Category Archives: SOX Whistleblower Decisions

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5th Circuit: Outing Whistleblower Equals Adverse Action

On November 12, 2014, in Halliburton, Inc. v. Admin. Review Bd., 5th Cir. No. 13-cv-60323, the Fifth Circuit affirmed an ARB’s decision that disclosing the identity of a whistleblower may constitute an “adverse action” under Section 806 of SOX.  This decision presents a number of risks for employers—even when they are acting conscientiously and in good … Continue Reading

Administrative Review Board Clarifies Causation Burdens in SOX Whistleblower Cases

The ARB recently clarified the competing burdens of proof on issues of causation for whistleblower retaliation cases arising under SOX Section 806 and other whistleblower protection statutes.  In particular, in Fordham v. Fannie Mae, ARB No. 12-061 (Oct. 9, 2014), a 2-1 decision, the ARB reversed an ALJ’s decision that had considered the Respondent’s affirmative … Continue Reading

SDNY Dismisses Extraterritorial SOX and Dodd Frank Whistleblower Claims

Overseas plaintiffs are continuing to seek to pursue  SOX and Dodd-Frank whistleblower claims.  On September 30, 2014, the Southern District of New York in Ulrich v. Moody’s Corp., 2014 U.S. Dist. LEXIS 138082 (S.D.N.Y. Sept. 30, 2014), dismissed SOX and Dodd-Frank whistleblower claims on the grounds that the statutes’ respective anti-retaliation provisions do not apply … Continue Reading

Second Circuit Strays From “Definitively and Specifically” Standard But Still Dismisses SOX Claim

On August 8, 2014, the Second Circuit affirmed the dismissal of a SOX whistleblower retaliation claim brought by a former AECOM Technology Corp. (“Company”) employee, holding that he did not engage in protected activity because he lacked a reasonable belief that the alleged conduct of which he complained violated one of the enumerated federal provisions … Continue Reading

SOX Claim Dismissed: Rejection of IP Assignment Clause Not Protected Activity

The U.S. District Court for the Northern District of Illinois recently granted a Rule 12(b)(6) motion to dismiss a SOX whistleblower retaliation claim, concluding that the plaintiff did not engage in protected activity.  Fuqua v. SVOX AG, No. 14-cv-216 (N.D. Ill. Aug. 1, 2014).  This is a useful decision for employers faced with SOX whistleblower … Continue Reading

Eleventh Circuit Sustains Award To Employer In Whistleblower Case

In a warning to plaintiffs’ counsel who seek emotional distress damages for alleged whistleblower retaliation under Florida law, the Eleventh Circuit in Smith v. Psychiatric Solutions, Inc., 750 F.3d 1253 (11th Cir. May 6, 2014) has created a Hobson’s choice: forcing plaintiff-employees either to forego potential emotional distress damages available under state law or risk … Continue Reading

E.D. Pennsylvania Limits Supreme Court’s SOX Whistleblower Decision

In a case of first impression, the U.S. District Court for the Eastern District of Pennsylvania ruled that the U.S. Supreme Court’s holding in Lawson v. FMR LLC, 134 S. Ct. 1158 (2014)—that the whistleblower protection provision in Section 806 of SOX protects employees of a private contractor to a publicly-traded company—does not cover an … Continue Reading

S.D.N.Y. Takes Broad Approach To SOX and Dodd-Frank Whistleblower Claims

The U.S. District Court for the Southern District of New York recently denied a motion to dismiss a plaintiff’s SOX and Dodd-Frank whistleblower claims, ruling that (i) the plaintiff engaged in SOX protected activity even though her purported protected activity was part and parcel of her job duties as Chief Risk Officer, and (ii) she … Continue Reading

4th Circuit: SOX Whistleblower Failed To Establish A Prima Facie Case Regarding Causation

On May 12, 2014, the Fourth Circuit Court of Appeals affirmed summary judgment on a SOX whistleblower claim, concluding that the whistleblowers’ alleged protected activity was not a “contributing factor” in the challenged adverse employment action.  Feldman v. Law Enforcement Assoc. Corp., No. 13-1849 (4th Cir. May 12, 2014).  Armed with this decision, employers are … Continue Reading

Podcast on Implications of U.S. Supreme Court’s First SOX Whistleblower Decision

Steven J. Pearlman, co-head of Proskauer’s Whistleblower & Retaliation Group, recently delivered a PODCAST for TheCorporateCounsel.net, focusing on the implications of the U.S. Supreme Court’s first SOX whistleblower decision, Lawson v. FMR.  This Podcast captures Pearlman’s interview with Randi Morrison, where Ms. Morrison presents the following questions: Can you describe the Majority’s ruling and the reasoning it … Continue Reading

Video Interview: Proskauer’s Pearlman Comments on Implications of First Supreme Court SOX Whistleblower Decision

In a recent VIDEO INTERVIEW, Darla Stuckey of the Society of Corporate Secretaries & Governance Professionals met with Steven J. Pearlman, co-head of Proskauer’s Whistleblower & Retaliation Group, to discuss the implications of the U.S. Supreme Court’s decision to extend whistleblower protection under the SOX whistleblower provision employees of a publicly traded company’s contractors and … Continue Reading

$6 Million SOX Whistleblower Verdict In California

On March 5, 2014, a California jury awarded $6 million to a former accounting executive at Playboy Enterprises Inc. (the “Company”), finding that the Company discharged the former employee in violation of Section 806 of SOX.  The case is Zulfer v. Playboy Enterprises Inc. et al., No. 2:12-cv-08263 (C.D. Cal.).  The award is reported to … Continue Reading

U.S. Supreme Court Extends SOX’s Whistleblower Protection To Employees of Publicly Traded Company’s Contractors

On March 4, 2014, the United States Supreme Court in Lawson v. FMR LLC held that SOX’s whistleblower protection extends to employees of a publicly traded company’s contractors and subcontractors.  Lawson v. FMR LLC, 572 U.S. __ (2014).    Notably, this is the first time the Supreme Court has decided a case under SOX’s whistleblower-protection provision (Section … Continue Reading

Federal District Court Deepens Divide Over SOX Whistleblower “Protected Activity”

On February 21, 2014, the District of Puerto Rico strayed from a prominent decision out of the First Circuit that employed the “definitively and specifically” standard governing protected activity under Section 806 of SOX, choosing instead to defer to the ARB’s rather expansive standard.  Stewart v. Doral, No. 13-cv-1349 (D.P.R. Feb. 21, 2014).   This decision underscores the … Continue Reading

Fifth Circuit Finds No Protected Activity under SOX, Mum on Extraterritoriality

In Villanueva v. United States Department of Labor, No. 12-60122, 2014 WL 550817 (5th Cir. Feb. 12, 2014), the Fifth Circuit Court of Appeals held that the petitioner had not engaged in protected activity under Section 806 of the Sarbanes-Oxley Act of 2002 (“SOX”) because he “blew the whistle” on alleged violations of Colombiantax law, … Continue Reading

District Court Denies Summary Judgment On Internal Audit/SOX Administrator’s Whistleblower Claim

In denying a bank’s bid for summary judgment on an Internal Audit and SOX Administrator’s SOX whistleblower claim, the U.S. District Court for the Western District of Washington highlighted the present conflict on the standard governing protected activity under Section 806 of SOX—i.e., the “definitively and specifically” standard or the more liberal “reasonable belief” standard.  … Continue Reading

ARB: No SOX Whistleblower Liability Where Termination Of In-House Counsel Was Based On Insubordination

The ARB recently affirmed an ALJ’s decision that American Commercial Lines Inc. (the “Company”) did not violate the whistleblower protection provision in Section 806 of SOX where the Company demonstrated by clear and convincing evidence that its decision to discharge employee Angelina Zinn, who was an in-house attorney, was based on her insubordination.  Zinn v. … Continue Reading

S.D.N.Y. Dismisses SOX Whistleblower Case, Applying Strict Protected Activity Standard And Finding No Causation

On December 12, 2013, the U.S. District Court for the Southern District of New York granted an employer summary judgment on a long-running SOX whistleblower claim.  Sharkey v. J.P. Morgan Chase & Co., No. 10-cv-3824 (S.D.N.Y. Dec. 12, 2013).  The court ruled that (i) Plaintiff Jennifer Sharkey (Plaintiff) had not engaged in protected activity because … Continue Reading

Major Media Outlets Quote Lloyd Chinn On Sox Whistleblower Case Before Supreme Court

In a recent Wall Street Journal (“WSJ”) article (subscription required), Lloyd Chinn, Co-head of Proskauer’s Whistleblower & Retaliation Group, commented on Lawson v. FMR LLC, a case before the U.S. Supreme Court concerning whether Section 806 of the Sarbanes-Oxley Act of 2002 (“SOX”) protects an employee of a privately held contractor or subcontractor of a … Continue Reading
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