On October 17, 2017, the Tenth Circuit overturned the ARB’s decision in favor of complainant for want of protected activity under SOX. Dietz v. Cypress Semiconductor Corp., No. 16-9529 (Oct. 17, 2017). This decision rolled back the ARB’s expansive determination that a company violated federal mail and wire fraud laws by implementing a mandatory bonus plan that failed to comply with state wage payment laws.
Background. Complainant worked for another entity before it was acquired by the Company. Offer letters were sent to some of the prior company’s employees, including Complainant, which included compensation information. The offer letters, however, omitted the fact that some of the employees would be subject to an alternative compensation plan (the “Design Bonus Plan”). The Design Bonus Plan involved a mandatory wage deduction, which would later be recuperated based on the performance of the affected employees’ projects. The Company did not start making the deductions until approximately nine months after the prior company’s employees started working for the Company. Training sessions about the Design Bonus Plan were also offered. In April 2013, after one of the training sessions, Complainant emailed his supervisor to discuss his concerns about the legality of the Design Bonus Plan and also discussed this with the General Counsel. Additionally, Complainant complained that the Design Bonus Plan took employees by surprise. Shortly thereafter, the Company disciplined Complainant and allegedly required him to write memos regarding his alleged errors. Two months later, Complainant informed the Company that he intended to resign. Instead of beginning the Company’s turnaround process (designed to retain employees), he was scheduled to attend a meeting two days later.