Morrison & Foerster LLP writes that the American Recovery and Reinvestment Act of 2009 adopted new whistleblower protections for employees of both state and local governements, as well as private employers, who believe they are privy to information regarding fraudulent, wasteful or gross mismanagement of federal stimulus funds.
These new rules cover "non-Federal employers" who received "covered funds". It is assumed that this includes all employers who receive federal funds or contracts. Whistleblower conduct protected under the new laws includes disclosure by an employee to a supervisor, state or federal regulatory agency, law enforcement, member of Congress, court or grand jury, head of a federal agency or an inspector general.
The employee may disclose evidence or information regarding the mismanagement, wast, abuse or violation related to stimulus funds, and he or she must have reasonable belief this action occurred. These new laws expressly cover internal disclosures that an employee may make during their regular course of job duties.
Termination, demotion and other retaliatory employment actions are prohibited by the Act, and the employer may only avoid liability by providing "clear and convincing" evidence that the same action would have been taken in the absence of disclosures made by the employee.
The inspector general must investigate all claims under the Act's requirements no more than 180 days after receipt of a complaint. Employers are also encouraged to ensure continued compliance with the False Claims Act by consistently following procedures which document legitimate, non-discriminatory and non-retaliatory reasons for all employer actions against an employee.