On December 6, 2022, the U.S. District Court for the Eastern District of Pennsylvania granted a defendant-employer’s motion for summary judgment on whistleblower retaliation claims brought under SOX and the Consumer Financial Protection Act of 2010 (“CFPA”).  It held that the plaintiff could not prove that her alleged complaints of illegal conduct contributed to the decision to discharge her, and that even if she could prove that, the employer would have fired her anyway.  Real-Loomis v. The Bryn Mawr Trust Company, No.-cv-0441.

Background

Plaintiff, who was employed as a banker, alleged that the defendant-employer subjected its employees to “relentless” and “incessant” pressure to meet sales quotas by tracking how much new business employees generated, which caused them to fear that their employment would be terminated if they did not meet their sales goals.  Plaintiff claimed that, on three separate occasions, she complained to her supervisor and branch manager about the sales pressure she allegedly experienced, stating her belief that the employer’s sales tactics were “inappropriate, fraudulent, and not at all in the best interests of customers.”  The branch manager then shared Plaintiff’s concerns with the regional manager.

Shortly thereafter, Plaintiff opened a joint bank account with her husband after the branch manager allegedly asked for help fulfilling the branch’s sales quota.  A senior manager subsequently noticed that there had been an unusually large number of new account openings at Plaintiff’s branch on the same day, and that many of the account openings for employees’ relatives.  Following an investigation due to the suspicious nature of these openings, it was allegedly determined that Plaintiff had forged her husband’s signature.  As a result, the senior manager decided to discharge multiple employees for their involvement in the allegedly fraudulent account openings, including Plaintiff and the branch manager to whom she had previous complained.

Plaintiff proceeded to file suit (following a complaint to the U.S. Department of Labor) claiming was retaliated against for her complaints about the pressure she faced to meet sales quotas in violation of SOX and the CFPA.

Ruling

The court granted the defendant-employer’s motion for summary judgment, finding that Plaintiff could not demonstrate at least two elements of a prima facie case because she did not show: (i) that she engaged in protected activity, or (ii) that any protected activity contributed to the decision to discharge her.  The court noted that Plaintiff’s general reference to “fraudulent” conduct in her complaints to the branch manager did not constitute protected activity under SOX or the CFPA because she failed to identify specific practices that she believed violated either of those laws.  Plaintiff also could not establish that her complaints to the branch manager or her subsequent complaint to the U.S. Department of Labor was a contributing factor in the termination decision.  Plaintiff offered no evidence that the senior manager who decided to discharge her was aware of Plaintiff’s complaints to the branch manager, and therefore those complaints could not have factored into the decision.  Plaintiff’s complaint to the Department of Labor, moreover, post-dated Plaintiff’s discharge and therefore could not have played a role in the termination decision.

The court also found that Plaintiff’s claims failed because the employer established that it would have made to same decision to discharge Plaintiff regardless of any protected activity.  The court noted that the employer fired two other employees as a result of its investigation: another employee who had also purportedly forged a family member’s signature, and the branch manager who had orchestrated the purported scheme.  The court held that this treatment of similarly situated employees who did not complain about violations of SOX and the CFPA constituted clear and convincing evidence that Plaintiff would have been discharged absent any protected activity.

Implications

This decisions reaffirms certain basic principles underlying typical whistleblower retaliation claims, including the common sense notion that an employer cannot decide to retaliate against an employee based on a complaint it did not know about or that was first made after the allegedly retaliatory conduct occurred.

Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

Photo of Pinchos Goldberg Pinchos Goldberg

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and…

Pinny Goldberg is a senior counsel in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims.

In addition to handling litigation and dispute resolution, Pinny regularly advises clients on a wide variety of employment issues, including drafting, reviewing and revising handbooks and workplace policies. He also addresses questions and concerns related to hiring, wage and hour issues, employee leave, performance problems, terminations of employment, and separation agreements and releases.