On January 4, the Third Circuit affirmed the dismissal of a former bank executive’s whistleblower retaliation claims, holding that two procedural errors doomed his case: he sued before exhausting his administrative remedies; and then he belatedly filed an administrative complaint after the statute of limitations had run.  Jaludi v. Citigroup, No. 21-cv-1108.

Background

Plaintiff alleged that he was demoted, transferred and ultimately discharged after he reported alleged wrongdoing.  He also alleged that he was then “blacklisted” from the financial industry.

In 2015, Plaintiff filed suit in the U.S. District Court for the Middle District of Pennsylvania alleging various claims, including unlawful retaliation under SOX’s anti-retaliation provision.  The district court initially granted the bank’s motion to compel arbitration, but in 2019, the Third Circuit reversed, holding that the Dodd-Frank Act amended SOX to prohibit pre-dispute agreements requiring arbitration of SOX whistleblower claims.  On remand, the district court dismissed the SOX claim as untimely because Plaintiff waited more than two years after the last incident of alleged retaliation to file an administrative complaint with OSHA—long after the 180-day deadline.

Ruling

On appeal, the Third Circuit affirmed.  The court first held—after analyzing the statute’s plain language and applying basic rules of statutory construction—that SOX’s statute of limitations and exhaustion requirements are not jurisdictional.  The court therefore determined that it could proceed to the merits.  The court then concluded that Plaintiff’s SOX claims were time-barred because he failed to exhaust administrative remedies before filing suit in court, and only filed his administrative complaint after the 180-day statute of limitations had expired.  The court also rejected Plaintiff’s request for leave to amend, ruling that any amendment would be futile.

Implications

This decision serves as a reminder that courts will strictly construe the 180-day statute of limitations applicable to SOX whistleblower claims.

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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.

Photo of Pinchos Goldberg Pinchos Goldberg

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department and a member of the Whistleblowing & Retaliation and Wage & Hour Practice Groups.

Pinny represents employers in a broad array of matters before federal and state courts, FINRA and…

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department and a member of the Whistleblowing & Retaliation and Wage & Hour Practice Groups.

Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, whistleblowing and retaliation, wage and hour, covenants not to compete, and tort and contract claims.

As an experienced trial lawyer, Pinny has successfully litigated numerous cases from complaint through jury verdict or arbitral award. Notably, Pinny served as trial counsel to King & Spalding LLP in a widely publicized wrongful termination lawsuit brought by a former associate in which the jury returned a complete defense verdict on the seventh day of trial.

In addition to handling litigation and dispute resolution, Pinny regularly advises clients on a wide variety of employment issues, including drafting, reviewing and revising handbooks and workplace policies. He also addresses questions and concerns related to hiring, wage and hour issues, employee leave, performance problems, terminations of employment, and separation agreements and releases.

Pinny represents employers across a broad range of industries, including financial services, insurance, law firms, media and entertainment, professional sports, and higher education.

In addition to his active practice, Pinny serves as an editor for the Proskauer Whistleblower Defense Blog and Proskauer on Trade Secrets Blog. He is also a regular author of “Expert Analysis” articles for Law360.

While in law school, Pinny served as an editor for the Cardozo Law Review.

Photo of Ariel Brotman Ariel Brotman

Ariel Brotman is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, whistleblower, trade secrets, and…

Ariel Brotman is an associate in the Labor & Employment Department and a member of the Employment Litigation & Arbitration Group. She represents employers in all aspects of employment litigation, including wage and hour, wrongful termination, discrimination, harassment, retaliation, whistleblower, trade secrets, and breach of contract litigation, in both the single-plaintiff and class-action context. She also counsels employers on a diverse range of workplace issues.

Ariel earned her J.D. from USC Gould School of Law, where she was a member of the Southern California Interdisciplinary Law Journal. During law school, she was also a clinical student in the University of Southern California Immigration Clinic. In addition, she served as a judicial extern to the Honorable Robert N. Kwan in the United States Bankruptcy Court, Central District of California.