May 29, 2020

May 29, 2020

Subscribe to Latest Legal News and Analysis

May 28, 2020

Subscribe to Latest Legal News and Analysis

May 27, 2020

Subscribe to Latest Legal News and Analysis

May 26, 2020

Subscribe to Latest Legal News and Analysis

Alabama Federal Court Denies Motion for Summary Judgement on SOX Whistleblower Claim

On April 2, 2019, the U.S. District Court for the Northern District of Alabama denied a defendant-employer’s motion for summary judgment on a SOX whistleblower retaliation claim, finding genuine issues of material fact existed as to the basis for Plaintiff’s discharge, whether his complaint qualified as protected activity, and whether he had a reasonable belief that the complained-of activity was unlawful.  Shea v. Kohl’s Dept. Stores, Inc., No. 16-cv-01155.


Defendant, a retailer, employed Plaintiff as a regional District Manager for Alabama and Georgia.  Defendant used a number of performance metrics used to evaluate stores, including daily credit applications.  It offered monetary incentives to encourage sales associates to ask each customer about opening a credit account.  Additionally, store managers’ bonuses were tied to the store’s performance on credit solicitation metrics.  In September 2015, Plaintiff allegedly began receiving reports from store managers that certain stores were creating fraudulent credit applications to increase reported numbers.  He allegedly became aware that one store in particular reported a credit application for every $96.00 in sales, compared to the usual average of one application for every $2,500 to $3,500 in sales.  These numbers allegedly concerned Plaintiff, who allegedly discovered sales associates at the store were submitting fraudulent credit applications using the social security numbers of customers and others without authorization.  Plaintiff sent an e-mail to the manager of the store and the District Loss Prevention Manager.  The e-mail was then forwarded to the Regional Vice President, who was Plaintiff’s supervisor.  Plaintiff’s employment was terminated shortly thereafter.  Plaintiff proceeded to file suit claiming he was retaliated against in violation of SOX for complaining of allegedly fraudulent conduct.


Defendant moved for summary judgment, arguing Plaintiff did not engage in protected activity under SOX because he did not raise his concerns to the appropriate person in the company under the company policy (the policy required employees to raise concerns directly to their supervisor).  The court denied the motion, finding Plaintiff had engaged in protected activity because the person he notified, the District Loss Prevention Manager, had authority to investigate the alleged misconduct.  The court also rejected Defendant’s argument that Plaintiff lacked a subjectively reasonable belief; it found there was a genuine issue of material fact as to whether Plaintiff had a reasonable belief that unlawful activity was occurring, noting he had said “shady” activity was occurring, which raised a question as to whether he subjectively believed something unlawful was afoot.  Finally, the court found Defendant had not substantially rebutted Plaintiff’s prima facie case with its alternative reason for Plaintiff’s termination, noting the close temporal proximity between the reports of the fraud and the termination, and Plaintiff’s favorable performance reviews.


This court appears to have employed a relatively employee-friendly standard of determining whether an employee has met his or her burden of identifying a violation of one of the types of misconduct enumerated in Section 806 of SOX.

© 2020 Proskauer Rose LLP.


About this Author

Steven J Pearlman, Labor Employment Law Firm, Proskauer Law firm

Steven Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm's Whistleblowing & Retaliation Group, resident in the Chicago office. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination and harassment, wage-and-hour laws and breaches of restrictive covenants (e.g., non-competition agreements). He has successfully tried cases to verdict before judges and juries in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S....

Pinny Goldberg Labor and Employment Lawyer Proskauer Rose Law Firm

Pinny Goldberg is an associate in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims. 

In addition to handling litigation and dispute resolution, Pinny regularly advises clients on a wide variety of employment issues, including drafting, reviewing and revising handbooks and workplace policies. He also addresses questions and concerns related to hiring, wage and hour issues, employee leave, performance problems, terminations of employment, and separation agreements and releases.

Prior to joining Proskauer, Pinny was a Labor and Employment associate at Seyfarth Shaw LLP. While in law school, he served as an editor for the Cardozo Law Review.

Samantha Shear Labor Employment Attorney

Samantha Shear is an associate in the New Orleans office and a member of the Labor and Employment Department. Samantha graduated cum laude from Tulane Law School where she spent two years as a member of the Judge John R. Brown moot court team. She served as coach of the moot court team one year, leading her team to win multiple awards for excellence in oral advocacy.

Prior to law school, Samantha worked as a freelance journalist for music publications.


  • Tulane University Law School, J.D., 2018

Admissions & Qualifications...