Sarbanes-Oxley Whistleblower Damages and Remedies
In a Sarbanes-Oxley whistleblower retaliation lawsuit brought against a bank, Judge Sweet held that the great weight of authority permits SOX whistleblowers to recover damages for reputational harm, harm to career, and emotional distress:
“With respect to damages for emotional distress, every circuit court to address the issue holds that such damages may be recoverable pursuant to SOX’s language stating that a prevailing employee `shall be entitled to all relief necessary to make the employee whole.'” Feldman-Boland v. Stanley, No. 15 Civ. 6698, 2016 WL 3826285, at *6 (S.D.N.Y. July 13, 2016) (citing the statutory language). Consistent with the reasoning in Feldman-Boland, other Courts have found that reputational injury is also compensable under SOX. “When reputational injury caused by an employer’s unlawful discrimination diminishes a plaintiff’s future earnings capacity, [she] cannot be made whole without compensation for the lost future earnings [she] would have received absent the employer’s unlawful activity.” Mahony v. KeySpan Corp., No. 04 CV 554 (SJ), 2007 WL 805813, at *7 (S.D.N.Y. March 12, 2007).
Recently a SOX whistleblower was awarded $2.7M in front pay in part because “his prospects for future employment are unpromising in part due to Defendant’s violations of his rights.” The whistleblower in that case was featured in an article in Corporate Counsel magazine entitled How to Help a Whistleblower.
Whistleblowers have obtained substantial recoveries in SOX whistleblower cases:
- 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 Recovers Nearly $5 Million
- JP Morgan SOX Whistleblower Wins $1.13M at Trial
See our tips to maximize your recovery in your whistleblower retaliation case.
SOX Whistleblowers Can Recover Front Pay
A prevailing SOX whistleblower can recover “all relief necessary to make the employee whole,” including reinstatement, back pay, attorney’s fees, and costs. 18 U.S.C. § 1514A(c). “Special damages” include damages for impairment of reputation, personal humiliation, mental anguish and suffering, and other noneconomic harm resulting from retaliation. See Kalkunte v. DVI Fin. Servs., Inc., ARB Case Nos. 05-139, 05-140, at 11 (ARB Feb. 27, 2009). Although reinstatement is the preferred and presumptive remedy to make an employee whole, some ALJs have awarded front pay in lieu of reinstatement. See, e.g., Hagman v. Washington Mutual Bank, Inc., ALJ Case No. 2005-SOX-00073, at 26–30 (ARB Dec. 19, 2006), appeal dismissed, ARB Case No. 07-039 (ARB May 23, 2007) (awarding $640,000 in front pay to a banker whose supervisor became verbally and physically threatening when the banker disclosed concerns about the short funding of construction loans). But, until recently, there was some ambiguity as to whether district courts would award front pay.
In October 2013, Judge Robert Payne held that front pay is an appropriate remedy in lieu of reinstatement in SOX actions. See Jones v. SouthPeak Interactive Corp., 986 F. Supp. 2d 680 (E.D. Va. 2013), aff’d, 777 F.3d 658 (4th Cir. 2015). Andrea Jones worked at SouthPeak Interactive Corp. (“SouthPeak”) as its chief financial officer, and SouthPeak terminated her employment two days after she disclosed accounting irregularities to the SEC. Following a four-day trial, a jury found for Jones and awarded nearly $700,000 in damages. Jones then filed a motion seeking front pay in lieu of reinstatement and in addition to compensatory damages. Judge Payne’s decision to award front pay under SOX was based on DOL regulations implementing SOX, which authorize the award of front pay in lieu of reinstatement, and on Fourth Circuit precedent affirming awards of front pay in lieu of reinstatement under similar remedial statutes, such as the ADEA and FMLA.
SouthPeak appealed Judge Payne’s decision. The DOL filed an amicus curiae brief arguing that front pay is an appropriate remedy under SOX, and the Fourth Circuit affirmed. See 777 F.3d at 663. Following Jones, other circuits will likely hold that SOX authorizes front pay in lieu of reinstatement. Large awards of front pay to highly compensated employees, such as corporate officers, could result in very large recoveries under SOX.
Experienced and Effective SOX Whistleblower Attorneys
The top-rated SOX whistleblower lawyers at Zuckerman Law have substantial experience litigating Sarbanes Oxley whistleblower retaliation claims and have achieved substantial recoveries for officers, executives, accountants, auditors, and other senior professionals. To learn more about corporate whistleblower protections, see our Sarbanes-Oxley Whistleblower Protection FAQ.
Click here to read client testimonials about the firm’s work in SOX whistleblower matters and other employment-related litigation.
Described by the National Law Journal as a “leading whistleblower attorney,” founding Principal Jason Zuckerman has established precedent under a wide range of whistleblower protection laws and obtained substantial compensation for his clients and recoveries for the government in whistleblower rewards and whistleblower retaliation cases. Three of the matters he has worked on are featured in Tom Mueller’s seminal book about whistleblowing Crisis of Conscience: Whistleblowing in an Age of Fraud and Dan Maldea’s Corruption in U.S. Higher Education: The Stories of Whistleblowers. False Claims Act qui tam cases he has worked on in conjunction with other attorneys have resulted in recoveries in excess of $100 million, and he has secured settlements in eight SOX whistleblower retaliation matters above $1 million.
Drawing on our substantial experience representing corporate whistleblowers, we have published a guide to SOX titled Sarbanes-Oxley Whistleblower Protection: Robust Protection for Corporate Whistleblowers.
To schedule a free preliminary consultation, click here or call us at 202-262-8959.
SOX Whistleblower Retaliation
Leading whistleblower law firm Zuckerman Law has written extensively about whistleblower protections and is quoted frequently in the media on this topic. A sample of those blog posts and articles appears below:
- Sarbanes Oxley Whistleblower Win Shows Strong Need For Whistleblower Protections
- DOL Adopts Strengthened Sarbanes-Oxley Whistleblower Regulations
- Jury Awards Former Bio-Rad Counsel $11M in Sarbanes-Oxley Whistleblower Case
- Sarbanes-Oxley Whistleblower Decision Clarifies Broad Scope of Protected Whistleblowing
- Decision Denying Motion for Summary Judgment Broadly Construes Sarbanes-Oxley Protected Whistleblowing
- Sarbanes-Oxley Protects Disclosures About Inadequate Information Security Controls
- Jury Awards Six Million Dollars to Whistleblower in Sarbanes-Oxley Case
- Sarbanes-Oxley Authorizes Damages for Reputational Harm
- OSHA Orders Bank to Reinstate Sarbanes-Oxley Whistleblower
- Sarbanes-Oxley Whistleblower Prevails on Appeal
- Sarbanes-Oxley Whistleblower Obtains $2.7M in Front Pay
- SOX Whistleblower Decision Adopts Favorable Pleading Standard for Whistleblowers
- OSHA Orders Wells Fargo to Pay $5.4M to Whistleblower
- District Court Rejects Materiality Requirement for Sarbanes-Oxley Whistleblower Actions
- SARBANES-OXLEY WHISTLEBLOWER CASE CLARIFIES THE BURDEN FOR PLEADING KNOWLEDGE OF PROTECTED WHISTLEBLOWING
- Whistleblowing Fraud Investigator Defeats Motion to Dismiss Sarbanes-Oxley Whistleblower Case
- Third Circuit Decision Highlights Key Procedural Distinctions Between Sarbanes-Oxley and Dodd-Frank Whistleblower Protection Provisions
- Federal Courts Are Adopting the Administrative Review Board’s Broad Interpretation of Sarbanes-Oxley Protected Conduct
- Are cybersecurity whistleblowers protected against retaliation?
- Court Rules that Whistleblowers Can Use Confidential Company Documents to Expose Fraud
- Fifth Circuit Holds that “Outing” a Whistleblower is an Adverse Action Under SOX
- Court Rules for In-House Counsel Whistleblower
- Leading SEC Whistleblower Law Firm Featured in Article About Growing Wave of Whistleblower Lawsuits
- Pro Se Sarbanes Oxley Whistleblower Prevails in Jury Trial
- Whistleblower Lawyer Interviewed About Dodd-Frank Whistleblower Protection Provision
- A Wells Fargo whistleblower warned about fake accounts in 2011 — nobody from the government ever spoke with her
- Whistleblower Lawyer Dallas Hammer Quoted About Cybersecurity Whistleblowing
- Tax Notes Quotes Whistleblower Lawyer Zuckerman About SOX Whistleblower Case
- Article Reports on Petition to Strengthen Whistleblower Rights
- Whistleblower Lawyer Zuckerman Quoted About OSHA Whistleblower Investigations
- Whistleblower Lawyer Quoted About Sarbanes-Oxley Whistleblower Development
- Whistleblower Lawyer Jason Zuckerman Quoted About Sarbanes-Oxley Whistleblower Protection
- Forbes Quotes Whistleblower Attorney Jason Zuckerman About Self-Help Discovery in Whistleblower Litigation
- Federal Courts Are Adopting the Administrative Review Board’s Broad Interpretation of Sarbanes-Oxley Protected Conduct
- DOL Clarifies Burden-Shifting Framework For Whistleblowers, Law 360 (October 2016)
- The Evolution Of SOX: A Powerful Remedy For Retaliation, Law 360 (May 2016)
- Whistleblower Protections and Incentives for Auditors and Accountants, Accounting Today (May 2016)
- 2016 Annual Update on the Whistleblower Provisions of SOX, American Bar Association Section of Labor and Employment Law Subcommittee on the Sarbanes-Oxley Act of 2002 (February 2016)
- Sixth Circuit Hands A Landmark Victory To SOX Whistleblowers, Law 360 (June 2015)
- A Year For Whistleblower Rewards And Protections, Law 360 (December 2014)
- Congress Strengthens Whistleblower Protections for Federal Employees, ABA Section of Labor and Employment Law (December 2012)
- Whistleblowers: What Protections And Forms of Relief Are Available For Foreign-Based Employees, ABA Section Of International Law Spring 2011 Meeting (March 2011)
- Law 360 Quotes Whistleblower Attorney Jason Zuckerman About Fifth Circuit Sarbanes-Oxley Whistleblower Decision
- Law 360 Quotes Whistleblower Lawyer Jason Zuckerman on Seminal Sarbanes-Oxley Whistleblower Decision
- Whistleblower Attorney Zuckerman Quoted in Article About Sarbanes-Oxley Whistleblower Protection Decisions
- Law 360 Quotes Whistleblower Lawyer Jason Zuckerman on Seminal Sarbanes-Oxley Whistleblower Decision
- Law360 Quotes Whistleblower Lawyer Jason Zuckerman About Sarbanes-Oxley Causation Standard
- Whistleblower Attorney Jason Zuckerman Quoted in Law360 Article About Whistleblower Self-Help Discovery
- Whistleblower Advocate Jason Zuckerman Quoted in Article About In-House Attorney Whistleblower Lawsuits
- Whistleblower Lawyer Hammer Quoted by Bloomberg About Rebound in Sarbanes Oxley Whistleblower Retaliation Claims
- Whistleblower Lawyer Quoted About Sarbanes-Oxley Whistleblower Development
- Whistleblower Lawyer Interviewed About the Rise of Cybersecurity Whistleblowing
