Sarbanes-Oxley

Sarbanes-Oxley Whistleblower Protection
Platone v. United States Department of Labor
No. 07-1635
U.S. Court of Appeals for the Fourth Circuit

NCLC urged the Fourth Circuit to affirm the Administrative Review Board’s dismissal of one of the first whistleblower cases brought under Sarbanes-Oxley (SOX).  In its brief, NCLC argued that the Board correctly held that the complainant did not engage in protected activity under SOX because she did not provide company officials with any information about fraud against shareholders.  While SOX protects an employee who engages in certain whistleblower activity, it shields employers from liability where their decisions are based on legitimate, non-retaliatory business reasons. 

Amicus brief filed 12/5/07.

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Protected Activity under Sarbanes-Oxley
Livingston v. Wyeth, Inc.
No. 06-1939
U.S. Court of Appeals for the Fourth Circuit
 
NCLC recommends that the court of appeals uphold the lower court's ruling that Sarbanes-Oxley (SOX) whistleblower protection protects against retaliation only where the employee subjectively believes at the time that the reported conduct may constitute fraud on shareholders, and there is a reasonable, objective basis for suspecting such fraud. In this case, Wyeth entered into a consent degree with the FDA that required a training program.  The plaintiff alleged he was terminated because he raised concerns that the training program might not be running by the time required by the consent decree.  Wyeth contended that the plaintiff was terminated because he engaged in gross misconduct at a holiday party.  The district court stated that it was not clear there was an obligation for Wyeth to inform shareholders of the alleged training program problems  prior to action by the FDA.  In ruling for Wyeth, the court also emphasized the role of materiality under the securities laws, and that the alleged wrongful conduct in this case had not related specifically to public financial statements. 
 
Amicus brief filed 12/20/06. Oral argument held 11/1/07.

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Sarbanes-Oxley Whistleblower Protection
Platone v. FLYi, Inc.(Formerly known as Atlantic Coast Airlines Holdings, Inc.)
ARB Case No. 04-154
ALJ Case No. 2003-SOX-27
U. S. Department of Labor Administrative Review Board

In one of the first cases to be brought under the whistleblower provisions of Sarbanes-Oxley, the Department of Labor's Administrative Review Board agreed with NCLC and reversed the decision of the Administrative Law Judge.  The board held that the complainant did not engage in protected activity under Sarbanes-Oxley because she did not provide company officials with any information about fraud against shareholders. 

Amicus brief in support of respondent and in support of reversal filed 9/10/04. Decision 9/29/06.

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