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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 1: The National Football League is being investigated by California and

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Speaker 1: New York over allegations that it fostered discrimination and harassment

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Speaker 1: in the workplace. The attorneys general of New York and

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Speaker 1: California announced the joint probe of the NFL's workplace practices

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Speaker 1: and culture, and have issued subpoenas to the league to

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Speaker 1: gather information and determine whether it flooded federal and state

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Speaker 1: pay equity laws and anti discrimination laws. Here's California ag

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Speaker 1: Rob Bonta.

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Speaker 2: Employees past and present continue to make allegations of discrimination,

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Speaker 2: and from where we stand, they have not been addressed,

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Speaker 2: and so we're going to dig in and see. We're

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Speaker 2: going to heavily scrutinize the NFL's practices, procedures and work environment.

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Speaker 2: We're going to look closely in turn all the stones

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Speaker 2: and see what's there.

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Speaker 1: An NFL spokesperson said the organization takes the issue seriously

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Speaker 1: and will fully cooperate with the attorneys general, but that

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Speaker 1: the allegations are quote entirely inconsistent with the NFL's value

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Speaker 1: and practices. My guest is Martini Dell, co chair of

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Speaker 1: the sports law practice at Gulston Stores. The NFL obviously

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Speaker 1: has faced investigations before, but this investigation appears to be

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Speaker 1: the first involving workplace violations in the league's corporate office.

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Speaker 1: Explain why the Attorneys General decided to take this.

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Speaker 3: Step As best as I divine type put myself in

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Speaker 3: the heads of both Letitia James and her California counterpart.

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Speaker 3: We have a group of employees more than thirty who

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Speaker 3: complained last year about a hostile work environment in the NFL.

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Speaker 3: You have the NFL also employing over thirty seven percent

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Speaker 3: of its employees are women, thirty percent of people of color.

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Speaker 3: With those kind of numbers, it's incumbent. It seems to

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Speaker 3: be on the Attorney's General of states in which the

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Speaker 3: NFL has offices men in California and New York, it

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Speaker 3: takes very seriously complaints about a hostile work environment, harassment.

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Speaker 3: You know, male cultures of dominance frankly or not to

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Speaker 3: exist anymore, but unfortunately still do.

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Speaker 1: So.

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Speaker 3: I think they're looking into what's going on there based

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Speaker 3: on the number of allegations, and it's because it's more

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Speaker 3: than one. We've as anti thirty women last year filed

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Speaker 3: allegations of a hostile work environment in discrimination against the NFL.

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Speaker 3: This year you have a couple of other people filing

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Speaker 3: women in particular, but also people of color filing complaints

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Speaker 3: about hostile work environments and discrimination against the NFL. And

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Speaker 3: I think the attorneys general of New York in California

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Speaker 3: are taking very seriously their obligations to investigate.

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Speaker 1: Well, the attorneys general be able to get further than

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Speaker 1: the women can in their lawsuits with discovery.

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Speaker 3: Well, what we do know? I think the answer is

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Speaker 3: they can get to the rout if there is a problem,

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Speaker 3: They can get to the root of it more quickly

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Speaker 3: than in a civil lawsuit, because this would be either

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Speaker 3: a civil or a criminal investigation, and the states have

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Speaker 3: enormous powers in terms of subpoenas and investigative powers that

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Speaker 3: would simply drag on for a much longer time than

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Speaker 3: any civil lawsuits.

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Speaker 1: There have been lawsuits filed by former employees. Congressional hearings

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Speaker 1: last year into the workplace practices of the Washington commanders,

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Speaker 1: and that twenty twenty two New York Times article reporting

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Speaker 1: on allegations of gender discrimination by more than thirty former

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Speaker 1: female NFL employees. So this is nothing new. The NFL

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Speaker 1: has been on notice about this for a long time.

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Speaker 3: Unfortunately, this is the most recent spat of complaints are

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Speaker 3: coming on the heels of other complaints about a hostile

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Speaker 3: work environment and discrimination. You know, we've seen them in

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Speaker 3: the media with Ray Rice and his then partner, subsequently

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Speaker 3: his wife, who he beat up in an elevator in

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Speaker 3: New Jersey. And you may recall that the commissioner initially

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Speaker 3: handed him a slap on the wrist, and then the

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Speaker 3: outcry was sufficient at large, the commissioner looked back into

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Speaker 3: it again and handed out a much more severe punishment.

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Speaker 3: But that wasn't the only incident. We have Flores who

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Speaker 3: filed his lawsuit. He was a coach with Miami who

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Speaker 3: didn't get headcast coaching positions although he was eminently qualified,

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Speaker 3: and he filed a discrimination lawsuit in February of twenty

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Speaker 3: twenty two, and that's winding its way through the Southern

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Speaker 3: District Court and they're in discovery at this point in

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Speaker 3: that lawsuit. And more recently, as you point out, we

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Speaker 3: have Dan Snyder and the commanders where it was reputed

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Speaker 3: he fostered a hostile work environment did things and people

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Speaker 3: shouldn't be doing at ever, but certainly not in a

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Speaker 3: heightened sensitivity environment that we currently exist. And there were

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Speaker 3: reports about as that went to Congress. Ultimately, the NFL.

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Speaker 3: I think it's fair to say forced Snyder out of

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Speaker 3: his ownership position, although he wasn't hurting for it because

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Speaker 3: he sold the ownership position for an enormous sum. But yes,

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Speaker 3: there are more and more incidents. It's coming out in

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Speaker 3: sports and particularly in the NFL, although the other leads

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Speaker 3: are not immune from claims of hostile work environment and discrimination.

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Speaker 1: I mean, how do you prove a hostile work environment?

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Speaker 3: Well, it has to be more than he said she said.

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Speaker 3: So you need to have a series of comments or

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Speaker 3: actions that would make an employee feel threatened in his

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Speaker 3: or her current environment. And you have to have In

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Speaker 3: this case, it would be the NFL not taking sufficient

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Speaker 3: least serious the allegations, or even if they did take

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Speaker 3: the allegations sufficiently seriously, not then implementing a corrective plan

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Speaker 3: for it, all of which are very difficult to do

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Speaker 3: but nonetheless are required by the law.

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Speaker 1: Roger Goodell, NFL Commissioner, said that workplace misconduct is thoroughly

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Speaker 1: investigated the NFL, and retaliation against complainants is prohibited. The

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Speaker 1: league has put more effort into diversifying its hiring and

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Speaker 1: as mandatory anti racism training and an anonymous hotline call

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Speaker 1: Protect the Shield for employees' concerns. Is there a way

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Speaker 1: to completely rid the NFL of any of these claims.

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Speaker 3: Well, the answer is you can never eliminate entirely a

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Speaker 3: hostile work environment, because there are always bad actors out there,

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Speaker 3: people who may feel entitled and just disregard what's there.

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Speaker 3: But the NFL is starting down the right path. This

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Speaker 3: may be late in the game, although better than not

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Speaker 3: having done anything, but taking allegation seriously investigating them thoroughly.

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Speaker 3: Because they have a media presence, they're wrong to start

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Speaker 3: with if they're accurate, and also they have a negative

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Speaker 3: media impact. And no matter what anybody says, the NFL

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Speaker 3: is not simply a mail domain. There are lots of

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Speaker 3: women who watch NFL games, and you don't want to

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Speaker 3: alienate your audiences, and the more complaints that come down

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Speaker 3: the grade the risk of alienating your audiences, alienating your sponsors,

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Speaker 3: and alienating your media hosts, which would be down to

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Speaker 3: negative impacts on profitability.

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Speaker 1: What other sports have similar complaints lodged against them?

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Speaker 3: Well, I don't think any other sports which I'm aware

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Speaker 3: currently has quite the same problem that the NFL has

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Speaker 3: because you don't have quite the same number of people complaining.

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Speaker 3: Are there people complaining? Sure? We had the incident with

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Speaker 3: the Phoenix Suns in the fall this year with Robert Sarver,

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Speaker 3: who a number of employees complaint had created a hostile

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Speaker 3: working environment discriminated against women, And unlike the NFL, the

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Speaker 3: NBA investigated the claims. It is very public in its report,

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Speaker 3: in making its report public, and in taking action to

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Speaker 3: try to strip Starver of his ownership interests, and ultimately

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Speaker 3: the Phoenix Suns were sold. That didn't take a year

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Speaker 3: or two years. It took a couple of months, Which

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Speaker 3: is why I think the NFL seems to be new

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Speaker 3: to what it's doing here and is perhaps a lot

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Speaker 3: slower than an MTGUE life the NBA.

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Speaker 1: Let's take an abrupt turn to wrestling. The question is

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Speaker 1: pro wrestling a sport or entertainment? And why does that matter?

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Speaker 1: Because it complicates whether betting should be permitted. WWE is

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Speaker 1: pushing states to legalize gambling on its matches, But should

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Speaker 1: regulators allow people to bet their real money on choreographed

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Speaker 1: events where the winners and losers are predetermined. I know

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Speaker 1: nothing about wrestling, Marty, so educate me.

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Speaker 3: So WWE Worldwide Wrestling has taken the position in the

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Speaker 3: past that it is a form of entertainment, not athletic sport,

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Speaker 3: which is based on performance. That would sort of lead

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Speaker 3: you to the conclusion, I don't want to use the

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Speaker 3: term fake, but the outcomes may be predetermined. If that's

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Speaker 3: the case, then WWE would not generally fit within the

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Speaker 3: framework of most states betting laws. States that permit betting

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Speaker 3: generally have it based on one a sport and two

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Speaker 3: where the outcome is not predetermined but is based on performance.

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Speaker 3: WWE does not seem to qualify under either count, and

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Speaker 3: I think that's why we see a lot of pushback there.

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Speaker 1: Well. Courts in Connecticut, Nebraska, New York, Ohio, Pennsylvania, and

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Speaker 1: Tennessee have issued conflicting decisions on whether pro wrestling is

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Speaker 1: a sport, entertainment activity or a hybrid.

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Speaker 3: There's one other thing there, which is WWE is pointing out, Well,

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Speaker 3: you know, betting is now allowed on the outcome of

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Speaker 3: the Oscars, and that is not a sport. It's predetermined

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Speaker 3: because because the actors who are on stage read the winner,

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Speaker 3: which has been determined previously. But it's different, it seems

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Speaker 3: to me, at least than WWE, because it has been

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Speaker 3: based on performance. Namely, people are voting who they think

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Speaker 3: is best actor or best actors built that's film writer, movie, etc.

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Speaker 3: And that is a performance base and there are very

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Speaker 3: few people who know the outcome. You know, it's those

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Speaker 3: accountants who come up on stage afterwards. But WWE, the

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Speaker 3: whole thing is we're a form of entertainment. We appeal

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Speaker 3: to people because they can see body slams, hair pulling

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Speaker 3: and the like, all of which is an art form

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Speaker 3: not based on any real performance. So I think WWE

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Speaker 3: will have a tough time convincing state regulatory authorities that

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Speaker 3: they should qualify for legal sports betting.

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Speaker 1: I won't be waiting anxiously for the result on this.

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Speaker 1: Thanks so much, Marty. That's Martiny Dell, co chair of

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Speaker 1: the sports law practice at Gulston Stores. Whistleblowers across various

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Speaker 1: industries potentially face a heightened standard for proving retaliation now

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Speaker 1: that the Supreme Court is taking on the case of

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Speaker 1: a former UBS bond strategist. The Second Circuit overturned a

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Speaker 1: one point seven million dollar jury verdict against UBS after

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Speaker 1: finding that the Sarbanes Oxley Act required former employee Trevor

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Speaker 1: Murray to show the bank fired him with retaliatory intent.

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Speaker 1: Joining me is an expert in business law, Eric Tally,

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Speaker 1: a professor at Columbia Law School. Eric tell us about

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Speaker 1: the case itself.

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Speaker 4: Yeah, this is a case that goes back to the

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Speaker 4: financial crisis, and this was an employee of UBS who

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Speaker 4: basically reported out irregularities having to do with the way

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Speaker 4: the very types of collateralized claims and mortgage backed securities

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Speaker 4: were working inside the bank. And after sort of making

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Speaker 4: these reports, a couple months after, this gentleman was terminated

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Speaker 4: and he filed suit claiming that he was terminated in

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Speaker 4: retaliation for exposing what he believed to be fraudulent practices.

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Speaker 1: He won one point seven million dollars in a jury verdict.

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Speaker 1: And then what happened at the Second Circuit.

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Speaker 4: Well, it was a federal claim, and so the case

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Speaker 4: comes up through the Southern District of New York and

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Speaker 4: then it goes to the Second Circuit on appeal from

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Speaker 4: ubs that had claimed that they really should have, you know,

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Speaker 4: won in a directed verdict right away that was denied

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Speaker 4: by the trial court. So they brought it up to

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Speaker 4: the Second Circuit, and the second Circuit ended up hearing

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Speaker 4: the case and then issuing opinion late last year that

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Speaker 4: I think surprised many people, saying that the trial court

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Speaker 4: made a problematic error by misinstructing the jury on how

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Speaker 4: they should think about these types of retaliation claims, and

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Speaker 4: in particular thinking about, you know, how do you prove

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Speaker 4: that you were terminated in retaliation for whistleblowing or a

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Speaker 4: protected report under the whistle blowing statute. The trial court

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Speaker 4: had basically said to the jury that you could find

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Speaker 4: that the employee was wrongfully terminated in violation of the

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Speaker 4: whistleblower retaliation rule if the act of blowing the whistle

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Speaker 4: of the protected report was a contributing factor to why

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Speaker 4: person ended up being terminated. And the Second Circuit said

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Speaker 4: that's not enough, that in fact, there has to be

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Speaker 4: specific intent to terminate. It can't just be one of

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Speaker 4: the many contributing factors. The whistle blowing activity has to

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Speaker 4: be the predominant factor. It has to be the main

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Speaker 4: reason why the employer gave you the pink slip to

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Speaker 4: the employee, not just one of the litany of reasons,

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Speaker 4: each of which is carrying a little bit of a load.

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Speaker 4: And so the Second Circuit basically had held that the

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Speaker 4: trial court had made it too easy to win this

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Speaker 4: case by basically, you know, telling the jury that, you know,

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Speaker 4: the whistle blowing activity really just needs to be one

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Speaker 4: of several contributing factors that led up to the termination, and.

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Speaker 1: The Second Circuit is an outlier from other circuits who've

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Speaker 1: addressed this issue.

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Speaker 4: Yeah, that's one of the interesting things about this is

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Speaker 4: that the Second Circuit really did kind of expose itself

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Speaker 4: as being, you know, very much on the outs compared

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Speaker 4: to other circuits. That's one of the main reasons why

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Speaker 4: the Supreme Court will take up a case like this.

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Speaker 4: But as far as I can tell, at least four

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Speaker 4: other major circuits, the Tenth Circuit, the Ninth Circuit, the

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Speaker 4: Fifth Circuit, in the Fourth Circuit have all held that

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Speaker 4: the trial court actually did it right, that the way

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Speaker 4: that the trial court's supposed to instruct the jury is

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Speaker 4: just to ask whether a substantial factor of the termination

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Speaker 4: was the whistle blowing activity, And so when the Second

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Speaker 4: Circuit decided it was going to sort of up the

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Speaker 4: ante to win one of these cases, it also put

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Speaker 4: itself out of step with several other circuits that it

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Speaker 4: had the opportunity to opine on the same issue as

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Speaker 4: it pertains to the SEC whistle blower rule.

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Speaker 1: Do you think the second circuit did that because from

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Speaker 1: what I understand, the Sarabanes Oxley Act punishes employers who

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Speaker 1: retaliate because of and employees protected activity. So they were

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Speaker 1: looking at the statute.

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Speaker 4: That's usually the first line of analysis when you're trying

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Speaker 4: to analyze the statute is to ask, well, is there

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Speaker 4: a plane meeting associated with the words of the statute?

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Speaker 4: And you're exactly right, that's what they did. They said,

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Speaker 4: the relevant section here said that the employer can't discharge, demote, suspend,

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Speaker 4: threatening the harassed, or in any other manner discriminate against

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Speaker 4: an employee because of whistle blowing activity, which the second

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Speaker 4: Circuit read to mean that there's got to be a

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Speaker 4: specific intent to do it predominantly on this basis, as

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Speaker 4: opposed to that being just a contributing factor. You know,

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Speaker 4: I think that that reasonable minds can differ as to

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Speaker 4: what the term because of means, and the Second Circuit

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Speaker 4: tried to put a little bit of has to behind

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Speaker 4: that conclusion, throwing out some dictionary definitions, and then you know,

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Speaker 4: laying some analogies to other areas of whistleblower law, where

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Speaker 4: the Second Circuit has similarly defined the requisite showing for

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Speaker 4: the employee to be one related to specific intent. But

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Speaker 4: you know, other court have interpreted some of the same

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Speaker 4: other whistleblower provisions to be different. So it really does

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Speaker 4: give rise to this disagreement amongst the various circuit court

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Speaker 4: systems as it pertains to national law, and as a result,

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Speaker 4: it really is kind of a prime thing for the

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Speaker 4: Supreme Court to take up. It's probably even more momentous

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Speaker 4: that this came out of the Second Circuit, where we

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Speaker 4: have a lot of whistle blower cases dealing with the

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Speaker 4: securities industry, and therefore this particular circuit to be out

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Speaker 4: of step with the others is probably something that would

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Speaker 4: be much more difficult to sustain over time.

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Speaker 1: So do you think that the Supreme Court took the

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Speaker 1: case because it wants to overturn the Second Circuit and

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Speaker 1: put it in line with the other circuits.

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Speaker 4: Well, it's possible. The fact of the matter is, no

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Speaker 4: matter what the Supreme Court ends up doing here, it's

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Speaker 4: going to change law in some circuit, and various other

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Speaker 4: circuits have actually just gone the other way here, So

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Speaker 4: you know, there probably is a little bit of benefit

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Speaker 4: to harmonizing across these different circuits. But even by the

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Speaker 4: same token, there are probably two dozen different federal whistle

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Speaker 4: blowing statutes out there, and there's going to be another

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Speaker 4: question about whether for this particular application, the court ends

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Speaker 4: up embracing something that is consistent, inconsistent, or unclear as

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Speaker 4: it compares to some of these other whistleblower statutes. Some

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Speaker 4: of the amiekas briefs that have been submitted to the court,

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Speaker 4: you know, are you're trying to persuade the court that

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Speaker 4: the contributing factor approach is more consistent with a lot

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Speaker 4: of other whistleblower statutes out there, and we will see

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Speaker 4: whether the Court agrees with that.

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Speaker 1: How is the court treated whistleblowers before, I mean, I

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Speaker 1: know this court is usually attuned to business interests.

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Speaker 4: Well, the whistleblower retaliation part of the security laws has

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Speaker 4: been probably less studied and analyzed by our federal courts.

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Speaker 4: Than another interrelated part that came a little bit later,

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Speaker 4: which is after the financial crisis, another amendment to our

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Speaker 4: securities laws came into place that would give whistleblowers the

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Speaker 4: ability to claim a bounty if they blew the whistle

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Speaker 4: on their employer and the sec ended up extracting a

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Speaker 4: settlement from the employer, the whistleblowing employee could in principle

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Speaker 4: be eligible to get between ten and thirty percent of

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Speaker 4: the amount of the fines or disordment, And so there's

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Speaker 4: sort of two things going on at the same time.

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Speaker 4: The retaliation protection is really about trying to make sure

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Speaker 4: that the employee is not terminated quote unquote because of

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Speaker 4: the whistleblowing activity. But whistleblowers also in the securities context

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Speaker 4: often have another fish to fry as well, which is

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Speaker 4: their potential eligibility to get a bounty under this kind

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Speaker 4: of sister section of the statute. And there the courts

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Speaker 4: actually have been pretty active. Just last year there was

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Speaker 4: a holding in this area. It seems to be pretty

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Speaker 4: clear that now if you were going to be a

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Speaker 4: whistleblower and try to claim the bounty, and you're going

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Speaker 4: to have to make sure that you make that report

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Speaker 4: directly to the SEC. You can't make it to someone

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Speaker 4: else internally, and that's kind of has caused a lot

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Speaker 4: more sort of formalistic type reporting. Another recent case also said, hey, listen,

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Speaker 4: if you make this report to the SEC, but then

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Speaker 4: some other agency and government pursues the claim and they

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Speaker 4: win an award, you're not eligible for the bounty. And

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Speaker 4: so there's been an awful lot of acts activity going

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Speaker 4: on about when and under what circumstances someone can take

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Speaker 4: a piece of the action from what happens through a

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Speaker 4: whistle blowing report, and so in some ways, you know

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Speaker 4: what happens here I think probably needs to be sort

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Speaker 4: of evaluated side by side with what's happening in whistleblowing.

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Speaker 4: I will note that just within you know, the last

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Speaker 4: couple of weeks, a record a whistleblower award or bounty

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Speaker 4: award of almost three hundred million dollars was doled out

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Speaker 4: to a whistleblowing employee. So this can be relatively lucrative,

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Speaker 4: you know, to claim the bounty, regardless of whether you

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Speaker 4: are also trying to claim a retaliation award.

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Speaker 1: That award of two hundred and seventy nine million dollars

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Speaker 1: for the SEC whistle blower was stunning. The chief of

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Speaker 1: the SEC's Office of the Whistleblower said the whistleblowers sustained assistance,

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Speaker 1: including multiple interviews and written submissions, was critical to the

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Speaker 1: success of these actions. So a few interviews and submissions,

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Speaker 1: I mean, doesn't that seem out of whack two hundred

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Speaker 1: and seventy nine million dollars.

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Speaker 4: It is a fairly significant chunk, And so one has

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Speaker 4: to wonder, you know, how these twin whistleblower rules operate

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Speaker 4: side by side together. One would guess that you know

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Speaker 4: to the extent that the courts are making it harder

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Speaker 4: to win on retaliation claims, then you know, employee might

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Speaker 4: be writing with more of their chips on the whistleblower claim.

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Speaker 4: The vast majority of whistleblower claims are not in that

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Speaker 4: order of magnitude, but it is not unusual to see

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Speaker 4: whistleblower awards that are in the low hundreds of millions

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Speaker 4: of dollars. If this happens to have set the newest record, though,

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Speaker 4: I will note that you know, in an inflationary period,

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Speaker 4: is exactly what you expect.

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Speaker 1: Right, So that's a lot of inflation.

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Speaker 4: To me, it sounds like a lot of inflation to

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Speaker 4: me as well. And this area, at least with in

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Speaker 4: security law, has really only been around for about twelve years,

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Speaker 4: so we're still kind of learning how these various pieces

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Speaker 4: of the puzzle operate in conjunction with one another. You know,

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Speaker 4: the other part of this is trying to just get

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Speaker 4: a sense of where whistleblowers kind of live in the

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Speaker 4: overall pantheon of the characters that play roles in the

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Speaker 4: regulatory state. One of the reasons why the Second Circuits

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Speaker 4: opinion in this particular UBS case maybe pretty momentous is

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Speaker 4: that there's a lore about whistle blowers that they're the

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Speaker 4: sort of the the mother Teresa Boy scout type employees

371
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Speaker 4: who happen one day at work to see something that

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Speaker 4: they think is suspect or wrong or violating of a

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Speaker 4: statute or even criminal, and they reported out. And I

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Speaker 4: have no doubt that many whistleblowers have that sort of

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Speaker 4: I don't know, character sketch about them. But you know,

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Speaker 4: it's also the case that sometimes whistleblowers will emerge from

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Speaker 4: larger settings that are more complex, which there's already been conflict,

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Speaker 4: and maybe this person also feels like, you know, they

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Speaker 4: are underrecognized, or other people are over recognized, or some

380
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Speaker 4: other strategic decision didn't go in their direction. But they

381
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Speaker 4: also know some of this information. And you know, I

382
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Speaker 4: have no idea what the empirical composition of whistleblowers are,

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Speaker 4: but to the extent that it's made up of folks

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Speaker 4: that you know already have some backstory and there's some

385
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Speaker 4: friction inside the organization, one would guess that it's going

386
00:24:12,920 --> 00:24:15,760
Speaker 4: to be harder than to claim that, oh, I was

387
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Speaker 4: terminated for the predominant reason of my whistle blowing activity

388
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Speaker 4: as opposed to some of these other conflicts that I

389
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Speaker 4: may have been involved with in the organization itself.

390
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Speaker 3: So this could.

391
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Speaker 4: Really end up moving the needle, at least on the

392
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Speaker 4: retaliation claims. It doesn't seem to bear on the whistleblower

393
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Speaker 4: bounty claims in the securities industry, however, those seem to

394
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Speaker 4: operate effectively under different standards.

395
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Speaker 1: The whistleblower bounty claims, Is there any transparency there, because

396
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Speaker 1: I haven't seen anything about you know, what this case

397
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Speaker 1: was about that had the largest whistleblower settlement.

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Speaker 4: There is an entire office at the SEC that ends

399
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Speaker 4: up sort of processing these claims. The content of the

400
00:25:00,280 --> 00:25:03,720
Speaker 4: employee has provided them, as opposed to things that they

401
00:25:03,800 --> 00:25:08,360
Speaker 4: developed on their own, is sometimes obscured in the final

402
00:25:08,440 --> 00:25:11,120
Speaker 4: sort of statement of settlements that you see that are

403
00:25:11,119 --> 00:25:15,119
Speaker 4: publicly available. It generally appears to be the case, though

404
00:25:15,200 --> 00:25:17,400
Speaker 4: the SEC is willing to be more generous the more

405
00:25:17,440 --> 00:25:20,320
Speaker 4: that they're having to depend on the underlying information of

406
00:25:20,359 --> 00:25:23,920
Speaker 4: the employee. To the extent that there are many sources

407
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Speaker 4: of information or maybe many employees that are simultaneously trying

408
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Speaker 4: to make those reports, it's harder to score one of

409
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Speaker 4: these larger bounties, but you can, you know, if you

410
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Speaker 4: were to sort of pick through the statement of these

411
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Speaker 4: settlements when they are issued by the SEC, sometimes with

412
00:25:38,280 --> 00:25:40,199
Speaker 4: a little bit of a delay, you can kind of

413
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Speaker 4: get a sense of what role the whistleblower played in

414
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Speaker 4: the process as well.

415
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Speaker 1: Going back to the retaliation claims, some lawyers have said

416
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Speaker 1: that requiring proof of retaliatory intent would make it virtually

417
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Speaker 1: impossible for whistleblowers to pursue sarbainez Oxley retaliation claims. Do

418
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Speaker 1: you agree with that?

419
00:26:00,080 --> 00:26:02,800
Speaker 4: Parts of that that I'm not so sure about, But

420
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Speaker 4: there is part of that claim that that definitely has

421
00:26:05,280 --> 00:26:08,000
Speaker 4: a kernel truth first thing to note is that when

422
00:26:08,040 --> 00:26:12,080
Speaker 4: you are making a retaliation claim under the Starbons Oxleygue

423
00:26:12,160 --> 00:26:16,280
Speaker 4: whistleblower provisions, you are actually subjected to one of the

424
00:26:16,280 --> 00:26:19,960
Speaker 4: more permissive burdens of proof, so called preponderance of the

425
00:26:20,000 --> 00:26:23,760
Speaker 4: evidence burden of proof, which is the mildest of all

426
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Speaker 4: of them that we have. In contrast, when the employer

427
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Speaker 4: is trying to disprove the claim, they actually have an

428
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Speaker 4: asymmetric burden. They have a clear and convincing evidence burden,

429
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Speaker 4: and that's not in question in any of these cases

430
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Speaker 4: that that relatively accommodating preponderant test is still going to

431
00:26:41,200 --> 00:26:44,600
Speaker 4: be applicable to all whistleblower claims. So I think we

432
00:26:44,720 --> 00:26:47,119
Speaker 4: just have to put this in proper context. On the

433
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Speaker 4: other hand, you know, the world is complex, and when

434
00:26:51,000 --> 00:26:54,280
Speaker 4: people make decisions and when organizations make decisions, it can

435
00:26:54,320 --> 00:26:56,720
Speaker 4: often come from a bunch of different sources.

436
00:26:56,800 --> 00:26:56,960
Speaker 3: Right.

437
00:26:57,040 --> 00:26:59,199
Speaker 4: There can be many things that end up sort of

438
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Speaker 4: you know, many straws that break the camels back, and

439
00:27:02,760 --> 00:27:05,639
Speaker 4: not one of them is the biggest straw in the pile,

440
00:27:05,760 --> 00:27:08,399
Speaker 4: and that can be a big problem for someone who's

441
00:27:08,440 --> 00:27:11,360
Speaker 4: making a retaliation claim if in fact, there are four

442
00:27:11,440 --> 00:27:14,679
Speaker 4: or five six, a dozen of different reasons that the

443
00:27:14,720 --> 00:27:18,440
Speaker 4: employer is citing, well, why the termination took place. It's

444
00:27:18,480 --> 00:27:21,680
Speaker 4: now going to become much more challenging to demonstrate that

445
00:27:21,840 --> 00:27:25,680
Speaker 4: the whistle blowing activity was in fact the predominant factor

446
00:27:25,720 --> 00:27:29,000
Speaker 4: and therefore there was specific intent to retaliate. You know,

447
00:27:29,040 --> 00:27:32,640
Speaker 4: if you're a strategic employer as well, then it's likely

448
00:27:32,760 --> 00:27:35,400
Speaker 4: that you know, when you make a decision to terminate

449
00:27:35,440 --> 00:27:38,919
Speaker 4: someone in the wake of a whistleblower complaint, you're not

450
00:27:38,960 --> 00:27:40,920
Speaker 4: just going to put the whistleblower complaint in there. You're

451
00:27:40,920 --> 00:27:43,240
Speaker 4: going to list six, seven or eight other reasons why

452
00:27:43,280 --> 00:27:46,320
Speaker 4: you were terminating that person. And that's just going to

453
00:27:46,400 --> 00:27:49,920
Speaker 4: make it much harder for the employee to say, Okay,

454
00:27:49,960 --> 00:27:51,960
Speaker 4: we're going to now have to weed through all those

455
00:27:52,000 --> 00:27:54,760
Speaker 4: reasons and to try to give the jury or the

456
00:27:54,920 --> 00:27:58,119
Speaker 4: judge reasons to doubt the other six or seven, leaving

457
00:27:58,359 --> 00:28:01,560
Speaker 4: just the whistleblower complaint on the horizon. Now, it sometimes

458
00:28:01,680 --> 00:28:05,119
Speaker 4: does help if you've documented the claim that you were making,

459
00:28:05,640 --> 00:28:08,120
Speaker 4: and in fact, the way that the bounty system has

460
00:28:08,200 --> 00:28:11,760
Speaker 4: kind of evolved has kind of created greater incentives to

461
00:28:11,880 --> 00:28:15,480
Speaker 4: document when and under what circumstances exactly to whom you

462
00:28:15,520 --> 00:28:18,760
Speaker 4: were making these whistleblowing reports. And that can actually help

463
00:28:18,800 --> 00:28:22,720
Speaker 4: in putting together a retaliation claim later on, But it

464
00:28:22,840 --> 00:28:25,359
Speaker 4: definitely is going to make it harder if, in fact,

465
00:28:25,440 --> 00:28:28,280
Speaker 4: the Supreme Court holds that you have to demonstrate that

466
00:28:28,400 --> 00:28:32,560
Speaker 4: retaliation was kind of the principal reason behind the termination.

467
00:28:32,920 --> 00:28:37,240
Speaker 1: Yeah, And in this case, UBS maintained that the whistleblower

468
00:28:37,320 --> 00:28:40,240
Speaker 1: was never a whistleblower and instead was fired as part

469
00:28:40,280 --> 00:28:44,640
Speaker 1: of a broader staff reduction. So if the Supreme Court

470
00:28:44,720 --> 00:28:50,440
Speaker 1: rules in favor of UBS, could that affect other whistleblower statutes?

471
00:28:50,520 --> 00:28:54,480
Speaker 1: Because two lawmakers who lead the Senate Whistleblower Protection Caucus

472
00:28:54,920 --> 00:28:58,960
Speaker 1: identified more than a dozen federal whistleblower protection statutes that

473
00:28:59,040 --> 00:29:02,800
Speaker 1: have virtually identical legal burdens. So what does Supreme Court

474
00:29:02,880 --> 00:29:04,280
Speaker 1: ruling here affect.

475
00:29:03,920 --> 00:29:07,360
Speaker 4: That it seems like it might and absolutely. One of

476
00:29:07,360 --> 00:29:11,680
Speaker 4: the Amikas briefs notes that the Sarbanes Oxley model itself

477
00:29:11,920 --> 00:29:15,560
Speaker 4: was fashioned after pre existing models, in which, at least

478
00:29:15,560 --> 00:29:19,280
Speaker 4: according to the folks submitting this Amikas brief, it was

479
00:29:19,400 --> 00:29:23,320
Speaker 4: drafted specifically to sort of mimic their structure and to

480
00:29:23,480 --> 00:29:28,360
Speaker 4: mimic the contributing factor approach rather than the specific intent approach.

481
00:29:28,400 --> 00:29:30,560
Speaker 4: And so if the Supreme Court were to come back

482
00:29:30,600 --> 00:29:33,040
Speaker 4: and say, well, you know, we're going to agree with

483
00:29:33,120 --> 00:29:36,680
Speaker 4: the Second Circuit, then it may in theory put into

484
00:29:36,760 --> 00:29:40,520
Speaker 4: play a bunch of these other whistleblower statutes and whether

485
00:29:40,600 --> 00:29:44,520
Speaker 4: and to what extent they similarly require a showing of

486
00:29:44,600 --> 00:29:47,760
Speaker 4: specific intent. Now, I will note that the Second Circuit,

487
00:29:47,840 --> 00:29:51,200
Speaker 4: you know, most of its analysis, and certainly the beginning

488
00:29:51,240 --> 00:29:54,080
Speaker 4: part of this analysis, is very, very wedded to the

489
00:29:54,160 --> 00:29:59,480
Speaker 4: precise textual structure of the retaliation provision in the Sarbanes Oxley.

490
00:30:00,120 --> 00:30:03,720
Speaker 4: That may provide at least a little wiggle room even

491
00:30:03,760 --> 00:30:06,280
Speaker 4: if the Supreme Court were to say, we're going to

492
00:30:06,320 --> 00:30:09,360
Speaker 4: agree with the Second Circuit. But that doesn't necessarily mean

493
00:30:09,400 --> 00:30:12,920
Speaker 4: that every other whistleblower retaliation statute out there is in

494
00:30:13,000 --> 00:30:16,280
Speaker 4: play as well, unless and to the extent to which

495
00:30:16,680 --> 00:30:20,120
Speaker 4: they mimic exactly the same sort of grammatical structure.

496
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Speaker 1: Thanks for being on the show, Eric, that's Professor Eric

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Speaker 1: Tally of Columbia Law School, and that's it for this

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Speaker 1: edition of the Bloomberg Law Show. Remember you can always

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Speaker 1: get the latest legal news on our Bloomberg Law podcast.

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Speaker 1: You can find them on Apple Podcasts, Spotify, and at

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00:30:34,760 --> 00:30:39,800
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00:30:39,880 --> 00:30:42,920
Speaker 1: remember to tune into The Bloomberg Law Show every weeknight

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Speaker 1: you're listening to Bloomberg