Whistleblower Holds Onto Most of Multi-Million Dollar Verdict
Bio-Rad’s former general counsel brought a whistleblower retaliation action claiming his employer violated the Sarbanes-Oxley (SOX) Act, Dodd-Frank Act and California public policy by terminating his employment as result of an internal report the employer had engaged in serious and prolonged violations of the anti-bribery and record-keeping provisions of the Foreign Corrupt Practices Act (FCPA) in China. The plaintiff won an $11 million verdict from a California jury and his employer appealed. On appeal the employer argued plaintiff’s disclosure of the alleged FCPA violations was not protected activity under SOX because the statutory provisions of the FCPA are not rules or regulations of the Securities and Exchange Commission (SEC). The Ninth Circuit agreed holding statutes, including the FCPA, do not constitute rules or regulations of the SEC for purposes of determining whether an employee engaged in protected activity in a whistleblower claim under Section 806 of SOX. However, the plaintiff retained $8,000,000 of his verdict, with the court vacating nearly $3 million for damages attributable solely to the Dodd-Frank verdict.