August 10, 2020

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August 07, 2020

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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.

© 2020 Foley & Lardner LLPNational Law Review, Volume VI, Number 281


About this Author

Bryan House, Litigation Attorney, Foley Lardner Law Firm

Bryan B. House is a partner with Foley & Lardner LLP and a member of the firm’s Securities Enforcement & Litigation and Government Enforcement, Compliance & White Collar Defense Practices. He is the chair of the Milwaukee Litigation Department. Mr. House’s particular focus area is securities litigation, securities enforcement proceedings and whistleblower matters.

Lisa Noller, Trial Lawyer, Foley Lardner Law Firm

Lisa Noller is a trial lawyer and investigator with Foley & Lardner LLP, where she is chair of the Government Enforcement, Compliance & White Collar Defense Practice. She has spent almost 20 years investigating, litigating and trying complex criminal and civil cases, including responding to government investigations, conducting corporate internal investigations, and persuading the government not to pursue clients. When cases proceed to trial, Ms. Noller also has significant experience successfully trying a wide variety of over 30 civil and criminal matters in state and federal courts. She represents companies and individuals in parallel civil and criminal proceedings initiated by government agencies for alleged wrongdoing, and proactively counsels clients in enforcement and other litigation matters. Ms. Noller also is a member of the firm's Business Litigation & Dispute Resolution and Securities Enforcement & Litigation Practices as well as the Health Care, Medical Devices, Life Sciences, and Food & Beverage Industry Teams.

Courtney Worcester, Litigation Attorney, Foley Lardner Law Firm

Courtney Worcester is a partner and litigation lawyer in the Boston office of Foley & Lardner LLP. Her practice focuses on complex commercial litigation involving corporations, venture capital and private equity firms, financial institutions and their directors and officers. She has represented clients in corporate governance, federal securities and shareholder litigation matters, including federal securities and consumer class actions, stockholder derivative litigations, and internal corporate investigations. In addition, she is experienced in diverse commercial...