The ARB recently affirmed an ALJ’s decision that American Commercial Lines Inc. (the “Company”) did not violate the whistleblower protection provision in Section 806 of SOX where the Company demonstrated by clear and convincing evidence that its decision to discharge employee Angelina Zinn, who was an in-house attorney, was based on her insubordination.  Zinn v. American Commercial Lines Inc., ARB Case No. 13-021 (ARB Dec. 17, 2013).

Background.  The Company, a publicly traded marine transportation and manufacturing company, employed Zinn as a corporate attorney.  Zinn alleged that the Company terminated her employment because she had alerted her supervisors of purported failures to properly vet a subcontractor and report the vetting failure and a change in the Company’s general counsel to the SEC.  Zinn asserted that she was retaliated against because, shortly after her complaint, the Company reduced her responsibilities, required her to take a drug test, subjected her to increased job performance monitoring and standards, and ultimately terminated her employment.

The ARB’s Ruling.  The ARB affirmed the ALJ’s determination that the Company was not liable under the SOX whistleblower provision because it established, by clear and convincing evidence, that it would have discharged Zinn regardless of any whistleblowing activity.  The ARB adopted the argument that the termination decision was based on Zinn’s insubordination and failure to complete work assigned to her by the Company’s Senior Vice President and General Counsel.  The evidence on which the ARB relied included an e-mail exchange in which Zinn stated that she would not complete her work and told the General Counsel, “I can’t respect you.”  With respect to Zinn’s allegation that she was improperly required to take a drug test, the ARB accepted the ALJ’s conclusion that Zinn was administered the test in accordance with Company policy after she appeared to be under the influence at work.  The ARB also accepted the ALJ’s finding that Zinn’s hours were reduced at her request and that, after she received a negative drug test, the Company monitored her performance in order to encourage better performance.

Implications.  This decision shows that while employers face a “clear and convincing evidence” standard in establishing that they would have taken the challenged adverse action regardless of protected activity, that standard can be readily satisfied through evidence establishing employee misconduct or insubordinate behavior.  Of course, the likelihood of prevailing on a causation defense increases where employers implement and follow clear policies and carefully document employee conduct that violates those policies. 

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Steven J. Pearlman Steven J. Pearlman

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

Steven’s practice covers the full spectrum of employment law, with a particular…

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

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

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.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. 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.” 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 has served on Law360’s Employment Editorial Advisory Board and is a Contributor to He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly 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.