North Carolina intellectual property law targeting whistleblowers faces lawsuit from PETA, other groups

by Jay Pate

People for the Ethical Treatment of Animals (PETA), the Center for Food Safety, and other groups have filed a federal lawsuit over a North Carolina intellectual property law that targets whistleblowers who expose corporate wrongdoing through the use of hidden cameras. Opponents of the law, which was passed last summer over the veto of Gov. Pat McCrory, say that it violates the constitutional free-speech and equal protection rights of whistleblowers and investigative journalists.

The law in question was intended by lawmakers to give legal recourse to employers against anyone who gets a job with a company for the purpose of stealing company secrets or recording alleged mistreatment of animals at a farm or factory. The law gives employers the ability to file a lawsuit for monetary damages against any person who gains access to nonpublic areas of their place of business and commits an act of theft or sets up audio or video recorders. Employers would be able to seek $5,000 in damages for each day that the state law is violated.

North Carolina legislators who supported the law said that it gave employers in the state an additional tool to protect against the theft of their intellectual property. However, PETA and the other groups who filed the lawsuit say that the North Carolina law is a thinly-veiled attempt to stop hidden-camera exposes of animal cruelty at farms and meat-packing plants. The groups also say that the law could make it easier for employers to intimidate employees who try to report misconduct such as elder abuse at nursing homes.

Wayne Pacelle, president and CEO of the Humane Society of the United States, said last year that the new law “turns whistleblowers into criminals, and it provides special protections for corporations and individuals that do terrible things to animals and even vulnerable people.” Lawmakers who voted against the bill said that a teenager who works in a pet store and posts pictures of abuse at the business on Facebook could be held civilly liable under the law. Other lawmakers said the law would restrict the ability of journalists to conduct undercover investigations.

North Carolina Gov. Pat McCrory vetoed the bill in June 2015 after it was passed by lawmakers in the state House and Senate. The Governor said that the law did not do enough to protect honest workers who report criminal activity, and would discourage those workers from reporting corporate wrongdoing. However, Republican lawmakers in both houses joined in a vote to override the Governor’s veto and the objections of Democratic lawmakers, allowing the law to go into effect.

Intellectual Property and “Qui Tam” Whistleblower Litigation

Individuals who have witnessed fraud first-hand may be eligible to file a “qui tam” or whistleblower lawsuit against the corporations or individuals who were responsible. To encourage private citizens to come forward with information regarding fraud against the government, the False Claims Act provides significant financial incentives. Billions have been recovered as a result of False Claims Act lawsuits, and hundreds of millions have been paid to the private citizens who below the whistler and made those recoveries possible.

Anyone who has information that a business or person has knowingly submitted a fraudulent claim to any branch of the government can potentially help file and pursue a lawsuit under the False Claims Act. The whistleblower in these cases does not have to have been personally harmed; they just need to be aware of the false or fraudulent conduct. If money is recovered from a settlement or from a court judgment, the whistleblower who helped initiate the lawsuit can potentially recover up to 30% of the total amount recovered.

The law firm of Heygood, Orr & Pearson has experience handling whistleblower claims. For example, our lawyers successfully negotiated a $1.75 million award for a whistleblower in a large tax fraud case. Our attorneys have the knowledge and experience to ensure that whistleblowers receive the highest possible compensation for pursuing fraud allegations involving government agencies.

Heygood, Orr & Pearson has also handled hundreds of intellectual property and commercial litigation cases, ranging in value from tens of thousands of dollars to tens of millions. These cases have involved businesses of all sizes, ranging from small, local businesses to some of the largest multinational corporations in the world. We have handled cases of all shapes and sizes, including patent matters, claims for trademark infringement, and patent rights interference.

For more information about filing a lawsuit involving intellectual property matters or whistleblower allegations, contact the lawyers at Heygood, Orr & Pearson for a free legal consultation. You can reach us by calling our toll-free hotline at 1-877-446-9001, or by following this link to our free legal consultation form and answering a few simple questions to get started.