The U.S. District Court for the Western District of Washington granted summary judgment on whistleblower claims brought by former compliance auditors of a global, public company. The plaintiffs, who were terminated after leaking confidential information about the company to the media, alleged that the company violated Section 806 of the Sarbanes-Oxley Act, which protects employees of public companies against retaliation from employers when the employee provides information or assistance to a federal regulatory or law enforcement agency, to Congress, or to a supervisor. The court disagreed, finding that communications with the media are not protected by Sarbanes-Oxley.
The plaintiffs were internal auditors who performed audits and testing on the company’s information technology internal controls. The plaintiffs had repeatedly complained to their supervisors about perceived auditing deficiencies, eventually contacting a reporter from the Seattle Post-Intelligencer and providing her with information and documents. When the company learned of the media leak, the plaintiffs were terminated. The plaintiffs alleged that they were terminated as a result of their complaints to their supervisors regarding the company’s non-compliance with Sarbanes-Oxley, not because of their communication with the media. The district court disagreed, finding that whistleblowing to the media is not a protected activity under Sarbanes-Oxley, and the company was entitled to terminate the plaintiffs for their conduct.