Wiest, et al. v. Lynch, et al.

Case Updates

The Third Circuit reversed the District Court's dismissal of the federal whistleblower claims and vacated the dismissal of the state law claims.

NCLC urged the Court to hold that the whistleblower provisions of the Sarbanes-Oxley Act (SOX) protect only those reports that implicate the laws enumerated in SOX and that go above and beyond an employee's regular job responsibilities. In this case, a terminated employee attempted to claim protection as a SOX whistleblower—not because he actually blew the whistle on illegal activity—but because he questioned business expenses pursuant to his assigned compliance job duties. The district court dismissed the complaint and denied reconsideration because Plaintiffs-Appellants failed to plead that Wiest engaged in protected activity. In its amicus brief, NCLC argued that the statute’s whistleblower protection extends only to reports about fraud against shareholders. An employee’s questioning of expenses pursuant to his regular job duties, without more, cannot constitute protected activity. Whistleblowing - as the term implies - must be loud and clear. Protecting general inquiries made pursuant to employee's regular duties would undermine the effectiveness of whistleblowing. NCLC also argued that interpretations of SOX by the Department of Labor Administrative Review Board ("ARB") are not entitled to deference by federal courts. NCLC urged the Third Circuit to affirm the district court’s ruling.