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The Employment Law Group® Law Firm Establishes that Statements on U-5’s Are Not Absolutely Privileged


On July 23, 2008, an arbitration panel of the Financial Industry Regulatory Authority (FINRA) held, for what appears to be the first time in Washington, DC area, that when a brokerage house says why it terminates a regulated employee it is not immune from suit.  In his complaint, a broker alleges that his former employer gave an untrue reason on his form U-5 for why it terminated his employment.  In this case, the employer denied any wrongdoing and moved to dismiss the broker’s defamation claim, arguing that it was immune from suit as any alleged defamatory statements it makes to FINRA on the U-5 are absolutely privileged.  In siding with the former employee to allow the claim to proceed to a determination at hearing, the FINRA panel embraced the position of the sixteen states that have enacted Section 507 of the Uniform Securities Act and rejected the position of New York’s highest court articulated in Rosenberg v. Metlife Inc., 8 N.Y.3d 359, 866 N.E.2d 439, 834 N.Y.S.2d 494 (2007).  The broker is represented by R. Scott Oswald and Adam A. Carter of The Employment Law Group® law firm.

The Employment Law Group® Law Firm Continues to Prevail in SOX Whistleblower Cases Despite Unfavorable Statistics

A survey conducted by the University of Nebraska College of Law revealed that in 2007, only four percent of Sarbanes-Oxley (“SOX”) whistleblower cases heard by the Occupational Safety and Health Administration were resolved in favor of the employee seeking whistleblower protection.   Despite the discouraging statistics, the attorneys at The Employment Law Group® law firm continue to obtain favorable decisions which are recognized by other leading attorneys in the field.  For example, in a blog post titled, “Sarbanes-Oxley Whistleblowers:  Are They out of Luck?”, IT Business Edge attorney and journalist writes about a recent decision in Florida where a district court held that a former Best Buy employee and client of The Employment Law Group® law firm could pursue a claim for whistleblower retaliation in federal court.  The Employment Law Group® law firm also made important law protecting SOX whistleblowers in Kalkunte v. DVI Financial Services, Inc., 2004-SOX-56 (ALJ July 18. 2005) and in Leznik v. Nektar Therapeutics, Inc., 2006-SOX-00093(ALJ Nov 16. 2007).

Congress Enacts Whistleblower Protection Law to Enhance Consumer Product Safety

Yesterday Congress enacted a new whistleblower law to protect public and private sector employees in the manufacturing and retail industries who disclose information to an employer, a regulatory agency, or a State Attorney General about a reasonably perceived violation of the Consumer Product Safety Commission Act (“CPSCA”) or any act enforced by the Consumer Product Safety Commission.  The law also protects an employee’s good faith refusal to violate the CPSCA.

Under this new whistleblower protection law, a retaliation claim must be filed with the Occupational Health and Safety Administration (“OSHA”) within 180 days of the employee first becoming aware of the retaliatory action.  After OSHA performs an investigation, either party can request a hearing before a Department of Labor Administrative Law Judge (“ALJ”) and can appeal an ALJ decision to the Department of Labor’s Administrative Review Board.  If the Department of Labor has not issued a final decision within 210 days of the filing of the complaint, the employee may remove the complaint to federal court for a jury trial.  A prevailing employee is entitled to reinstatement, back pay, compensatory damages, and litigation costs including reasonable attorney fees and expert witness fees.