DOLOn February 18, 2016, the ARB dismissed a former employee’s whistleblower retaliation claim under Section 806 of SOX, concluding that he failed to show that his protected activity contributed to the decision to terminate his employment, noting.  The ARB noted that Complainant threatened a co-worker and failed to attend a required counseling program before his employment was terminated.  Folger v. SimplexGrinnell, LLC, ARB Case No. 15-021 (Feb. 18, 2016).

Background

Complainant was employed by the Company, a provider of fire protection and life safety systems, as a Senior Tech Representative.  He alleged that he was terminated by the Company in retaliation for reporting potential violations of SOX—namely, he alleged, that customer inspection assignments were mysteriously disappearing from the Company’s dispatch system.  Complainant made a number of complaints to various co-workers, including his direct supervisor, about alleged inconsistencies in the Company’s billing and inspection practices and other unspecified alleged “book cooking.”  On October 5, 2011, the Company decided to terminate Complainant’s employment for the proffered reasons that he had threatened a co-worker and failed to attend a required counseling program.  Complainant subsequently filed a complaint against the Company with the DOL, alleging that he was discharged in violation of Section 806 of SOX for engaging in protected activity.

The ARB’s Ruling

The ARB pointed to several deficiencies with respect to Complainant attempt to show that his complaint contributed to the decision to terminate his employment.  First, he failed to present any evidence showing that any of the individuals who made the decision to terminate his employment were aware of his complaints.  Second, the Company presented evidence establishing that Complainant threatened a co-worker and failed to attend a required counseling program before his employment was terminated.  Third, Complainant had a documented history of making allegations about the Company’s financial practices that preceded his termination (in addition to several positive performance evaluations) by nearly five years.  Accordingly, the ARB affirmed the ALJ’s finding that Complainant’s protected activity was not a contributing factor in the decision to terminate his employment.

Implications

This decision shows that causation defenses are still well received by the ARB, particularly the defense that protected activities did not contribute to an adverse employment action.

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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.