Tuesday, May 30, 2017

On Not Giving Up

On Not Giving Up

Occasionally whistleblowers speak of feeling vindicated at the end of their ordeals[1].  Their years-long battles testify to whistleblowers’ hope for vindication and their reluctance to give up.  Even where vindication is lacking, there is ample evidence of their determination.

On March 28, 2014, Evan Howington, an oil services contractor employee, boarded an oil rig 100 miles south of New Orleans in the Gulf of Mexico.  He happened to see fluid leaking from the rig into the Gulf water and informed the rig supervisor, who told him not to worry because it was just hydraulic fluid.  A few days later he witnessed three supervisors of the companies that operated the rig intentionally discharge hydraulic fluid and then laugh about doing so.  He not only witnessed the men, he recorded them on his phone.

Fearful that he could be charged with complicity if the company failed to report the discharge, he took his evidence to the Environmental Protection Agency and later spoke with staff at other federal agencies.  An investigation ensued, and a year and a half later Walter Oil & Gas agreed to pay a $400,000 fine for failing to report the discharge.  But this was not enough for Howington.

In May 2017, Howington sued the United States of America for the negligence of the Department of Justice attorney who was in charge of the case against Walters and who negotiated the settlement, which Howington considered an inadequate penalty for its intentional misdeed.  He figured that, according to federal regulations, the fine should be closer to $18 million.

Sometimes suing the federal government pays off although that can take a while.  Robert MacLean was an air marshal when he spoke out against what he believed were unsafe measures taken by the Department of Homeland Security.  He was fired in 2006.  Suits, judgments, and appeals took him to the U.S. Supreme Court, which ruled in his favor in January 2015.  A year later he was back at work, complaining again of retaliations.

Suits against private and non-federal government employers can also drag on through years of appeals by both sides.  North Carolina state trooper Reginald Newberne was fired in 2001 after he spoke out against the misconduct of a fellow trooper, and it wasn’t until 2016 that a jury finally decided in his favor.  Steven Babyak, who disclosed illegal kickbacks paid to doctors by his employer, won only after 8½ years of legal fighting.  Paul Bishop and Robert Kraus had to battle against Wells Fargo and two acquired banks for 10 years before the U.S. Supreme Court decided that their False Claims Act suit could move forward, a suit that may have years more to play out.

Then there are others who engage in extended disputes only to quit in defeat.  Robert Purcell struggled for 18 years before having to give up when the U.S. Supreme Court refused to hear his appeal.  Laura King was fired in 2009 by the St. Tammany Parish (Louisiana) Coroner after she refused to buy him a laptop with grant funds; she finally quit her self-funded appeals in 2016.

Sometimes, even if the whistleblower appears to win, it is not enough.  Howington is one example.  Another is Eric Ben-Artzi, who refused his $8.25 million reward for information against Deutsche Bank’s illegal activities because he thought the wrong people were paying the fine.  Whether the result of his disclosure is successful is, I suppose, a personal judgment that every whistleblower makes – from big-time players like Snowden to the many of us small-time whistleblowers.

When I complained about HomeFirst’s violations of licensing regulations and food handler card requirements, I was vindicated by authorities who judged that the company had operated improperly.  The company was permitted to modify its procedures without penalty, and my complaints led to my termination.  Some my other complaints – the master lease violation, the HUD overbilling, and the County overbilling – I continue to play with even though it is pretty clear after three and more years that no one but me cares.

Throughout our lives we face decisions whether to call out perceived misdeeds.  We sense how far we can push before bad things will happen to us, then we decide what to do.  Usually we stop before we pass the point where the likely blowback is dangerous.  Once we become whistleblowers, though, we are on an unfamiliar path where it is harder to tell when we should stop.  Dropping our unsuccessful complaints negates the value of what we have put into our projects.  Stopping means giving up the pretense of our heroic valor and accepting that we may have had it wrong.  It means getting on with life as lived by others.

An attorney might prod us to continue if he sees the prospect of sufficient contingency fees or thinks we still have funds for the contest.  On our own, as I am now, the thing may eventually yield its disappointing result or starve to death in our arms. Without apology[2], we press on, to ultimate success or failure.




[2] Cf. Alessandri, Mariana.  “In Praise of Lost Causes.” New York Times.  May 29, 2017.

Friday, May 12, 2017

Figuring Who Is Right in Whistleblower Cases

Figuring Who Is Right in Whistleblower Cases

Suzanne E. Esserman had worked for 23 years at the Indiana Department of Environmental Management (IDEM) when she was made a Senior Environmental Manager in December 2011.  In her new role, she reviewed planned reimbursements to residents for costs associated with the cleanup of underground contamination.  Esserman got a new boss in July 2012, and he put her on a performance improvement plan three months later.  The problem, as he saw it, was she wasn’t working fast enough to complete her assignments.

During early 2013, Esserman was out on medical leave for surgery.  When she returned to work in June, she was assigned a monthly review quota.  She went out on leave again in September and October.  In December, the month before she was fired, she exchanged snarky emails with her boss: he told her to speed it up; she replied that the taxpayers would pay too much for the cleanups – she pointed to one nearly $1,000 adjustment – if she didn’t continue her thorough reviews, but thanks for your feedback. 

IDEM wrote that she was terminated in January 2014 for failing to meet work expectations, and it opposed her request for unemployment benefits.  The Indiana Department of Workforce Development rejected Esserman’s application, noting that she had failed to meet her quotas because her investigations went beyond what her employer asked her to perform.  Esserman argued that she always gave her best effort on the job and she could have been held personally responsible for submitting false claims if she believed that the planned payments were not properly reviewed before they reached her desk.

The Indiana Court of Appeals wrote that, like all employers, IDEM needed to decide on an appropriate balance of efficiency and thoroughness in areas like Esserman’s.  But estimation of that balance is often controversial.  In light of Esserman’s 25 years of service, the Court decided that IDEM had failed to meet its burden of proof that Esserman should have understood that her conduct violated her duty to her employer.  It warned the parties, however, that a claim for unemployment benefits should not be confused with a wrongful termination lawsuit.

After Esserman was fired, she did sue for wrongful termination under Indiana’s False Claims and Whistleblower Protection Act and the State Employees’ Bill of Rights.  The suit was complicated by the fact that no false claims were made or even attempted.  The trial court accepted IDEM’s argument that the Act applied only to private employees, not to someone in Esserman’s position.  Her appeal for reconsideration was accepted, and the case is on its way to being heard in the Indiana Supreme Court.

A key question in Esserman’s whistleblower complaint is whether IDEM was misusing government funds.  If it was, then her objections would be protected activities and she may succeed in her lawsuit.

The answer hinges on the balance issue raised in her unemployment claim dispute: if the expected cost of making excessive payments exceeded the social benefit of achieving complete payment accuracy, then IDEM arguably did misuse state funds by diverting Esserman from her personal mission to get it right.  On the other hand, if the cost of exceptional accuracy outweighed the probable benefits, then IDEM acted reasonably.

Many whistleblower cases involve this problem of finding a fair balance.  If, for example, Wells Fargo’s sales goals and control systems – however faulty they have been found by press, courts, and government agencies – produced (as the bank effectively claimed) greater social benefit, in the form of new services and greater business effectiveness, than social costs, then employee complaints of wrongdoing amounted to a misunderstanding of the nature of that balance.  Or if, as the federal government claims, the NSA surveillance techniques exposed by Edward Snowden provided social benefit (e.g., in fighting terrorism) that outweighed their social cost (e.g., loss of privacy), then Snowden misperceived the balance.

My lack of success in arguing my complaints against HomeFirst may imply that I misread the balance.  Some authorities clearly weighed the factors differently than I did: The Department of Justice attorney warned that the DoJ didn’t like to hurt companies that did good; neither Santa Clara County nor HUD wanted to risk stopping the company’s good work by demanding the return of improperly obtained money.  The California licensing department and the Santa Clara County food inspection group both allowed the company to explain how it had fixed the problems that I identified.

Powerful organizations are constantly playing that balance, and they rigorously defend their view of the scale[1]. HomeFirst echoed the conclusion of Professor Sissela Bok[2] when it claimed that my allegations of the company’s misdeeds were offensive and I had no right to suppose that I was right in my allegations.

As social complexity deepens and groups grow intensely interconnected, more competing perceptions of the proclaimed benefits and charged costs must be weighed.  Multiplying laws and regulations provide an ample context for disputes; expanding government purchases of goods and services unaccompanied by a commensurate investment in resources to test the fairness of the balances leave the determination to the most powerful. 

Whether or not the complaint of Suzanne Esserman, me, or any whistleblower is justified in an unbiased court – if such a place can be found – should not be our determining concern.  What counts for the individual and society is our independent assessment of benefits and costs of organizational actions.  
Organizations already enjoy great power to wreak havoc on individual lives.  In judging cases of retaliation against whistleblowers, the scale must be weighted to favor the whistleblower; we should not pretend that failing to favor the whistleblower is in any way fair.



[2] “The whistleblower hopes to stop the game; but since he is neither referee nor coach, and since he blows the whistle on his own team, his act is seen as a violation of loyalty.”  Bok, Sissela.  “Whistleblowing and Professional Responsibilities.” In Ethics Teaching in Higher Education. Daniel Callahan and Sissela Bok (eds.).  New York and London: Plenum Press. 1980. 277-295

Saturday, May 6, 2017

The Punishment for Whistleblowing

The Punishment for Whistleblowing

News reports on whistleblowers tend to describe three kinds of cases: (a) False Claims Act suits, which focus on the accused organization’s overcharging the government and care little about the whistleblower except as a source of evidence; (b) complaints involving private companies, which are usually settled out of court to limit the availability of information; and (c) disclosures by employees who accuse public agencies or employees of wrongdoing.   

The retaliations against the whistleblower described in these reports come in waves.  First come the usual informal[1] organizational actions – such as different forms of ostracism and modifications of the protester’s job.   Examples from articles over the past month or so:

Joel Allen – mental health was questioned by his boss in a large setting
Steven Babyak – sales region reduced but quota increased
Joann Brown – verbal abuse, exclusion from leadership training event,
Sabrina Burton – lost university grant and committee seats, physically threatened.
April Grundfor – assigned to work area with no private phone access, no adequate computers/printers, denied access to patient medical records.
Dale Klein – stripped of hospital duties.
Kim Martin – stripped of supervisory responsibility.
Walter Tamosaitis – moved to basement office with no meaningful work for 15 months.
Barbara Temeck ­– office moved to basement
Pamela Treadwell – threatened with jail time for the misdeed she disclosed.
Richard Trusz – limited exposure to clients, reduced responsibilities,

Occasionally, informal actions assume extreme forms:

Kim Martin – cardboard rats place on her desk.
Joe Crystal – a dead rat placed on his patrol car windshield.

Then come formal actions that typically involve official documentation:

Jonathan Blaylock – challenged on sick time & hours worked, unusual discipline for alleged mistakes, performance improvement plan.
Joann Brown – critical performance review, vague & impossible performance improvement plan (fairly common retaliations; also see: April Grundfor)
Dale Klein – lost patient contact and hospital privileges; the VA closed his pain management clinic
Joseph Lovelace – coded language in performance appraisal that made promotion impossible
David Scrip – disciplined for trivial infractions.
Jerry Speziale – denied security credentials, work vehicle taken away, denied medical leave benefits for terminally ill wife.
Barbara Temeck ­– demoted, clinical privileges withdrawn.
Frank Timek – suspension without pay, job changed.

The final formal action is termination, which leads to some sort of complaint by the whistleblower.  The accused organization sometimes responds with its own explanations that the whistleblower without disproving his allegations.  These false criticisms will be used to fight the whistleblower’s application for unemployment benefits and will complicate his personal relations and his search for a new job.

Joel Allen – vandalism, threatened other employees, made false allegations.
Svetlana Blackburn – ongoing performance problems (a common accusation).
Jason Blasdell – disruptive.
Sabrina Burton – behaved unprofessionally, disrespectful, harassing and intimidating behavior (another common complaint).
Glen Brooks – lying.
Johnny Burris – complaints from customers.
John Connors – violated media policy.
Stephen Furst – obscene photos on his computer.
Woody Hildebrandt – stole from school.
Kuaahtemoc Rodriguez – violated privacy policy.
Walter Tamosaitis – lack of work (another common explanation; for example, Tracy Woodward).
Robert Trojan – boss sent email to broad list suggesting he’d been fired for cause

Even after termination, the organization may instigate further retaliations against the whistleblower.  It may informally discourage other organizations from hiring the whistleblower, or it may take more aggressive actions against him:

Craig Price – employer held him responsible for $14,000 customer loss, comment on the financial industry’s U5 record (the U5 record comment is a common technique of banks: Jeremy received one after being fired by Wells Fargo; Johnny Burris also was hit by comments that kept him from being hired at other financial firms).
Nick Ramler – sued by the organization; Thomas Guilfole was also sued by his former employer after his whistleblower complaint was dismissed.

The combined effects of these retaliations can make whistleblowers regret that they ever made their disclosures:

Lisa Magin – “It has been hell”, almost lost her home, no medical insurance.

Research[2] on the experiences of whistleblowers has found similar types of retaliations across broader populations.  My own experience at HomeFirst, though far less harsh than that of most whistleblowers, included many of the same elements: the ostracism, exclusion from meetings, reduction in responsibilities, reprimands for actions that might not have earned reprimands for others, termination without notice, and later the threat of a lawsuit if I continued to complain about the company’s behavior or if I contacted anyone at the company.

Just as the misdeeds disclosed by whistleblowers are common in corporations, these retaliations resemble actions that organizations regularly take against employees they no longer appreciate and would like to see leave, even without whistleblowing as a factor.  Thus, it is no surprise that the organization claims that the whistleblowing did not influence its behavior – the wrongdoing and the behavior toward an unwanted employee are actions the organization takes all the time.

Although the personal pain they cause can be intense, retaliations against whistleblowers are commonplace.  By themselves, they raise no one to an exalted status; they surprise no one.  Likewise, the organization’s disingenuous defense of its attack on an employee who speaks up should surprise no one.  Yet its claim on the loyalty and commitment of employees too often garners sympathy[3].

The decision to blow a whistle changes the game for both parties.  It moves the organizational misdeed from the routine to the noteworthy and actions against the employee from conventional to unlawful (or at least reprehensible). Whistleblowing shifts the expression of an employee’s displeasure from simply leaving a nasty situation to malicious behavior that may be protected by law.

The punishment dealt to the whistleblower provides a shortcut for each side: the tedious dickering over relations and behavior that should be improved is exchanged for a high cost transaction in which both sides claim, without convincing justification, to take the higher ethical ground.




[1] The distinction between informal and formal control systems is discussed in Campbell, Jamie-Lee and Anja S. Goritz. “Culture Corrupts! A Qualitative Study of Organizational Culture in Corrupt Organizations.” Journal of Business Ethics 120 (2014): 291–311
[2] For example, Devine, Tom and Tarek F. Maassarani. The Corporate Whistleblower’s Survival Guide. San Francisco: Berrett-Koehler Publishers, Inc. 2011.  “12 Most Common retaliation Tactics.” Forbes.  See also my earlier post.
[3] For example, Schrag, Brian.  “The Moral Significance of Employee Loyalty.” 11.1 (January 2001): 41-66; and Goldsmith, Marshall. “How to Increase Employee Commitment.” Harvard Business Review. January 28, 2008