In what might be an unsettling trend for employers, juries in Philadelphia and Anchorage have recently issued multi-million dollar jury awards in favor of whistleblowers. Specifically, on March 22, 2013, a Philadelphia Common Pleas Court jury awarded Plaintiff-whistleblower Marla Pietrowski $1.7 million for her claims under the New Jersey Conscientious Employee Protection Act, and Ms. Pietrowski’s fee petition, which could result in an additional $500,000 in attorneys’ fees and costs, is pending. A few days after the Pietrowski award, an Anchorage, Alaska jury awarded Plaintiff-whistleblower Paul Blakeslee $3.5 million for his claim under the federal False Claims Act (FCA). These awards are concerning for additional reasons discussed below.
Pietrowski v. The Kintock Group, Case No. 111003328 (Phil. Cty. Ct. Mar. 22, 2013)
On July 13, 2009, Defendant Kintock Group hired Ms. Pietrowski as a senior case manager in its Vineland, New Jersey facility. In October of 2009, while working in the Vineland facility kitchen, Ms. Pietrowski alleged that her supervisor said that he used his long pinkie fingernail for “bagging,” which she believed to mean bagging cocaine. When she complained internally about that comment, management allegedly responded that the supervisor was a personal friend of the company’s founder and chairman. Ms. Pietrowski also alleged that she complained to management after her supervisor purportedly violated Defendant’s ethical standards by bringing his eight-year-old daughter to a facility that provided transition services to registered sex offenders.
While she was still employed, Ms. Pietrowski filed suit under the New Jersey Conscientious Employee Protection Act. She added allegations that, after filing her complaint, her supervisor excluded her from department meetings, required employees to submit complaints about her work to human resources, and that she was passed over for promotion in 2010. Ms. Peitrowski’s employment was terminated after she filed suit on the basis that she had engaged in misconduct by making false allegations against co-workers.
On March 22, a jury issued a verdict in Ms. Pietrowski’s favor in the amount of $1.7 million, comprised of $78,000 in back pay, $100,000 for pain and suffering, and $1.5 million in punitive damages. The Defendant’s motion for a judgment in its favor regardless of this jury award is still pending.
Blakeslee v. Shaw Infrastructures, Inc., No. 09-cv-00214 (D. Alaska Mar. 26, 2013)
In this case, the plaintiff, who managed about 40 workers for Shaw Environment and Infrastructure (Shaw), claimed to have learned that a Company project manager based in Alaska was a part-owner of another private company that was leasing approximately $2M in equipment to Shaw without competitive bidding. According to the plaintiff, the project manager had created a leasing company and bought equipment and leased it to Shaw at several times the market rate. Plaintiff alleged that he began writing a letter to the Company’s CEO reporting the misconduct and, when the project manager learned that he was developing a complaint, the plaintiff was told that he would be laid off if he did not retire. The plaintiff was discharged days later, and responded by filing a lawsuit claiming that the company had unlawfully retaliated against him in violation of the FCA.
The jury concluded that the Company wrongfully discharged the plaintiff as a result of his whistleblowing activity, and awarded him $445,574 in lost wages, $486,458 for emotional distress, and $2.5M in punitive damages.
Implications
These awards should catch the eye of employers faced with whistleblower claims, as many types of whistleblower claims carry the risk of punitive damages and pose reputational risks. These awards are particularly concerning given that the employers appeared to have viable defenses in both cases, and the complaint in the Pietrowski matter did not implicate a common compliance failure that employers regularly face under whistleblower protection laws.