Proskauer Whistleblower Defense

On December 21, 2018, the U.S. District Court for the Northern District of California stayed a plaintiff’s whistleblower retaliation claim under SOX (which was not subject to mandatory arbitration) while granting a motion compelling arbitration of the plaintiff’s remaining employment discrimination and retaliation claims. Anderson v. Salesforce.com, Inc., No. 18-cv-06712-PJH. Background Plaintiff alleged that he was terminated after he raised concerns about his employer’s accounting practices. He subsequently filed suit in the Northern District…
On November 15, 2018, the U.S. Securities and Exchange Commission (“SEC”) published its statutorily mandated fiscal year report to Congress covering the agency’s whistleblower program. The report, which covers the period from October 1, 2017 through September 30, 2018, was prepared by the SEC’s Office of the Whistleblower (“OWB”) to summarize its whistleblower bounty program, report on the program’s recent growth, and highlight key amendments to the SEC’s Dodd-Frank regulations. Whistleblower Bounty Program Through the…
On October 22, 2018, the U.S. District Court for the Northern District of Illinois granted a Rule 12(b)(6) motion to dismiss a first-impression whistleblower retaliation claim under the Commodity Exchange Act (“CEA”).  Johnson v. Oystacher, No. 15-cv-02263. Background Plaintiff and Defendant went into business together in January 2011, with Plaintiff acting as Chief Risk Officer and Defendant handling the company’s volume futures trading.  They split ownership of the company by 10% and 90% respectively.  In…
On October 2, 2018, the U.S. District Court for the Western District of Pennsylvania federal court denied a Rule 12(b)(6) motion to dismiss a SOX whistleblower retaliation claim, reasoning that Plaintiff sufficiently alleged that he engaged in protected activity and that his protected activity was a contributing factor in his termination.  But it dismissed the Dodd-Frank whistleblower claim because Plaintiff only provided information to the SEC after his employment was terminated.  Wutherich v. Rice Energy
On September 6, 2018, the SEC Office of the Whistleblower awarded $39 million to one whistleblower and $15 million to another. The $39 million award is the second-largest award in the history of the program, behind a $50 million award made in March of this year. The Chief of the SEC Office of the Whistleblower, Jane Norberg, said in a press release that “[w]histleblowers serve as invaluable sources of information, and can propel an investigation…
On July 12, 2018, the U.S. Commodity Futures Trading Commission (CFTC) issued its largest whistleblower award ever, approximately $30 million, as part of its Dodd-Frank whistleblower program.  This is the first award under the Trump Administration, and only the fifth award that the CFTC has issued since the inception of its whistleblower bounty program.  Notably, this award dwarfs the next highest award of $10 million, which was awarded in April 2016. The CFTC Chairman,…
On June 27, 2018, the U.S. Court of Appeals for the Third Circuit affirmed the dismissal on summary judgment of a SOX whistleblower retaliation claim, concluding that the Plaintiff’s purported belief that the Defendant had committed fraud was not objectively reasonable. Westawski v. Merck & Co., No. 16-4075, 2018 WL 3159093 (3d Cir. June 27, 2018). Background Plaintiff Joni Westawski was a research analyst at Merck & Co.  She was assigned to oversee a diabetes-related…
On June 27, 2018, the U.S. District Court for the Central District of California granted Snap Inc.’s motion to compel arbitration of a Dodd-Frank whistleblower retaliation claim.  Pompliano v. Snap Inc., No. 17-cv-3664 (2018 WL 3198454). Background.   Plaintiff signed an employment agreement (the “Agreement”) with Snap Inc. (the “Company”) without consulting an attorney.  Fired just “three tension-filled weeks” after starting, he sued under Dodd-Frank’s whistleblower provisions, claiming retaliation for allegedly opposing the use of faulty growth…
On June 28, 2018, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) voted in an open meeting on several final rules and rule proposals that will have a material impact on the Commission’s whistleblower program. Most notably, the SEC approved a rule proposal that would modify its Rule 21F, which defines who is a whistleblower and establishes anti-retaliation protection, to comport with the U.S. Supreme Court’s holding in Digital Realty Tr., Inc. v. Somers,…
On May 29, 2018, the U.S. District Court for the Northern District of Alabama granted a motion to dismiss in part Plaintiff’s whistleblower retaliation claims under SOX on the grounds that the Plaintiff failed to exhaust his administrative remedies against the Defendant CEO.  Wingo v. S. Co., 17-cv-01328. Background.  Plaintiff, a Project Manager, informed his supervisor that a project was on track for a delayed Commercial Operation Date (“COD”).   Plaintiff alleged that after he informed…