]

Section 11(c)(3) provides that the secretary of labor must notify a complainant of the secretary's determination within 90 days of the filing of the complaint. However, this 90-day provision is considered directory, rather than mandatory, and the secretary's failure to meet this timeline does not bar further investigation and does not affect the secretary's ability to file in federal court.[15]

Encouraging Settlement

It is OSHA's policy to seek settlement of all cases determined to be meritorious prior to referring the case for litigation. Further, at any point prior to the completion of an investigation, OSHA will attempt to resolve complaints in which both parties seek a resolution, either informally or through its early resolution program.[16]

OSHA's Early Resolution Program

OSHA has implemented an early resolution program that enables the parties to a whistleblower complaint to attempt to resolve a complaint before a full investigation occurs. The early resolution process can be launched either before the case is assigned for an investigation, or at any point while an investigation is ongoing.

The investigation is stayed while the parties attempt to resolve the case with the assistance of a neutral OSHA representative. Information obtained by the neutral representative during the early resolution process is confidential and is not disclosed to OSHA's investigative staff. Should the parties fail to reach a settlement, the case will be transferred to an investigator to start or resume investigation of the complaint.

While parties may request that the case be submitted to the early resolution program at any point during the investigation process, as a general rule, parties may only submit their case to the program one time.[17]

OSHA's Requirements for Settlement Agreements

OSHA generally requires that any settlement agreement to which it is a party contain the elements outlined below, though these may be tailored to fit the particular situation:

• It must be in writing.

• It must stipulate that the respondent agrees to comply with the relevant statute(s).

• It must specify the relief obtained.

• It must address a constructive effort to alleviate any chilling effect, where applicable, such as a posting — including electronic posting, where the respondent communicates with its employees electronically — or an equivalent notice. If a posting or notice is not included in the settlement agreement the case file should contain an explanation.[18]

Employers and employees may resolve disputes between themselves and enter into private settlement agreements to which OSHA is not a party. To end OSHA's investigation or lawsuit, a private agreement must be approved by OSHA.

OSHA will approve a private settlement if it deems it to be:

• Fair;
• Adequate;
• Reasonable;
• Consistent with the purpose and intent of Section 11(c); and
• In the public interest.

OSHA will not approve a whistleblower settlement agreement that contains provisions that may discourage whistleblowing, such as:

• Provisions that require employees to waive the right to receive a monetary award from a government-administered whistleblower award for providing information to a government agency about violations of the law; or

• Provisions that require an employee to advise the employer before voluntarily communicating with the government or to affirm that the employee is not a whistleblower.[19]

If the parties do not submit their agreement to OSHA or if OSHA does not approve the signed agreement, OSHA may dismiss the complaint or continue its investigation.

Employers and their counsel should be aware that OSHA often issues press releases announcing the terms of settlements, including the monetary components.

Pursuing a Section 11(c) Claim in Federal Court

If OSHA finds merit and the case cannot be settled, the secretary will file a civil action in federal court against the person who committed the violation.[20] There is no private right of action under Section 11(c).[21] The secretary in a federal court action is represented by the regional solicitor's office.

There is no statute of limitations for the secretary to file an action in federal court after notifying the parties of the outcome of an investigation. However, courts have held that the doctrine of laches may apply if the secretary's delay was unreasonable and inexcusable and the delay has resulted in prejudice to the defendant.[22]

Some States Recognize a Private Right of Action

Note, however, that some states do recognize a private right of action under state law for wrongful discharge based on public policy where an employee is discharged in retaliation for raising a safety complaint.[23]

Remedies Available for a Section 11(c) Complainant

Section 11(c) provides: "In any such action the United States district courts shall have jurisdiction, for cause shown to restrain violations of paragraph (1) of this subsection and order all appropriate relief including rehiring or reinstatement of the employee to his former position with back pay."

Courts have interpreted this provision broadly to include:

• Lost wages;
• Medical expenses;
• Travel and housing expenses;
• Emotional distress damages; and
• Prejudgment interest.[24]

Reinstatement

Reinstatement of the complainant to his or her former position is the presumptive remedy in whistleblower cases involving a discharge or demotion. Where reinstatement is not feasible, front pay in lieu of reinstatement may be awarded from the date of the award up to a reasonable amount of time for the complainant to obtain another job. Situations where front pay may be appropriate include:

• Those where the respondent's retaliatory conduct has caused the complainant to be medically unable to return to work;

• Those where the complainant's former position or a comparable position no longer exists; or

• Those where reinstatement might lead to extreme hostility or debilitating anxiety or other risks to the complainant's mental health.

If a complainant seeks front pay, consider retaining an economic and/or a vocational expert to limit a potential front pay award.

Back Pay

Back pay is typically calculated by deducting the complainant's interim earnings — from sources such as interim employment and workers' compensation payments — from the complainant's total earnings (before taxes and other deductions) that the complainant would have earned during the period of unemployment. It typically includes any cost-of-living increases or raises that the complainant would have received if he or she had continued to work for the respondent, if supported by competent evidence. A back pay award may also include compensation for lost bonuses, overtime, benefits, raises and promotions.

Complainants have a duty to mitigate their damages. To be entitled to back pay, a complainant must exercise reasonable diligence in seeking alternate employment. Employers may wish to consider whether it is appropriate and feasible to make an offer of reinstatement to a complainant to limit back pay exposure. A respondent's cumulative liability for back pay ceases when a complainant rejects a bona fide offer of reinstatement to a job substantially equivalent to the complainant's former position.

Compensatory Damages

A successful Section 11(c) complainant may also be entitled to an award of compensatory damages, which typically includes both pecuniary losses resulting from the adverse action, as well as damages to compensate the complainant for emotional distress, pain and suffering, loss of reputation, personal humiliation, and mental anguish he or she has suffered as a result of the adverse action.

Compensable pecuniary losses may include, for example, out-of-pocket medical expenses resulting from the cancellation of a company health insurance policy and medical expenses for treatment of symptoms directly related to the retaliation (e.g., post-traumatic stress, depression, etc.). They may also include:

• Vested fund or profit-sharing losses;
• Credit card interest and other property loss resulting from missed payments; or
• Annuity losses.

Successful complainants may also recover expenses incurred as a result of searching for other employment.

A successful complainant in a Section 11(c) action may also be awarded compensatory damages for emotional distress, pain and suffering, loss of reputation, personal humiliation and mental anguish resulting from the respondent's adverse employment action. Emotional distress is not presumed.

Generally, a complainant must provide evidence of both:

• Objective manifestations of distress; and
• A causal connection between the retaliation and the distress.

Objective manifestations of emotional distress include, but are not limited to:

• Depression;
• Post-traumatic stress disorder; and
• Anxiety disorders.

Objective manifestations also may include conditions that are not classified as mental disorders such as sleeplessness, harm to relationships, and reduced self-esteem.

Because a complainant must prove a causal connection between the retaliation and the emotional distress for which he or she seeks compensation, you should explore in discovery whether there may be other causes for a complainant's emotional distress.

Courts generally do not require medical evidence to support a claim of emotional distress under Section 11(c).[25] However, evidence from a health care provider is required if a complainant seeks to prove a specific and diagnosable medical condition.

Punitive Damages

Courts may award a complainant in a Section 11(c) action punitive damages to punish the employer for violations in which respondents are aware that they are violating the law or where the violations involved egregious misconduct. There is no statutory cap on punitive damages under Section 11(c).

A respondent's good faith is a defense to punitive damages. Thus, a respondent may successfully defend against punitive damages if it can demonstrate that, for instance, its managers were acting on their own and contrary to a clear, consistently enforced anti-retaliation policy. To establish this defense, an employer will likely need to show not only that such a policy exists, but also that the offending manager was disciplined or terminated for violating it.

Nonmonetary Remedies

Remedies may also include:

• Injunctive relief and expungement of warnings, reprimands and derogatory references in a complainant's personnel file;

• Providing the complainant with a neutral reference for future employers;

• Nonretaliation training for managers and/or employees; and

• The posting of a notices regarding employees' Section 11(c) rights.

---

Kenneth D. Kleinman is senior counsel and Brad M. Kushner is a shareholder at Stevens & Lee PC.

This article is excerpted from Practical Guidance, a comprehensive practice resource that includes practice notes, checklists, and model annotated forms drafted by experienced attorneys to help lawyers effectively and efficiently complete their daily tasks. For more information on Practical Guidance or to sign up for a free trial, please click here.

Law360 and Practical Guidance are both owned by LexisNexis Legal & Professional, a RELX Group company. 

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] 29 U.S.C. § 660(c).

[2] For a full version of this practice note, see Whistleblower Complaint Response and Defense Strategies under Section 11(c) of the Occupational Safety and Health Act.

[3] For more guidance on key OSH Act legal issues, see OSH Act Requirements, Inspections, Citations, and Defenses. For OSH Act issues related to the coronavirus, see COVID-19 and OSHA and Employers Providing Face Masks Should Review Their Health and Safety Obligations. For tracking of recent agency rules regarding employer requirements and penalties under OSHA and other key federal, state, and local Labor & Employment legal developments, see Labor & Employment Key Legal Development Tracker. For information on state occupational safety and health plan laws, including health and safety laws and posting requirements that are not part of OSHA-approved state plans, see Occupational Safety and Health Plan State Law Survey and OSH Act Compliance, Employee Health, and Workplace Security State Practice Notes Chart.

For additional information on federal and state whistleblower laws and protections, see Whistleblowing State and Federal Practice Notes Chart. For additional practice notes, annotated forms, and checklists concerning whistleblower policies, programs, and investigations, see the Discrimination, Harassment, and Retaliation – Whistleblowing landing page. For information on state whistleblower laws, see Whistleblowing State and Federal Practice Notes Chart. For whistleblower reporting training, see Whistleblower Reporting: Training Presentation.

[4] 29 U.S.C. § 660(c).

[5] 29 C.F.R. § 1977.4.

[6] 29 C.F.R. § 1977.5(a).

[7] See id. ("[T]he broad remedial nature of this legislation demonstrates a clear congressional intent that the existence of an employment relationship, for purposes of Section 11(c), is to be based upon economic realities rather than upon common law doctrines and concepts.") (citations omitted).

[8] 29 C.F.R. § 1977.5(b). For discussion of discrimination, harassment, and retaliation issues, see the Discrimination, Harassment, and Retaliation subtask.

[9] See Whistleblower Investigations Manual: Directive Number CPL 02-03-007 (Whistleblower Manual) at 2-2.

[10] See Whistleblower Investigations Manual: Directive Number CPL 02-03-007 (Whistleblower Manual) at 1-4.

[11] See Whistleblower Manual at 23–6.

[12] See Whistleblower Manual at 23–6.

[13] See Whistleblower Manual at 3-5, 3-6.

[14] See "Clarification of the Investigative Standard for OSHA Whistleblower Investigations," memorandum from Directorate of Whistleblower Protection Programs. See Whistleblower Manual at 3-6.

[15] See Marshall v. N. L. Industries, Inc., 618 F.2d 1220, 1224 (7th Cir. 1980) (Secretary's failure to comply with 90-day provision did not bar action in federal court against employer); Donovan v. Freeway Const. Co., 551 F. Supp. 869, 878 (D.R.I. 1982) (Secretary's failure to notify discharged employees within 90 days of complaint of Secretary's determination to proceed against employer did not prohibit institution and prosecution of action against employer).

[16] See Whistleblower Manual at 6-12–6-13.

[17] See OSHA DIRECTIVE NUMBER: CPL 02-03-006 (Alternative Dispute Resolution (ADR) Processes for Whistleblower Protection Program).

[18] See Whistleblower Manual at 6-15.

[19] See Whistleblower Manual at 6-19–6-20.

[20] 29 U.S.C. § 660(c)(2).

[21] Donovan v. Occupational Safety & Health Review Commission, 713 F.2d 918, 926 (2d Cir. 1983); George v. Aztec Rental Ctr. Inc., 763 F.2d 184, 186 (5th Cir. 1985); Taylor v. Brighton Corp., 616 F.2d 256, 258–64 (6th Cir. 1980).

[22] Donovan v. Square D Co., 709 F.2d 335, 340 (5th Cir. 1983); Marshall v. Intermountain Elec. Co., 614 F.2d 260, 263 (10th Cir. 1980).

[23] See, e.g., Pytlinski v. Brocar Prods., Inc., 94 Ohio St. 3d 77, 760 N.E.2d 385 (Ohio 2002) (terminated employee who alleged he had delivered a memorandum to his employer detailing violations of OSHA regulations in the workplace stated a valid claim); Cloutier v. Great Atlantic & Pacific Tea Co., Inc., 121 N.H. 915 (N.H. 1981) (permitting recovery for wrongful discharge in violation of a public policy tenuously premised on duties imposed under OSHA). Other states hold that any such complaint is preempted by Section 11(c). See, e.g., McLaughlin v. Gastrointestinal Specialists, Inc., 561 Pa. 307, 750 A.2d 283 (Pa. 2000) (holding that OSHA provides the exclusive remedy for employees that claim retaliatory termination based on an OSHA complaint); Walsh v. Consolidated Freightways, 278 Or. 347, 563 P.2d 1205 (Or. 1977) (holding that plaintiff's claim of wrongful termination for raising workplace safety concerns was preempted by PSHA).

[24] See, e.g., Reich v. Cambridgeport Air Sys., Inc., 26 F.3d 1187, 1194 (1st Cir. 1994) ("We conclude . . . that the statutory power to award "all appropriate relief" gave the district court authority, where such relief is in fact appropriate, to award compensatory and even such traditional other relief as exemplary damages."); Martin v. H.M.S. Direct Mail Service, Inc., 936 F.2d 108, 109 (2d Cir. 1991) (holding that prejudgment interest is an appropriate component of a back pay award in a Section 11(c) case).

[25] See, e.g., Acosta v. Fairmount Foundry, Inc., 2019 U.S. Dist. LEXIS 232592, at *1, n. 1 (E.D. Pa. Feb. 6, 2019) (holding that plaintiff's testimony regarding his emotional distress was sufficient to overcome a summary judgment motion).

For a reprint of this article, please contact reprints@law360.com.