Little-Used Law for Federal Contract and Subcontract Employees to Lapse in 2017

Washington, DC — A law enacted by Congress in 2013 to protect employees of federal contractors and subcontractors from retaliation for reporting fraud or related misconduct is due to sunset before it has been widely used. Public Employees for Environmental Responsibility (PEER) has now filed suit under this law on behalf of a U.S. Forest Service contract employee who was fired after reporting rampant contract violations in a wildlife habitat enhancement project on the Ottawa National Forest in Michigan.

As part of the National Defense Authorization Act for Fiscal Year 2013, Congress enacted a “Pilot Program for Enhancement of Contract Employee Whistleblower Protections” which protects contract employees from termination or other adverse action resulting from their reporting wrongdoing, such as fraud or gross mismanagement, related to the contract. These legal protections are only in effect for four years and will cease to be in effect on July 1, 2017, unless extended by Congress.

Today, PEER filed a petition for review in the U.S. Court of Appeals for the Sixth Circuit on behalf of Terry Schaedig who was discharged on September 22, 2014 from his job as an employee of a government contractor after disclosing numerous contract violations to both his management and federal officials responsible for contract oversight. The contract was between the Forest Service and his employer, the National Wild Turkey Federation.

On December 19, 2014, PEER filed a formal whistleblower complaint in the matter with the Office of Inspector General of the U.S. Department of Agriculture, the Forest Service’s parent agency. In a letter dated September 4, 2015, Agriculture Secretary Tom Vilsack declined to act and issued an “Order Denying Relief.” This action exhausted the law’s stipulated administrative process and freed Mr. Schaedig to seek judicial review, which PEER’s filing initiated.

“Whistleblower protections are only powerful if they are enforced,” stated PEER Staff Counsel Laura Dumais, who filed the judicial petition for review, noting by most estimates that for every one federal employee there are least four contract employees. “Much of the public’s business is accomplished under contracts for which there are few meaningful quality controls. Encouraging contract employees to report problems, misconduct, and mismanagement is a big step toward defending the public’s best interests.”

Although the whistleblower law for federal contract workers is potentially quite consequential, several major agencies appear to have ignored its provisions, especially the requirements that agencies write whistleblower protections into contracts, and ensure that employees of federal contractors are informed about their rights. PEER submitted Freedom of Information Act requests to all major agencies in June 2014 asking for records documenting how they have implemented the new law. The response from the Department of Homeland Security was typical. In a September 30, 2015 response (15 months after the request), DHS could find only five pages of responsive records, all of which they declined to release.

“We are concerned that the whistleblower rights for millions of contract workers may fade into the sunset before they are discovered, let alone utilized,” Dumais added, pointing out that the contract workers’ right to judicial review is a feature largely denied federal workers. “This is a pilot program that has yet to leave the hangar.”