A colleague just raised to my attention the case of Sistek v. Department of Veteran’s Affairs, ___ F.3d ___ (April 8, 2020), Fed. Cir. case 19-1168. Some specialty publications in their own reporting of this case described it as “gutting” the Federal Whistleblower Protection Act. I think that’s overstating the case.
Sistek was a director of the Purchased Care Office of the VA in Denver. In August of 2012, he made a report of what he believed were improperly “parked” appropriated funds to the VA’s Office of the Inspector General. He also later raised issues concerning a contract with a third party in October 2013, again making an OIG report. These were protected acts under the Federal Whistleblower Protection Act (WPA). He then raised the issue of the “parked” funds in a conference call on January 14, 2014, in which his second-line supervisor, Kindred, was participating.
Very shortly after this call, Kindred initiated an investigation into an alleged sexual affair between two of Sistek’s co-workers; about three weeks after the conference call, Sistek was interviewed as part of the investigation. Sistek then realized he was a subject of that investigation because he allegedly knew of the affair and had failed to report it. By July, the investigation concluded exactly that, and in August 2014, Sistek’s immediate supervisor issued a letter of reprimand to Sistek based on the investigation’s findings.
Of interest is that in January 2015, Sistek had a new second-line supervisor who, for reasons not stated, removed that letter of reprimand from Sistek’s file. Sistek’s concerns about the “parked” funds were validated in March of 2015 when the OIG concluded that the VA had indeed violated the law by handling the funds as Sistek had reported. Sistek retired from the VA in January of 2018.
The question before the Federal Circuit was whether the investigation of Sistek for the sexual affair was an act of retaliation for his report of the illegally “parked” funds. We learn two things from the Court’s treatment of the issue.
First, we learn that initiating an investigation, by itself, is not an actionable “personnel action” within the definition of the WPA, defined at 5 U.S.C. § 2302(a)(2)(A).
But second, we learn that it is possible for a petitioner to prove that an investigation fits into the catchall definition of a “personnel action” if it can qualify as “any other significant change in … working conditions.” 5 U.S.C. § 2302(a)(2)(A)(xii). To do that, the petitioner must demonstrate, by a preponderance of the evidence, a) the existence of a causal nexus between his protected whistleblowing activity, and b) that the investigation was sufficiently severe and pervasive as to materially alter the conditions of the workplace. Two suggestions are indicated in the case as to what that second element might look like. It might be a very long and intrusive investigation, such that the subject is required to devote an hour a day, every day, for a long period of time responding to it. Or, it might be one of a series of events raised as part of a claim of a hostile workplace environment.
On the facts, Sistek’s case doesn’t meet this test. The person who initiated the investigation, Kindred, was aware of the substance of Sistek’s complaint, but there weren’t any facts that she was aware that Sistek had raised the issue to the OIG. She also demonstrated that she would have initiated the investigation regardless of whether Sistek had made an OIG complaint or whether she had been aware of that fact: the investigation was of an improper sexual relationship involving two other people, something logically unrelated to Sistek’s OIG complaint. So Sistek necessarily was going to fail the “causal nexus” prong of the test.
It’s not clear from the opinion whether Sistek had claimed other incidents of hostility in the workplace deriving from his whistleblowing activity, and the Court didn’t reach the question of whether a letter of reprimand materially altered the conditions of Sistek’s workplace for the four to five months in was in his file; again, we would expect to see a plaintiff offering some other facts supporting such a claim if those facts existed.
On its face, of course, this affects only interpretation and application of the Federal Whistleblower Protection Act. But it’s persuasive as to other kinds of whistleblowing situations. And it’s not a pro-plaintiff case, to be sure. It’s easy to imagine other ways the Court could have structured a test for whether and when an investigation constitutes an act of retaliation for whistleblowing.
One thing I notice is that the issue of “heightened scrutiny” as a potential way for an employer to retaliate against protected activity is not addressed. The indication is that heightened scrutiny, by itself, would likely have to meet the same standard of gravity that an investigation would: it must be very intrusive, or it must be part of a pattern of other facts that amount to a hostile workplace environment. Again, there are other kinds of standards the Court might have chosen here, but there has to be some kind of standard, and this is the standard that we’re left with (absent Supreme Court review, which appears unlikely at this time). While I’d hardly say that this decision “guts” the WPA, it does give it a little bit of a haircut.
The practical lesson for private employers is that when an employee engages in what might be called whistleblowing activity, and that employee might themselves be involved in some unrelated but improper activity, it’s really important to get guidance before proceeding with an investigation into that person, much less actually imposing discipline. That’s can feel unfair and frustrating to the employers in that situation. But there is a path available to the complaining employee in that situation which can lead to liability, and the consequences of retaliating against protected activity can be severe. That means there’s risk, even if the evidence against the employee seems strong.
Therefore, the prudent employer will get counsel involved, before taking action, to work with human resources and management to make sure that the investigation proceeds cleanly and properly.