In a recent Law360 article (subscription required), Lloyd Chinn, Co-head of Proskauer’s Whistleblower & Retaliation Group, commented on the Tenth Circuit Court of Appeal’s recent decision in Lockheed Martin Corp. v. Dep’t of Labor, et al., that employee complaints do not have to implicate shareholder fraud to constitute protected activity under the Sarbanes-Oxley Act of 2002 (“SOX”).
Chinn, who had submitted an amicus brief on behalf of the U.S. Chamber of Commerce in support of Lockheed Martin, told Law360 that the Tenth Circuit’s decision unduly expands the scope of SOX beyond Congress’ intent. The intent of SOX, Chinn stressed, is to prevent Enron-style shareholder frauds, not to impose a “sort of generalized whistleblower law” for employees of publicly traded companies.
Chinn concluded that, “in the absence of a contrary Supreme Court ruling, this is a very negative outcome for employers, as you now have the Obama administration, Administrative Review Board and one circuit court in agreement that Sarbanes-Oxley is not in any way limited to shareholder fraud, but [is] a sort of generalized whistleblower law.”