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Category Archives: SOX Whistleblower Decisions

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Federal Court Allows SOX Whistleblower Claim To Proceed But Dismisses Dodd-Frank Claim

By Steven J. Pearlman and Annabel Pollioni on Posted in SOX Whistleblower Decisions
On October 2, 2018, the U.S. District Court for the Western District of Pennsylvania federal court denied a Rule 12(b)(6) motion to dismiss a SOX whistleblower retaliation claim, reasoning that Plaintiff sufficiently alleged that he engaged in protected activity and that his protected activity was a contributing factor in his termination.  But it dismissed the … Continue Reading

Third Circuit Affirms Dismissal of SOX Whistleblower Suit

By Harris Mufson and Jay M. Cohen on Posted in SOX Whistleblower Decisions
On June 27, 2018, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal on summary judgment of a SOX whistleblower retaliation claim, concluding that the Plaintiff’s purported belief that the Defendant had committed fraud was not objectively reasonable. Westawski v. Merck & Co., No. 16-4075, 2018 WL 3159093 (3d Cir. June 27, … Continue Reading

Alabama Federal Court Partially Grants Motion to Dismiss SOX Claim On Exhaustion Grounds

By Brett Schwab and Steven J. Pearlman on Posted in SOX Whistleblower Decisions
On May 29, 2018, the U.S. District Court for the Northern District of Alabama granted a motion to dismiss in part Plaintiff’s whistleblower retaliation claims under SOX on the grounds that the Plaintiff failed to exhaust his administrative remedies against the Defendant CEO.  Wingo v. S. Co., 17-cv-01328. Background.  Plaintiff, a Project Manager, informed his … Continue Reading

Update on BofI Whistleblower Litigation

By Lloyd B. Chinn, Harris Mufson and Austin McLeod on Posted in SOX Whistleblower Decisions
We previously reported in March and last October on a whistleblower litigation brought by Charles Erhart, a former Bank of Internet Holding, Inc. (BofI) internal auditor.  On December 3, 2015, in a separate action, the shareholders of BofI brought a derivative suit, based in part on the facts of the whistleblower case, claiming BofI’s board of directors … Continue Reading

ARB Rejects SOX Claim Due to Complainant’s Harassment

By Steven J. Pearlman, Harris Mufson and Arielle E. Kobetz on Posted in OSHA Administration, SOX Whistleblower Decisions, Title VII
The ARB recently affirmed a motion for summary decision against a Complainant claiming retaliatory discharge under SOX, finding that he failed to demonstrate that he engaged in protected activity and that the Company would have discharged him in the absence of any protected activity given his misconduct. Latigo v. ENI Trading & Shipping, 2018 DOL … Continue Reading

Chicago Federal Court Rejects Retaliatory Discharge Claim Due To Existence Of SOX Whistleblower Claim

By Steven J. Pearlman and Alex Weinstein on Posted in SOX Whistleblower Decisions, State-Specific Whistleblower Claims
On April 23, 2018, the U.S. District Court for the Northern District of Illinois ruled that a plaintiff’s SOX claim precluded his claim for common law retaliatory discharge.  Cohen v. Power Solutions International, Inc., No. 17-cv-4385. Plaintiff, a COO, claimed that in early 2016, he became suspicious of the Company’s financial dealings and believed the Company … Continue Reading

SDNY Grants Summary Judgment Against Plaintiff in SOX Blacklisting Suit

By Lloyd B. Chinn, Harris Mufson and Annabel Pollioni on Posted in SOX Whistleblower Decisions
The U.S. District Court for the Southern District of New York recently granted a motion for summary judgment against a Plaintiff claiming retaliatory blacklisting under SOX, holding that a former employer’s policy of refusing to conduct business with plaintiff was not actionable under the circumstances of the case.  Kshetrapal v. Dish Network, 2018 U.S. Dist. … Continue Reading

Tenth Circuit Reverses Grant of Summary Judgment on SOX Whistleblower Claim

By Steven J. Pearlman and Bassam Gergi on Posted in SOX Whistleblower Decisions
On February 22, 2018, the Tenth Circuit Court of Appeals reversed a district court’s grant of summary judgment against Plaintiff who claimed that his employment was terminated in violation of the SOX whistleblower protection provision.  The court concluded that genuine issues of material fact existed as to whether Plaintiff actually believed that the complained-of conduct … Continue Reading

Mississippi Federal Court Denies Summary Judgment on SOX Whistleblower Claim

By Steven J. Pearlman and Brett Schwab on Posted in SOX Whistleblower Decisions, State-Specific Whistleblower Claims
On February 12, 2018, the United States District Court for the Northern District of Mississippi recently denied a motion for summary judgment in a SOX whistleblower claim where the defendant company alleged that it terminated the plaintiff pursuant to a reduction-in-force (RIF). Hendrick v. ITT Engineered Valves, LLC, No. 16-cv-204. Background. Plaintiff began working as … Continue Reading

Seventh Circuit Affirms Grant of Summary Judgment on Terminated CEO’s SOX And DFA Claims

By Lloyd B. Chinn, Harris Mufson and Bassam Gergi on Posted in Dodd Frank, SEC, SOX Whistleblower Decisions
Last week, the Seventh Circuit Court of Appeals held that a terminated CEO’s complaints about his board of directors’ managerial decisions did not qualify as protected whistleblowing under the Sarbanes-Oxley Act of 2002 (“SOX”) nor under the Dodd-Frank Act of 2010 (“DFA”).  Verfuerth v. Orion Energy Sys., Inc., No. 16-3502, 2018 WL 359814 (7th Cir. … Continue Reading

Tenth Circuit Vacates ARB Whistleblower Decision

By Steven J. Pearlman and Marissa A. Mastroianni on Posted in DOL Decisions, SOX Whistleblower Decisions
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 … Continue Reading

S.D. Fla. Refuses To Dismiss SOX and Dodd-Frank Whistleblower Claims

By Steven J. Pearlman and Marissa A. Mastroianni on Posted in Dodd Frank, SEC, SOX Whistleblower Decisions
The Southern District of Florida recently denied a Rule 12(b)(6) motion to dismiss a former employee’s Sarbanes-Oxley and Dodd-Frank whistleblower retaliation claims, finding that the plaintiff sufficiently alleged that she had an objectively reasonable belief regarding alleged securities violations.  Thomas v. Tyco Int’l Mgmt. Co., LLC, No. 16-cv-80501 (Mar. 31, 2017).  This case is noteworthy … Continue Reading

UPDATE: California Federal Court Permits Former Bank Internal Auditor’s Whistleblower Claims to Proceed

By Harris Mufson, Jeremy M. Mittman and Pietro Deserio on Posted in SOX Whistleblower Decisions
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, … Continue Reading

DOL Allows SOX Claim Where Foreign Whistleblower Alleged Violation of US Law

By Lloyd B. Chinn, Harris Mufson and Rachel Fischer on Posted in SOX Whistleblower Decisions
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, … Continue Reading

Purported Whistleblower Barred from Pursuing Illinois Retaliatory Discharge Claim

By Steven J. Pearlman and Amanda Wiley on Posted in Dodd Frank, SOX Whistleblower Decisions, State-Specific Whistleblower Claims
The Northern District of Illinois recently dismissed an Indiana-based employee’s claims for retaliatory discharge in violation of common law pursuant to Illinois public policy, focusing on the nature of the connection (or lack thereof) to Illinois and noting that the plaintiff possessed adequate statutory remedies under federal whistleblower laws.  O’Risky v. Mead Johnson Nutrition Co., … Continue Reading

Ninth Circuit Affirms Dismissal Of Dodd-Frank Whistleblower Case, Using Securities Fraud Standard

By Steven J. Pearlman and Pietro Deserio on Posted in Dodd Frank, SOX Whistleblower Decisions
The Ninth Circuit recently affirmed a grant of summary judgment in an employer’s favor, dismissing a SOX and Dodd-Frank whistleblower retaliation case based on the plaintiff’s lack of an objectively reasonable belief of violations of securities law.  Rocheleau v. Microsemi Corporation, Inc., 680 Fed. Appx. 533 (2017). Background.  Defendant, a publicly traded company, hired Plaintiff … 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

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

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

N.D. Indiana: Employer Bears Burden of Proving Whistleblower Exhausted Administrative Remedies

By Steven J. Pearlman and Amy Blackwood on Posted in OSHA Administration, SOX Whistleblower Decisions
On February 1, 2016, the Northern District of Indiana ruled in a case brought under the Federal Railroad Safety Act (FRSA) that whether a whistleblower has fulfilled relevant administrative requirements prior to filing suit is a “condition precedent” rather than a “jurisdictional requirement.”  King v. Ind. Harbor Belt R.R., 2017 U.S. Dist. LEXIS 43263 (N.D. … Continue Reading

Texas District Court Dismisses SOX Whistleblower Claim For Lack of Protected Activity

By Lloyd B. Chinn and Emilie Adams on Posted in Dodd Frank, SOX Whistleblower Decisions
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, … Continue Reading

Maryland District Court Dismisses SOX and Dodd Frank Whistleblower Claims

By Steven J. Pearlman and Edward Young on Posted in Dodd Frank, SOX Whistleblower Decisions
On March 1, 2017, the District of Maryland dismissed a Dodd Frank whistleblower retaliation claim because the plaintiff failed to allege that he had complained directly to the SEC about a violation of securities laws, and dismissed the plaintiff’s SOX whistleblower retaliation claim because the complaint did not allege that the employer was a publically … Continue Reading

Proskauer to Present on Managing Whistleblowing Employees at ABA Midwinter Meeting

By Lloyd B. Chinn on Posted in Best Practices, SOX Whistleblower Decisions
On Thursday March 23, 2017 at 9:00 a.m., Lloyd Chinn will speak on “Practical Advice and Tips for Managing Whistleblowing Employees: Where Do We Go After the Volcano Blows?” at the 2017 Midwinter Meeting of the ABA Section of Labor and Employment Law’s Employment Rights and Responsibilities Committee in Puerto Vallarta, Mexico. Chinn is a partner … Continue Reading
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