On June 18, 2020, the U.S. Department of Labor Administrative Review Board (“ARB”) held that a complaint about a theoretical violation of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010 (“Dodd-Frank”) does not constitute protected activity under the whistleblower provisions of that statute. Bryan Horn v.
DOL Decision Confirms Extraterritorial Limits of SOX Whistleblower Provision
As we previously reported, the Department of Labor’s (DOL) Administrative Review Board has twice held that Sarbanes Oxley’s anti-retaliation provision does not apply extraterritorially. See Hu v. PTC, Inc., ARB Case No. 2017-0068 (Sept. 18, 2019); Perez v. Citigroup, Inc., ARB Case No. 2017-0031 (Sept. 30, 2019).
Tenth Circuit Vacates ARB Whistleblower Decision
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.
Proskauer to Present at Whistleblower Conference in NY
On Monday, February 27, 2017, Proskauer Partner Steve Pearlman, co-head of the Firm’s Whistleblowing & Retaliation Group, will present on key considerations for crafting effective employment-related agreements, including separation and settlement agreements, at a program developed by Compliance Week and Financial Research Associates. This in-depth conversation will allow senior compliance,
ARB Broadly Interprets Adverse Action Once Again
On November 24, 2015, the ARB adopted an expansive interpretation of what constitutes an adverse action for claims asserted under the Federal Railroad Safety Act of 1982 (FRSA), holding that a reduced performance rating with no compensation-related consequences and a failure to pay medical bills in connection with a work-related accident are actionable. Fricka v. National Railroad Passenger Corp., ARB Case No. 14-047 (Nov. 24, 2015).
ARB Rules That Secret Recording of Workplace Conversations Can Be Protected Whistleblowing Activity
On September 28, 2015, the U.S. Department of Labor Administrative Review Board (“ARB”) held that the recording of workplace conversations can be protected whistleblower activity under the Energy Reorganization Act of 1974 (“ERA”). Franchini v. Argonne National Laboratory, ARB Case No. 13-081 (Sep. 28, 2015).
ALJ Applies Villanueva Factors, Finds Overseas Employee’s Whistleblower Claim “Territorial”
In Dos Santos v. Delta Airlines, Inc., 2012-AIR-20 (ALJ Jan. 11, 2013), an Administrative Law Judge (ALJ) of the U.S. Department of Labor (DOL) examined whether the facts alleged by the complainant required a territorial or extraterritorial application of one of the whistleblowing statutes enforced by the DOL. This blog posting summarizes the ALJ’s decision and analyzes the impact for multinational employers.