Another Federal Appeals Court Endorses the DOL’s Standard for Pursuing a Retaliation Claim under SOX Act
In Beacom v. Oracle America, Inc., the United States Court of Appeals for the Eighth Circuit upheld the district court’s summary judgment decision dismissing Vincent Beacom’s claim under the Sarbanes-Oxley Act (SOX) and Dodd-Frank anti-retaliation provisions. Beacom was Oracle’s vice president of sales in the Americas. The court found that Beacom failed to establish that a reasonable person in his position, with the same training and experience, would have believed Oracle was committing a securities violation. The Eighth Circuit thus becomes the fourth federal appeals court to endorse the Department of Labor’s (DOL) standard that a fired employee may pursue a SOX Act claim if a “reasonable employee” under the same circumstances “would believe that the employer violated securities laws,” even if that belief turned out to be mistaken. While adopting the less rigorous standard, the court affirmed the dismissal of the complaint. The court found that Beacom’s concern that Oracle systematically gave inaccurate forecasts and projections of earnings to Wall Street was unreasonable for a person in his position and with his experience. Noting that Beacom’s business unit missed its projections by no more than $10 million, the court held that people with similar background and experience would understand the “predictive nature” of revenue projections and understand that $10 million is a minor discrepancy for a company that annually generates billions of dollars.