WHISTLEBLOWER PROTECTION FOR
FINANCIAL SERVICES INDUSTRY EMPLOYEES

Section 1057 of the Dodd-Frank Wall Street Reform and Consumer Protection Act prohibits banks and other consumer financial services providers from retaliating against an employee for providing information to an employer, a regulatory agency, or law enforcement agency about a reasonably perceived violation of a consumer financial protection law or a regulation of the Bureau of Consumer Financial Protection (CFPB).

What are the elements of a Section 1057 whistleblower retaliation claim?

What conduct is protected?

Are employees protected when they blow the whistle in the course of performing their ordinary job duties?

What acts of retaliation are prohibited?

What is the employee's burden for proving unlawful retaliation?

What compensation can a prevailing employee recover?

Are Section 1057 claims subject to mandatory arbitration?

What procedures govern 1057 whistleblower retaliation actions?

What should I do if my employer unlawfully retaliates against me?

What are the elements of a Section 1057 whistleblower retaliation claim?  Back to top

To prevail on a Section 1057 claim, the whistleblower must prove that

1. The whistleblower engaged in protected conduct;
2. the employer knew that she engaged in protected conduct;
3. the employer took an adverse employment action against her; and
4. the protected conduct contributed to the employer's decision to take the adverse employment action.

What conduct is protected?  Back to top

Section 1057 protects disclosures about unlawful conduct related to a consumer financial product or service if the employee:

1. discloses the information to an employer, the CFPB, or a government authority;
2. participates in a judicial or administrative proceeding concerning a violation of a consumer financial protection law or a CFPB regulation; OR
3. objects to any act that the employee reasonably believes is a violation of the law or is prohibited by the CFPB.

Examples include reporting, participating in a proceeding on, or objecting to fraudulent:

• Loan underwriting
• Credit rating practices
• Real estate settlement services
• Property appraisals
• Financial advisory services
• Credit counseling
• Any other practice related to a consumer financial product or service

Are employees protected when they blow the whistle in the course of of performing their ordinary job duties?  Back to top

Section 1057 expressly protects employees who blow the whistle in the ordinary course of performing their job duties.

What acts of retaliation are prohibited?  Back to top

Section 1057 prohibits a broad range of adverse employment actions, including:

• termination
• demotion
• suspension
• threatened adverse employment actions
• harassment
• any conduct that would dissuade a reasonable employee from whistleblowing

What is the employee’s burden for proving unlawful retaliation?  Back to top

To prevail in a CFPB whistleblower action, an employee must prove by a preponderance of the evidence that her protected activity was a contributing factor in the employer’s decision to take the adverse employment action. The employer can only avoid liability by proving by clear and convincing evidence that it would have taken the same adverse employment action in the absence of the employee’s protected conduct.

What compensation can a prevailing employee recover?  Back to top

A prevailing employee can:

1. be reinstated to their former position;
2. recover the wages owed to the employee in the form of back pay with interest;
3. recover compensatory damages; and
4. recover attorney fees and litigation costs, including expert witness fees.

Are Section 1057 claims subject to mandatory arbitration?  Back to top

No. The employee's right to file a whistleblower retaliation claim under Section 1057 cannot be waived as a condition of employment or by a mandatory arbitration agreement.

What procedures govern 1057 whistleblower retaliation actions?  Back to top

The employee must file a complaint with the Department of Labor (DOL) within 180 days of the occurrence of the retaliatory adverse employment action. OSHA will investigate the complaint and can order the employer to preliminarily reinstate the employee to her former position. Either the employee or the employer can appeal OSHA's determination by requesting a hearing before a DOL Administrative Law Judge (ALJ). The ALJ's decision can be appealed to the DOL Administrative Review Board (ARB), and the ARB's decision can be appealed to the Circuit Court of Appeals in the jurisdiction where the adverse employment action took place. If DOL does not issue a final decision within 210 days of the filing of the complaint, the employee can remove her claim to federal court where the employee can request a trial by jury.

What should I do if my employer unlawfully retaliates against me?  Back to top

If you feel that you have been the subject of retaliation because of your disclosure regarding illegal activity by your employer, contact The Employment Law Group® law firm at 1-888-603-0983 or inquiry@employmentlawgroup.com.

The Employment Law Group® law firm recently published an article on the whistleblower provisions of the Dodd-Frank Act.

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