corpcounsel.com | December 23, 2015
Trends in Whistleblower Retaliation Claims,
and How Companies Can Steer Clear of Trouble
Allegra J. Lawrence-Hardy
and Bonnie R. Burke
Whistleblower retaliation litigation is on
the rise, and a recent decision from the U.S.
District Court for the Southern District of New
York is expected to boost it further. Whistleblowers can expect to find protection against
employer retaliation as courts continue to
make statutory protections more readily
available. Companies are not without protections themselves, however. The trend in
these cases has also established key factors
employers should monitor to increase the
likelihood of success against such claims.
The New York decision is part of a rising
trend among some other courts to remove
old barriers to whistleblower retaliation
complaints. In Sharkey v. J.P. Morgan Chase
& Co., et al, the plaintiff alleged “violations
of the SOX anti-retaliation statute.” The district court initially found that the plaintiff
SOX offers protection for employees of pub-
it required the whistleblower to determine
had not sufficiently identified the illegal
licly traded companies who complain of finan-
which law or laws the company had broken.
conduct on which she based her whistle-
cial improprieties that th ey believe violate
The company, in turn, could potentially defeat
blower complaint. Ultimately, the district
rules or regulations of the U.S. Securities and
the allegation by showing that its conduct did
court renounced the prior court-established
Exchange Commission or other provisions of
not violate that specific law. Last year, howev-
pleading standard for whistleblower claims
federal law that amount to fraud against share-
er, the Second Circuit in Nielson v. AECOM Tech.
and paved the way for a far more lenient
holders. Despite the language of the statute
Corp. was asked to decide whether a whistle-
pleading standard under the Sarbanes-Ox-
requiring that whistleblowers need only a “rea-
blowing employee had to “definitively and
ley Act of 2002 (SOX). In doing so, the court
sonable belief” that the conduct about which
specifically” allege one of the listed catego-
followed a trend among the U.S. Courts of
they are complaining is illegal, until recently
ries of fraud or securities violations in the SOX
Appeals for the Second, Third and Sixth Cir-
whistleblowers had to specifically allege which
statute. The Second Circuit concluded that
cuits. Now, whistleblower retaliation protec-
of six laws they believed had been violated
this standard is not required under SOX. The
tions may be easier for employees to obtain
“definitively and specifically” to gain protec-
court decided that SOX protections extend
and tougher for employers to defeat based
tion under SOX. This was a much tougher
to whistleblowers even if the whistleblower is
on imprecise allegations.
standard than the statutory standard because
not sure which law was broken, but they had
December 23, 2015
a reasonable belief that one of the six identified
before the employee’s involvement in pro-
in the statute was violated.
tected activity.
Temporal proximity is a key factor examined by courts and, alone, may sufficiently
The district court’s decision follows the
Allegations of retaliation can be more dif-
demonstrate retaliation if the employee’s en-
Second Circuit’s ruling to broadly interpret
ficult to prove when more than one person
gagement in protected activity occurs close
whistleblower protections under the statute.
is involved in the decision to terminate, or
in time to an adverse employment action. A
The protections include, among others, that
take some other adverse employment action
time lapse of less than two months may be
an employer may not take an adverse employ-
against, a whistleblower. Multiple decision-
sufficiently close in time to support an alle-
ment action against a whistleblower simply
makers are less likely to have a retaliatory mo-
gation of retaliation. Should an adverse ac-
because the employee blew the whistle. Un-
tive for taking an adverse action or are less
tion against a whistleblowing employee be
der the statute, adverse employment actions
likely to have information that the employee
necessary, employers should closely examine
include discharge, demotion or unfavorable
has engaged in protected activity. Therefore,
the employee’s personnel file for evidence of
reassignment, threats, harassment or discrimi-
companies should consider whether to use a
the aggrieved behavior and discipline that
nation in the terms and conditions of employ-
panel of management-level decision-makers
pre-dates the whistleblowing. While temporal
ment. The U.S. Department of Labor’s Admin-
when taking an adverse employment action
proximity is not necessarily determinative of
istrative Review Board (ARB) expanded the
against the whistleblower. Since companies
the company’s motive for taking an adverse
definition of “adverse employment action” in
should not single-out and treat differently
action, it is an important factor and should not
the 2011 Menendez v. Halliburton, Inc. decision.
employees who have blown the whistle and
be overlooked.
There, the ARB held that an employee may
are protected by SOX, this multi-person panel
Employers should be aware of the lenient
suffer an adverse employment action even if
may be necessary for all adverse actions taken
standard to which whistleblowers are held
he or she did not experience a tangible con-
against employees, whether or not they are
when alleging violations, and the trend for
sequence. As such, even “outing” the whistle-
whistleblowers.
broadly interpreting whistleblower protec-
blower by making the whistleblower’s name
Another defense the company can offer
tions. A defendant company’s success may
known to colleagues and superiors consti-
is to show that it followed its own policies
depend on maintaining a thorough personnel
tutes an adverse employment action.
and procedures in taking the adverse action
file, documenting concerns about employee
Employers, however, are not without rem-
against the whistleblower. By showing that
performance and following a consistent set
edy against allegations of retaliation. Com-
the employee engaged in conduct that is pro-
of policies and procedures in making any ad-
panies can mitigate the potential for whistle-
hibited by company policies, and demonstrat-
verse employment decisions.
blower success in court by reviewing some
ing that disciplinary procedures were followed
factors examined by courts when deciding
in taking the adverse action, the company
whistleblower retaliation cases. Generally,
may be able to show that the conduct was not
courts look at the totality of the circumstances
in retaliation for whistleblowing.
and weigh the facts when deciding a whistle-
Companies will also want to show if an ad-
blower retaliation matter. Important factors
verse action was contemplated before the em-
have emerged that may tip the scales in the
ployee engaged in protected activity. Courts
company’s favor and defeat a retaliation claim.
are likely to examine the company’s documen-
These may include the number of decision-
tation of prior performance issues, disciplinary
makers involved in the adverse employment
measures taken and communications consid-
action, whether the protected activity was the
ering the necessity of an adverse employment
direct cause of the adverse action, whether
action against the whistleblower. Companies
proper documentation exists to support the
have used a clear and well-documented re-
company’s contention that the adverse ac-
cord of prior offenses, e-mail threads or other
tion was justified and not based upon the
communications that the employer was con-
employee’s involvement in protected activity,
cerned about the employee’s conduct to jus-
the temporal proximity of the adverse action
tify the adverse action that was eventually
to the employee’s involvement in protected
taken. This evidence goes a long way to rebut
activity or evidence that the decision to take
an allegation that the whistleblower suffered
the adverse action was being contemplated
retaliation.
Allegra J. Lawrence-Hardy is a partner at
Sutherland Asbill & Brennan in Atlanta, where she
co-heads both the business and commercial litigation
team and the labor and employment team. She works
with her clients on complex commercial and labor and
employment matters. She has successfully defended
Fortune 100 companies throughout the United States
and abroad in numerous trials, arbitrations and other
forms of alternative dispute resolution. She can be
reached at [email protected].
Bonnie R. Burke is a project attorney in Sutherland’s
litigation practice group in Atlanta, where she
focuses on labor and employment matters. She defends
employers in both single plaintiff and collective actions
arising under the Fair Labor Standards Act and can
be reached at [email protected].
Reprinted with permission from the December 23, 2015
edition of Corporate Counsel © 2016 ALM Media
Properties, LLC. This article appears online only. All
rights reserved. Further duplication without permission
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