An employee alleging a violation of the Sarbanes-Oxley Act (SOX) must file a complaint within 90 days from the date of that alleged violation. That 90-day period begins to run from the date on which the complainant knows or reasonably should know that the complained-of act has occurred. In whistleblower cases under SOX, the 90-day statute of limitations runs from the date on which the employee receives “final, definitive, and unequivocal notice” of an adverse employment decision. As defined in SOX, the term “unequivocal” means that the notice is not ambiguous, and is free from misleading possibilities.
On April 30, 2009, a Department of Labor Administrative Review Board (ARB) determined that an employer’s notice to its employee was ambiguous and did not trigger the 90-day statute of limitations, because the letter included language that indicated that the company was willing to review and consider any evidence from the employee that could refute the termination decision. Snyder v. Wyeth Pharmaceuticals, DOL ARB, No. 09-008 (4/30/09, released 5/7/09). Based on that fact, the employee’s complaint to OSHA was timely, even though the complaint was filed more than six months after the employee received the letter which ostensibly indicated that the company had decided to terminate his employment.
Gregg Snyder was employed by Wyeth Pharmaceuticals as an Engineer IV, responsible for all Building System functions at the company’s Cambridge, Massachusetts facility. In September 2007, Wyeth’s HR director informed Snyder that he was being suspended with pay pending an investigation of allegations that he had improperly accessed confidential information. On October 1, while suspended, Snyder sent an e-mail to Wyeth, alleging certain Code of Conduct violations by Wyeth officials, and alleging that his suspension was part of a continuing course of retaliation by Wyeth. On October 17, Snyder received a letter from Wyeth’s HR Director (Lingen) which stated that prior to Snyder’s October 1 e-mail, the company already had made a decision to terminate Snyder’s employment. However, the letter also stated that “if you would to provide me with specific information in writing as to why you think your termination is not justified or specific details of the ‘harassment’ you feel you have received, I would be happy to review it.” Snyder responded on October 19 by again alleging retaliation and harassment.
On February 11, 2008, Wyeth sent a letter to Snyder stating that the company “has concluded that the decision to terminate your employment is appropriate,” and informed Snyder that the termination was effective as of that date.
On May 8, 2008, Snyder filed a SOX complaint with the Occupational Safety and Health Administration (OSHA). OSHA found that the complaint was untimely because it had not been filed within 90 days of October 17, when Snyder received Lingen’s letter regarding the pre-October decision to terminate him. Upon review, that decision was upheld by an Administrative Law Judge. However, the ARB subsequently reversed the decision, finding that the wording of Lingen’s letter offered to allow Snyder to provide information that might change the termination decision, injecting an element of ambiguity into the communication. Therefore, the letter did not constitute a final, definitive, and unequivocal notice of termination sufficient to commence the running of the statute of limitations.
This decision tells employers that threats of termination that include either an opportunity for performance improvement or a mechanism for avoiding the threatened firing do not actually constitute the “final, definitive, and unequivocal notice” necessary to start to 90-day statute of limitation running under SOX for a whistleblower claim. While this should not preclude employers from allowing individuals to avoid employment termination by improving performance, it does provide a warning that once a termination decision is made and appropriately substantiated, it should be implemented without delay, unless there is a legitimate business-related reason for that delay.