Friday, January 8, 2016

Court narrowly construes whistleblower protection

According to a report in the National Law Journal a federal judge in Virginia, from which bad news for plaintiffs often comes, has dismissed a whistleblower action filed under Dodd-Frank and Sarbanes-Oxley. The judge rejected the claim as a matter of law saying that the misconduct which is alleged to have triggered plaintiff's discharge amounted at most to a violation of company policy. Janet Puffenbarger had reported to her supervisor that the employer had made an unauthorized paid time off cash payment to another employee.

The case comes the context of a Circuit split. Roshni Hemlani addressed this in her student Note Reinstating Employer Accountability by Protecting All Forms of Whistleblowing: Erisa Section 510, 20 Fordham J. Corp. Financial Law 203-267 (2014). The issue at hand was Section 510 of the Employee Retirement Income Security Act which governs pensions and benefit plans for large employers and multi-employer groups.

Ms. Hemlani addressed a split in the federal circuits on the question of whether an informal internal complaint entitled one to whistleblower protection. Some held that it was only a complaint outside the employing organization that constituted protected whistleblowing. As she began her research she surveyed not only federal law, but conducted a systematic fifty state survey of whistleblower protection - identifying various approaches to the problem. Her conclusion that unsolicited internal complaints warrant protection is well supported and important.

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