The International Business Times has referred to Reuben Guttman as one of the most prominent whistleblower attorneys in the world.
by Reuben Guttman, partner, Guttman, Buschner & Brooks, PLLC; Guttman is a member of the ACS Board of Directors.
When the United States Supreme Court issued its decisions in Bell Atlantic Corp v Twombly, 550 U.S. 544 (2007) and Ashcroft v Iqbal, 556 U.S. 662 (2009), there was sea change in the standard by which judges evaluated lawsuits to determine their sufficiency to withstand a motion to dismiss. Rather than merely placing a defendant on notice of a claim, the Court established a new standard. Plaintiffs must allege facts allowing a court to find that a claim is plausible. In reviewing the allegations of the complaint, courts are challenged to weed out conclusory statements and base their analysis on only the factual pleadings of the Complaint.
Naturally, Iqbal and Twombly have raised serious access to justice issues for plaintiffs who must muster the facts without an opportunity to gather evidence through discovery. The “plausibility” standard is of course entirely subjective; what is plausible to one judge based on his or her life’s journeys may not be plausible to another. And with the challenge to plead facts, plaintiffs are undoubtedly encouraged to put the “kitchen sink” into their complaints and plead complaints that are exponentially larger than those of yesteryear.
With all of the problems caused by Iqbal and Twombly, there is a nugget of gold that can be snatched as a teaching lesson. The notion that litigants are instructed to make their cases based on facts and not conclusions or hyperbole, is a solid concept.
The question of what is a fact and what is a conclusion is of course a lesson that lawyers must understand. In one of my classes at Emory Law School, I asked the students to outline the good facts and bad facts for a case involving assault and robbery. A student raised his hand noting that a good fact for the Defendant is “he has an alibi.” I turned to the student and said, “Are you telling me a fact or are you giving me a conclusion?” The student looked at me. I said, “unpack what you just told me in terms of the evidence, or facts, that support the alibi.” The student then began to tell me about a witness who saw the defendant at a theater performance at the time of the alleged incident; theater tickets found in the defendant’s wallet; and a receipt from a theater vendor which had the time and date stamp on it. Of course these are three very powerful facts – often hard to dispute – which are more compelling than merely stating the conclusion that an alibi exists.
In two weeks, I will again be teaching second year students trial advocacy at Emory Law School. It is hard to explain the difference between facts and conclusions but I give them this example which, in past years, they seem to remember.
Several years ago, a seven year old girl who is the daughter of a trial lawyer, said to her father: “I hate my little brother, no one likes him, he is extremely difficult and we need to trade him in for a new brother.” The father said, “Sweetie, haven’t I told you to make your arguments with facts and not conclusions or hyperbole?” The daughter said, “Yes, I remember Daddy; I will start over. Here is a photo of your BMW and the can of spray paint used to redecorate it. Here is a photo of our dog Spot tied up in your Versace Neck Ties and I have here a photo of your 80 inch Samsung TV set and the baseball that went through the screen; I also have here an essay the little fellow wrote for school which discusses his contemporary art projects. Finally, Daddy, here is a study by a prominent Harvard Psychologist who says that parents do well to act early and trade in ill-behaved children.” The father responded: “I understand. Say no more. The little fellow is history.”
Source: American Constitution Society for Land and Policy Blog, https://www.acslaw.org/acsblog/the-art-of-advocacy
Whistleblowers are of vital importance to regulators, helping them put the pieces of the jigsaw together, says Reuben Guttman.
Back in 2013, HSBC whistleblower, Herve Falciani, told the German publication Der Spiegel: “Banks such as HSBC have created a system for making themselves rich at the expense of society, by assisting in tax evasion and money laundering.” Conclosury statements like this are levied all the time by public interest groups, legislators, opinion writers and pundits. When they are made, they are often a matter of speculation or at most, an argument of inferences from loose facts. Of course, Herve Falciani is different. When he left HSBC in 2008, he reportedly took data from 130,000 customers. He took the facts to allow authorities to make solid claims of tax evasion; claims that can only be effectively levied with inside information.
In a global economy with complex transactions, communications occurring in multiple languages and transactions and communications made with the jargon of the industry, it is extraordinarily complicated for outside regulators to investigate and gather the facts to prove complex fraud cases. To some degree, it is analogous to a large ship attempting to navigate a harbor without a local captain available to explain where the rocks are or where the water is shallow. Or, perhaps it is like a blind person walking into a room for the first time without having any sense of where the furniture is located.
Of course regulators have the ability to access documents through a subpoena or civil and investigative demands, and they might even have the ability to ask questions under oath. But which documents do the regulators ask for? And when the questions are asked, how should the questions be worded so that regulators target the facts with the precision of a laser guided missile? Imagine an investigator questioning an HSBC official: Question:“Have you aided and abetted foreign citizens in ways that allow them to avoid paying taxes?” Answer: “No, that is not our mission … we are a bank.”
The problem is that most sophisticated lawbreakers understand the concept of a smoking gun. Never create a document that summarizes the wrongdoing for regulators. Never create a document that lays out the facts leading regulators to pinpoint the wrongdoing. And of course, in a large corporation, never create documents, rules, policies or plans that will cause the average employee to question the propriety of a corporation’s efforts. We live in an age where complex wrongdoing is orchestrated through communications and programmes which, if analysed independently, would seem harmless.
Yet, it is the whistleblower – the person inside the box – who can explain how patterns of innocent conduct, when linked together, amount to wrongful schemes involving fraud, money laundering, racketeering and tax evasion. Whistleblowers like Falciani are so critically important to regulators and without their help, regulators face a daunting task of fully understanding the schemes and pinpointing and gathering the evidence to convince a trier effect that wrongful conduct has occurred. Hence, “the importance of the whistleblower.”
Source: The Global Legal Post, 18 May 2015 http://www.globallegalpost.com/blogs/commentary/the-importance-of-whistleblowers-68342968/
by Reuben A. Guttman. Guttman practices law with Guttman, Buschner & Brooks PLLC
A half century ago, in Boire v. Greyhound, 376 US 473 (1964), the United States Supreme Court opined that two or more employers could exist as “joint employers” for the purposes of labor relations. Elaborating on this joint employer doctrine, the United States Court of Appeals for the Third Circuit, in a case known as NLRB v. Browning-Ferris Industries of Pennsylvania, 691 F.2d 1117 (3rd Cir. 1982), held that “the joint employer concept recognizes that the business entities involved are in fact separate but that they share or codetermine those matters governing the essential terms and conditions of employment.”
The joint employer doctrine allows for the imposition of liability against entities that do not sign the employee’s paycheck and do not provide monetary benefits but – still – in other ways, exercise or share control over the terms and conditions of employment. Last month, this tiny gem of labor doctrine formed the basis of 13 complaints, encompassing 78 separate charges, brought by the General Counsel to the National Labor Relations Board against McDonald’s USA, LLC, and McDonald’s franchisees as “joint employers.”
The complaints allege that the respondents interfered with employees’ rights to engage in concerted-protected activity, that is, organize a labor union, and in some cases retaliated against employees for doing so. While the substantive allegations are to some degree routine, the use of the “joint employer” doctrine to impose liability on the parent company – albeit the entity that probably does not pay workers directly – is the more interesting part of the case. The issuance of a complaint by the NLRB General Counsel is not a finding of liability; it is the beginning of a process that will cause the case to proceed to trial before an Administrative Law Judge, review of any decision by the full NLRB, and perhaps a hearing before a United States Court of Appeals where the decision will be enforced or overturned. Whatever the outcome, renewed focus on the joint employer doctrine is important in an era where employment paradigms are so complex that a myriad of entities may play a role in decisions that impact individual workers.
The control over labor relations exercised by a franchisor over franchisees – as in the case of McDonald’s — may provide a set of facts to establish common law applicable to more attenuated or complex relationships. While the McDonald’s matter will only have immediate precedential value to cases brought under the National Labor Relations Act, the NLRB’s ultimate ruling may be useful in analyzing employment settings not directly regulated by US Labor Law.
One need only consider US retailers that manufacture their products in China, Bangladesh, Vietnam and India. When problems occur at the local workplaces, the retailors – back home – often hide behind the excuse that their products are manufactured by “independent” employers. But is this really the case? When these retailers – for marketing purposes – tout their strict oversight on production and thus quality, can they truly say that responsibilities for local labor conditions are outside their control? Is it really possible for Apple Computers to manufacture its products in Southern China and tout them as true Apple products but when labor problems arise say that they are really the product of an independent company that is responsible for labor conditions at the local level? And so to some degree the McDonald’s case asks the question: “is it really possible for a company to tout the uniform quality of its product and then maintain that it does not exercise at least some control over those at the front line of production who make the product?”
For its part, the NLRB’s remedial abilities are limited and it must go to court to enforce its orders. Other than requiring employers to post notices acknowledging a violation of the law and informing employees of their rights to engage in protected concerted activity, the most the NLRB can require is that employees be given back pay where the employer’s conduct has caused the loss of work or an employment opportunity.
Yet, any back pay award is often offset by compensation received by the employee if he or she were able to find substitute work. And for employees who cannot document their efforts to find new jobs, there is sometimes even a
presumption that they would have found work. The NLRB’s processes are also extremely slow and workers and their unions are not entitled to pursue relief if the General Counsel does not believe their allegations merit a “complaint.”
Against this backdrop, unions have claimed that employers routinely violate Federal Labor Law because the chances of being civilly prosecuted are small and if the General Counsel pursues and secures a remedy, the remedies are worth the price of an infraction which may have the impact of chilling a union organizing campaign. Of course these criticisms of the NLRB are not new and it is because of them that many unions have strategized about ways to protect workers and organise without resort to the NLRB. And so, as the NLRB nears its 80th Anniversary – it was established in 1935 – there are more than a few people who are contemplating its relevance. Curiously, with the pursuit of McDonald’s, all eyes are back on the Board not because any remedy will have a material impact on the hamburger chain’s bottom line, but because the ultimate remedy may provide some insight into the protection of those who are part of attenuated supply chains or complex employment paradigms.