posted on Friday, February 10, 2006 3:05 PM
by
Lou Michels
Whistleblowing on a Title VII Basis
When Sarbanes Oxley whistleblowing provisions became law, I had a real fear that somehow, somewhere, someone would figure out a way to connect Title VII protected activity with SOX's protected activity and create a hybrid claim that would be extremely difficult to defend under normal SOX procedures. Just such a claim was raised in Smith v. Hewlett Packard (No. 2005-SOX-00088). The administrative law judge determined that there was no viable claim under Sarbanes Oxley, but then thoughtfully outlined how a plaintiff could make a claim if he so desired.
The good news is that such a claim is hard to establish -- the plaintiff must show that his employer failed to disclose either litigation or pending litigation of such magnitude that it would have an effect on a company's value on the public market. Those types of cases should be few and far between, but one does not have to think too long or hard to envision a situation where an embattled human resources manager raises a red flag of systemic discrimination, checks the company's annual report to its shareholders to determine that his claims are not disclosed there, and then files his report with the Department of Labor after he's disciplined for some unrelated reason. It's only a matter of time before senior management types who have access to facts that might lead to class-wide employment litigation begin crafting these kinds of claims for job security or to enhance their severance packages.