Reyher v. Grant Thornton, LLP analyzed whether an employee of a CPA firm is protected by the anti-retaliation provisions of the Dodd-Frank Act for lodging complaints with an employer about suspected illegal activity regarding non-public clients.

The Plaintiff discovered what she believed were accounting irregularities in tax matters for non-public clients and complained to administrators at Grant Thornton about the inaccurate information. The Plaintiff believed the irregularities “amounted to bank fraud, mail fraud, wire fraud and/or fraud against shareholders.” By way of example, the alleged wrongful activities included “problematic deductions,” failure to file required returns, and failure to pay gift tax.

Grant Thornton terminated the Plaintiff and allegedly told the Plaintiff she was terminated because she had been disruptive, did not want to be at Grant Thornton and was not a good fit for Grant Thornton’s culture. The Plaintiff filed suit in the Eastern District of Pennsylvania, claiming her termination violated the anti-retaliation provisions of the Dodd-Frank Act because her whistleblower disclosures constituted protected activity under the Sarbanes-Oxley Act. The thrust of Plaintiff’s complaint was she qualified as a protected whistleblower because Grant Thornton was a contractor to public companies, even though her claims related only to private companies.

The Court determined the applicable precedent was Lawson v. FMR LLC. Lawson involved employees of private contractors that provided day-to-day operational services for public mutual funds. The plaintiffs in Lawson alleged that they were terminated after raising concerns about accounting by the mutual funds in SEC registration statements. In Lawson, the Supreme Court held the Sarbanes-Oxley Act protects employees of private contractors and subcontractors. Lawson did not directly address the types of claims made against Grant Thornton. However, the Court found that Lawson contemplated that Sarbanes-Oxley protection would not extend to Plaintiff who engaged in whistleblowing unrelated to Grant Thornton’s work as a contractor to public companies. Accordingly, the Court dismissed the Plaintiff’s claim for retaliation under the Dodd-Frank Act.