Ben James wrote an article titled DOL Broadly Reads Protected Activity in SOX Case in which he discusses the Brown v. Lockheed Martin Corp. ruling by the DOL where the Administrative Review Board found that Lockheed Martin Corp. violated the Sarbanes-Oxley Act (SOX). Andrea Brown, Lockheed employee had complained to management that the vice president of communications acted unethically by using a pen pal program between Lockheed employees and U.S. soldiers to send X-rated materials to troops overseas and to schedule sexual encounters with U.S. soldiers during working hours. According to brown’s lawsuit, management retaliated by demoting her and eventually constructively firing her.
Ordering Brown reinstted and awarding her $75,000 in damages, the ARB held that shareholder fraud is not required to prove the existence of protected whistleblower activity under SOX and that allegations of mail or wire fraud are sufficient. The article quotes Jason Zuckerman, a principal attorney at The Employment Law Group® law firm, stating that the broad reading of the SOX whistleblower provisions was just what Congress intended:
“Some federal judges and ALJs ignored the plain meaning of the statute and held that protected conduct is limited solely to disclosures concerning shareholder fraud,” Zuckerman said.
The ARB under former Secretary of Labor Elaine Chao weakened SOX by creating loopholes that ran counter to congressional intent, but that’s no longer the case, Zuckerman said. Now, the ARB is “willing to apply the plain meaning of the statued and to construe SOX in light of its remedial purpose.”
The Employment Law Group® attorney Jason Zuckerman was quoted in a Law360 article titled DOL Board Clarifies Scope of Whistleblower Protection regarding the DOL Administrative Review Board’s recent decision in Johnson v. Siemens Building Technologies, Inc.:
Jason Zuckerman, a principal at The Employment Law Group®, who filed an amicus brief on behalf of whistleblower advocacy groups, said that federal courts will likely heed the decision.“Obviously, Congress intended to protect employees of subsidiaries of publicly traded companies,” Zuckerman said. “Tragically, many meritorious claims were dismissed due to strained and overly narrow constructions of the scope of SOX coverage.”The decision represents the current board’s move toward a broader construction of Sarbanes-Oxley, he said.
The ARB held in Johnson that the whistleblower provision of the Sarbanes-Oxley Act (SOX) applies to employees of subsidiaries of publicly-traded companies and Section 929A of the Dodd-Frank Act further clarified that SOX whistleblower protection coverage extends to employees of subsidiaries of publicly-traded companies.
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Washington, D.C. — Voices for Corporate Responsibility is hosting a Whistleblower Seminar on Tuesday, May 10, 2011 at the Fairmont Hotel. The seminar will include whistleblower attorney Jason Zuckerman as a panellist and will consist of two sessions: Will Internal Compliance Requirements Strengthen or Weaken the Law? and Can the SEC Handle the Whistleblower Law? To register for the event and learn how the proposed SEC rules will affect the implementation of the Dodd-Frank Act, click here.
Ryan Davis wrote an article titled Courts Grapple With In-House Atty Whistleblower Suits in which he discusses how courts have had difficulty deciding a host of thorny issues that arise when in-house attorneys blow the whistle on illegal activity. These issues often include the scope of attorney-client privilege and confidentiality among other issues, but Jason Zuckerman, a principal attorney at The Employment Law Group® law firm, argues that attorneys should be allowed to report illegal or fraudulent activity. He is quoted in the article further expressing his thoughts on these issues:
The claims [by in-house attorneys] can be acrimonious because the attorneys feel they were doing the right thing to get the company to comply with the law, and the company feels betrayed by a trusted adviser, said Jason Zuckerman, principal of The Employment Law Group, which represents whistleblower plaintiffs.
In-house counsel who blow the whistle are never eager to do so, said Zuckerman, the plaintiffs lawyer. They feel they have no other choice to expose misconduct at their companies and essentially destroy their careers in the process, he said.
“It’s not easy for in-house counsel to proceed with these suits. It really takes a lot of courage,” Zuckerman said.
Allowing in-house counsel to pursue whistleblower claims would lead to greater exposure of corporate malfeasance, he said, speculating that attorneys at Lehman Brothers and other scandal-ridden companies must have known what was going on but chose to look the other way.
“I think that it is important in certain instances for in-house counsel to draw a line in the sand, and act not only as an officer of the corporation, but also has an officer of the court,” he said. “If they put themselves on the line and get their head chopped off, it’s important that they can bring a claim.”
Laura Schreier wrote an article in Banker & Tradesmen titled Dodd-Frank Weighs Heavily on Mass. Whistleblower Case in which she discusses the recent U.S. District Court ruling in Pezza v. Investors Capital Corp. that Section 922(e) of the Dodd-Frank Act applies to pending cases. Section 922(e) bans pre-dispute agreements in employment contracts that require Sarbanes-Oxley whistleblowers to settle disputes with their employer in arbitration instead of federal court. The article quoted Jason Zuckerman, a principal attorney at The Employment Law Group® law firm:
[Zuckerman] said such cases belong in the public spotlight – indeed, having a courtroom trial is precisely the point of blowing the whistle in the first place.These people take action because they want underhanded deeds brought to light in a public court – an outcome denied by arbitration, Zuckerman said. Dodd-Frank’s new rules essentially correct an oversight from the post-Enron Sarbanes-Oxley Act, where whistleblowers gained protections but were not explicitly protected from signing employment contracts that included arbitration requirements.Dodd-Frank also allows for a reward for whistleblowers who bring their concerns to the SEC, something the American Bankers Association has vigorously opposed.…Zuckerman, for his part, applauds the idea.By providing a significant reward, he said, it is hoped more employees will do the right thing and reveal bad practices.
“From my perspective, one has to ask, where were all those people at the large financial institutions who knew about the significant corporate wrongdoing in the financial industry and the housing industry, and didn’t speak up about it?” he asked.If they had an incentive to come forward, he said, it’s possible that many of the glaring financial problems building in the economy would have come to light before they imploded.