WHISTLEBLOWER PROTECTIONS UNDER THE SARBANES-OXLEY ACT: A PRIMER AND A CRITIQUE

Fordham Journal of Corporate & Financial Law, 2007 by Watnick, Valerie

Based on these facts, the ARB found that the employer had not violated the STAA even though the employee had made safety complaints and was fired within six months of making such complaints."6 This was so even though the employer's purported legitimate reasons for termination were directly related to the employee's safety concerns: actually constituting the basis for his complaints about safety; and even though the adverse action occurred within six months of the protected activity."7 In Anderson, the very actions that resulted in his termination-pulling off the road to sleep and keeping loads longer than the six hours allowed by company rules-were also the very subject of complainant's safety reporting."* Yet, these actions, according to the ARB, were sufficient legitimate reasons for the employer's adverse action, and oddly enough, they were enough to show that the employee's reporting of safety concerns had not been the causal factor"9 in his termination.120 The Anderson case illustrates the extreme uphill battle a complainant must overcome in proving that his protected activity ultimately was a contributing factor in the adverse employment action against him.121

E. Adverse Employment Action

The Department of Labor has indicated that any negative employment action will satisfy this element of a whistleblower claim "if it is reasonably likely to deter employees from making protected disclosures."122 A complainant need not prove termination or suspension from the job, or even a reduction in salary or responsibilities.123 For example, even being placed on a possible "layoff list has been said to qualify as adverse employment action, even where the employee was not ultimately laid off.124

F. The Employer's Burden to Rebut

While the employee bears the initial burden of proving the elements of his case by a preponderance of the evidence under Sarbanes-Oxley,125 the employer can still beat back the claim of discrimination by proffering "clear and convincing evidence" of legitimate motives for its adverse actions.126 In such a case, where there exist both legitimate and illegitimate motives for the adverse action, the court may engage in what has frequently been called a "dual motive analysis."127 In these cases, if the employer can show by clear and convincing evidence that it would have taken the same action in the absence of the protected activity by the employee,128 the burden will shift back to the employee to ultimately persuade the trier of fact that the offered reasons are a mere "pretext" for the real cause of the adverse action: the protected conduct.129 Alternatively, the employee can show that his conduct was at least a contributing factor in the employer's decision to take adverse action.130

Cases where the employer offers what it calls "clear and convincing evidence" of a legitimate reason for adverse action put the employee in an untenable position.131 In most instances an employee bringing a Sarbanes-Oxley whistleblower claim is also an "at will" employee who can be fired for just about any reason-at any time-and so most any reason offered by the employer can be deemed "legitimate" by the tribunal.132 Thus, the level of protection offered to at- will employees by state employment law-as to what constitutes proper dismissal-is the ultimate determinant of how much protection whistleblowing employees133 will actually receive under Sarbanes-Oxley.134