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Punitive damage awards to whistle-blowers “may not be appropriate” if an employer can show that retaliating managers were acting on their own in violation of the employer’s “clear and effectively enforced policy” against retaliation, according to an updated edition of the Occupational Safety and Health Administration’s (OSHA’s) Whistleblower Investigations Manual.
Released by the agency May 21, 2015, the guide contains substantive revisions on compensatory damages and settlement agreements.
OSHA has responsibility for investigating and enforcing 22 whistle-blower retaliation statutes.
The manual has not been updated since 2011 and contains several notable changes to Chapter 6 regarding remedies and settlement agreements, including:
*Determining when punitive damages are appropriate. Punitive damages are awarded over and above compensatory damages for violations in which employers are aware that they are violating the law or where the violations involved egregious misconduct. To decide whether punitive damages are appropriate, the manual instructs OSHA investigators to ascertain the employer’s awareness that the act was illegal—proved by witness statements, prior complaints of retaliation, or the employer’s anti-retaliation training—or evidence that indicates that the employer’s conduct was particularly egregious.
Examples of egregious conduct include discharging a whistle-blower accompanied by harassment or subsequent blacklisting; discharging multiple whistle-blowers; committing violence against a whistle-blower; a pattern or practice of retaliation; or maintaining a policy contrary to OSHA’s whistle-blower regulations.
*Good-faith defense. OSHA clarified that employers may be able to successfully defend against punitive damages if it can be demonstrated that managers who retaliated were acting on their own and the employer had a clearly enforced policy against retaliation.
*Front pay in lieu of reinstatement. Providing the whistle-blower with his or her former job is the presumptive remedy in merit whistle-blower cases involving a discharge or demotion. Where reinstatement is not feasible, front pay in lieu of reinstatement may be awarded up to a reasonable amount of time for the whistle-blower to obtain another job. The manual provides additional situations where front pay in lieu of reinstatement may be appropriate in addition to being “not feasible,” including where reinstatement would result in “debilitating anxiety” to the complainant or if “extreme hostility” exists between the employer and the whistle-blower.
*Calculating back pay. The revised guide clarifies that if the whistle-blower is paid a salary rather than an hourly wage, the salary may be broken down into a daily rate and then multiplied by the number of days that a complainant typically would have worked. Further, investigators must take into account lost bonuses, benefits, raises and promotions when calculating back pay. Unemployment benefits are not deducted from gross back pay, but workers’ compensation benefits may be deducted.
*Emotional distress damages. Two pages of guidance on awards for emotional distress and pain and suffering have been added to the manual. Damages for emotional distress and mental anguish may be awarded under all OSHA-administered whistle-blower statutes, but the awarding of damages is not presumed. Whistle-blowers must demonstrate both objective manifestations of distress, such as depression, anxiety or post-traumatic stress disorder, and a causal connection between the retaliation and the distress. A statement from the whistle-blower “may be sufficient” to prove distress if the complainant’s statement “is credible,” according to OSHA. Evidence from health care providers is not required to recover emotional distress damages. However, evidence is required if the whistle-blower seeks to prove a specific and diagnosable medical condition.
*Training as a remedy. For the first time, employers could be required to provide whistle-blower training to current employees and/or managers as part of settling a whistle-blower claim. The manual points out that training may be appropriate where the employer’s misconduct was especially egregious, the adverse action was based on a discriminatory personnel policy, or the facts reflect a pattern or practice of retaliation.
*Settlements. The revised manual allows for settlements without acknowledging whistle-blower violations, a change from previous practice.
Roy Maurer is an online editor/manager for SHRM.
Follow him @SHRMRoy
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