Schroeder v. Greater New Orleans Federal Credit Union,
U.S. Court of Appeals for the Fifth Circuit.
The case of Schroeder v. Greater New Orleans Federal Credit Union raises the question of whether whistleblower protections should extend to individuals who disclosed information to internal supervisors, instead of only to those who disclosed to federal agencies.
Mary Schroeder is a former employee of the Greater New Orleans Federal Credit Union (“GNOFCU”). She was a manager of the collections, lending and call center department. Whistleblower Network News explains how on June 19, 2008, she contacted the National Credit Union Administration (“NCDU”) to report fraudulent loan activity on behalf of GNOFCU. She followed up her concerns with GNOFCU’s Supervisory Committee as well as with Federal Bureau of Investigation (“FBI”). An internal audit uncovered evidence consistent with Schroeder’s claims. GNOFCO CEO Janet Sanders invited Schroeder’s assistant to dinner where it was revealed that Schroder had contacted the NCDU. Within days, Sanders was planning how to confront Schroeder whilst avoiding “the appearance of any retaliation.” They began by demoting Schroeder for making “negative comments that might stimulate discord” and that show “poor judgment on your part” before peppering Schroeder’s file with employee complaints about her “attitude” and “management style.” Schroeder retained an attorney who helped her make more complaints to the NCUA and FBI. On October 8, 2008, GNOFCU fired Schroeder.
On February 11, 2011, the National Whistleblower Center (“NWC”) submitted an amicus brief in support of Schroeder. In the brief, it’s argued that Schroeder’s report to the GNOFCU Supervisory Committee should also be protected by the Federal Credit Union Act (“FCUA”). The brief made creative use of the comments that the Chamber of Commerce and Association of Corporate Counsel have made to the US Sentencing Commission and the SEC about the importance of their internal compliance programs. It also reached back to the 1970’s mining cases that first explained how employees use the chain of command as the established channels for the first steps in making disclosures.
The outcome was a complete victory for Schoeder, who could then challenge all of the adverse actions facing her before a jury and was even eligible to seek punitive damages.
Photo by Dmitrij Paskevic