Date: March 19, 2013
Law360 tapped the expertise of R. Scott Oswald, managing principal of The Employment Law Group® law firm, in its in-depth analysis of the landmark Wiest v. Lynch ruling by the U.S. Court of Appeals for the Third Circuit.
Quoteworthy:
"It's really the first word on whether the courts will follow the DOL on expanding SOX protections."
R. Scott Oswald
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[EXCERPT]
3rd Circ. Lowers Bar For SOX Whistleblowers In Tyco Case
The Third Circuit on Tuesday revived whistleblower claims brought against Tyco Electronics Corp. by an accountant who was allegedly terminated for reporting improper expenditures, a much-anticipated decision that lawyers say expands the scope of the Sarbanes-Oxley Act’s retaliation provision in line with the Obama labor department’s worker-friendly interpretation.
The appeals court’s precedential, 2-1 opinion said a lower court had erred by holding that Tyco accounting department veteran Jeffrey Wiest had to allege that his disclosures to supervisors “definitively and specifically” related to an existing violation of a particular anti-fraud law.
According to the majority, whistleblowers only have to have a “reasonable belief” that their employer has violated or will violate the law or U.S. Securities and Exchange Commission rules. The ruling deferred to the U.S. Department of Labor Administrative Review Board’s blockbuster May 2011 ruling in Sylvester v. Parexel, which eschewed the “definitively and specifically” standard.
[…]
For whistleblowers and their attorneys, the decision is a major victory. The Employment Law Group’s Scott Oswald said that the Third Circuit had opened up SOX protections to ordinary employees, making it clear that no legal background, legal advice or particular “magic words” are necessary to report misconduct.
[…]
According to Oswald, Tuesday’s decision is a sign of things to come as other courts mull whether to accept or reject the current ARB’s positions on whistleblower law.
“It’s really the first word on whether the courts will follow the DOL on expanding SOX protections,” he said. “So it will set the table for courts who will be determining the extent to which they will defer to the ARB.”
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