Articles Tagged with Whistleblower

photo-Space-X-300x231A “whistleblower” is an employee who complains of something illegal or unethical internally, to the press or to a government agency and because of that suffers as a result. A lawsuit filed by such an employee, especially when it involves a business doing business with a government entity, can be highly damaging not only in legal costs and potential damages but because the negative light it casts on a company can disrupt relationships with current customers and make it more difficult to get new ones.

Space Exploration Technologies Corp. was cleared by a jury in state court in Los Angeles earlier this month, dismissing a claim by a former technician, Jason Blasdell, he was fired because he told his supervisors (and even company founder Elon Musk) technicians were being pressured by management to falsify test results for rocket and spacecraft parts, reports Bloomberg.

The company stated the plaintiff was fired for poor job performance and he didn’t actually complain of anything illegal or unethical. The company’s attorney argued that Blasdell never saw, performed or complained of unlawful testing and never communicated his concerns to federal authorities. The plaintiff allegedly lost his job because his job performance was unacceptable and fellow employees were worried about their safety because of him.

photo - whistleblower by Steve DepoloA “whistleblower” claim is a lawsuit filed by a current or former employee who alleges the defendant retaliated against him or her because of a report within a company or to a government agency of wrongdoing. This kind of cause of action is a combination fraud and employment law claim.

The Orange County Register reports that Hoang Nguyen, a former assembly worker for Ameri-King Corp., a Huntington Beach based aircraft part manufacturer, alleged in a whistleblower lawsuit filed in Orange County Superior Court in December that the company,

  • Repaired faulty parts and resold then as new parts approved by the Federal Aviation Administration (FAA).
  • Ordered employees to remove “Made in China” labels on airplane parts and replace them with “Made in the USA” labels.

If you fly, you may not want to learn about Nguyen’s allegations, which include,

  • He raised safety concerns with his supervisors and was told not to worry.
  • A supervisor told him that no single company is held liable in an airplane crash because an airplane “has a thousand parts and any single one of them could have resulted in the crash.”

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photo - detective work by MatitoA corporate whistleblower can be a plaintiff’s best friend when it comes to starting a lawsuit and providing evidence to support it. A case in San Francisco federal court resulted in an unusual evidentiary decision in the plaintiffs’ favor in a securities class action case.

In these types of cases plaintiffs’ attorneys are caught in a Catch-22. Complaints must contain detailed and specific allegations of fraud, but the attorneys can’t seek information or documents from the defendant which can substantiate those allegations until the defendant has sought, but failed, to dismiss the complaint.

To resolve this chicken and the egg situation, plaintiffs’ securities class action firms seek out current or past corporate employees to gather evidence to flesh out their claims so the complaints will be substantial enough to survive a motion to dismiss. Defendants may claim information from an employee, or ex-employee, can’t be used if that person signed a confidentiality agreement or leaks documents that belong to the defendant.

In a class action securities case against mobile communications company Vocera the judge found such documents could be used, despite a confidentiality agreement, in part because the information and documents were handled with great care.

  • The lead plaintiffs’ firm’s investigator found the company’s former audit director, who granted an interview and provided a binder of internal documents related to the fraud investigation.
  • The investigator felt some of the documents could be privileged and the firm sequestered the material before any lawyers at the firm even saw it. The firm also hired an ethics advisor to help them handle the issue.
  • He contacted Vocera’s lawyers with a request that they review the documents and notify him whether they were privileged.
  • The company instead informed plaintiffs’ attorneys that the former audit director had violated his severance agreement and misappropriated internal documents.

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