Firm client prevails in Sarbanes Oxley whistleblower case

Prince, Lobel, Glovsky & Tye LLP attorney Amy Serino recently won a significant Sarbanes Oxley Act ("SOX") whistleblower case for our client, an international asset management company. The case was originally dismissed at the Department of Labor/OSHA ("OSHA") phase and then Amy won summary dismissal following the plaintiff's appeal to a Department of Labor Administrative Law Judge.

In this case, the company's former information technology developer claimed that the termination of his employment was in retaliation for alleged whistleblowing activities. The Firm argued that our client was not covered by SOX because it was not publicly traded and the plaintiff failed to demonstrate that his termination was retaliatory.  OSHA dismissed the plaintiff's claim both on jurisdictional grounds and on the merits.  The case was appealed and, on June 14, 2006, our client won on a motion for summary decision based on lack of jurisdiction (see attached decision).
 
SOX whistleblower litigation is a new weapon employees are using against their current and former employers.  The case Amy won is one of the first in this area to be litigated to the stage of proceedings at which our client prevailed. Public companies, investment firms, and private subsidiaries of public companies should be aware of the dangers of SOX whistleblower claims, which may subject a company to significant monetary damages and the unusual remedy of mandatory immediate reinstatement of the complaining employee while the case is being litigated.

If you have any questions about this issue, please contact Amy Serino at 617.456.8182 or via email at aserino@PrinceLobel.com.