A California federal court—in Erhart v. BofI Holding, Inc., 2017 U.S. Dist. LEXIS 14755, Case No. 15-cv-02287 (S.D. Cal. Sept. 11, 2017)—recently denied BofI Federal Bank’s (“BofI’s”) motion to dismiss the Sarbanes-Oxley whistleblower claims plead in their former internal auditor Charles Erhart’s amended complaint. The court also denied BofI’s motion as to Erhart’s defamation claim, allowing it to proceed, but dismissed Erhart’s claims for (i) violation of the Confidentiality of Medical Information Act (“CMIA”); (ii) intentional infliction of emotional distress; and (iii) breach of the implied covenant of good faith and fair dealing.
DOL Allows SOX Claim Where Foreign Whistleblower Alleged Violation of US Law
The Department of Labor’s Administrative Review Board (ARB) recently held that a former employee of Exelis Systems Corporation who was employed in Afghanistan could bring a SOX claim even though he worked exclusively outside of the United States. Blanchard v. Exelis Systems Corp./Vectrus Systems Corp., ARB Case No. 15-031 (August 29, 2017). In so ruling, the ARB opened the door to the potential extraterritorial application of SOX, reversing course from its prior decision addressing this same issue.
Tennessee District Court: Dodd-Frank is Not a General Anti-Retaliation Law
The United States District Court for the Western District of Tennessee recently emphasized the limited scope of what constitutes protected activity under the Dodd-Frank Act’s (the Act) whistleblower protection provision, noting that the Act protects only “certain kinds of whistleblowers who report certain kinds of violations.” Boyle v. Evolve Bank & Trust et al, No. 16-02171, 2017 U.S. Dist. LEXIS 111964 (W.D. Tenn. July 19, 2017).
Federal Court Compels Arbitration of Dodd-Frank Whistleblower Claim
In a recent decision, the U.S. District Court for the Western District of Wisconsin held that Dodd-Frank whistleblower claims (Section 922 claims) are subject to mandatory arbitration. Wussow v. Bruker Corp., No. 16-CV-444-WMC, 2017 WL 2805016 (W.D. Wis. June 28, 2017).
In Wussow, upon his hire, the plaintiff
E.D. Pennsylvania Dismisses Dodd-Frank Whistleblower Claim After Plaintiff Fails to Qualify as a Whistleblower
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.
Jury Rejects Whistleblower Claim By Former SpaceX Employee
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
Second Circuit Affirms the Dismissal of a SOX Claim for Failing to Meet the “Reasonable Belief” Standard
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, 2017). In doing so, the Court of Appeals affirmed its prior ruling in Nielsen v. AECOM Technology Corp.
ACA Retaliation Claim Survives Despite No Complaint About ACA Provisions
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 Aurora, DOL Administrative Review Board Nos. 16-012, 15-076, ALJ Nos. 2015-ACA-5, 2015-SOX-13 (ARB Apr. 28, 2017).
The Northern District of New York Applies the “Reasonable Belief” Standard
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 sufficiently alleged a reasonable belief of plausible securities law violations in his complaint. McManus v. Tetra Tech Construction, Inc., et al., 2017 U.S. Dist. LEXIS 71838 (N.D.N.Y. May 11, 2017).
California Federal Court Upholds $8 Million Jury Verdict In Former General Counsel’s Whistleblower Lawsuit
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).