DOL Decision Expands SOX Whistleblower Protection

The Administrative Review Board of the Department of Labor has significantly broadened the scope of whistle blower protection under SOX in Sylvester v. Parexel.    As scholars have noted, few SOX whistle blowers had previously prevailed at the ARB due its prior narrow interpretation of the law.   The ARB held that 1) The heightened pleading standards of Federal Courts (Iqbal and Twombley) do not apply to SOX claims  2) the Complainant need only express a "reasonable belief" of a SOX violation to engage in protected activity (with an accompanying less rigorous test for such reasonable belief) 3) protected activity need not describe an actual violation of law 4) the "definitive and specific" evidentiary standard of Platone applied in prior ARB decisions is not appropriate 5) SOX complaints do not have to relate to fraud against shareholders and 6) a SOX complaint need not establish criminal fraud to prevail on a retaliation claim.   This same dispute previously produced the Parexel NLRB decision (356 NLRB No. 82) which significantly expanded protected, concerted activity under Section 7 of the Act.

Hat tip: Pat McDermott (Salisbury), who served as counsel-of-record for Complainants.

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