Enforcement Themes for 2011 — A Deputized Workforce and Energized Agencies to Step Up and Refer Out

The 2011 landscape is a product of ground laid before the start of the year. The landmark financial reform legislation and U.S. Department of Labor ("DOL") initiatives indicate a sampling of new considerations and challenges for employers.

While certain employee-protective legislation was not passed in significant respects, one "sound" from 2010 that is likely to resonate throughout the business community in 2011 relates to bounty awards and protections against retaliation for whistleblowing. The bounty awards introduced in the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") in July 2010 received substantial, deserved attention. Dodd-Frank brings expanded employee protections against retaliation and the prospect of sharing 10 percent to 30 percent of certain sanctions imposed by the Securities and Exchange Commission ("SEC") or the Commodity Futures Trading Commission ("CFTC"). For details, see The Sounds of New Whistleblower Awards and Protections under the Dodd-Frank Wall Street Reform and Consumer Protection Act (originally published by Bloomberg Finance L.P.).

If whistleblowing becomes more shrill in 2011, it may be attributable in some measure to Dodd-Frank's policy choices. Instead of positioning the SEC and CFTC as compliance partners of businesses having compliance programs, Dodd-Frank creates a structure where potentially enormous awards are available to individuals who are quickest to supply those regulatory and enforcement agencies with original information that leads to a successful judicial or administrative action resulting in monetary sanctions exceeding $1,000,000. Reporting internally has no comparable payoff — irrespective of how established and effective corporate channels otherwise had been or could be. Administrative agency rulemaking will need to cope with that inherent tension created by Dodd-Frank.

Administrative agency activism in the employment context was seen elsewhere in procedures adopted during 2010. In April, the DOL launched its "We Can Help" nationwide campaign, led by the department's Wage and Hour Division, to "help connect America's most vulnerable and low-wage workers with the broad array of services offered by the Department of Labor," accompanied by "a special focus" on certain industries and having a declared intent to "address such topics as rights in the workplace and how to file a complaint with the Wage and Hour Division to recover wages owed." Also in April 2010, the DOL announced a sweeping new program of regulatory and non-regulatory initiatives, called "Plan/Prevent/Protect," to address wage and hour, safety, and other obligations.

Following those ambitious April launches, on December 13, 2010, the DOL announced an "unprecedented collaboration" between its Wage and Hour Division and the American Bar Association's Standing Committee on Lawyer Referral and Information Service. In introducing the program, the DOL cited limitations on its own resources and capacity to assist. By terms of this "Bridge to Justice" collaboration (http://www.dol.gov/whd/resources/ABAReferralPolicy.htm), individuals will be given a toll-free number to contact the newly created ABA-Approved Attorney Referral System. While the referral system could enhance enforcement efforts where completed investigations indicate probable merit in Fair Labor Standards Act and Family and Medical Leave Act matters that the DOL has declined to pursue, the program also may be utilized well before any such determination is possible. The DOL's announcement of the program explains that a complainant will be provided the referral system's toll-free number at any of four stages:

  1. The complaint intake stage, if an individual decides not to file a complaint or expresses a preference to pursue a private right of action;
  2. The complaint review stage, if the reviewing DOL manager determines, based on the Wage and Hour Division's national and regional priorities and the office's current resources and workload, that giving the complainant the referral system's toll-free number provides the worker with the quickest access to justice;
  3. After an attempt at conciliation, if the employer refuses to remedy a violation but, based on the same criteria used at the complaint review stage, the DOL manager decides that giving the complainant the referral system's toll-free number is a better option than further investigating or litigating the complaint; or
  4. After an investigation, if the case is not resolved through settlement, the Wage and Hour Division may decide, often in consultation with the DOL's Office of the Solicitor, to leverage the resources of the private bar by providing the complainant the referral system's toll-free number.

Depending upon the stage at which the referral occurs, it may be aided by additional information about the complaint and the DOL's attempts at conciliation — or even a statement of violations found, the amount of back wages believed to be owed, and a form that will allow complainants or the authorized attorney representative "to quickly obtain certain items from the investigation case file."

Whether employees will pursue available, effective internal channels to raise matters of concern remains to be seen. But Congress and administrative agencies have offered expanded alternatives and supportive resources that employers need to factor into their own programs and related orientation, training, investigation, decision-making, and communications processes.