New Whistleblower Law for Federal Contractors


In the 1980s the United States enacted a law protecting government employees and employees of government contractors from reprisal as a result of reporting questionable activities.  These questionable activities were defined as gross mismanagement of government grants &/or contracts, gross waste of DOD funds , substantial  and specific danger to public health or safety or a violation of law related to a DOD contract or grant.  This was passed into law by Congress in 1986 as Title 10, U.S.C. Section 2409.  This law has been amended by Congress over the years since to include coverage for alleging violations of sexual discrimination, prohibiting the use of referrals for mental health evaluations among others. 

Even with all of the revisions to the law, there was a huge missing element to the law: it did not protect subcontractors should they notice and bring to light a problem.  Part of the 2013 National Defense Authorization Act has taken care of that problem.  Section 827 of this law allows for subcontractors to be afforded the same protection as the law previously afforded to contractors.  This law went into effect on July 1st. 

So what does this mean?  Certainly it means employees of subcontractors have the same protection for whistleblower actions that previously were provided only for government employees and contractor employees.  It also affords protection to these employees from reprisal actions requested by executive branch officials.  The employees are protected to disclose information to courts, grand juries, company management or other employees that are charged with investigating misconduct.  The types of information protected has also been expanded to include disclosures of abuse of authority in management of a DoD grant or contract, violations of rules and regulations related to a DoD contract and initiation of or participation in any judicial or administrative proceeding related to waste, fraud or abuse on a DoD contract or grant. 

Companies are required to notify their employees of these rights in writing (using the native language used by the work area).  This will be effective on all contracts awarded after July 1st of this year.  The notification of employees of these rights is something of a new requirement for a small subcontractor.  There may also be some concerns that employees might abuse this system to protect themselves from layoff.  What is clear, however, is that the playing field has been leveled for subcontractors.  It's about time!