Potential Damages in Whistleblower Cases

Date: Mar 01, 2016

Last week, the Occupational Safety and Health Administration (OSHA) ordered an Alaskan aviation company to pay an employee over $400,000 in back pay and an additional $100,000 in damages for pain, suffering, and mental distress. OSHA also ordered the company to reinstate the employee. In that case, the employee repeatedly raised concerns at work relating to safety, including allegations of inadequate drug testing and poor recordkeeping.  Because OSHA’s order is only based upon its own findings of fact, the parties have thirty days from receipt of the agency’s findings to file objections and request a hearing before an administrative law judge.

OSHA's order to the Alaskan company is just one of three enforcement cases involving whistleblower allegations that resulted in high damages, including compensatory and punitive damages, this year. In January, OSHA ordered a New York trucking company to pay its former employee $32,642.20 in lost wages, $10,000 in punitive damages, and $3,060.02 in attorneys’ fees for violating whistleblower protections under the Surface Transportation Assistance Act. OSHA also brought suit in a federal district court in New York against a demolition company earlier this month seeking lost wages, compensatory damages (i.e., emotional and financial distress damages) and punitive damages for the company's termination of an employee who had reported safety concerns related to deteriorated flooring in the work area. 

These three cases illustrate a potential trend in whistleblower damages, in which whistleblower complainants are awarded larger damages amounts as well as compensatory and punitive damages. Here, compensatory damages refer to pain, suffering, and emotional distress.  The potential trend to add compensatory and punitive damages in addition to backpay is reflected in OSHA’s Whistleblower Investigations Manual.

The Manual, which was updated in January 2016, recommends that compensatory damages be assessed whenever a complainant has “objective manifestations of distress,” which can be determined from the complainant’s own statements or statements of family members, friends, or coworkers. The Manual also advises OSHA investigators to consider punitive damages whenever an employer acted with knowledge that the action was illegal, or was particularly egregious.

The number of whistleblower complaints filed with OSHA continues to rise each year.  In 2015, whistleblower complaints increased by another six percent.  As a consequence, OSHA has requested a 23% increase in funding for handling whistleblower cases. 

Before taking any adverse action against an employee who has whistleblower protection, an employer should review the basis for the adverse action to make sure that they are well documented and consistent with similar cases.

For more information on OSHA’s regulations and enforcement initiatives, or for assistance with OSHA compliance, investigations, or litigation proceedings, contact any member of Keller and Heckman’s Workplace Safety and Health Team.