*This post was drafted with contribution from Ashley Gambone, law clerk.
Affirming a SOX victory for an employee, the Fourth Circuit in a 2-1 decision in Gunther v. Deltek upheld a Department of Labor award of four-years of front pay to a former financial analyst of a software firm and also affirmed an award of tuition reimbursement for a four-year, full time, college degree program. The Fourth Circuit’s Gunther decision discusses the standards for proving or disproving a causal connection in SOX cases, for meeting the after-acquired evidence standard to cut off damages, and for proving entitlement to front pay and other damages under SOX.
Recently in Verdrager v. Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., No. SJC-11901, 2015 WL 10937776 (Mass. May 31, 2016), the Supreme Judicial Court of Massachusetts held, as a matter of first impression, that self-help discovery “may in certain circumstances constitute protected activity” under the state anti-retaliation statute, provided that, “the employee’s actions are reasonable in the totality of the circumstances.”
On Friday, May 20th, the SEC’s Office of the Whistleblower issued an order determining that it would award two whistleblowers $450,000 for voluntarily providing original information to the agency that led to a successful enforcement action. The two tipsters will split the award evenly. While the order does not provide any specific facts related to the action or the parties, the SEC’s press release describes it as a “corporate accounting investigation.”
Last Friday, the SEC announced a whistleblower award of more than $3.5 million to an employee whose tip advanced an SEC investigation into the whistleblower’s company. According to the Order, while the information the whistleblower provided did not cause the SEC to open a new line of inquiry, the information “significantly contributed” to the SEC’s ongoing investigation by focusing the Commission on a particular issue and providing the agency with additional settlement leverage during its negotiations with the company.
The Ontario Securities Commission (“OSC”), Canada’s largest securities regulator, has proposed establishing its own whistleblower program for individuals to report suspected securities fraud, marking Canada’s first foray into establishing such a system.
With the rise of the cybersecurity whistleblower, there is a growing trend of whistleblower-initiated regulatory investigations. In this Law360 article, Orrick attorneys Renee Phillips, Aravind Swaminathan, and Shea Leitch examine the DOJ’s investigation, prompted by a cybersecurity whistleblower, into whether Tiversa Holding Corp. provided false information to the Federal Trade Commission about data breaches at companies that declined to purchase its data protection services. The article discusses what companies can do to protect themselves against this growing risk.
The Department of Labor’s Administrative Review Board (“ARB”) recently upheld an order finding a semiconductor company had constructively discharged a manager who complained the company’s bonus plan violated state wage and hour laws, and in doing so, broadly interpreted the protections offered under the Sarbanes-Oxley Act (“SOX” or “Act”).
The Organisation for Economic Cooperation and Development (“OECD”), an international organization whose goal is to promote policies that will improve the economic and social well-being of people across the world, recently published a report entitled “Committing to Effective Whistleblower Protection” (the “Report”). A booklet containing the highlights of the report is available here. In the Report, the OECD reviews whistleblower laws and practices within its 34 member countries, making it a useful resource for multinational companies doing business around the world.
On February 2, 2016, the Third Circuit affirmed the dismissal of a long-running SOX whistleblower suit filed by Jeffrey Wiest, a former accounts payable manager for Tyco Electronics. The decision is the first in which the Third Circuit has defined the “contributing factor” causation standard for SOX retaliation cases and provides helpful guidance on the issue.
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