A fundamental piece of advice that I give to my clients is to, “keep sufficient documentary records of an employment decision so that we can recreate the analysis that led to the decision several years later.” In virtually every employment case that ends up in some kind of agency or court setting, the key to prevailing is the ability to convincingly show what transpired between employer and employee that led to the decision at issue.
This is always crucial in discrimination cases where an employer is usually aware of the employee's protected factor (you can't credibly testify that you didn't know you were dealing with a black female, or a Hispanic male, for example) and is asked to demonstrate that the protected factor did not play a role in the ultimate decision.
This type of analysis is also crucial in retaliation claims, where the employer has to argue, for example, that it wasn't the fact that the employee was a gadfly/whistleblower but rather it was her poor performance that caused the company to fire her. Again, an employer must keep solid records of its thought process and the basis for termination, because while most jurors might have difficulty believing that race was a factor in an employment decision, very few of them will have difficulty believing that the company was motivated to strike back at an employee who was causing significant cost and or embarrassment by outing some problematic business practice.
The Sarbanes-Oxley Act was designed to provide significant whistleblower protections for employees of publicly traded companies to report corporate fraud or securities violations. The SCOTUS recently handed down a decision that should provide plenty of incentive for employers terminating whistleblowers to make sure that they can demonstrate that they are cleaner than Caesar's wife's hound's tooth.
Sorry for the mixed metaphor but you get the picture.
The SCOTUS reversed a Second Circuit finding that the SOX Act required an employee to show so-called “retaliatory intent” on the part of an employer to sustain a SOX violation. Instead, SCOTUS unanimously held that all a whistleblower has to show is that the protected activity- in this case, a claim that supervisors at UBS Securities were attempting to pressure an employee to alter his independent reporting- was a contributing factor to the employer's adverse personnel action. In essence, SCOTUS stated that if the employer was aware of the whistleblowing activity, it would have to produce convincing evidence that it would have made the same decision absent its knowledge that the affected employee was a rat, er, whistleblower, to escape liability.
As noted above, this is a very high bar for the employer. To overcome the perfectly understandable inference that an aggrieved employer would act by retaliating against a problematic employee, a company is going to have to provide substantial evidence that either the aggrieved employee was already almost out the door because of her conduct and that the decision was effectively made before the company became aware of the whistleblowing, or that the conduct for which the employee was terminated was so egregious that his whistleblowing was not even a blip on the employer's radar when it made the call.
Both of these scenarios require very credible testimony, backed up by credible documentation to show that the whistleblowing was not a factor.
So, if you find yourself in a situation where you have identified a whistleblower in a SOX environment, your notes, memoranda, and testimony had better be recorded and validated. Otherwise, your next documentation is likely to take the form of a check to the plaintiff.
No comments:
Post a Comment