Today the Department of Labor’s Administrative Review Board (ARB)ARB held its first oral argument in a case under the Sarbanes-Oxley Act (SOX). Last November, the ARB gave notice of today’s oral argument, and invited interested groups to submit friend-of-the-court (or “amicus”) briefs. The ARB asked the parties to address issues of how specific OSHA complaints have to be, whether Administrative Law Judges (ALJs) can grant motions to dismiss on the pleadings, and the nature of protected activity under SOX. A prior blog post covered the amicus briefs, including the briefs of the National Whistleblowers Center and Doug Evans. Pictured here are ARB Board Members Luis Corchado, Paul Igasaki (Chair), E. Cooper Brown (Vice-Chair) and Joanne Royce.

Continue Reading ARB holds first oral argument in a SOX case

My colleague, Stephen M. Kohn (Executive Director of the National Whistleblowers Center) and I spent New Year’s Eve racing the clock to file two friend-of-the-court “amicus” briefs with the Department of Labor’s Administrative Review Board (ARB). Last November, the ARB issued an invitation to file amicus briefs to address a series of questions about the requirements for valid whistleblower complaints. In an amicus brief on behalf of my client, Douglas Evans, we answered the questions about the whether whistleblower complaints to OSHA have to meet the standards for pleading claims in federal court, and what procedure Administrative Law Judges (ALJs) should follow before considering whether to dismiss a claim without a hearing. In a separate amicus brief on behalf of the National Whistleblowers Center (NWC), we answer the questions about the scope of protected activity under the Sarbanes-Oxley Act (SOX). Specifically, we trace the long history of Department of Labor and court decisions that broadly applied a variety of whistleblower protections.  We note how Congress relied on the body of law when it enacted SOX.  We argue that the ARB and Court decisions of the last five years made a mistake, and violated congressional intent, by narrowing the scope of protection. We specifically ask the ARB to reject the requirement that protected activity must “definitively and specifically” relate to a violation of law. We examine the difference between raising concerns outside of established channels, and the “exceptionally broad” protection that activity has when it is pursued through established channels. We also dispute the claim that SOX claims should connect to some “fraud” or meet some standard of “materiality.” Finally, we show that the concerns raised by Ms. Kathy Sylvester and Ms. Theresa Neuschafer (breaches of Good Clinical Practices or GCPs) are at the core of Parexel’s business as set out in its Form 10-k, and is, therefore, material.

These briefs would be a good reference for any whistleblower or lawyer facing a challenge to any whistleblower claim on grounds of pleading standards, or the scope of protected activity.  Enjoy the new year.


Continue Reading Amicus briefs address OSHA complaints and protected activity

Lawyers for Matt Neumann and Nick Tides are currently finishing their last brief to the U.S. Court of Appeals for the Ninth Circuit in an appeal that will decide if corporate fraud whistleblowers can ever be protected from retaliation when they make disclosures to the media. For the National Whistleblowers Center, David Colapinto and I filed a brief in September that urged the Court to use the same balancing test used in Title VII and other discrimination cases. This test balances “the purpose of the Act to protect persons engaging reasonably in activities opposing . . . discrimination, against Congress’ equally manifest desire not to tie the hands of employers in the objective selection and control of personnel.” Wrighten v. Metropolitan Hosp., Inc., 726 F.2d 1346, 1355 (9th Cir. 1984) (holding a press conference is protected). I explained Tides’ and Neumann’s case in an earlier blog post.

Now the Boeing Company has filed their brief arguing that media disclosures can never be protected under the Sarbanes-Oxley Act. Boeing’s opening paragraph (page 1 of the brief and page 6 of the linked PDF file) essentially concedes that the company fired Neumann and Tides because of their disclosures to a newspaper reporter. Next, Boeing argues that while the law protects giving the disclosures to company officials would be protected, giving the disclosures to the media is not protected.  Boeing makes this argument even though there is no dispute that Boeing officials did get the information — and they acted on it promptly by firing the whistleblowers.


Continue Reading Boeing’s brief claims SOX can never protect disclosures to the media

On behalf of the National Whistleblowers Center (NWC), David Colapinto and I filed a friend-of-the-court brief last week arguing that the Sarbanes-Oxley Act (SOX) can protect corporate whistleblowers who make disclosures through the media. We filed the brief with the U.S. Court of Appeals for the Ninth Circuit in the case of Tides v. The Boeing Company, Case No. 10-35238. The brief examines the history of how whistleblowers have used the public attention of the media to spur government action on matters of public concern. In the 1970’s, Congress began enacting statutes to protect whistleblowers. Courts and the Department of Labor quickly recognized that when whistleblowers use media outlets to raise their safety concerns, their use of the media can and should be protected. It is now one of the recognized ways in which whistleblowers can “cause” information to be disclosed to law enforcement agencies and others who can correct violations or set enforcement policy. This case law was well developed when Congress enacted SOX in 2002, and is fully consistent with the legislative purposes behind SOX.

Continue Reading NWC files brief arguing that SOX protects disclosures to the media

Last week, I posted here an amicus brief for the U.S. Department of Labor’s Administrative Review Board (ARB) explaining how the Sarbanes-Oxley Act (SOX) protects corporate whistleblowers employed by the subsidiaries of publicly traded companies. What a difference a day makes. With President Obama’s signature today on the Dodd-Frank Wall Street Reform Act, SOX is now amended to explicitly protect the employees of subsidiaries. What is more is that Senate Report 111-176 makes clear that the amendment was intended to restore SOX to the broad scope originally intended, and that defenses based on subsidiary status should now be unsuccessful. The National Whistleblowers Center (NWC) has now filed a supplemental letter brief with the ARB in its test case of Carri Johnson v. Siemens Building Technologies, Inc., ARB Case No. 08-032. The letter brief makes clear that the Dodd-Frank Act firmly establishes that SOX has always covered the employees of subsidiaries. NWC Executive Director Stephen M. Kohn led our work on this letter, with myself and NWC intern Margot Weisberg. The ARB, meanwhile, has invited supplement briefs on the effect of the Dodd-Frank Act on subsidiary coverage under SOX. The ARB has allowed an additional ten (10) days for these briefs, but ours is already filed.

Continue Reading NWC letter to ARB explains how Dodd-Frank Act ices SOX subsidiary coverage