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Law360 Quotes TELG Attorney on Ruling Expanding Scope of SOX-Protected Conduct

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Ben James wrote an article titled DOL Broadly Reads Protected Activity in SOX Case in which he discusses the Brown v. Lockheed Martin Corp. ruling by the DOL where the Administrative Review Board found that Lockheed Martin Corp. violated the Sarbanes-Oxley Act (SOX). Andrea Brown, Lockheed employee had complained to management that the vice president of communications acted unethically by using a pen pal program between Lockheed employees and U.S. soldiers to send X-rated materials to troops overseas and to schedule sexual encounters with U.S. soldiers during working hours. According to brown’s lawsuit, management retaliated by demoting her and eventually constructively firing her.

Ordering Brown reinstted and awarding her $75,000 in damages, the ARB held that shareholder fraud is not required to prove the existence of protected whistleblower activity under SOX and that allegations of mail or wire fraud are sufficient. The article quotes Jason Zuckerman, a principal attorney at The Employment Law GroupĀ® law firm, stating that the broad reading of the SOX whistleblower provisions was just what Congress intended:

“Some federal judges and ALJs ignored the plain meaning of the statute and held that protected conduct is limited solely to disclosures concerning shareholder fraud,” Zuckerman said.

The ARB under former Secretary of Labor Elaine Chao weakened SOX by creating loopholes that ran counter to congressional intent, but that’s no longer the case, Zuckerman said. Now, the ARB is “willing to apply the plain meaning of the statued and to construe SOX in light of its remedial purpose.”

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