OSHA Promulgates Final Rule on ACA Whistleblower Complaints

WhistleblowerOn October 12, 2016, the Occupational Safety and Health Administration (“OSHA” or the “Agency”) announced that it had issued a Final Rule establishing procedures for the filing, evaluation, and litigation of whistleblower complaints under the Affordable Care Act (“ACA”).  The rule became effective on October 13, 2016.  It lays out time frames for the handling of retaliation complaints under the ACA and explains the different procedural steps in the process; namely, filing a complaint, investigation of the complaint by OSHA, appealing OSHA determinations, hearings before an Administrative Law Judge (ALJ), and options for review of final determinations.  Much of the framework for ACA whistleblower complaints is similar to other whistleblower laws enforced by OSHA and will seem familiar to employers, but below are some of the highlights of the final rule of which employers should be aware.

Protected Activity and Types of Retaliation

The ACA was signed into law back in 2010, but many of its significant requirements did not kick in until several years later.  Of significance from an employer perspective, employers with 50 or more full-time employees (employees working 30 or more hours per week) must provide affordable health care coverage to their full-time employees and may be subject to a financial penalty if a full-time employee receives a premium tax credit for purchasing individual coverage on an insurance exchange.  Although enforcement of the ACA’s requirements generally does not fall within the purview of OSHA, the Agency has been charged with enforcing the whistleblower provisions of the Occupational Safety and Health Act (“OSH Act”), as well as 21 other statutes, including the ACA.

Based on employer obligations under the ACA, the final rule prohibits retaliation against an employee for receiving a tax credit or a cost-sharing reduction for enrolling in a qualified health plan.  OSHA also explains in the preamble to the Final Rule that this protected activity could include employee actions taken to exercise their rights under the ACA, such as retaliation against an employee who requests information necessary to apply for a tax credit.  Additionally, like most other whistleblower provisions, an employee is protected from retaliation for reporting or refusing to participate in acts he or she reasonably believes to be in violation of the ACA.  In this context, a reasonable belief means “both a subjective, good faith belief and an objectively reasonable belief.”

OSHA has also specifically laid out the types of actions it would deem retaliatory if taken, at least in part, based on an employee’s protected activity.  These types of actions include:

  • Firing or laying off;
  • Reducing pay or hours;
  • Blacklisting;
  • Demoting or denying promotion;
  • Denying overtime or benefits;
  • Failing to hire or rehire;
  • Disciplining;
  • Intimidating or making threats; or
  • Reassigning in a manner that threatens prospects for promotion.

Timing and Process for Filing a Complaint

If an employee has engaged in protected activity under the ACA and, as a result, feels he or she has been retaliated against by the employer, the employee must file a complaint with OSHA within 180 days after the retaliation has occurred.  This means an employee has 180 days from the time a retaliatory action is taken and the employee either was aware or reasonably should have been aware of the retaliatory action.  As compared to the whistleblower provisions of the OSH Act, this is double the amount of time employees have to file a complaint for a violation of those whistleblower protections.

The final rule does not require complaints be filed in a specific form and they can be submitted in any language.  An employee can file a complaint with OSHA in person at the local OSHA office; by phone call to the local OSHA office; or in writing by fax, electronic communication, mail or hand delivery to the closest OSHA office.  The date the complaint is communicated or delivered, or, in the case of mailing, the date the complaint is postmarked, is considered the date the complaint is filed for purposes of evaluating whether it was timely made within the 180-day period.

Agency Investigation and Evaluation of the Complaint

Upon receiving a complaint, a designated OSHA representative will review it to determine whether it meets certain basic threshold requirements to move forward.  One such threshold consideration will be whether it has been filed within the 180-day window.  OSHA will also immediately notify the subject employer of the filing of the complaint, including the allegations contained therein and the evidence supporting the complaint.  OSHA will provide the same information to the complaining employee and the appropriate federal agency charged with administration of the provision of the ACA under which the complaint is filed.  Within 20 days of receiving the notification from OSHA, the employer and complaining employee may submit to OSHA written statements regarding the complaint including supporting evidence and documentation.

OSHA must initially assess the complaint to determine whether the complaint, supplemented by interviews of the employee, supports a prima facie case of impermissible retaliation.  If it does, and only if it does, will OSHA perform a full investigation of the complaint, considering evidence presented by both parties.  To establish a prima facie case, the employee must show:

  1. The employee engaged in activity protected by the ACA;
  2. The employer knew or suspected that the employee engaged in protected activity;
  3. The employee suffered an adverse employment action; and
  4. The circumstances presented are sufficient to raise an inference that the protected activity was a contributing factor in the adverse action.

Notably, under the ACA whistleblower provisions, the protected activity must be only a “contributing factor” to the adverse action; a lower burden to establish than the whistleblower provisions of other laws that use a “but for” standard.  Under the “contributing factor” standard, an employee must show the protected activity alone, or in connection with other factors, affected the employer’s adverse decision in any way.

If OSHA determines that the employee has established a prima facie case, it may discontinue its investigation of the complaint if the employer can prove by “clear and convincing evidence” that it would have taken the same adverse action in the absence of the protected activity.  However, conversely to the employee’s burden, the clear and convincing evidence standard creates a more significant hurdle for employers, requiring they show it is “highly probable” or “reasonably certain” they would have taken the adverse action even if the protected activity had not occurred.

Based on the evidence gathered during its investigation, OSHA must issue written findings within 60 days of the complaint being filed.  These findings will specify OSHA’s determination as to the merits of the complaint.  If OSHA finds the evidence does not support retaliation, the complaint will be dismissed.  Alternatively, if OSHA finds reasonable cause to believe the complaint has merit, the Assistant Secretary will order appropriate relief for the employee such as preliminary reinstatement (if terminated), back pay with interest, compensatory damages, attorney fees and costs, and/or some sort of affirmative action to abate the violation.

Appealing a Determination

After a determination is rendered, the employer and/or employee has 30 days from receipt of the findings to file objections, in writing, to the Agency’s determination and, in effect, request a full hearing before an ALJ.  The filing of objections will stay any remedy granted by the Agency except preliminary reinstatement of the employee.  If neither party files objections within the 30-day period, the Assistant Secretary’s determination becomes a final order, no longer subject to review.

Timely objections will result in a hearing before an ALJ that must occur “expeditiously” after receipt of the objections unless good cause is shown or the parties otherwise agree.  The hearing will require de novo review of the complaint, meaning the ALJ will assess the evidence presented during the hearing without influence from the Agency’s prior determination or considering the validity of that determination.  The same burdens of proof and production apply for the employee and employer as in the Agency evaluation stage of this process.

The decision of the ALJ will become a final order of the Secretary of Labor if there is no request for review to (1) the Administrative Review Board within 14 days after the date of the decision; or (2) the United States Court of Appeals for the applicable circuit within 60 days of the issuance of a final order.  Appeals for judicial review can also be made within 60 days of issuance of a final order based on a decision of the Administrative Review Board.

OSHA, the employee, and the employer can also agree to a settlement prior to the issuance of a final order, although the type of settlement will depend on the stage in the proceeding.

Recommendations for Employers

There are several steps employers can take to try to avoid whistleblower complaints from their employees under the ACA.  First, employers should ensure there is a complaint system in place employees can use to bring issues of suspected retaliation to the employer’s attention before going directly to OSHA.  If an employer receives a complaint, it should thoroughly investigate and inform the employee of its findings and any actions it plans to take.  Second, employers should implement anti-retaliation policies and train management representatives and benefits administrators on those policies, as well as how to effectively manage covered employees.  Third, prior to and at the time an adverse action is taken, employers create and maintain documentation of the decision-making process to clearly establish it any adverse action is unrelated to the employee’s protected activity.

If a complaint of retaliation is filed with OSHA, the employer should take full advantage of its opportunity to provide its position and support for that position to the Agency.  This could lead to a determination in the employer’s favor earlier in the process, avoiding increased costs and additional time spent litigating the whistleblower claim.  It could also facilitate settlement, if that is the course the employer would like to pursue, as information is shared among the parties to the proceeding.

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