On October 31, 2019, the ARB held that an employee who merely “hints” that he or she intends to file a whistleblower complaint has not engaged in protected activity sufficient to invoke the whistleblower protection provision in SOX.  Hoptman v. Health Net of California, ARB Case No. 2017-0052, (Oct. 31, 2019).

Background

Complainant was a claims representative for the Company, a health maintenance organization.  Complainant alleged that he discovered systemic overpayments to the Company by plan members and began working with a plan member to purportedly expose his employer’s actions.  Complainant allegedly texted the plan member and asked her to fill out a HIPAA form so that he could access her personal information, explaining that he could not afford to continue with his investigation against the Company and that he would share money with her if she would help him with his case.  Following Complainant’s suggestion, the plan member filed a complaint with California’s Department of Managed Health Care (DMHC) regarding her alleged overpayments.

Later, during a meeting with a Company manager on an unrelated matter, Complainant mentioned that he had a complaint “in the works” and that the Company would get “in a lot of trouble,” though he conceded that he did not mention any fraudulent activity nor that he was considering filing a complaint with the SEC.  Shortly thereafter, the plan member informed DMHC about her communications with Complainant and DMHC shared this information with the Company.  The Company then terminated Complainant’s employment.

Complainant filed a SOX complaint with OSHA and after OSHA dismissed his complaint for lack of protected activity, an ALJ granted Respondent’s motion for summary judgment on the same basis.  He then appealed to the ARB.

Ruling

The ARB affirmed, finding that Complainant did not engage in protected activity under SOX.  Complainant argued that in his communications with the plan member he had revealed that he was “about to file” a complaint, and his later conversation with a senior manager “hinted” at this assertion.  However, the ARB ruled that because the communications with the plan member were “deliberately concealed” from the Company, and Complainant stated only that he was planning on filing a complaint, he had not engaged in protected activity under SOX.

Implications

This decision demonstrates that the current ARB may take a more limited approach to determining the scope of what constitutes protected activity under SOX.