On March 21, 2017, the Northern District of Texas dismissed a former employee’s whistleblower retaliation claim on the ground that her allegations of fraud were too far removed from potentially harming the shareholders of a publicly-traded company to be covered under SOX’s anti-retaliation protections. Brown v. Colonial Savings, F.A., No. 4:16-cv-00884 (N.D. Tex. Mar. 21, 2017).
Ninth Circuit — Dodd-Frank Protects Internal Whistleblowers
On March 8, 2017, a split three-judge panel of the Ninth Circuit Court of Appeals affirmed a Northern District of California decision declining to dismiss a Dodd-Frank whistleblower retaliation claim because the plaintiff did not report his concerns to the SEC. Somers v. Digital Realty Trust, 15-17352 (9th Cir. March 8, 2017). The Ninth Circuit thus aligned itself with the Second Circuit on this issue while the Fifth Circuit came to the opposite conclusion.
Proskauer To Present On Whistleblower Developments At ABA Midwinter Meeting
On February 24, 2017 at 10:30 am, Proskauer Partner Connie Bertram will speak on “Whistleblower Provisions of Sarbanes Oxley” at the American Bar Association Section of Labor and Employment Law’s Federal Labor Standards Legislation Committee Midwinter Meeting in Playa Del Carmen, Mexico. Bertram is the head of Proskauer’s DC Labor
SEC Intervenes In Former In-House Attorney’s Whistleblower Lawsuit
On March 28, 2016, the U.S. Securities and Exchange Commission (“SEC”) filed an amicus brief in a whistleblower lawsuit brought by a former in-house attorney against Vanguard Group (the “Company”). The case is Danon v. Vanguard Group, Inc., Civ. A. No. 15-6864 (E.D. Pa.).
OSHA Releases Final Dodd-Frank Whistleblower Regulations
OSHA recently released its final rule implementing the whistleblower provisions of the Consumer Financial Protection Act of 2010 (“CFPA”). The following are the key features of the rule:
- Deadline for Filing a Complaint: A complaint must be filed within 180 days of the alleged retaliation. OSHA’s
ARB Rejects SOX Claim of Employee Who Threatened Co-Worker
On 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).
Critic of High-Frequency Trading Receives SEC Whistleblower Bounty Award
According to a MarketWatch report, Eric Hunsader of Nanex LLC has identified himself as is the recipient of a more than $700,000 Dodd-Frank whistleblower bounty award. According to Hunsader, the information he provided to the SEC led to a $5 million fine of the New York Stock Exchange.
S.D.N.Y Dismisses Former Employee’s SOX and Dodd-Frank Whistleblower Claims
The U.S. District Court for the Southern District of New York recently granted a motion for summary judgment dismissing a plaintiff’s SOX and Dodd-Frank whistleblower claims. The court ruled that the plaintiff failed to establish retaliation because: (1) almost all of the plaintiff’s alleged protected activity did not allege shareholder fraud and therefore failed; and (2) the plaintiff did not offer any evidence establishing that a single protected complaint she made concerning the defendant’s SEC proxy statements contributed to her termination. Yang v. Navigators Group, Inc., Case No. No. 13-cv-2073 (S.D.N.Y. Jan. 4, 2016).
Divided Sixth Circuit Dismisses Compliance Officer’s FCA Whistleblower Retaliation Claim
Last week, the U.S. Court of Appeals for the Sixth Circuit rejected a former compliance officer’s whistleblower retaliation claim because she did not establish that she had an objectively reasonable belief that she was investigating illegal conduct when her employment was terminated.
Eleventh Circuit Limits Scope of FCA Whistleblower Suit
Late last month, a three-judge panel of the Eleventh Circuit Court of Appeals reinstated portions of a former executive’s False Claims Act (“FCA”) whistleblower action against Health Management Associates Inc. (“HMA”), alleging that the company engaged in an illegal to generate referrals of Medicare and Medicaid patients to its facilitates.
In its ruling, the Eleventh Circuit affirmed the dismissal of plaintiff-relator Michael Mastej’s claims relating to events in 2008 and 2009. It only reversed the Middle District of Florida’s dismissal of Mastej’s allegations concerning events in 2007. The district court had dismissed his claims for failure to satisfy the heightened pleading standards of Rule 9(b) of the Federal Rules of Civil Procedure.