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Fourth Circuit Rules 2-1 For Defendant In SOX Whistelblower Case

By Sean E. Andrussier

Today, in Livingston v. Wyeth, Inc., the Fourth Circuit affirmed summary judgment for Wyeth in a "whistleblower retaliation" action under the Sarbanes-Oxley Act ("SOX"), 15 U.S.C. 1514A. The court was split. Judge Niemeyer wrote the majority decision. Judge Michael dissented.

Plaintiff, who worked at the company's Sanford, N.C. facility, alleged he was fired in retaliation for expressing concerns about a training program implemented to comply with the FDA's good manufacturing practices, a program that arose out of a consent decree his employer had entered. Plaintiff invoked SOX, which gives whistleblower protection for employees of publicly-traded companies by prohibiting their employers from retaliating against them for providing information or cooperation in investigations relating to violations of federal law relating to a company's fraud against shareholders, as well as specified laws such as securities fraud. The panel majority held, as a matter of law, that plaintiff failed to establish that his internal complaints about the training program concerned company conduct that he reasonably believed constituted securities fraud.

Judge Michael, in dissent, concluded that, viewing the evidence in the light most favorable to Livingston, the case should go to a jury trial. He concluded, among other things, that the evidence established that Plaintiff formed a reasonable belief that his employer was intentionally failing to comply with the consent decree. He disputed the majority's holding that the consent decree didn't cover the Sanford facility.

In support of Wyeth, and on behalf of the U.S. Chamber of Commerce, Womble Carlyle filed an amicus brief in this appeal. A copy of that brief, which addresses the scope of SOX's whistleblower protection, is here.

Full post as published by North Carolina Appellate Blog on March 24, 2008 (boomark / email).