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 DOL ALJs and federal judges 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).
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.
In Mahony v. KeySpan Corp., No. 04 Civ. 554 (SJ), 2007 WL 805813, at *7 (E.D.N.Y. Mar. 12, 2007), the court held that “[w]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.”)
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