“Put Up or Shut Up:” The Third Circuit Denies Former Tyco Employee’s SOX Whistleblower Claim
There have been a series of legal battles since 2009 between Tyco Electronics Corp. and its former accounts payable manager, Jeffrey Wiest, fired for sexually harassing and engaging in inappropriate sexual relations with several female subordinates. In the latest skirmish, a Third Circuit panel unanimously backed Tyco, holding that Wiest was, in fact, discharged for sexual harassment and not for whistleblowing activity protected under the Sarbanes-Oxley Act.
Releasing its findings on February 2, 2016, on Wiest’s appeal of summary judgment entered by the District Court in favor of Tyco, the panel held that Wiest failed to offer facts sufficient to provide the necessary nexus between his protected activity and his firing. Instead, the Court emphasized that Tyco’s thorough and fully documented investigation surrounding the allegations of Wiest’s sexual behavior demonstrated that it would have taken the same steps toward termination despite Wiest’s voicing concerns over improper corporate expenses.
In its analysis, the Third Circuit set precedent when it looked to sister circuits to clarify the meaning of a “contributing factor” to a retaliatory firing under the Sarbanes-Oxley Act, which it found must be “any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision.” Armed with this standard, the panel had no problem finding that Wiest did not meet his burden. In fact, the court cited to Tyco’s evidence that Wiest’s involvement with the corporate expense issues was limited and was not temporally related to the termination decision; and that Wiest received favorable treatment in the form of positive accolades for his loyal 30-year tenure with Tyco following his protected activities.
The court also distinguished between a motion to dismiss, in which the court accepts the allegations in a plaintiff’s complaint as true, and a motion for summary judgment under Rule 56, which the court said is “essentially ‘put up or shut up’ time for the non-moving party, who must rebut the motion with facts in the record.” The panel affirmed the lower court’s holding that Wiest failed to “put up” the necessary facts for a reasonable jury to find the allegations in his complaint to be true. Thus, the Third Circuit found that Tyco did not violate the Sarbanes-Oxley Act when it took the adverse action against him by discharging him without warning or probation.
Wiest also raised a constructive discharge claim, stating that his colleagues were “less communicative” with him after his protected actions. The Circuit Court, however, rejected this claim as well on the basis that the conduct of co-workers being less communicative “is insufficient to constitute a constructive discharge.”
Reportedly, Jeffrey Wiest may petition for an en banc hearing before the Third Circuit, so the battle may continue.
The case is Jeffrey Wiest et al. v. Tyco Electronics Corp., case number 15-2034, in the U.S. Court of Appeals for the Third Circuit