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Proskauer Whistleblower Defense

Third Circuit Sizes Up Dodd-Frank’s Anti-Arbitration Provision

Posted in Dodd Frank

On October 24, 2014, in Khazin v. TD Ameritrade Holding Corp, et al., the U.S. Court of Appeals for the Third Circuit heard oral argument on an issue of first impression (within that forum):  whether Dodd-Frank applies retroactively to invalidate pre-dispute arbitration agreements.  Dodd Frank expressly invalidates pre-dispute arbitration agreements of whistleblower claims brought under Section 1057,  SOX and the Commodities Exchange Act.  Notably, however, Dodd-Frank does not invalidate pre-dispute arbitration agreements of whistleblower claims under Securities Exchange Act (“SEA”), 15 U.S.C. §78u-6(h)(1)(A).  Nor does Dodd-Frank explicitly address the retroactivity of its anti-arbitration provisions.       Continue Reading

Administrative Review Board Clarifies Causation Burdens in SOX Whistleblower Cases

Posted in SOX Whistleblower Decisions

The ARB recently clarified the competing burdens of proof on issues of causation for whistleblower retaliation cases arising under SOX Section 806 and other whistleblower protection statutes.  In particular, in Fordham v. Fannie Mae, ARB No. 12-061 (Oct. 9, 2014), a 2-1 decision, the ARB reversed an ALJ’s decision that had considered the Respondent’s affirmative defense in deciding that an employee had not demonstrated that her whistleblowing was a “contributing factor” in the termination of her employment. Continue Reading

False Claims Act Does Not Protect An Employee Disclosing His Whistleblower History

Posted in False Claims Act

On October 20, the United States District Court for the Southern District of Ohio found that the False Claims Act (“FCA”) did not protect an employee who was fired after revealing his history as a whistleblower and offering to help his new employer prevent overcharges on a government contract.  The court held that the employee failed to state a claim under the FCA because he did not act “in furtherance of” efforts to stop one or more specific or potential FCA violations. Continue Reading

FINRA Again Cautions Against Confidentiality Provisions Silencing Whistleblowers

Posted in Best Practices, FINRA

FINRA LogoAs reported this week by Law360 (subscription required), the Financial Industry Regulatory Authority (FINRA) recently issued a reminder (Regulatory Notice 14-40) warning firms against the use of confidentiality provisions in settlement agreements that prohibit or otherwise restrict customers or anyone else (such as current employees) from communicating with the Securities Exchange Commission (SEC), FINRA, or any federal or state regulatory authority regarding a possible securities law violation. Continue Reading

Further Expanding An Already Expansive NJ Whistleblowing Law

Posted in State-Specific Whistleblower Claims

Often touted as the most expansive state whistleblowing law in the U.S., New Jersey’s seemingly boundless Conscientious Employee Protection Act (“CEPA”) may get even broader.   On October 9, 2014, New Jersey’s Senate Labor Committee approved bill S768, which would expand CEPA to prohibit workplace retaliation against public employees who disclose or object to “a substantial waste of public funds by a governmental entity or . . . an abuse of authority or gross mismanagement.”  Though the proposed amendment focuses solely on governmental misconduct, it would not be surprising if the legislature introduces a similar proposal applicable to private employees in the future.

The bill now heads to the Senate for consideration. We’ll keep you posted.  For more on recent CEPA-related developments, see our CEPA roundup.

SDNY Dismisses Extraterritorial SOX and Dodd Frank Whistleblower Claims

Posted in Dodd Frank, SOX Whistleblower Decisions

Overseas plaintiffs are continuing to seek to pursue  SOX and Dodd-Frank whistleblower claims.  On September 30, 2014, the Southern District of New York in Ulrich v. Moody’s Corp., 2014 U.S. Dist. LEXIS 138082 (S.D.N.Y. Sept. 30, 2014), dismissed SOX and Dodd-Frank whistleblower claims on the grounds that the statutes’ respective anti-retaliation provisions do not apply extraterritorially. Continue Reading

ARB Affirms Blacklisting Award To Whistleblower

Posted in Key ARB Decisions

The ARB upheld a damages award in favor of a whistleblower after his former employer purportedly “blacklisted” him by providing an apparently negative employment reference to a prospective employer.  Timmons v. CRST Dedicated Services, Inc., ARB Case No. 14-051 (Sept. 29, 2014).  This underscores the impact whistleblower laws have on employers’ post-termination conduct.

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Court Affirms $3M Jury Award In Illinois Whistleblower Action

Posted in State-Specific Whistleblower Claims

On August 28, 2014, Judge James McCarthy issued a decision in Crawley v. Chicago State University, Case No. 10 L 12657 (Cook County, Ill., Law Div.), affirming payment of over $3 million to Plaintiff James Crowley (“Plaintiff”), a former Chicago State University (“University”) Senior Legal Counsel, following a jury trial on his whistleblower retaliation claim under the Illinois State Official and Employee Ethics Act (“Ethics Act”).  We previously reported on the jury’s award in our March 18, 2014 post. Continue Reading

Second Circuit To Decide Retroactivity of Dodd-Frank Bounty Provision

Posted in Dodd Frank

As discussed in a Law360 article by Ed Beeson, the Second Circuit Court of Appeals will decide in Stryker v. SEC, No. 13-cv-4404, whether the SEC needs to pay Dodd-Frank whistleblower bounties to tipsters who provided information to the SEC prior to July 21, 2010, the date the law was enacted. Continue Reading