Proskauer Whistleblower Defense

Tag Archives: SOX

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

SEC Votes in Favor of Proposal to Amend Whistleblower Rules to Comport with U.S. Supreme Court’s Holding in Digital Realty Trust

By Lloyd B. Chinn and Bassam Gergi on Posted in Dodd Frank, SEC
On June 28, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) voted in an open meeting on several final rules and rule proposals that will have a material impact on the Commission’s whistleblower program. Most notably, the SEC approved a rule proposal that would modify its Rule 21F, which defines who is a … 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

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

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

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

FINRA Rule Amended: Whistleblower Claims Not Subject To Mandatory Arbitration

By Steven J. Pearlman, Lloyd B. Chinn and Harris Mufson on Posted in FINRA
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank)  amended the whistleblower provision in Section 806 of the Sarbanes-Oxley Act of 2002 (SOX) to state that pre-dispute arbitration agreements that require arbitration of a dispute arising under that section are invalid and unenforceable, and that Section 806 rights cannot be waived through a … Continue Reading

ARB Says “Convenience Leave” Letter Does Not Trigger SOX Statute of Limitations

By Lloyd B. Chinn, Steven J. Pearlman and Daniel Saperstein on Posted in SOX Whistleblower Decisions
On August 31, 2012, the Administrative Review Board (ARB) of the U.S. Department of Labor (DOL) liberally interpreted the standard governing when the SOX statute of limitations clock starts ticking, ruling that a letter informing Complainant Kenneth Poli that he was being placed on a “convenience leave” was not a “final, definitive and unequivocal” notice … Continue Reading

The Fight Isn’t Over: Employers Should Keep Battling The Definition of “Whistleblower” Under Dodd-Frank

By Steven J. Pearlman, Lloyd B. Chinn and Harris Mufson on Posted in SOX Whistleblower Decisions
The “Securities Whistleblower Incentives and Protection” section of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“DFA”) is an integrated scheme designed to encourage individuals to complain to the SEC of securities law violations by offering bounties and protection against retaliation.  The two components of this section are:  (i) a whistleblower bounty … Continue Reading
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