Whistleblower Protection Law for Employees of Government Contractors and Grantees
The whistleblower protection provision of the NDAA provides robust protections to employees of federal contractors, subcontractors, and grantees who report waste, fraud, or abuse. It also extends these protections to personal services contractors working on defense or civilian contracts or grants. In moving to pass the bill, Rep. Jason Chaffetz, R-Utah, chairman of the House Committee on Oversight and Government Reform, stated:
[W]histleblowers are invaluable to the oversight work of Congress. We rely on people who are on the front lines seeing things as they truly are to provide information and blow the whistle when they see something going awry. They are one of our best sources of information about waste, fraud and abuse within the federal government.
As an institution, we should try to do everything we can to encourage them to come and speak with us, and when they do, to make sure that they have the proper and adequate protections.
The anti-retaliation provisions of the National Defense Authorization Act for Fiscal Year 2013 (NDAA) will be a powerful tool to combat waste, fraud, and abuse in government contracts and grants, which total about half a trillion dollars annually.
For more information about whistleblower protections for employees of government contractors and grantees, including Department of Defense contractors, see our Practical Law Practice Note titled Whistleblower Protections Under the National Defense Authorization Act. This Practice Note surveys the legal protections for employees of federal contractors, subcontractors, and grantees that receive federal funds who report waste, fraud, or abuse involving federal funds, a violation of law, rule, or regulation related to a federal contract, or a substantial and specific danger to public health or safety.
NDAA Whistleblower Protection Law
Two provisions of the NDAA protect whistleblowers: Section 827, codified at 10 U.S.C. § 2409, covers individuals working on contracts with the U.S. Department of Defense or NASA; and Section 828, codified at 41 U.S.C. § 4712, covers individuals working on contracts or grants funded by other federal agencies. Section 827 amended an existing law that protects employees of DOD contractors, but Section 828 was enacted as a new pilot program and would have expired in 2017 absent the enactment of S. 795.
The scope of coverage is broad and includes all individuals performing work on a government contract or grant, including personal services contractors and employees of a contractor, subcontractor, grantee, or subgrantee. The NDAA whistleblower provisions do not apply, however, to work performed for intelligence agencies, including the Federal Bureau of Investigation, the Central Intelligence Agency, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the National Security Agency, the Office of the Director of National Intelligence, and the National Reconnaissance Office. Note that the NDAA does not mention sovereign immunity and does not abrogate Eleventh Amendment immunity. But a state entity such as a university could affirmatively agree to comply with the requirements of the NDAA.
Protected Whistleblowing under the NDAA/Defense Contractor Whistleblower Protection Law
Both NDAA anti-retaliation provisions protect disclosures about:
- Gross mismanagement of a federal contract or grant, which is “a management action or inaction which creates a substantial risk of significant adverse impact upon the agency’s ability to accomplish its mission.” Kavanagh v. Merit Systems Protection Board, 176 F. App’x 133, 135 (Fed. Cir. April 10, 2006) (citing White v. Department of the Air Force, 63 M.S.P.R. 90, 95 (1994));
- A gross waste of federal funds, which is “more than [a] debatable expenditure that is significantly out of proportion to the benefit reasonably expected to accrue to the government.” Chambers v. Department of the Interior, 515 F.3d 1362, 1366 (Fed. Cir. 2008) (quoting Van Ee v. Environmental Protection Agency, 64 M.S.P.R. 693, 698 (1994));
- An abuse of authority relating to a federal contract or grant, which is “an arbitrary or capricious exercise of power … that adversely affects the rights of any person or that results in personal gain or advantage to … preferred other persons.” Doyle v. Department of Veterans Affairs, 273 F. App’x 961, 964 (Fed. Cir. April 11, 2008) (quoting Embree v. Department of the Treasury, 70 M.S.P.R. 79, 85 (1996)); or
- A “substantial and specific danger to public health or safety” (alleging the nature and likelihood of the harm, as well as when the harm may occur), or a “violation of law, rule or regulation” related to a federal contract. See Chambers, 515 F.3d at 1367, 1369.
To be protected, a disclosure must be made to a member of Congress or a congressional committee; an inspector general; the Government Accountability Office; a federal employee responsible for contract or grant oversight or management at the relevant agency; an authorized official of the U.S. Department of Justice or other law enforcement agency; a court or grand jury; or a management official or other employee of the contractor or subcontractor who has the responsibility to investigate, discover or address misconduct.
Broad Scope of Prohibited Retaliation Against Government Contractor Whistleblowers
Similar to the text of Section 806 of the Sarbanes-Oxley Act, the NDAA whistleblower-protection provisions bar a broad range of retaliatory acts, including discharging, demoting or “otherwise discriminat[ing] against a whistleblower.” The latter, catchall category of retaliatory adverse employment actions will likely be construed to encompass the Burlington Northern material-adversity standard — i.e., prohibited retaliation likely includes actions that well might have dissuaded a reasonable worker from engaging in protected conduct. See Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53, 67–68 (2006).
Favorable Causation Standard for NDAA Government Contractor Whistleblowers
The NDAA applies the burden-shifting framework and causation standard set forth in the Whistleblower Protection Act (WPA). Under that standard, a complainant prevails merely by demonstrating that the protected disclosure was a contributing factor in a personnel action, which can be accomplished by using the knowledge-timing test (i.e., by showing that the person taking the personnel action knew of the disclosure and that the personnel action occurred within a period of time such that a reasonable person may conclude that the disclosure was a contributing factor in the personnel action). A whistleblower need not demonstrate the existence of a retaliatory motive to establish that protected conduct was a contributing factor in a personnel action. Marano v. Department of Justice, 2 F.3d 1137, 1141 (Fed. Cir. 1993).
Once a whistleblower has proved contributing-factor causation by a preponderance of the evidence, his or her employer can defeat the NDAA claim only by showing by clear and convincing evidence that it would have taken the same challenged action in the absence of the protected disclosure. Under the WPA, the law upon which the NDAA anti-retaliation provision is modeled, courts consider three factors in determining whether an agency meets this onerous burden:
- “The strength of the agency’s evidence in support of its personnel action”;
- “The existence and strength of any motive to retaliate on the part of the agency officials who were involved in the decision”; and
- “Any evidence that the agency takes similar actions against employees who are not whistleblowers but who are otherwise similarly situated.”
Carr v. Social Security Administration, 185 F.3d 1318, 1323 (Fed. Cir. 1999).
Remedies for Prevailing NDAA Whistleblowers
Remedies include reinstatement, backpay, uncapped compensatory damages (emotional distress damages) and attorney’s fees and costs.
Procedures Governing NDAA Whistleblower Retaliation Claims
An NDAA reprisal claim must be filed initially with the Office of Inspector General of the agency that awarded the contract or grant about which the employee disclosed wrongdoing. The statute of limitations is three years after the date of the reprisal. Unless the OIG determines that the complaint is frivolous, fails to allege a violation of the NDAA, or has previously been addressed in another federal or state judicial or administrative proceeding, the OIG shall investigate the complaint and, upon completion of such investigation, submit a report to the head of the agency.
The agency head can issue an order denying relief or require the contractor to take affirmative action to abate the reprisal and provide make-whole relief to the whistleblower. If the whistleblower has not obtained relief within 210 days of the filing of the complaint, then he or she may bring an action de novo in federal district court and try the case before a jury.
Where an NDAA complaint is removed to federal court, the whistleblower can add a claim under the anti-retaliation provision of the False Claims Act, which affords the whistleblower an opportunity to recover double backpay. The False Claims Act protects “lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under [the FCA],” as well as “other efforts to stop one or more [FCA] violations.” 31 U.S.C. § 3730(h)(1). FCA-protected conduct includes internal reporting of fraudulent activity to a supervisor and steps taken to investigate a potential FCA action.
The following table summarizes key distinctions between Section 3730(h) of the False Claims Act and Sections 827 and 828 of the NDAA:
|False Claims Act Whistleblower Protection||NDAA/Defense Contractor Whistleblower Protection Act|
|Coverage||Employee, contractor, or agent of federal contractor||Employee of a contractor, subcontractor grantee, or subgrantee, or a personal services contractor|
|Scope of Protected Conduct (protected whistleblowing)||Protects lawful acts done by the employee, contractor, agent, or associated others (1) in furtherance of an action under the FCA or (2) other efforts to stop 1 or more violations||Protects disclosures to employer or the government concerning:
-Violation of law, rule, or regulation related to a federal contract
-Gross mismanagement of a federal contract or grant
-Gross waste of federal funds
-Abuse of authority relating to a federal contract or grant
-Substantial and specific danger to public health or safety
|Administrative Exhaustion||No exhaustion requirement; file directly in federal court||Must file initially at OIG and after 210 days, can remove claim to federal court|
|Causation Standard||"But for" causation||Contributing factor causation|
|Damages||Double back pay, reinstatement, uncapped special damages (emotional distress and harm to reputation), attorney’s fees||Back pay, reinstatement, uncapped special damages, attorney’s fees|
|Statute of Limitations||3 years||3 years|
False Claims Act Whistleblower ProtectionFalse Claims Act Whistleblower Protection Law
Testimonial from Federal Contractor Whistleblower
A former client represented by leading whistleblower firm Zuckerman Law in an NDAA whistleblower retaliation claim offered the following review of Jason Zuckerman on Avvo:
“I was in a very difficult work situation dealing with the National Defense Authorization Act (NDAA) and whistleblower claims, and I needed legal representation. I was referred to Mr. Zuckerman by an attorney for a major corporation, who indicated that if they were in a similar situation, they would want Mr. Zuckerman on their side. From the get-go, Mr. Zuckerman listened to the details of my situation and believed in the merits of my case. He quickly dug into the details of my case and asked me thought-provoking questions, providing his legal expertise to help to build and shape my case. In doing so, he led me to see clearly how the employer wronged me. With his probing questions and knowledge of the relevant and applicable laws/statues, we filed a very strong NDAA and whistleblower claim, and combined with his tenacity, I was eventually able to settle with my employer and avoid a lengthy lawsuit.
Mr. Zuckerman was very knowledgeable, professional, and always in my corner. He was always accessible, and always very responsive to my questions and needs. He accompanied me and represented me in official meetings, and he was always available to provide guidance, even emailing and responding to me very late in the evening. Mr. Zuckerman is competent, fair, ethical, and honest, and it was a pleasure working with him. I would not hesitate in recommending him to anyone who has experienced whistleblower retaliation.”
WHEN REVIEWING INFORMATION ABOUT TESTIMONIALS OR STATEMENTS REGARDING A LAWYER’S QUALITY, CONSIDER THAT 1) THE FACTS AND CIRCUMSTANCES OF YOUR CASE MAY DIFFER FROM THE MATTERS IN WHICH RESULTS AND TESTIMONIALS HAVE BEEN PROVIDED; 2) ALL RESULTS OF CASES HANDLED BY JASON ZUCKERMAN ARE NOT PROVIDED AND NOT ALL CLIENTS HAVE GIVEN TESTIMONIALS; AND 3) THE TESTIMONIALS PROVIDED ARE NOT NECESSARILY REPRESENTATIVE OF RESULTS OBTAINED BY JASON ZUCKERMAN OR OF THE EXPERIENCE OF ALL CLIENTS OR OTHERS WITH JASON ZUCKERMAN. EVERY CASE IS DIFFERENT, AND EACH CLIENT’S CASE MUST BE EVALUATED AND HANDLED ON ITS OWN MERITS.
Experienced Government Contractor Whistleblower Protection Attorneys
The experienced whistleblower attorneys at leading whistleblower law firm Zuckerman Law have substantial experience representing whistleblowers disclosing fraud and other wrongdoing at government contractors and grantees. To schedule a free preliminary consultation, click here or call us at 202-262-8959.
Our experience includes:
- Representing whistleblowers in NDAA retaliation claims before the Department of Defense, and Department of Homeland Security, Department of Justice Offices of Inspectors General.
- Litigating False Claims Act retaliation cases.
- Representing qui tam relators.
- Representing whistleblowers disclosing fraud on the government in Congressional investigations.
In addition, we have substantial experience representing whistleblowers under the Whistleblower Protection Act (WPA) and enforcing the WPA, the law that the NDAA whistleblower provisions are based upon.
- Dallas Hammer has extensive experience representing whistleblowers at government contractors in retaliation and rewards claims and has written extensively about cybersecurity whistleblowing. He was selected by his peers to be included in The Best Lawyers in America® in the category of employment law in 2021 and 2022.
- Described by the National Law Journal as a “leading whistleblower attorney,” founding Principal Jason Zuckerman has established precedent under a wide range of whistleblower protection laws and obtained substantial compensation for his clients and recoveries for the government in whistleblower rewards and whistleblower retaliation cases. He served on the Department of Labor’s Whistleblower Protection Advisory Committee, which makes recommendations to the Secretary of Labor to improve OSHA’s administration of federal whistleblower protection laws. Zuckerman also served as Senior Legal Advisor to the Special Counsel at the U.S. Office of Special Counsel, the federal agency charged with protecting whistleblowers in the federal government. At OSC, he oversaw investigations of whistleblower claims and obtained corrective action or relief for whistleblowers.
- Matt Stock is a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. As an auditor, Stock developed an expertise in financial statement analysis and internal controls testing and fraud recognition. He uses his auditing experience to help whistleblowers investigate and disclose complex financial frauds to the government.
- Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” (2020, 2018, 2017, 2015, 2009, and 2007), selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2021) and in SuperLawyers in the category of labor and employment law (2012 and 2015-2021), is rated 10 out of 10 by Avvo, based largely on client reviews, and is rated AV Preeminent® by Martindale-Hubbell based on peer reviews
- We have published extensively on whistleblower rights and protections, and speak nationwide at seminars and continuing legal education conferences. We blog about new developments under whistleblower retaliation and rewards laws at the Whistleblower Protection Law and SEC Awards Blog, and in 2019, the National Law Review awarded Zuckerman its “Go-To Thought Leadership Award” for his analysis of developments in whistleblower law.
- Our attorneys have been quoted by and published articles in leading business, accounting, and legal periodicals, including The Wall Street Journal, Forbes, CNBC, MarketWatch, Vox, Accounting Today, Going Concern, Law360 – Expert Analysis, Investopedia, The National Law Review, inSecurities, Government Accountability Project, S&P Global Market Intelligence, Risk & Compliance Magazine, The D&O Diary, The Compliance and Ethics Blog, Compliance Week and other printed and electronic media.
We have also written extensively about whistleblower protections for employees of government contractors and grantees, including the following articles and blog posts:
- Boosting Contractor Employee Whistleblower Protections, Law 360 (December 2016)
- New Tools to Combat Whistleblower Retaliation, Taxpayers Against Fraud Education Fund Quarterly Review, Vol. 57 (October 2010)
- GAO Report Calls for Improvements in Government Contractor Whistleblower Protections
- False Claims Act Retaliation Decision Underscores Broad Scope of FCA Whistleblower Protection
- NDAA Provides Robust Whistleblower Protection
- FAR Amendment Bars Agencies from Subsidizing Whistleblower Retaliation
- NDAA Contractor Whistleblower Protection Law Highly Effective in Rooting Out Fraud
- Congress Enacts Anti-Gag Provision in Cromnibus Spending Bill
- Whistleblower Lawyer Jason Zuckerman Will Speak About False Claims Act Litigation at Taxpayers Against Fraud Conference
- Whistleblower Protections Under the Whistleblower Protection Act, Practical Law (October 2016)
- Whistleblower Lawyer Jason Zuckerman Quoted in National Law Journal
- Whistleblower Lawyer Jason Zuckerman Quoted About Federal Employee Whistleblower Rights
- Washington Post Quotes Whistleblower Attorney Jason Zuckerman About Chilling Effect of Insider Threat Program
- How to foster a more ethical culture
- Whistleblower Lawyer Jason Zuckerman Quoted About MacLean Whistleblower Protection Act Case
- Trump Questionnaire Raises Concerns About Retaliation Against Energy Department Staff
- CFPB official wants to silence a whistleblower before he can talk to Congress
Exclusion for Claims Against the Government
As discussed in a December 2021 Department of Interior OIG Report of Investigation, the NDAA whistleblower protection provision does not appear to authorize a claim against the federal government:
“The text of § 4712 supports the conclusion that the Complainant cannot state a claim for whistleblower reprisal based on allegedly improper actions taken by the Government. First, the statute’s “Exhaustion of Remedies” clause gives the whistleblower the right to file an action against his or her employer—but not the Government—in Federal district court after exhausting all administrative remedies.5 Moreover, although § 4712 recognizes that prohibited acts of reprisal may involve “the request of an executive branch official,” 6 the statute contemplates that the alleged improper actions must be taken by the Federal contractor, grantee, or cooperative agreement partner, not the Government. The statute’s “Rules of Construction” also provide that, for purposes of stating a claim of reprisal under § 4712, “an employee who initiates or provides evidence of contractor, subcontractor, or grantee misconduct in any judicial or administrative proceeding relating to waste, fraud, or abuse on a Federal contract or grant shall be deemed to have made a disclosure” covered by 41 U.S.C. § 4712.7 Thus, the statute protects employees who “blow the whistle” on their employers in order to protect the Government from waste, fraud, or abuse. The statute does not create a private cause of action for non-Federal employees against the Government for alleged Government misconduct, which is what the Complainant is alleging here.”
Federal Contractor Whistleblower Protection Lawyers