Last Tuesday, a former JPMorgan wealth manager was awarded $1.13 million by a jury in the Southern District of New York for her claims under the whistleblower provisions of the Sarbanes-Oxley Act. Nonetheless, the staggering victory may be short-lived. Just hours after the verdict, the judge presiding over the case, Judge Denise Cote, revealed her intention to toss the verdict based on the jurors’ prejudice against the bank.
Jennifer Sharkey, the plaintiff, filed her lawsuit following her termination of employment in 2009. Sharkey claimed that JPMorgan fired her in retaliation for announcing her plan to end the bank’s relationship with a lucrative client since she believed the client was involved in fraud and money laundering. The bank’s actions, Sharkey claimed, violated Sarbanes-Oxley’s anti-retaliation provisions meant to protect corporate whistleblowers like herself.
After more than seven years of tortuous legal proceedings and appeals, a jury trial was held in November 2017. The jury deliberated for five hours before awarding Sharkey $563,000 in back pay and the same amount for emotional distress damages.
Any victory celebration for Sharkey, however, was quickly dimmed by Judge Cote’s post-trial comments delivered just several hours after the jury returned the verdict. Judge Cote called attention to the jury’s “prejudice” against the bank which “undermines the entire verdict.” She described the verdict as “substantially flawed” and indicated she would order a new trial unless the parties were somehow able to settle the matter.
Regardless of whether the $1.13 million verdict stands, the case is an unwelcome reminder to employers that corporate whistleblower cases can be quite costly, both in terms of drawn-out legal proceedings as well as potentially enormous jury verdicts. As such, employers subject to Sarbanes-Oxley’s anti-retaliation provisions—or any other federal or state whistleblower protection law—should take care to avoid triggering liability.