Tag: Whistleblowers

Miami Condo Collapse: What Role Can Whistleblowers Play to Prevent Such Tragedies?

In the early morning hours of June 24, 2021, a 13-story condominium building in the town of Surfside on Miami Beach, Florida, collapsed. Tragically, four people have been confirmed dead, and search and rescue crews continue their efforts to find other survivors, with at least 156 people still unaccounted for. According to recent reports, nearly three years before the collapse, in October 2018, a consultant found evidence of “major structural damage” to concrete slabs beneath the pool deck and beams and walls of the parking garage under the building. While the cause of the collapse remains unknown, the 2018 report suggests that the complex’s management association knew of the potentially severe structural damage to the building.

This tragedy was not the first time a building has collapsed in the County. In 1974, the federal Drug Enforcement Agency building in downtown Miami collapsed. In response, Miami-Dade County created a recertification process for buildings over 40 years old to ensure these buildings’ structural integrity. Because of weather conditions in South Florida and exposure to corrosive salt air, damage to rebar and steel beams can impact the structural integrity of a building over time. The Miami-Dade County Code requires inspections to be conducted to evaluate the general structural condition of the building and to ensure building safety. The association was set to begin plans to repair the building this year, in connection with this recertification process.

This recent disaster leaves many wondering what could have been done to prevent it, and how we can avoid such tragedies. Employees and contractors in the construction industry are uniquely positioned to discover safety risks and other violations in building projects. As such, they can play a significant role in alerting the government, and in turn the public, of serious risks. What laws exist to protect and incentivize these whistleblowers?

Protections for Whistleblowers in Florida

Florida provides broad protection to employees who report legal violations. For employees in the public sector, the law protects public employees, as well as independent contractors with a government agency, who report to an appropriate government agency violations “that create a substantial and specific danger to the public’s health, safety or welfare.” The state’s private sector whistleblower law also protects private employees who disclose wrongdoing to a government agency. Significantly, the law also protects private employees who have “objected to, or refused to participate in, any activity, policy, or practice of the employer which is in violation of a law, rule, or regulation.” An employee who faces retaliation for reporting wrongdoing may be entitled to damages, including lost wages, benefits, and other types of compensatory damages.

False Claims Acts

Protections under the federal False Claims Act (FCA) apply across a wide range of industries, including in the construction industry. The FCA prohibits the intentional presentation of false claims to the government for payment, which includes providing false information in connection with any claims for payment. If a construction whistleblower discovered a violation of the FCA – for example, if a company received federal funds to complete building repairs that were not completed – he or she could file a lawsuit on behalf of the federal government, known as a qui tam. An individual who brings a successful qui tam lawsuit can receive 15 to 30 percent of the damages received by the government. The FCA also includes worker protections so that an individual who brings a qui tam action or tries to stop the FCA violations may be entitled to relief if he or she experiences retaliation on the job.

Like many other states, Florida has a statute modeled on the federal FCA that protects employees for reporting an employer who presents false claims to the state or otherwise misappropriates state property. An individual who brings an action under the Florida FCA may be entitled to a percentage of the amount recovered by the government. Similar to the federal FCA, individuals who report violations under Florida’s FCA are also protected from retaliation for trying to stop such violations or bringing a qui tam action.

Conclusion

News reports state it may take months to know what caused the horrific collapse of the condo building in Miami. Miami-Dade County will undoubtedly evaluate how it may prevent such tragedies in the future. In Miami and elsewhere, whistleblowers can play an integral role in protecting public safety. Federal and state laws provide protections and incentives to those who come forward to report potential violations.

Katz, Marshall & Banks, LLP
For more articles on whistleblowers, visit the NLR Criminal Law / Business Crimes section.

OSHA to Employers: No Gagging Whistleblowers!

OSHA whistleblowersOn September 9, 2016, the United States Occupational Safety and Health Administration (“OSHA”) published new guidelines for approving settlements between employers and employees in whistleblower cases to ensure that those agreements do not contain terms that could be interpreted to restrict future whistleblowing. OSHA reviews settlements between employees and employers to ensure that they are fair, adequate, reasonable, and in the public interest, and that the employee’s consent was knowing and voluntary. The guidance provides that OSHA will not approve settlement agreements that contain provisions that discourage (or have the effect of discouraging) whistleblowing, such as:

  • “Gag” provisions that prohibit, restrict, or otherwise discourage an employee from participating in protected activity, such as filing a complaint with a government agency, participating in an investigation, testifying in proceedings, or otherwise providing information to the government. These constraints often arise from broad confidentiality or non-disparagement clauses, which complainants may interpret as restricting their ability to engage in protected activity. The prohibited constraints may also be found in provisions that:

    • restrict the employee’s right to provide information to the government, file a complaint, or testify in proceedings based on a respondent’s past or future conduct;

    • require an employee to notify his or her employer before filing a complaint or voluntarily communicating with the government regarding the employer’s past or future conduct;

    • require an employee to affirm that he or she has not previously provided information to the government or engaged in other protected activity, or to disclaim any knowledge that the employee has violated the law; and/or

    • require an employee to waive his or her right to receive a monetary award from a government-administered whistleblower award program for providing information to a government agency.

  • Provisions providing for liquidated damages in the event of a breach where those provisions are clearly disproportionate to the anticipated loss to the respondent of a breach, the potential liquidated damages would exceed the relief provided to the employee, or whether, owing to the employee’s position and/or wages, he or she would be unable to pay the proposed amount in the event of a breach.

When OSHA encounters these types of provisions, it will ask the parties to remove those provisions and/or prominently place the following statement in the settlement agreement: “Nothing in this Agreement is intended to or shall prevent, impede or interfere with the complainant’s non-waivable right, without prior notice to Respondent, to provide information to the government, participate in investigations, file a complaint, testify in any future proceedings regarding Respondent’s past or future conduct, or engage in any future activities protected under the whistleblower statutes administered by OSHA, or to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a government agency.”

ARTICLE BY Shennan Harris of Squire Patton Boggs (US) LLP

© Copyright 2016 Squire Patton Boggs (US) LLP

Filthy Pharma – Whistleblowers and Current Good Manufacturing Practices

Mahany Law Firm

Last year a federal appeals court in Richmond, Virginia upheld the dismissal of a whistleblower suit alleging violations of current good manufacturing practices, known in the industry as “cGMP.” Filed under the federal False Claims Act, the whistleblower claimed that his former employer, Omnicare, violated a series of cGMP safety regulations requiring that penicillin and non-penicillin drugs be manufactured in complete isolation from one another. The regulations are designed to prevent cross contamination.

Because Omnicare’s drugs were not manufactured in isolation, the whistleblower claimed that they were not eligible for reimbursement under Medicare and Medicaid programs. A judge in Baltimore dismissed the suit saying that this particular alleged cGMP was not one that could be prosecuted privately by a whistleblower.

The case was appealed and ultimately upheld by a three judge appeals panel last year. (United States ex. rel Barry Rostholder vs. Omnicare) Is this the end for “filthy pharma” cases under cGMP and the False Claims Act? No!

The Justice Department and Food and Drug Administration (FDA) support whistleblower filings for cGMP violations. In the aftermath of the Omnicare decision, however, it is prudent to have more than a mere allegation that products were not manufactured in properly segregated facilities.

In April 2013, the Justice Department announced that it would be taking “an especially hard look” at cGMP violations. Jeffrey Steger, deputy director of the Justice Department’s consumer protection unit, said the agency’s priority was to “identify and prosecute the most serious instances of food, drug and medical device violations… and in general [protect] consumers from adulterated or misbranded products…”

Notwithstanding the big loss for whistleblowers in Omnicare, the court did not slam shut the door on all cGMP violations. The court appears to have left the door open for cGMP violations that are significant and substantial and give rise to actual discrepancies in the functioning of the product.

What does this mean in practical terms? Merely claiming that a drug wasn’t manufactured properly may no longer be enough. To qualify for a whistleblower award, one should show both bad practices and that the product is tainted, adulterated, mislabeled, diluted or contaminated.

People with inside knowledge of adulterated drugs and cGMP violations may qualify for cash awards under state and federal False Claims Acts. Last year the federal government alone paid out $635 million to whistleblowers. Under the federal law, companies can be assessed triple damages and fined up to $11,000 per violation. Whistleblowers can receive up to 30% of whatever the government collects. (The average award is closer to 20%.)

ARTICLE BY

Brian Mahany
OF
Mahany Law