On February 22, 2018, the Tenth Circuit Court of Appeals reversed a district court’s grant of summary judgment against Plaintiff who claimed that his employment was terminated in violation of the SOX whistleblower protection provision.  The court concluded that genuine issues of material fact existed as to whether Plaintiff actually believed that the complained-of conduct was unlawful and whether the complaints were a contributing factor in Plaintiff’s termination. Genberg v. Porter, No. 16-cv-1368.

Background.  Plaintiff was an executive at a biopharmaceutical company.  In March 2010, he sent a pair of e-mails to the company’s board of directors, which alleged, among other things, that the CEO was engaged in insider trading.  The board hired an attorney to investigate, and the investigation found no evidence of insider trading but allegedly uncovered that Plaintiff had been involved in an attempt to acquire the company.  Allegedly on that basis, the board discharged Plaintiff.  Plaintiff proceeded to sue the CEO under SOX in the United States District Court for the District of Colorado, arguing that the e-mails constituted protected activity.  The district court granted the employer’s motion for summary judgment, holding that at least one of Plaintiff’s two e-mails had not been protected by SOX because it did not “definitively and specifically” relate to a violation of one of the laws enumerated in Section 806 of SOX.

Rulings.  The Tenth Circuit reversed the district court, ruling that the lower court had incorrectly applied the “definitively and specifically” standard when it should have applied the standard articulated by the Administrative Review Board in Sylvester v. Parexel, No. 07-123 (ARB May 25, 2011).  The court wrote, “[the district court’s] statement of the burden was incorrect, for the Administrative Review Board of the Department of Labor has explicitly disavowed the definitive and specific evidentiary standard… [and] [u]nder Chevron deference, we follow the Administrative Review Board’s interpretation if it is based on a permissible construction of an ambiguous statute.”  Further, the Tenth Circuit found that genuine factual disputes existed as to whether Plaintiff’s e-mails contributed to the decision to terminate his employment.  The court reasoned that the temporal proximity between the e-mails and the board’s decision to discharge the Plaintiff meant that a reasonable factfinder could potentially conclude that the e-mails had been a contributing factor in the decision.

Implications.  The Tenth Circuit’s opinion is another example of a court deferring to the ARB’s standard in Sylvester, which lowers the burden for a plaintiff who seeks to demonstrate that he or she engaged in protected activity under SOX.