Labor Dept's handling of whistleblower cases criticized by another watchdog

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A new watchdog report says the U.S. Labor Department often fails to properly investigate complaints by corporate workers who seek whistleblower protection.

The Labor Department inspector general’s report comes on the heels of the Government Accountability Office’s recent findings that the labor agency “has done little” to insure that investigators who review whistleblower complaints have the necessary training and equipment to do their jobs.

In July, an investigation by the Center for Public Integrity found that the agency had failed to aggressively enforce whistleblower protections under the Sarbanes-Oxley corporate reform act. The Center found that over the past eight years the agency had upheld just 25 whistleblower claims under the Sarbanes-Oxley corporate reform law — and tossed out 1,066 claims. That translated into a winning percentage of little more than 2 percent for workers seeking whistleblower status.

The new report by the Labor Department’s internal watchdog looked at cases involving three key whistleblower laws. It estimated that the Occupational Safety and Health Administration – which is responsible for handling whistleblower claims under 19 laws – failed 80 percent of the time to meet all elements that are “essential to the investigative process.”

For example, OSHA investigators apparently failed to interview or attempt to interview the complainant’s witnesses in 37 percent of the cases that the watchdog reviewed. In nearly half the cases – 46 percent – investigators “conducted the entire investigation by telephone or email and performed no face-to-face interviews or on-site investigative work,” the new report said.

During the audit period, 77 percent of the whistleblower complaints under OSHA 11(c), Sarbanes-Oxley Act, and Surface Transportation Assistance Act were either dismissed or withdrawn. Settlements which accounted for 21 percent were generally minimal, and the remaining 2 percent were found to have merit. “As a result of not providing complainants with thorough investigations, OSHA could not provide assurance that complainants were protected as intended under the various whistleblower protection statutes,” the watchdog said.

OSHA, which is best known for setting workplace safety standards, is also responsible for investigating claims made by whistleblowers in industries ranging from securities companies to trucking, nuclear power, pipeline, environmental, rail, and consumer products.

When presented with the Center’s investigative findings in July, OSHA chief David Michaels said he ordered a comprehensive, “top to bottom” review of all whistleblower programs under the agency’s responsibility.

Michaels used the same phrase in responding to the new inspector general’s report. “The results of this comprehensive evaluation will include recommendations to the Assistant Secretary on programmatic changes to ensure that there is consistency and program delivery is greatly improved,” Michaels said in a response letter attached to the report. He added that OSHA was hiring more investigators and rewriting its whistleblower policies.

The Dodd-Frank financial reform law enacted a few weeks ago includes substantial cash rewards for whistleblowers who expose securities violations. It also expands the number of employees covered by Sarbanes-Oxley protections.

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