Broad Whistleblower Protections Are Included In The American Recovery and Reinvestment Act of 2009

Posted on June 16, 2009 by Kathryn Dugan

The American Recovery and Reinvestment Act of 2009 (the “Recovery Act”) is an economic stimulus package enacted by Congress and signed into law by President Obama on February 17, 2009. The Recovery Act is based largely on proposals made by President Obama and is intended to provide a stimulus to the country’s economy in the wake of the recent economic downtown. The Recovery Act includes federal tax relief; expansion of unemployment compensation benefits and other social welfare provisions; and domestic spending in education, health care and infrastructure. Often overlooked, but of particular importance to employers and employees, are the powerful “whistleblower” protections created by the Recovery Act. The Act’s whistleblower provisions apply to employers that receive a contract, subcontract, grant or other payment funded in whole or in part by the federal stimulus package.

The Recovery Act protects both traditional whistleblowers who report fraud or illegal activity as well as employees who complain about mismanagement, waste, dangers to public health or safety, or an abuse of authority. The terms of the Recovery Act’s protections are broader in scope than other whistleblower statutes such as the New Jersey Conscientious Employee Protections Act (“CEPA”) or Sarbanes Oxley. For example, the Recovery Act protects employees who informally complain to their direct supervisor or to any other employer representative with the authority to investigate, discover or remedy misconduct. Specifically, it protects complaints made by employees in the ordinary course of their job duties.

Not only does the Recovery Act expand the scope of protected employee activity, but it also sets forth a relatively easy burden for employees to satisfy to establish they were the subject of retaliation. The Recovery Act provides that employees need only demonstrate that their protected activity was a “contributing factor” in the adverse action taken against them. Employees can meet this burden through the use of “circumstantial evidence.” On the other hand, employers have quite a difficult burden to defeat a whisteblower claim, since under the Recovery Act they must prove by “clear and convincing evidence” that they acted for a legitimate purpose unrelated to any protected whisteblower activity. Due to the scope of the protections provided to employees under the Recovery Act as well as the respective burdens of both employers and employees, employers must be aware of their potential liability.
 

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Employers Must Be Aware of Changes to NJ COBRA Rules

Posted on April 6, 2009 by Randi W. Kochman

The American Recovery and Re-Investment Act of 2009 (“ARRA”), enacted on February 17, 2009, made significant changes to federal COBRA, as previously reported on this blog. New Jersey employers with less than twenty (20) employees, who are subject to New Jersey’s mini-COBRA statute (“NJ COBRA”), should also be aware that the ARRA makes significant changes to NJ COBRA.

“Assistance eligible individuals” who elect COBRA (or NJ COBRA) may receive a government subsidy equal to 65% of their health insurance premium for up to nine (9) months and remain obligated to pay 35% of the premium. Under NJ COBRA, “an assistance eligible individual” is an individual who loses group health coverage because of an employee’s involuntary termination between September 1, 2008 and December 31, 2009 and who is otherwise eligible for New Jersey continuation coverage. Under New Jersey law, employees who are terminated for “cause” are not eligible for continuation coverage. The NJ COBRA premium subsidy is also not available if the individual’s income that year exceeds $125,000.00 for an individual filer and $250,000.00 for a joint filer. Finally, the NJ COBRA premium subsidy is not available if the employee is otherwise eligible for other insurance coverage, such as through a spouse’s plan or Medicare.

New Jersey’s small employers with less than 20 employees should be aware of their obligations to provide NJ COBRA notices to eligible employees. Employees who are involuntarily terminated between September 1, 2008 and February 16, 2009 must elect the subsidy no later than April 18, 2009. Those who are involuntarily terminated between February 17, 2009 and December 31, 2009 must elect New Jersey continuation coverage within thirty (30) days after their coverage ended due to an involuntary termination of employment. These individuals must also sign up for the subsidy within that same thirty (30) day period. This thirty (30) day period is different than the election period applicable to COBRA. 

Employers should also be aware that individuals who initially declined to elect group continuation coverage or initially elected coverage and then lost it due to their failure to pay premiums will have an additional opportunity to elect group continuation coverage and receive the subsidy. In this situation as well, individuals will have until April 18, 2009 to enroll. Coverage for eligible individuals who enroll will end on the date coverage would have ended had they initially elected continuation coverage following their termination. 

Unlike COBRA, under NJ COBRA only the person who is involuntarily terminated may make a continuation election, and not the employee’s dependents. 

Small employers should make note of those “take away” items referenced in the Firm’s March 6, 2009 posting on the ARRA and its impact on COBRA. Employers should also note that the Department of Labor has issued model forms for employers to use when notifying individuals of their rights under COBRA and NJ COBRA. These forms can be found at http://www.dol.gov\ebfa\COBRA.html.

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