In an appellate court rule of first impression concerning the whistleblower provisions of Sarbanes-Oxley Act, a former employee's claim was not precluded by an adverse ruling from a DOL ALJ. Where the DOL has not issued a 'final decision' on an administrative complaint, the Act permits an employee to apply for a 'de novo' review from a federal district court.
The DOL has a timer running, from 180 days after the administrative complaint is filed, to issue a final decision.
As you all probably know, there is no general federal whistleblowing statute, and SOX is remarkable in that it is the first federal enactment to reach into the the private sector (excepting statutes providing for disclosures relating to specific regulatory regimes like nuclear energy, transportation, or the discrimination laws.) The court probably struck the right balance here--employees shouldn't have their claims held up forever in administrative limbo. SOX has a remarkably short statute of limitations--90 days. So you have to get hoppin' with OSHA fast if you smell one of these.
Finally, it will be interesting to see how the district court weighs the preclusive effects of the adverse DOL ruling in making its determinations. My guess is that we may not have seen the last of Mr. Stone in the Fourth Circuit!
SOX is potentially broad and still a relatively young statute...there is still so much room for growth! Frankly, I'm kind of shocked we haven't seen more SOX whistleblower issues related to the recent economic meltdown.
(Stone v. Instrumentation Lab. Co., 4th Cir., No. 08-1970, 12/31/2009)
