4thOn May 20, 2016, the Fourth Circuit affirmed the decision of the ARB, finding that a former employee of Deltek, Inc. (Company) was retaliated against in violation of Section 806 of SOX and entitled to four years’ worth of front pay.  Deltek, Inc. v. Dep’t of Labor, No. 14-cv-2415 (unpublished).

Dinah Gunther (Plaintiff), a former financial analyst, allegedly believed her employer was deliberately subjecting invoices to baseless disputes in an effort to hide a telecommunications budget shortfall and obfuscate the true financial condition of the IT Department.  She reported her concerns to company officials, and complained that she was being subject to adverse treatment following her complaints.  In a meeting with in-house counsel and the Vice President of Human Resources on the day she returned to work following a leave of absence, she said she believed she was being retaliated against.  She made a secret recording during that meeting, which the Company learned of at a later date.  The following day, the Company terminated her employment.  The Company’s proffered reason for the termination was Plaintiff’s purportedly confrontational and disruptive conduct during and after the meeting.

Following her discharge, Plaintiff filed a complaint with the DOL under Section 806 of SOX.  An ALJ found that the Company retaliated against her and awarded her four years of front pay and required the Company to maintain its tuition reimbursement program for Plaintiff.  The front pay award amounts to $300,352 and the tuition reimbursement benefits are valued at $30,000.  The ARB affirmed, and the Company appealed to the Fourth Circuit.  The Fourth Circuit affirmed in whole.  It found there was substantial evidence to support the conclusion that Plaintiff’s protected activity contributed to Plaintiff’s termination.  With regard to damages, the court disagreed with the Company that the front pay award was speculative.

The Dissent criticized the Majority on both its causation- and damages-related findings.  The Dissent was concerned that the Majority rubberstamped the decision of the lower tribunal, failing to account for the Company’s explanations for discharging Plaintiff.  It also found that the damages awarded were “rankly speculative” and amounted to a windfall.

This decision underscores the risk of oversized front-pay awards in SOX cases and highlights the degree to which some courts may defer to the ARB and ALJs.

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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 Forbes.com. 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.