Law360 Quotes R. Scott Oswald on Landmark Opinion in Wiest Case

Posted on March 20, 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.

The court’s March 19, 2013, decision will allow more corporate whistleblowers to claim protection under the Sarbanes-Oxley Act (SOX), Mr. Oswald told the legal news service, since it drops a requirement that employees specify the exact rules that may have been broken by their employer.

Under Wiest, employees may report possible fraud to their superiors without needing legal expertise or reciting any “magic words” to be shielded from retaliation, Mr. Oswald said. If they are punished for speaking up, whistleblowers can claim SOX protection as long as they acted on a “reasonable belief” that their company was acting fraudulently.

That’s a change from previous standards, which required employees to make “definitive and specific” statements about lawbreaking in order to get a hearing on the merits.

The Sarbanes-Oxley Act of 2002 sets strict accountability rules for financial behavior by public companies and, under Section 806, protects workers against retaliation for blowing the whistle on a number of specific violations.

Until now, employers have used a narrow interpretation of Section 806 to kill whistleblower lawsuits in their infancy. Under President Obama, however, the U.S. Department of Labor has pushed to broaden Section 806 protections. The Third Circuit now has added its weight to the effort.

The Wiest decision will “set the table” for debate by other federal circuits — and potentially for debate by the Supreme Court, which may provide the final word on the protection standard, said Mr. Oswald.

For more detail on the Wiest decision, see the Whistleblower Law Blog.

R. Scott Oswald represents employees in whistleblower and discrimination cases. He has brought more than three dozen trials to verdict and recovered more than $90 million in judgments and settlements.