The Ninth Circuit held today that the whistleblower provision of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A(a)(1) (“SOX”), protects employees of publicly-traded companies who disclose certain information to three recipients: (1) federal regulatory and law enforcement agencies; (2) Congress; and, (3) employee supervisors. These three recipients are specifically enumerated in the law. The Court held that “leaks to the media are not protected.” See, Tides v. Boeing Co., 9th Cir., No. 10-35238, (5/3/11)

The plaintiffs alleged that their disclosures of perceived SOX violations to a newspaper were protected under § 1514A(a)(1) because reports to the media may inevitably “cause information to be provided” to Congress, federal law enforcement or regulatory agencies. The Ninth Circuit refused to adopt such an inevitable disclosure doctrine under SOX. Rather, the Court relied on the plain language of the statute when it wrote:

If Congress wanted to protect reports to the media under § 1514A(a)(1), it could have listed the media as one of the entities to which protected reports may be made.

The decision is a victory for publically-traded employers since plaintiffs’ arguments could have lead to a significant expansion of SOX. Employers should continue to monitor the case to see if the Ninth Circuit’s decision will be appealed.

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Photo of Jonathan A. Siegel Jonathan A. Siegel

Jonathan A. Siegel is one of the founding Principals of the Orange County, California, office of Jackson Lewis P.C. He practices before the Equal Employment Opportunity Commission, National Labor Relations Board, state and federal agencies and courts.

Mr. Siegel also provides advice and…

Jonathan A. Siegel is one of the founding Principals of the Orange County, California, office of Jackson Lewis P.C. He practices before the Equal Employment Opportunity Commission, National Labor Relations Board, state and federal agencies and courts.

Mr. Siegel also provides advice and counsel regarding labor and employment law with respect to various issues ranging from wage and hour law, reduction in force, WARN Act, discipline, leave management and harassment and discrimination issues. Mr. Siegel defends employers regarding different varieties of wrongful termination and discrimination claims.

Mr. Siegel has represented management in union organizing drives and regularly defends employers in unfair labor practice proceedings as well as in collective bargaining and arbitrations. He also has extensive experience conducting wage and hour preventive audits. He conducts single location and multi-location audits for employers. The scope of such audits can range from examining specific issues, i.e., exempt status under federal law and California, to comprehensive FLSA and California Labor Code audits. Mr. Siegel has conducted audits for a wide range of industries including, but not limited to manufacturing, retail, transportation, various service industries, defense contractors and healthcare.

Mr. Siegel regularly speaks on a variety of topics including wage and hour, harassment/discrimination, national and California employment trends, Workers’ Compensation, EEO, managing leaves of absence under FMLA and state leave laws and union avoidance. He has moderated numerous programs and is featured as a keynote speaker for several different organizations.