Law360, San Diego (November 12, 2014, 8:10 PM ET) -- A Fifth Circuit panel on Wednesday denied Halliburton Inc.’s attempt to overturn a U.S. Department of Labor finding that it retaliated against a whistleblower by revealing his name in a document preservation notice, ruling an administrative board did not ignore Sarbanes-Oxley Act precedent.
Former Halliburton employee Anthony Menendez complained to both the U.S. Securities and Exchange Commission and Halliburton’s board about the company’s accounting practices. Halliburton’s general counsel, having seen Menendez’s internal complaint, assumed that an SEC notice about its inquiry was tied to Menendez...
...Halliburton retaliated against a whistleblower by outing him to his colleagues, an appeals court upheld in a Wednesday ruling.
The Fifth Circuit Court of Appeals affirmed a U.S. Department of Labor Administrative Review Board ruling that found the firm retaliated against former staffer Anthony Menendez by disclosing his identity to his colleagues, which led to them ostracizing him.
Mr. Menendez in 2005 raised concerns internally about some of Halliburton’s accounting practices. Later that year, he submitted a confidential complaint with the Securities and Exchange Commission over the same concerns, according to the order.
When the Securities and Exchange Commission told Halliburton it was investigating allegedly improper accounting practices in 2006, Bert Cornelison, the general counsel at the time, sent Mr. Menendez’ colleagues an e-mail that identified him as the whistleblower behind the agency’s probe, the order said. Colleagues then started to avoid Mr. Menendez and treat him differently.
Later that year, the SEC closed its investigation without taking action.
The Administrative Review Board said the company’s conduct constituted illegal retaliation under the 2002 Sarbanes-Oxley Act, which prohibits retaliation against staffers that report certain kinds of suspected wrongdoing.
"October 31, 2014, the federal Court of Appeals for the Sixth Circuit upheld a trial court's dismissal of an assertion of unlawful retaliation under the Tennessee Public Protection Act (TPPA) (Hugo v. Millennium Laboratories, Inc.). This statute provides that an employee may not be discharged or terminated solely for refusing to participate in or remain silent about illegal activities. Without reviewing the facts of the case in detail, it is noteworthy that the Court indicated that a plaintiff must provide more detailed evidence than "personal beliefs, conjecture and speculation." The employee must have been discharged "solely for ... [his] refusal to participate in or remain silent about the illegal activity."
The Sixth Circuit wrote that a common law claim for retaliatory discharge requires that a substantial factor in the discharge was the employee's exercise of protected rights or compliance with a clear public policy. Evidence must establish a causal connection between the employee's termination and protected activity. Additionally, the Court noted in a footnote, the Tennessee Supreme Court has stressed that this "exception to the employment-at-will doctrine" "must be narrowly applied and not be permitted to consume the general rule ... that employers need freedom to make their own business judgments without interference from the courts."
A whistleblower must have very clear and specific evidence of retaliatory conduct as well as clearly meet the statutory procedures and coverage. "