Elements of a SOX Whistleblower Retaliation Claim - Chapter 2
To prevail, a SOX whistleblower must prove by a preponderance of the evidence that:
they engaged in protected activity (they made a protected disclosure under Section 806);
the employer knew that they engaged in the protected activity;
they suffered an unfavorable personnel action;
the protected activity was a contributing factor in the unfavorable action.
Once a SOX whistleblower has proven these elements by a preponderance of the evidence, the burden is on the employer to prove by clear and convincing evidence that it would have taken the same adverse action in the absence of the employee engaging in protected activity.
Yes, a whistleblower can bring a retaliation claim under SOX against individuals who have the functional ability to retaliate against the whistleblower, and are aware of the whistleblower’s protected conduct (or influenced by a person with knowledge of the protected conduct).
The Fourth Circuit and a California district court have held that directors may be held individually liable under SOX as agents of a publicly traded company. See Jones v. Southpeak Interactive Corp. of Delaware, 777 F.3d 658, 675 (4th Cir.2015); Wadler v. Bio-Rad Labs, Inc., No. 15-cv-02356-JCS, 2015 WL 6438670 (N.D. Cal. Oct. 23, 2015).
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1 Bechtel v. Admin. Review Bd., 710 F.3d 443, 447 (2d Cir. 2013)