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ARB: “Hinting” at Filing a Whistleblower Complaint is Not Protected Activity

On October 31, 2019, the ARB held that an employee who merely “hints” that he or she intends to file a whistleblower complaint has not engaged in protected activity sufficient to invoke the whistleblower protection provision in SOX.  Hoptman v. Health Net of California, ARB Case No. 2017-0052, (Oct. 31, 2019).

Background

Complainant was a claims representative for the Company, a health maintenance organization.  Complainant alleged that he discovered systemic overpayments to the Company by plan members and began working with a plan member to purportedly expose his employer’s actions.  Complainant allegedly texted the plan member and asked her to fill out a HIPAA form so that he could access her personal information, explaining that he could not afford to continue with his investigation against the Company and that he would share money with her if she would help him with his case.  Following Complainant’s suggestion, the plan member filed a complaint with California’s Department of Managed Health Care (DMHC) regarding her alleged overpayments.

Later, during a meeting with a Company manager on an unrelated matter, Complainant mentioned that he had a complaint “in the works” and that the Company would get “in a lot of trouble,” though he conceded that he did not mention any fraudulent activity nor that he was considering filing a complaint with the SEC.  Shortly thereafter, the plan member informed DMHC about her communications with Complainant and DMHC shared this information with the Company.  The Company then terminated Complainant’s employment.

Complainant filed a SOX complaint with OSHA and after OSHA dismissed his complaint for lack of protected activity, an ALJ granted Respondent’s motion for summary judgment on the same basis.  He then appealed to the ARB.

Ruling

The ARB affirmed, finding that Complainant did not engage in protected activity under SOX.  Complainant argued that in his communications with the plan member he had revealed that he was “about to file” a complaint, and his later conversation with a senior manager “hinted” at this assertion.  However, the ARB ruled that because the communications with the plan member were “deliberately concealed” from the Company, and Complainant stated only that he was planning on filing a complaint, he had not engaged in protected activity under SOX.

Implications

This decision demonstrates that the current ARB may take a more limited approach to determining the scope of what constitutes protected activity under SOX.

© 2020 Proskauer Rose LLP.

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About this Author

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

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....

312-962-3545
Pinny Goldberg Labor and Employment Lawyer Proskauer Rose Law Firm
Associate

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.

212.969.3074
Law Clerk

Abigail Rosenblum is a law clerk in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration Group.

Abigail earned her J.D. from the University of Pennsylvania Law School, where she also completed a certificate program in business management at The Wharton School and served as a Senior Editor of the Journal of International Law. During law school, she interned for the Honorable Eduardo C. Robreno of the Eastern District of Pennsylvania.

Prior to law school, Abigail worked in management at an industrial supply company,...

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