Sarbanes-Oxley Compliance Journal Publishes Article by The Employment Law Group® Managing Principal, R. Scott Oswald

According to The Employment Law Group® law firm’s managing principal, R. Scott Oswald, “2011 marked a sea change for whistleblowers at the Department of Labor’s Administrative Review Board (ARB).”  The Sarbanes-Oxley Compliance Journal recently published an article by Mr. Oswald which discusses the impact of recent ARB decisions on whistleblower protection and describes why “2011 was an important year for whistleblowers.”

In the article, Oswald highlighted 2011’s significant developments in whistleblower law, noting that “the ARB changed the standard of proving protected activity, embraced the concept of corporate knowledge, established the most generous standard for an adverse action in employment law, and established the fact that most Sarbanes-Oxley cases should proceed to an evidentiary hearing.”

Specifically, Oswald discussed the significance of the following 2011 ARB decisions:

  • In Sylvester v. Parexel International LLC, ARB No. 07-123, ALJ Nos. 2007-SOX-039, 042 (May 25, 2011), the ARB affirmed that whistleblowers are protected under SOX even when mistaken and held that an employer’s disclosure of the whistleblower’s identity constitutes an adverse employment action, and, finally, found that whistleblowers can establish causation by showing that their whistleblowing activity was merely a contributing factor in the employer’s decision to take the adverse employment action.
  • In Funke v. Federal Express Corporation, ARB No. 09-004, ALJ No. 2007-SOX 043 (ARB July 8, 2011), the ARB expanded whistleblower protections by confirming that an employee’s disclosure that a FedEx customer was using FedEx services to engage in mail fraud was protected activity under SOX, as was the whistleblower’s reporting of the customer’s conduct to local law enforcement.
  • In Vannoy v. Celanese, ARB No. 09-118, ALJ No. 2008-SOX-064 (ARB September 28, 2011) the ARB “relieved whistleblowers from the heavy burden of proving their claims without using any of the employer’s confidential information,” whereas previously, Oswald noted, “whistleblowers could be subject to serious penalties for doing so.”
  • In Menendez v. Halliburton, ARB Nos. 09-002, 09-003, ALJ No. 2007-SOX-005 (ARB September 13, 2011) the “ARB affirmed that whistleblowers are protected under SOX even when they are mistaken about the nature of their complaints” and held that an employer’s disclosure of the whistleblower’s identity constitutes an adverse employment action.
  • In Johnson v. Siemens Bldg. Techs, Inc., ARB No. 08-032, ALJ No. 2005-SOX-015 (ARB March 31, 2011) the ARB “declared that whistleblowers may seek SOX’s protections from non-publically traded subsidiaries of publically traded companies.”
  • Finally, in Villanueva v. Core Laboratories, ARB No. 09-108, ALJ No. 2009-SOX-006 (ARB December 22, 2011) the ARB “found that SOX can protect disclosures of violations of United States law by foreign whistleblowers who work for foreign branches or subsidiaries of United States companies”.  In the article, Mr. Oswald noted that, “as a result” of this decision, “even complaints to foreign compliance offices should be taken seriously and investigated when the violation claimed refers to U.S. law” because “foreign offices or subsidiaries can still violate U.S.s securities laws and resolutions.”

In addition to ARB decisions expanding whistleblower protections, 2011 also saw “the Consumer Financial Protection Bureau extend whistleblower protections to new industries pursuant to the Dodd Frank Act of 2010 – most recently payday lenders, student loan companies and mortgage finance companies”.

With this expansion of whistleblower protection, according to Oswald, “the ARB’s influence over the scope and contours of whistleblower protection, articulated in its precedents in 2011, will be felt for years to come by employers in areas of the US economy that may have had few, if any, whistleblower protections before.”

The article, entitled “More Protection for Whistleblowers”, was published in the April 25, 2012 edition of the Sarbanes-Oxley Compliance Journal and was also syndicated in Compliance Daily, as well as Governance, Risk Management & Compliance Daily.

The Employment Law Group® law firm is a leader in the field of whistleblower law and has an extensive nationwide whistleblower practice representing employees who have exposed illegal activity by their employer.