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…

We previously reported in March and last October on a whistleblower litigation brought by Charles Erhart, a former Bank of Internet Holding, Inc. (BofI) internal auditor.  On December 3, 2015, in a separate action, the shareholders of BofI brought a derivative suit, based in part on the facts of the whistleblower case, claiming BofI’s board of directors engaged in multiple schemes that caused a drop in stock price.  On May 11, 2018, the United States…