Facebook Icon.       LinkedIn Icon.

Whistleblower Protections for Employees of Government Contractors Under the NDAA

Aug 17th, 2020

Federal Contractor Whistleblower Protection

The National Defense Authorization Act (NDAA) generally extends the protections of the Whistleblower Protection Act (WPA) to private sector employees who work for federal government contractors. These protections are codified in two sections of federal law, 10 U.S.C. § 2409 and 41 U.S.C. § 4712.

Who is Protected by the NDAA?

After it was amended and extended, the NDAA protects all individuals performing work on a federal government contract or grant. It includes employees of contractors, subcontractors, grantees, or subgrantees. Section 827 of the NDAA protects whistleblowers who are employed by contractors and subcontractors of the Department of Defense (DOD) and NASA. See 10 U.S.C. § 2409(a)(1). Section 828 protects a broader scope of whistleblowers. It includes employees of other federal contractors and subcontractors, employees of federal grant recipients or subgrantees, employees of entities that receive federal funds, and personal services contractors working on federally funded projects. See 41 U.S.C. § 4712(a)(1).

The NDAA does not cover disclosures relating to any element of or contract with the intelligence community, such as the CIA, NSA, or intelligence elements of the FBI or armed forces.

What Disclosures Are Protected by the NDAA?

The NDAA only protects disclosures of waste, fraud, and abuse in federal contracts, grants, and payments. It generally protects whistleblowers from retaliation for disclosing:

  • Gross mismanagement of a federal contract or grant;
  • Gross waste of federal funds;
  • Abuse of authority, defined broadly, relating to a federal contract or grant;
  • Violations of a law, rule, or regulation related to a federal contract or grant;
  • Violations of requirements for competition for or negotiation of a federal contract; or
  • Substantial and specific dangers to public health or safety.

However, to be protected, a whistleblower must disclose one of the above matters to one of the designated covered persons or bodies, which are:

  • A Member of Congress or representative of a congressional committee;
  • An Inspector General;
  • The Government Accountability Office (GAO);
  • A Federal employee responsible for oversight at the relevant agency;
  • An official at the Department of Justice (DOJ) or other law enforcement agency;
  • A court or grand jury, including the provision of evidence in any judicial or administrative proceeding; or
  • A management official or other employee of the contractor, subcontractor, grantee, or subgrantee who has responsibility to investigate, discover, or address misconduct.

This final category of covered persons is broad. It essentially protects whistleblowers who report their good faith reasonable concerns internally, in addition to the other protected external disclosures.

Importantly, an employee need only have a Reasonable Belief that the matter she disclosed was or is an instance of waste, fraud, or abuse, as detailed above. The employee does not need to show actual waste, fraud, or abuse. Even a reasonable, but mistaken, belief is sufficient, so long as a person standing in the whistleblower’s shoes could reasonably have believed improper conduct was occurring.

What Reprisals or Retaliatory Actions are Barred by the NDAA?

The NDAA prohibits covered employers from retaliating against an employee for making a protected disclosure by:

  • Discharging the employee;
  • Demoting the employee; or
  • Otherwise discriminating against the employee.

The last category, precluding “otherwise discriminating” against a whistleblower, includes actions that might dissuade a reasonable employee from blowing the whistle by making a protected disclosure. In other words, if the employer’s actions would scare a potential whistleblower to the extent that they would be scared to disclose waste, fraud, or abuse relating to a federal contract, then such adverse action is sufficient for a claim under the NDAA.

How is the Connection Between a Protected Disclosure and Adverse Action Established?

The NDAA applies the whistleblower-friendly “contributing factor” causation standard, and expressly incorporates the knowledge-timing test. Under this standard, a whistleblower can show an actionable causal connection between a protected disclosure and an adverse action (such as a termination) by presenting direct or circumstantial evidence that their protected disclosure was one of the factors, but not necessarily to sole or motivating factor, in the decision to take the adverse action. This means that even when an employer has other reasons for the decision to take an adverse action, if the employee’s protected disclosure played any role in that decision there is a sufficient causal connection. Moreover, in addition to other direct or circumstantial evidentiary means, the NDAA provides that a whistleblower can establish causation if (a) the decision-maker knew of the protected disclosure and (b) the adverse action occurred in close temporal proximity to the protected disclosure.

Importantly, under the contributing factor causation standard, the whistleblower does not need to show that retaliatory motive or intent to establish a claim under the NDAA.

In addition to proving causation, the whistleblower must also establish that the employer had notice of the protected disclosure and that the decision-maker(s) had actual or constructive knowledge of the protected disclosure.

What Defenses Does the Employer Have Under the NDAA?

Among the normal defenses that an employer may assert in a retaliation case, under the NDAA (as well as other whistleblower protection statutes) there is also a Same Decision Affirmative Defense. Under this defense, an employer can avoid liability if it can establish that it would have taken the same adverse action, even in the absence of the protected disclosure. The employer must be able to prove this by the heightened clear and convincing evidentiary standard. Notably, the employer cannot use or consider any of the information or context associated with the whistleblower’s protected disclosure and generally must show that it treated other similarly situated employees the same.

How Do I File an NDAA Retaliation Claim?

A claim for retaliation under the NDAA must be filed initially with the Office of Inspector General (OIG) of the agency that awarded the contract or grant that the whistleblower made a protected disclosure regarding.

Such a claim must be filed with the OIG within three (3) years of the adverse action that constituted the retaliation or reprisal.

The OIG investigates the complaint to determine the sufficiency of the claims, which may involve interviewing the parties and witnesses, collecting information, and meeting with counsel for the parties. Once the OIG finishes its investigation, it submits a report to the agency head and other relevant parties within 180 days of receiving the complaint, unless the whistleblower agrees to an extension. Within 30 days the agency head must issue an order either denying relief or requiring the contractor to take certain actions, including reinstating the whistleblower and/or paying damages and costs.

A whistleblower may file a lawsuit in federal district court alleging retaliation under the NDAA if the whistleblower (a) is denied relief after filing a complaint with the OIG or (b) has not obtained relief within 210days of filing their complaint with the OIG (the “kickout” provision).

What Remedies or Damages are Available Under the NDAA?

Remedies for a successful NDAA whistleblower retaliation claim include reinstatement to the same level of position (or potential frontpay if reinstatement is not feasible), backpay (lost wages), compensatory damages (noneconomic injuries), and attorney fees and costs.

What Other Claims Could a Whistleblower Have?

Whistleblowers who are protected under the NDAA may also have claims under other federal statutes, state statutes, and state common law. The False Claims Act anti-retaliation provision is often applicable to NDAA whistleblowers, as it precludes retaliation for efforts by the whistleblower to pursue a complaint by the government relating to fraudulent or false claims for payment, or other efforts to stop such conduct. The False Claims Act provides double backpay to successful whistleblowers. Other potential protections may be found under the Sarbanes-Oxley Act, the Dodd-Frank Act, other statutes administered by OSHA, state whistleblower statutes, and state wrongful discharge law.

Are you an Employee who believes you have suffered retaliation or reprisal for making a protected disclosure or blowing the whistle on improper conduct? You should contact the employment and whistleblower attorneys at Ogborn Mihm LLP to discuss their case and potential representation.