Exxon Whistleblower Case to Determine Ability of Corporate Whistleblowers to be Preliminarily Reinstated

Exxon Whistleblower

In the case Lindsey Gulden and Damian Burch v. Exxon Mobil Corporation, the Third Circuit Court of Appeals is set to decide whether or not a district court can enforce Department of Labor orders calling for the preliminary reinstatement of whistleblowers under the Sarbanes-Oxley Act (SOX). According to National Whistleblower Center (NWC), who filed an amicus curiae brief in the case, the court’s decision will be highly consequential as preliminary reinstatement is an essential remedy for corporate whistleblowers facing retaliation.

The case stems from the whistleblowing of Dr. Lindsey Gulden and Dr. Damian Burch, two scientists who worked at Exxon Mobil. In 2019, the scientists raised concerns to Exxon’s H.R. department about a financial disclosure filed by Exxon which included higher projections for oil output at the company’s drilling sites in Texas and New Mexico. The scientists believed there was no empirical evidence to support this increase and that it was in order to boost Exxon’s public filings. Later that year, Dr. Gulden and Dr. Burch were fired.

In October 2022, following an investigation by the Occupational Safety and Health Administration (OSHA) whistleblower program, the Department of Labor (DOL) announced that it had found that Exxon had fired the scientists in retaliation for the possibility they had blown the whistle to the media, a violation of the SOX. The DOL ordered that Exxon preliminary reinstatement Gulden and Burch while the whistleblower retaliation case moved forward.

Exxon, however, refused to reinstate the whistleblowers. When the scientists took the issue to court, a district court ruled that it did not have jurisdiction under SOX to enforce the DOL’s preliminary reinstatement order. Gulden and Burch have appealed this decision.

“This Third Circuit decision will be a pivotal moment for corporate whistleblowers,” said NWC Executive Director Siri Nelson. “A failure to reverse the district court’s denial of jurisdiction will render the preliminary reinstatement remedy powerless and put thousands of employees at risk for retaliatory discharge.”

“SOX was created to improve corporate accountability and encourage whistleblowers to come forward, the Third Circuit should uphold the intent behind this law, and reverse the district court’s decision,” Nelson added.

NWC’s brief argues that limiting the enforcement of preliminary reinstatement orders would counter the Congressional intent behind SOX: protecting corporate whistleblowers. It also explains that the district court ruling puts corporate whistleblowers at further risk of retaliation and will have a chilling effect on would-be-whistleblowers wary of the inability to get preliminary reinstated. 

“Effective statutory construction preserves rather than destroys Congressional intent. Congress designed SOX to protect whistleblowers,” the brief states. “Preliminary reinstatement is an essential tool to prevent a chilling effect and protect both whistleblowers and the public. The language of AIR21 clearly indicates that objection to preliminary reinstatement does not constitute a stay.”

“The finding that this court does not have subject matter jurisdiction is disastrous for corporate whistleblowers and corporate accountability efforts, and completely undermines the Secretary of Labor’s authority rendering preliminary reinstatement moot and incentivizing defendants to disregard administrative orders. Reversal of the district court decision is necessary to maintain corporate integrity and prevent a chilling effect for whistleblowers nationwide.”

The DOL and OSHA Whistleblower Protection Program oversee the enforcement of SOX and more than 20 other federal whistleblower laws.

Further Reading:

NWC’s Amicus Brief

More OSHA Whistleblower News

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