NWC Joins Amicus in SOX Whistleblower Retaliation Case

Yesterday, the National Whistleblower Center joined other groups in filing an amici curiae brief with the Department of Labor Administrative Review Board (ARB) in Powers v. Union Pacific Railroad Company, ARB Case No. 13-034. Joining the NWC as amici are the National Employment Lawyers Association, the Truckers Justice Center and Teamsters for a Democratic Union.

The ARB called for amici to file briefs in the Powers case to consider the standard of proof for employees to establish the “contributing factor” test in whistleblower retaliation cases arising under the Sarbanes-Oxley Act (SOX) and other whistleblower statutes. The full ARB is considering whether an earlier 2-to-1 ARB panel decision in Fordham v. Fannie Mae, ARB No. 12-061 was correctly decided. In Fordham, the ARB reversed and vacated an Administrative Law Judge’s recommended decision that had improperly weighed employer defenses in determining whether the employee had demonstrated her whistleblowing was a contributing factor in her termination.

The ARB’s majority opinion in Fordham noted that Congress had created the “contributing factor” test to lower the standard of proof needed in whistleblower cases, and that once a “contributing factor” is shown the burden of proof shifts to the employer to prove by “clear and convincing” evidence that it would have taken the same action in the absence of the employee’s whistleblowing.

For example, if an employee satisfied the “contributing factor” test by circumstantial evidence, the burden should shift to the employer to prove any non-retaliatory reasons for the termination (such as misconduct or other alleged reasons) by “clear and convincing” evidence. In such cases, the employer’s evidence as legitimate reasons supporting the termination must be proven under the higher clear and convincing standard. That’s what the statute requires, and that’s what nearly all U.S. Courts of Appeals have determined.

However, as the Fordham decision makes clear, permitting the employer’s evidence to be weighed under the “contributing factor” test by a “preponderance” of evidence negates clear and overwhelming Congressional intent that the employer’s defenses be weighed by a higher standard of proof, i.e., “clear and convincing” evidence.

“We strongly urge the full ARB to uphold the Fordham decision because it provides much needed clarity and uniformity by interpreting the ‘contributing factor’ test consistently with Whistleblower Protection Act where that test was initially adopted by Congress,” said Stephen M. Kohn, author of The Whistleblower’s Handbook.

It only makes sense that an employer should not escape having to prove its defense by “clear and convincing” evidence and allowing it to defeat the employee’s evidence under the lower “contributing factor” standard. The ARB needs to end the dubious practice of permitting employers to escape the higher burdens of proof mandated by Congress when it enacted the “contributing factor” test.

The NWC is pleased to have joined with the other groups in filing this amici curiae brief and it is thankful for attorney Jason Zuckerman agreeing to draft and file this important amici brief.