On May 20, 2016, the Fourth Circuit affirmed the decision of the ARB, finding that a former employee of Deltek, Inc. (Company) was retaliated against in violation of Section 806 of SOX and entitled to four years’ worth of front pay.  Deltek, Inc. v. Dep’t of Labor, No. 14-cv-2415 (unpublished).

Dinah Gunther (Plaintiff), a former financial analyst, allegedly believed her employer was deliberately subjecting invoices to baseless disputes in an effort to hide a telecommunications budget shortfall and obfuscate the true financial condition of the IT Department.  She reported her concerns to company officials, and complained that she was being subject to adverse treatment following her complaints.  In a meeting with in-house counsel and the Vice President of Human Resources on the day she returned to work following a leave of absence, she said she believed she was being retaliated against.  She made a secret recording during that meeting, which the Company learned of at a later date.  The following day, the Company terminated her employment.  The Company’s proffered reason for the termination was Plaintiff’s purportedly confrontational and disruptive conduct during and after the meeting.

Following her discharge, Plaintiff filed a complaint with the DOL under Section 806 of SOX.  An ALJ found that the Company retaliated against her and awarded her four years of front pay and required the Company to maintain its tuition reimbursement program for Plaintiff.  The front pay award amounts to $300,352 and the tuition reimbursement benefits are valued at $30,000.  The ARB affirmed, and the Company appealed to the Fourth Circuit.  The Fourth Circuit affirmed in whole.  It found there was substantial evidence to support the conclusion that Plaintiff’s protected activity contributed to Plaintiff’s termination.  With regard to damages, the court disagreed with the Company that the front pay award was speculative.

The Dissent criticized the Majority on both its causation- and damages-related findings.  The Dissent was concerned that the Majority rubberstamped the decision of the lower tribunal, failing to account for the Company’s explanations for discharging Plaintiff.  It also found that the damages awarded were “rankly speculative” and amounted to a windfall.

This decision underscores the risk of oversized front-pay awards in SOX cases and highlights the degree to which some courts may defer to the ARB and ALJs.