An individual who convinced a divided U.S. Supreme Court in 2014 that Sarbanes-Oxley’s (“SOX”) whistleblower protections extend to the employees of a public company’s contractors and subcontractors has ultimately lost her case before a federal jury in Massachusetts, thus ending her ten-year legal saga.
Lawson claimed that in 2005 she spotted what she believed were accounting irregularities at Fidelity that allowed the company to charge millions of dollars in excessive fees to mutual fund shareholders. She never called Fidelity’s information hotline to report the inaccuracies, but instead filed a whistleblower tip a year later with the SEC regarding the alleged fraud. While the SEC did not pursue an enforcement action against the company, Lawson claimed that Fidelity managers and employees harassed her and retaliated against her for the reporting by giving her lower performance ratings and bonuses. Lawson resigned in 2007 and sought whistleblower protections under SOX. READ MORE
Momentum for the SEC’s Dodd Frank whistleblower program is growing, and 2014 can be expected to bring continued expansion of the program and the number and types of whistleblower actions initiated by the SEC. The SEC’s annual report to Congress reported that 3,238 whistleblower tips were received in 2013, up almost 10% from 2012, and awards to whistleblowers who provide information to the SEC are increasing as more substantive tips are received. READ MORE
Back on October 8, 2013, we highlighted three cases currently pending on the United States Supreme Court docket that employers will definitely want to follow. The cases address issues ranging from the proper interpretation of Sarbanes Oxley’s whistleblower provision to the breadth of Presidential NLRB appointment power, to what constitutes “changing clothes” under the FLSA. Although decisions have not yet come down, important developments have taken place in all three cases. READ MORE
On Tuesday, June 4th, the Tenth Circuit Court of Appeals issued its first decision interpreting the Sarbanes Oxley Act’s whistleblower protection provision, affirming a decision by the U.S. Department of Labor’s Administrative Review Board (“ARB”), which held that Lockheed Martin violated SOX by constructively discharging employee Andrea Brown after she had engaged in protected activity. The court applied Chevron deference to the ARB’s employee-friendly interpretations of SOX’s requirements. READ MORE