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E.D. Pennsylvania Dismisses Dodd-Frank Whistleblower Claim After Plaintiff Fails to Qualify as a Whistleblower

By Lloyd B. Chinn, Harris Mufson and Brett Schwab on Posted in Dodd Frank
On July 6, 2017, the U.S. District Court for the Eastern District of Pennsylvania dismissed a whistleblower claim after determining that the plaintiff did not qualify as a whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Reyher v. Grant Thornton, LLP, No. 16-1757 (E.D. Pa. July 6, 2017). Background The plaintiff, … Continue Reading

Jury Rejects Whistleblower Claim By Former SpaceX Employee

By Harris Mufson and Susan McAleavey on Posted in State-Specific Whistleblower Claims
On June 7, 2017, a California jury returned a 9-3 verdict, dismissing whistleblower claims brought by a former Space Exploration Technologies Corporation (“SpaceX”) employee.  Jason Blasdell v. Space Exploration Technologies Corp. et al., Case No. BC 615112 (Cal. Super., LA County). Jason Blasdell, who was employed as an Avionics Test Technician by SpaceX, a space … Continue Reading

Second Circuit Affirms the Dismissal of a SOX Claim for Failing to Meet the “Reasonable Belief” Standard

By Harris Mufson and Sunghee Sohn on Posted in SOX Whistleblower Decisions
On June 1, 2017, the Second Circuit affirmed the dismissal of a Sarbanes-Oxley Act (“SOX”) whistleblower retaliation claim brought by a former Metropolitan Life Insurance Co. (“Company”) employee because the employee lacked a reasonable belief that the Company engaged in any fraudulent conduct.  Kantin v. Metropolitan Life Insurance Co., No. 16-1091-cv (2d Cir. June 1, … Continue Reading

ACA Retaliation Claim Survives Despite No Complaint About ACA Provisions

By Lloyd B. Chinn, Harris Mufson and Susan McAleavey on Posted in ACA
On April 28, 2017, the United States Department of Labor Administrative Review Board (“ARB”) allowed a whistleblower retaliation claim under the Patient Protection and Affordable Care Act (“ACA”) to proceed even though the purported protected activity alleged in the complaint made no reference to ACA provisions.  The case is Gallas v. The Medical Center of … Continue Reading

The Northern District of New York Applies the “Reasonable Belief” Standard

By Lloyd B. Chinn, Harris Mufson and Dana N. Berber on Posted in Dodd Frank, SOX Whistleblower Decisions
On May 11, 2017, the Northern District of New York applied the Second Circuit’s standard for evaluating a Dodd-Frank retaliation claim in response to a motion to dismiss under F.R.C.P. Rule 12(b)(6).  The court denied the employer’s motion to dismiss unlawful retaliation claims brought by a former employee under Dodd-Frank, finding that the whistleblower had … Continue Reading

California Federal Court Upholds $8 Million Jury Verdict In Former General Counsel’s Whistleblower Lawsuit

By Lloyd B. Chinn, Harris Mufson and Andrew Sherwood on Posted in Dodd Frank, SOX Whistleblower Decisions
Recently, a California federal court denied the defendant–employer’s motion for a new trial, upholding the jury’s $7.96 million verdict finding that the Company terminated its former general counsel for reporting alleged Foreign Corrupt Practices Act violations.  See Sanford S. Wadler v. Bio-Rad Labs., Inc. et al., 2017 WL 1910057 (N.D. Cal. May 10, 2017).… Continue Reading

SEC Issues Another Whistleblower Bounty Award

By Lloyd B. Chinn, Harris Mufson and Dana N. Berber on Posted in SEC
On May 2, 2017, the Securities and Exchanges Commission issued a Dodd-Frank whistleblower award of more than $500,000 to an unidentified company employee.  According to the SEC, the individual reported information that prompted an SEC investigation and resulted enforcement action by the agency.  Jane Norberg, Chief of the SEC’s Office of the Whistleblower stated that … Continue Reading

SEC Announces First Whistleblower Award During Trump Era

By Lloyd B. Chinn, Harris Mufson and McKenzie A. Wilson on Posted in Dodd Frank, SEC
On April 25, 2017, the Securities and Exchange Commission issued a Dodd-Frank whistleblower award of nearly $4 million.  This was the first bounty award that was issued from start-to-finish (i.e. from the preliminary determination stage through final order) since Trump’s inauguration.  To maintain the whistleblower’s confidentiality, the SEC declined to disclose the organization involved.  The agency did acknowledge, however, that … Continue Reading

Third Circuit Revives In-House Attorney’s Whistleblower Claim

By Steven J. Pearlman, Harris Mufson and McKenzie A. Wilson on Posted in Dodd Frank, False Claims Act, SEC, SOX Whistleblower Decisions, State-Specific Whistleblower Claims
On April 12, 2017, the Third Circuit partially revived a former in-house attorney’s whistleblower retaliation lawsuit against his previous employer.  Danon v. Vanguard Group, Inc., No. 16-cv-2881. Plaintiff, a former in-house tax lawyer, previously raised retaliation claims against the Company in New York State Court under the New York False Claims Act, alleging he was … Continue Reading

U.S. Supreme Court Passes On Opportunity To Address Scope of Dodd-Frank “Whistleblower” Provision

By Harris Mufson and Edward Young on Posted in Dodd Frank
On Monday, March 20, 2017, the U.S. Supreme Court denied a Petition for Writ of Certiorari in Verble v. Morgan Stanley Smith Barney, LLC. (No. 16-946), thereby declining an opportunity to resolve a conflict amongst circuit courts as to whether Dodd Frank’s anti-retaliation protections extend to employees who do not report an alleged securities violation … Continue Reading

SEC Reduces Whistleblower Bounty Based On Culpability And Delayed Reporting

By Harris Mufson, Steven J. Pearlman and Amy Blackwood on Posted in SEC
On February 28, 2017, in an Order almost entirely devoid of detail, the SEC announced that a whistleblower will receive 20% of any monetary sanctions collected in an enforcement action commenced as a result of the whistleblower’s tip. The SEC is giving this “reduced” award while acknowledging that the whistleblower (1) was “culpable” in the … Continue Reading

S.D.N.Y. Dismisses Dodd-Frank Whistleblower Retaliation Claim

By Steven J. Pearlman, Harris Mufson and Pinchos Goldberg on Posted in Dodd Frank
In one of the first cases to address the standard governing a motion for summary judgment in a Dodd-Frank whistleblower retaliation case, Judge Jed S. Rakoff ruled that two former executives of Vista Outdoor Inc. (the Company) had failed to show that their terminations were causally connected to vague complaints about internal Company controls.  Vista … Continue Reading

Highlights of SEC’s 2016 Annual Whistleblower Report

By Harris Mufson and Marissa A. Mastroianni on Posted in SEC
The Securities and Exchange Commission’s Office of the Whistleblower recently released its sixth Annual Report on the Dodd-Frank Whistleblower Program to Congress, which details information on the SEC’s activities and bounty payouts.  The report covers the SEC’s 2016 fiscal year, which ran from October 1, 2015 to September 30, 2016.… Continue Reading

SEC Issues Two Large Whistleblower Awards

By Harris Mufson and Marissa A. Mastroianni on Posted in SEC
In less than one week, the SEC issued two whistleblower awards totaling over $4.4 million. On December 5, 2016, the SEC issued a whistleblower award of approximately $3.5 million. Several days later, on December 9, 2016, the SEC issued another whistleblower award of more than $900,000.… Continue Reading

E.D. Pennsylvania Limits Protected Activity Under SOX

By Steven J. Pearlman, Harris Mufson and Pinchos Goldberg on Posted in SOX Whistleblower Decisions
In Westawski v. Merck & Co., No. 14-cv-3239 (E.D. Pa. Oct. 18, 2016), the Eastern District of Pennsylvania granted Defendant Merck & Co. (Company) summary judgment on Plaintiff Joni Westawski’s (Plaintiff) SOX whistleblower retaliation claim, concluding that her purported belief that the Company violated securities laws was not objectively reasonable.… Continue Reading

OSHA Issues New Guidance Regarding Whistleblower Settlements

By Harris Mufson and Laura Fant on Posted in Best Practices, SOX Whistleblower Decisions
OSHA has issued new guidance on approving settlement agreements in whistleblower cases, revising portions of its Whistleblower Investigations Manual.  The guidance, dated August 23 but not released until September 15, states that settlements approved by OSHA cannot contain provisions discouraging employees from making future disclosures or contacting the government.  It also sets forth other settlement … Continue Reading

CFTC Proposes New Amendments to its Whistleblower Rules

By Lloyd B. Chinn, Harris Mufson and Esther Pak on Posted in Dodd Frank
The U.S. Commodity Futures Trading Commission (“CFTC” or the “Commission”) has proposed numerous amendments to the Whistleblower Rules found in Part 165 of the CFTC’s Regulations. The Commission seeks to enhance the process for reviewing whistleblower claims and clarify staff authority to administer the whistleblower program through the proposed amendments. Significantly, the CFTC has proposed … Continue Reading

Wisconsin District Court Follows 5th Circuit: Internal Tipsters Are Not Considered “Whistleblowers” Under Dodd-Frank

By Harris Mufson and Esther Pak on Posted in Dodd Frank
On August 12, 2016, the U.S. District Court for the Eastern District of Wisconsin in Lamb v. Rockwell Automation Inc., No. 15-CV-1415-JPS (E.D. Wis. Aug. 12, 2016) held that the Dodd-Frank whistleblower protection provision (Section 922) only protects individuals who provide information to the SEC.  In so holding, the court adopted the Fifth Circuit’s holding … Continue Reading
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