FSMA-Related Whistleblower Claims Are On the Rise
By John T. Shapiro
Recently, in settlement of the lawsuit that two consumer advocacy groups brought to compel deadlines for final publication of the rules that form the cornerstone of the Food Safety Modernization Act (FSMA), the U.S. Food and Drug Administration (FDA) agreed that it would publish the final rules pursuant to the following timeline:
• August 30, 2015 – Preventative control rules for human food and preventive control rules for animal feed
• October 31, 2015 – Produce safety standards,foreign supplier verification program, and accreditation of third party auditors
• March 31, 2016 – Sanitary transport of food and feed
• May 31, 2016 – Intentional adulteration of food
FDA indicates that it is working expeditiously to meet the agreed-to deadlines with final rules that properly and adequately myriad complex food safety concerns.
The additional time in which to promulgate final FSMA rules notwithstanding, some commentators continue to question whether FDA will receive sufficient resources to adequately enforce FSMA. Therefore, some food companies may believe that they will be able to operate under the radar of FSMA and FDA, even after FDA fully implements FSMA.
Congress, however, built into FSMA a powerful deterrent for any food company that might consider skirting the preventive processes for which FSMA calls or otherwise placing unsafe food into the supply chain. That is, FSMA encourages employees to blow the whistle on their employers’ unsafe food practices. To that end, on February 13, 2014, the Occupational Safety and Health Administration published interim final regulations that govern FSMA’s whistleblower provisions, entitled “Procedures for Handling Retaliation Complaints Under Section 402 of the FDA Food Safety Modernization Act” (Procedures). Specifically, the Procedures establish systems and time frames for the filing, handling and investigation of and the ruling on FSMA-related retaliation complaints, including that whistleblowing employees are to submit their FSMA-related retaliation complaints to the U.S. Department of Labor.
The Procedures reiterate that the protections FSMA affords whistleblowing employees are broad. Under FSMA, a company may not retaliate against, discipline or otherwise take an adverse action against an employee on the basis that the employee:
• “Provide[s], cause[s] to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of” FSMA
• “Testif[ies], assist[s] or participate[s] in proceedings concerning such violations”
• “Object[s] to, or refuse[s] to participate in, any activity, policy, practice or assigned task that the employee (or other such person) reasonably believed to be in violation of” FSMA
[See Procedures, Federal Register Vol. 79 at p. 8621 (citations and internal quotation marks omitted).] The Procedures further explain that a whistleblowing employee will be deemed to have a “reasonable belief” under FSMA where the employee has both“a subjective, good faith belief and an objectively reasonable belief that the complained-of conduct violated” FSMA. The subjective component is satisfied where the employee actually believes that conduct of which the employee complains violated the law. The objective component is satisfied where the knowledge available to a person with the same training and experience and in the same factual circumstances as the whistleblowing employee renders that belief reasonable, if the belief regarding the law is mistaken the law. (Id.)
The Department of Labor is accepting comments on the Procedures until April 14, 2014. A copy of the Procedures may be downloaded from the Department of Labor’s website. As with the other rules that will govern their operations, it is important for food companies to study and, if warranted, comment on the whistleblower rule. FSMA-related whistleblower claims are on the rise. According to the Department of Labor, it received 54 FSMA-related whistleblower claims in fiscal year 2013, an increase of more than 100 percent over fiscal year 2012. Of the 54 claims filed in fiscal year 2013, 41 have already been finally determined, with nine “settled,” 21 “dismissed,” two “kick[ed]-out” and nine “withdrawn,” according to the Department of Labor. Nevertheless, the steady increase in the number of whistleblower claims over the first few years of FSMA’s existence foreshadows the likelihood that the upward trend in filings will continue.
How may a food company prepare for whistleblower claims? For starters, food companies should educate their employees on FSMA, and the programs and processes by which the company intends to comply with FSMA and its implementing regulations. Simply stated, FSMA compliance in the first place is the best way to ward off employee complaints. Even so, whistleblower claims may be inevitable. Companies thus should craft and employ a written whistleblower policy that provides a clear procedure by which employees may reportknown and suspected violations without fear of discrimination, retaliation or other repercussion, including reference to the interim rule. Education is essential to the success of any such policy. That is, employees, supervisory personnel, human resource administrators and leadership all should be informed of the policy, and management should receiving training on how to implement and audit the efficacy of the policy. Through proper and prompt consideration of whistleblower complaints, companies may be able to reduce the likelihood that a whistleblower complaint will be filed with the Department of Labor, or ultimately pursued in court, let alone limit the harm to brand and reputation that often accompanies government investigation, corrective actions and litigation.
John T. Shapiro is partner and member of the Food Industry Team at Freeborn & Peters LLP (Chicago).