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What is the employer’s burden in a Sarbanes-Oxley whistleblower retaliation case?


Employer Affirmative Defense in SOX Whistleblower Cases

Once a SOX whistleblower has proven that SOX protected conduct was a contributing factor in the decision to take an adverse action, an employer can avoid liability only if it proves clearly and convincingly that it would have taken the same adverse employment action even if the employee had not engaged in protected activity.[i]  This is known as the same-decision or same-action defense.

The operative phrase here is “would have.” An employer fails to meet its burden if it establishes merely that it could have taken the same adverse action. “Clear and convincing” evidence can be quantified as establishing the probability of a fact at issue “in the order of above 70%.”[ii]

The employer bears this onerous burden only if an employee establishes that their protected activity contributed to the employer’s decision to take the adverse action against them.

An employer may rely on evidence that:

  • the whistleblower recently performed poorly or otherwise gave the employer reason to take action;
  • the employer’s reason for taking the adverse action materialized before the company allegedly engaged in misconduct or the employee blew the whistle; or
  • the whistleblower’s personnel file supports the employer’s explanation and details the employer’s intent to take the adverse action.

A sham investigation of a whistleblower instigated in response to the whistleblowers’ protected conduct (also known as a retaliatory investigation) will not enable the employer to establish a same-decision defense.  See, e.g., Genberg v. Porter, 882 F.3d 1249 (10th Cir. 2018).

“[W]here the protected activity is virtually inseparable from the basis for the imposition of discipline, the fact finder must be careful to assure that the employer has met the high clear and convincing affirmative defense standard.”  Brousil v. BNSF Railway Co., ARB No. 16-025, -031, ALJ No. 2014-FRS-163 (ARB July 9, 2018) (citing Abdur-Rahman v. DeKalb Cnty, ARB Nos. 08-003, 10-074; ALJ Nos. 2006-WPC-002, -003 (ARB Feb. 16, 2011)(alleged insubordination included protected safety concerns); Smith v. Duke Energy Carolinas, LLC, ARB No. 11-003, ALJ No. 2009-ERA-007 (ARB June 20, 2012)(protected disclosures exclusively led to disciplinary investigation); Henderson Wheeling & Lake Erie Ry., ARB No. 11-013, ALJ No. 2010-FRS-012 (ARB Oct. 26, 2012)(termination letter referenced protected activity); see also Smith v. Duke, ARB No. 14-027, ALJ No. 2009-ERA-007 (ARB Feb. 25, 2015)(Royce, J. dissenting); Speegle v. Stone & Webster, ARB No. 11-029-A, ALJ No. 2005-ERA-006, slip op. at 15, n.97 (ARB Jan. 31, 2013).

“[B]ecause a respondent’s affirmative defense burden is high, and because ‘it is a fact intensive determination, involving questions of intent and motivation’ for taking adverse action, resolving this issue on summary decision is challenging.”  Kao v. Areva Inc., ARB No. 16-090, ALJ No. 2014-ERA-00004 (ARB Apr. 30, 2018).

[1] Colorado v. New Mexico, 467 U.S. 310 (1984).

[ii] Palmer v. Canadian National Railway, ARB No. 16-035 at 57.

SOX Whistleblower Protection Lawyers

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. Click here to read reviews from senior executives and professionals that we represented in whistleblower retaliation matters.

To learn more about the Sarbanes-Oxley corporate whistleblower protection law, download our guide Sarbanes-Oxley Whistleblower Protection: Robust Protection for Corporate Whistleblowers.SOX whistleblower protection

Why Hire Leading Whistleblower Law Firm Zuckerman Law

We have assembled a team of leading whistleblower lawyers to provide top-notch representation to Sarbanes-Oxley (SOX) whistleblowers.  Recently Washingtonian magazine named two of our attorneys top whistleblower lawyers. U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 Law Firm in the Washington D.C. metropolitan area.

To schedule a free preliminary consultation, click here or call us at 202-262-8959.

  • 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.
  • Both Bachman and Zuckerman served in senior positions at the Office of Special Counsel, where they oversaw investigations of whistleblower retaliation claims and whistleblower disclosures, and enforced the Whistleblower Protection Act.
  • Eric Bachman has substantial experience litigating precedent-setting employment cases.  His wins include a $100 million settlement in a disparate impact Title VII class action and a $16 million class action settlement against a major grocery chain.  Having served as Special Litigation Counsel in the Civil Rights Division of the Department of Justice and as lead or co-counsel in numerous jury trials, Bachman is ready to go the distance to obtain the relief that you deserve.
  • Bachman and 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.
  • 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 (2011-2020), and selected by his peers to be listed in SuperLawyers(2012 and 2015-2020) 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.
  • The firm has published extensively on whistleblower rights and protections, and regularly speaks nationwide at seminars and continuing legal education conferences.  We blog about new developments in whistleblower law at the Whistleblower Protection Blog.

Client Reviews from Executives and Senior Professionals in SOX Whistleblower Retaliation Matters

Clients reviews from Avvo:

  • 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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  • “I selected Jason to handle my case after consulting with three other lawyers because of his extensive SOX experience and negotiation skills. My decision paid off as he easily surpassed all of my expectations. He quickly analyzed the merits of my case and aggressively engaged my former employer to reach a favorable settlement, avoiding years of potential litigation. He was responsive, professional, ethical and a great advocate on my behalf. I truly believe that I could not have found a better lawyer to represent my interests. He would be the first person I would recommend if a colleague or friend were to ever need similar services. Put simply, Jason is a top notch lawyer who works tirelessly to achieve a positive outcome for his clients. It’s easy to see why he is regarded as an expert in the field.”
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Clear and Convincing Evidence

Clear and convincing evidence is “evidence indicating that the thing to be proved is highly probable or reasonably certain.” Williams v. Domino’s Pizza, ARB No. 09092 at 6 (quoting Brune, ARB No. 04037 at 14). Evidence is clear when the employer has presented an unambiguous explanation for the adverse action. It is convincing when based on the evidence the proffered conclusion is highly probable. DeFrancesco v. Union R.R. Co., ARB No. 13057, ALJ No. 2009FRS009, slip op. at 78 (ARB Sept. 30, 2015) (“DeFrancesco II”) (citing Speegle v. Stone & Webster Constr., Inc., ARB No. 13074, ALJ No. 2005ERA006, slip op. at 6 (ARB Apr. 25, 2014)); see also AcostaARB No. 20180020, slip op. at 13. This is a difficult standard for employers, signaling Congressional concern with past industry practice and the importance of the interests at stake. See
Araujo v. New Jersey Transit Rail Operations, Inc., 708 F.3d 152, 159 (3d Cir. 2013); (citing Stone & Webster Eng’g Corp. v. Herman, 115 F.3d at 1568, 1572 (11th Cir. 1997); see also DeFrancesco II, ARB No.13057, at 8. 
The ARB has offered a series of questions to consider, including whether the employer routinely monitors or investigates compliance with the rules absent protected activity; whether the employer consistently imposes equivalent discipline to employees who violate the rule but engage in no protected activity; whether the rules charged are routinely applied; whether the rule is vague and subject to manipulation; and whether the evidence shows that the investigation was designed to further the purpose of the rule rather than as a way to punish the employee. DeFrancesco II, slip op. at 1112. To prevail, an employer must show more than that a rule was violated, that it had a legitimate motive for the adverse action, and that it imposes discipline generally whenever it determines a rule
has been broken. Instead, it is necessary to establish that the rule is applied consistently such that employees who engage in substantially similar conduct absent the protected activity are also investigated and punished in the same manner. Id. at 1314.” 
Klinger v. BNSF Railroad Co., ALJ No. 2016-FRS-00062, at 19 (ALJ Sept. 29, 2022).

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Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.