On September 30, 2013, OSHA awarded more than $1.9 million to a former CFO of Clean Diesel Technologies, Inc. (the Company) (based in Ventura, California) who is not identified in OSHA’s press release.  This award is based on OSHA’s finding that the Company violated Section 806 of SOX by discharging the CFO in retaliation for his warning the board of directors about financial concerns raised by a proposed merger. 

Background

In late March 2010, the former CFO allegedly provided information to the Company’s board of directors based on his/her belief that there was a conflict of interest involving the chair of the board of directors.  According to OSHA, the CFO believed a proposed merger was detrimental to the Company, important financial information was withheld from board members, and the conflict of interest violated internal controls and the Company’s code of ethics.  The CFO filed a SOX whistleblower retaliation complaint with OSHA in April 2010, a week after he/she was discharged.  OSHA’s investigation found the complaint to be meritorious. 

The Relief OSHA Ordered

In its September 30 Order, OSHA ordered the Company to:

  • pay the complainant more than $486,000 in lost wages, bonuses, stock options and severance pay;
  • pay over $1.4 million in compensatory damages for pain and suffering, damage to career and professional reputation, and lost 401(k) employer matches and expenses;
  • post OSHA’s findings in a Form 8-K submission to the SEC;
  • expunge all files and computerized data systems of disciplinary actions related to the complainant’s termination;
  • post the order and a notice to workers at all Company locations and on its internal website; and
  • pay reasonable attorney’s fees.

Implications

OSHA’s press release expresses its intent to “send a clear message to publicly traded companies that silencing those who try to do the right thing as unacceptable.”  The sheer size and range of relief OSHA seeks to require through its preliminary order exposes that goal in a loud and clear way.  Query what implications including OSHA’s findings in a Form 8-K may have, and whether the Company will appeal this preliminary order.  We will keep our readers updated as events unfold.

Posted in OSHA Administration
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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice.…

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice. Steven’s national practice focuses on defending companies in federal and state courts and arbitration against claims of: discrimination, retaliation and harassment, including claims brought by high-level executives; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations (including class, collective and PAGA actions).

Illustrating his versatility, Steven has successfully handled bench and jury trials in multiple jurisdictions (e.g., Illinois, California, Florida and Texas); defended one of the largest Illinois-only class actions in the history of the federal courts in Chicago; and prevailed following his oral arguments before the Seventh Circuit and state appellate courts. Steven brings his litigation experience to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He was also named as One of the Top 10 Impactful Labor & Employment Lawyers in Illinois for 2023 by Business Today. He is a Fellow of the College of Labor and Employment Lawyers. Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Chambers also reports that “He is someone who can navigate the twists and turns of litigation without difficulty. Steven is great with brief-writing, crafting arguments, and making sure the client is always happy.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC, and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

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