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Category Archives: SOX Whistleblower Decisions

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DOL Decision Confirms Extraterritorial Limits of SOX Whistleblower Provision

By Harris Mufson, Pinchos Goldberg and Dominique Kilmartin on Posted in DOL Decisions, SOX Whistleblower Decisions
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).  An Administrative Law Judge (ALJ) of the DOL … Continue Reading

SDNY: Directors Not Liable For Whistleblower Claims Under SOX

By Steven J. Pearlman, Pinchos Goldberg and Scott Tan on Posted in SOX Whistleblower Decisions
On December 9, 2019, the U.S. District Court for the Southern District of New York ruled that, as a matter of law, directors cannot be held liable under the anti-retaliation provisions of the Sarbanes-Oxley Act.  Zornoza v. Terraform Global Inc., No. 18-cv-11617. Background Plaintiff is the former President and CEO of the defendant companies which … Continue Reading

ARB: SOX Whistleblower Provision Does Not Apply Extraterritorially

By Harris Mufson and Allison Martin on Posted in Key ARB Decisions, SOX Whistleblower Decisions
In a pair of recently issued decisions, the Department of Labor’s Administrative Review Board (ARB) held that Sarbanes Oxley’s anti-retaliation provision does not apply extraterritorially.  Hu v. PTC, Inc., ARB Case No. 2017-0068 (Sept. 18, 2019); Perez v. Citigroup, Inc., ARB Case No. 2017-0031 (Sept. 30, 2019). Hu Decision In Hu, the complainant worked entirely … Continue Reading

SDNY Grants Motion to Dismiss SOX Retaliation Claim

By Steven J. Pearlman and Jacob L. Hirsch on Posted in SOX Whistleblower Decisions
On September 18, 2019, the U.S. District Court for the Southern District of New York granted a defendant-employer’s motion to dismiss a SOX whistleblower retaliation claim, finding that the plaintiff failed to adequately plead protected activity.  Tonra v. Kadmon Holdings, Inc., No. 18-cv-9028. Background The defendant-employer is a publicly traded biopharmaceutical company that develops and … Continue Reading

District of Rhode Island Dismisses In-House Attorney’s SOX Whistleblower Claim for Lack of Protected Activity

By Steven J. Pearlman, Pinchos Goldberg and Tony S. Martinez on Posted in SOX Whistleblower Decisions
On July 19, 2019, the U.S. District Court for the District of Rhode Island granted an employer’s motion to dismiss a SOX whistleblower claim, holding that the Plaintiff—an in-house attorney—failed to allege sufficient facts to show he had an objectively reasonable belief that fraud had occurred.  Colesanti v. Dickinson, No. 18-491. Background Plaintiff was an … Continue Reading

ARB Affirms Dismissal of SOX Whistleblower Claim Against Non-Public Companies

By Steven J. Pearlman and Allison Martin on Posted in Key ARB Decisions, SOX Whistleblower Decisions
The ARB recently affirmed the dismissal of a whistleblower retaliation claim under Section 806 of SOX, holding an employer is not a “contractor” covered by SOX simply because it was a party to a contract with a publicly traded company.  Griffo v. Book Dog Books, LLC, Robert William Holdings, LLC & Robert William Mgmt., LLC, … Continue Reading

Eastern District of Pennsylvania Grants Summary Judgment on SOX Claim

By Lloyd B. Chinn, Tony S. Martinez and Pinchos Goldberg on Posted in SOX Whistleblower Decisions
On July 18, 2019, the U.S. District Court for the Eastern District of Pennsylvania granted a defendant-employer’s motion for summary judgment on a SOX whistleblower retaliation claim, holding that the Plaintiff did not have an objectively reasonable belief that the defendant violated any SEC regulation.  Reilly v. Glaxosmithkline, LLC, No. 17-cv-2045. Background Plaintiff worked in … Continue Reading

4th Circuit Vacates ARB SOX Whistleblower Decision for Lack of Protected Activity

By Steven J. Pearlman, Holly Ren Morris and Pinchos Goldberg on Posted in SOX Whistleblower Decisions
On June 13, 2019, the Fourth Circuit overturned the ARB’s decision in favor of a complainant, ruling that the plaintiff had not engaged in protected activity under the SOX whistleblower protection provision by complaining of a company’s use of a mandatory arbitration policy that allegedly was overly broad.  Northrop Grumman Systems Corp. v. U.S. Dep’t … Continue Reading

SDNY Dismisses SOX and Dodd-Frank Whistleblower Claims Against Private Company

By Steven J. Pearlman, Jacob L. Hirsch and Pinchos Goldberg on Posted in Dodd Frank, SOX Whistleblower Decisions
On June 3, 2019, the U.S. District Court for the Southern District of New York granted a defendant-employer’s motion for summary judgment on SOX and Dodd-Frank whistleblower retaliation claims, finding that the alleged whistleblowing did not involve fraud related to a public company.  Tellez v. OTG Interactive, LLC, No. 15-cv-8984. Background Defendants operate restaurants and … Continue Reading

Update on Bofl SOX Whistleblower Litigation

By Lloyd B. Chinn, Pinchos Goldberg and Annabel Pollioni on Posted in SOX Whistleblower Decisions
This is an update on our previous blog posts regarding the Erhart v. BofI Holding, Inc. case. We previously reported in October 2017 and March 2017 on a whistleblower litigation brought by Charles Erhart, a former Bank of Internet Holding, Inc. (Bofl) internal auditor.  In late 2018, the parties filed cross-motions for judgement on the … Continue Reading

Alabama Federal Court Denies Motion for Summary Judgement on SOX Whistleblower Claim

By Steven J. Pearlman, Pinchos Goldberg and Samantha Shear on Posted in SOX Whistleblower Decisions
On April 2, 2019, the U.S. District Court for the Northern District of Alabama denied a defendant-employer’s motion for summary judgment on a SOX whistleblower retaliation claim, finding genuine issues of material fact existed as to the basis for Plaintiff’s discharge, whether his complaint qualified as protected activity, and whether he had a reasonable belief … Continue Reading

Ninth Circuit Affirms Most of Jury Verdict in Former GC’s SOX Whistleblower Lawsuit

By Steven J. Pearlman, Lloyd B. Chinn and Pinchos Goldberg on Posted in Foreign Corrupt Practices Act, SOX Whistleblower Decisions
On February 26, 2019, the Ninth Circuit affirmed much of a jury’s approximately $11M verdict finding that a former general counsel was discharged in retaliation for reporting alleged Foreign Corrupt Practices Act (“FCPA”) violations.  Wadler v. Bio-Rad Labs., Inc., No. 17-cv-16193. Background Sanford Wadler, then the former General Counsel of Bio-Rad Laboratories, Inc. (the “Company”) … Continue Reading

Fifth Circuit Affirms Summary Judgment on SOX Whistleblower Claim

By Steven J. Pearlman, Lloyd B. Chinn and Edward Young on Posted in SOX Whistleblower Decisions
On February 15, 2019, the Fifth Circuit affirmed the grant of summary judgment in favor of Andeavor Corporation f/k/a Tesoro Corporation on a SOX whistleblower claim, concluding that the plaintiff lacked an objectively reasonable belief that the company was misreporting its revenue to the SEC.  Wallace v. Andeavor Corp., No. 17-cv-50927. Background Plaintiff, a Vice … Continue Reading

California Federal Court Stays SOX Claim Pending Arbitration of Related Claims

By Lloyd B. Chinn, Pinchos Goldberg, Tony S. Martinez and Steven J. Pearlman on Posted in SOX Whistleblower Decisions
On December 21, 2018, the U.S. District Court for the Northern District of California stayed a plaintiff’s whistleblower retaliation claim under SOX (which was not subject to mandatory arbitration) while granting a motion compelling arbitration of the plaintiff’s remaining employment discrimination and retaliation claims. Anderson v. Salesforce.com, Inc., No. 18-cv-06712-PJH. Background Plaintiff alleged that he … Continue Reading

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
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