The 11th Circuit joins other courts in restricting protections to terminated employees
The 11th Circuit Court has joined a number of other circuits in restricting the application of SOX whistleblower protections afforded to terminated employees of public companies.
In its ruling on Gale v. US Department of Labor, the Court found that anti-retaliation protections as defined by SOX include both subjective and objective components. As Robert Reder, co-practice group leader of Milbank Tweed’s global corporate group, explained in a letter to clients: ‘It is worth noting that, in contrast to the tendency of federal courts to narrowly construe SOX Section 806, the recently-enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 expands the scope of federal whistleblower protections in several respects.
‘The 11th Circuit’s holding follows what now appears to be settled law that a terminated employee must demonstrate a subjective, as well as an objective, belief that his or her employer was engaged in the types of prohibited acts delineated in SOX Section 806. This decision represents another instance in which a federal court has chosen to narrowly interpret not only Section 806 of SOX, but other provisions of SOX as well.’
Court rulings of this type – that narrow the application of whistleblower protection – run against recent moves by lawmakers that aim to expand protections and incentives for whistleblowers. The statute of limitations on such claims has been extended, and a wider list of employees is now covered. Also, under the new rules, people informing on companies may be entitled to incentive payments from the government totaling millions of dollars depending on the size of the litigation
