Is constructive discharge a prohibited act of retaliation under SOX?
Is constructive discharge a prohibited act of retaliation under SOX?
Retaliatory termination goes beyond “You’re fired!” Under the SOX whistleblower protection law, constructive discharge is an adverse employment action. Constructive discharge occurs where an employer has created “working conditions so intolerable that a reasonable person in the employee’s position would feel forced to resign,” or where the employer “acts in a manner so as to have communicated to a reasonable employee that [s/he] will be terminated, and the . . . employee resigns.” Under the latter standard, an employee facing “imminent discharge” may establish constructive discharge.[i]
And an employer’s refusal to remedy the violations that a whistleblower reports can constitute a constructive discharge. See, e.g.,United States, ex rel. DRC, Inc. v. Custer Battles, LLC,444 F.Supp.2d 678, 691 (E.D.Va. 2006), rev’d on other grounds, 562 F.3d 295 (4th Cir.2009). In Custer Battles, the court found that the plaintiff’s resignation following defendant’s alleged repeated refusals to correct and cease violations could support a whistleblower retaliation claim of constructive discharge under the False Claims Act’s anti-retaliation provision. Id. The court reasoned, “faced with the specter of…entangling himself in his employer’s fraudulent practices, [the plaintiff] chose to resign…these facts are sufficient to allow a jury to find that [the plaintiff] was constructively discharged.” Id.
[i]Dietz v. Cypress Semiconductor Corp., ARB Case No. 15-017, 2016 WL 1389927, at *7(ARB Mar. 30, 2016).
SOX Whistleblower Retaliation Law
We represent corporate whistleblowers nationwide in high-stakes whistleblower retaliation cases and have obtained substantial recoveries for CEOs, CFOs, auditors, accountants, risk managers, CISOs, and other executives and senior professionals. We have obtained settlements in excess of one million dollars in at least five SOX matters. Click here to read reviews from senior executives and professionals that we represented in whistleblower retaliation matters.
Matt Stock is a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor. As an auditor, Mr. Stock developed an expertise in financial statement analysis, internal controls testing and fraud recognition, and he uses his auditing experience to help whistleblowers investigate and disclose complex financial frauds to the government and obtain damages for retaliation. He is lead author of SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.
Zuckerman served on the Department of Labor’s Whistleblower Protection Advisory Committee, which makes recommendations to the Secretary of Labor to improve OSHA’s administration of federal whistleblower protections. He also served in a senior position at the Office of Special Counsel, where he oversaw investigations of whistleblower retaliation claims and whistleblower disclosures, and enforced the Whistleblower Protection Act.
Jason Zuckerman was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2017, 2015, 2009, and 2007, selected by his peers to be included in The Best Lawyers in America® in the category of employment law (2011-2017), and selected by his peers to be listed in SuperLawyers(2012 and 2015-2017) in the category of labor and employment law. Zuckerman is rated 10 out of 10 by Avvo, based largely on client reviews, and rated AV Preeminent® by Martindale-Hubbell based on peer reviews.
Client Reviews from Executives and Senior Professionals in SOX Whistleblower Retaliation Matters
“Jason is the consummate professional when it comes to SOX retaliation claims. He is, without question, one of the most deeply knowledgeable, technical, and astute attorneys in this very specialized body of law. During one of the most difficult times in my professional career, Jason not only provided exceptional legal guidance, but equally as important, he provided emotional support that was vital to my family and me. Jason ran circles around the “major national law firm” team that was assigned to defend my employer. In fact, Jason made them look silly at times. Jason always advocated my best interests, not his own. Jason is not only an exceptional attorney who helped my family to achieve a favorable outcome, but he is a friend. I’ve worked with major law firms throughout my career and when it comes to SOX and employment law matters, there is not a finer, more talented attorney than Jason Zuckerman.”
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“Jason did an exceptional job in quickly understanding the intricacies of my case, grasping not only his field of expertise of employment law, but also the violations of law and SEC Regulations that were central to my dispute. The overall strategy he utilized insured that opposing counsel was challenged and made clear that this case would simply not proceed based on a timetable convenient to them. Jason is thorough, accurate and seemingly working at all hours based on phone calls and correspondence. Fortunately Jason has a very down to earth personality, understands issues readily and can convey in understandable language current “legal” circumstances and probable outcomes. I would easily and thoroughly recommend Jason for issues related to a Sarbanes-Oxley or employment related dispute.”
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“Jason Zuckerman is the most focused, thoughtful and aggressive attorneys I have ever known, let alone had the pleasure to have on my side in a highly complex legal case. He brought well-honed legal insights and a rapid pace to our legal preparations. He forcefully brought those preparations to the opposing side, which gave them little choice but to engage with us until a positive settlement was reached. In addition, we found Jason to be extremely responsive at every step, even if it required working past midnight. His character is beyond reproach and his dedication through the entire process was unwavering. If I ever need someone in my legal court again, I won’t hesitate for even a second, before I seek Jason’s support.”
