A National Law Journal article titled “Wells Fargo’s Whistleblower Problem Could Grow Substantially” quotes leading whistleblower lawyer Jason Zuckerman about Sarbanes-Oxley whistleblower retaliation cases brought against Wells Fargo. The article reports that Wells Fargo disclosed in a 10-Q filing that there are “multiple single plaintiff Sarbanes-Oxley Act complaints and state law whistleblower actions filed with the Department of Labor or in various state courts alleging adverse employment actions for raising sales practice misconduct issues.”
In the article, Zuckerman notes that Wells Fargo could face significant exposure in these cases:
“Wells Fargo may have substantial exposure in some of the whistleblower cases because many of the whistleblowers were unable to secure comparable employment in the financial services industry. Therefore, back pay liability and lost future earnings in some of these cases will likely exceed $1 million,” said Jason Zuckerman, a whistleblower lawyer at Washington’s Zuckerman Law.
A prevailing SOX whistleblower can recover “all relief necessary to make the employee whole,” which includes:
- back pay (lost wages and benefits);
- reinstatement with the same seniority that the employee would have had, were it not for the retaliation;
- special damages (damages for impairment of reputation, personal humiliation, mental anguish and suffering, and other noneconomic harm that results from retaliation); and
- attorney’s fees, and costs.
Back pay includes promotions and salary increases that the whistleblower would have obtained but for the retaliation. Note that back pay is offset by interim earnings.
Uncapped special damages can be substantial where the retaliation has derailed the whistleblower’s career. “When reputational injury caused by an employer’s unlawful discrimination diminishes a plaintiff’s future earnings capacity, [they] cannot be made whole without compensation for the lost future earnings [they] would have received absent the employer’s unlawful activity.” Mahony v. KeySpan Corp., 2007 WL 805813, at *1 (E.D.N.Y. Mar. 12, 2007).
Recently, some SOX whistleblowers have obtained substantial damages at trial, including a former in-house counsel who recovered approximately $11M:
Jury Awards Former Bio-Rad Counsel $11M in Sarbanes-Oxley Whistleblower Case
Jury Awards Six Million Dollars to Whistleblower in Sarbanes-Oxley Case
Sarbanes-Oxley Whistleblower Obtains $2.7M in Front Pay
For more information about corporate whistleblower protection, download our free guide titled Sarbanes-Oxley Whistleblower Protection: Robust Protection for Corporate Whistleblowers.
