The U.S. District Court for the Western District of Washington has dismissed on summary judgment whistleblower claims brought by two former compliance auditors of the Boeing Company, Inc. The district court found that Boeing did not violate Section 806 of the Sarbanes-Oxley Act, which prohibits publicly traded companies from discriminating against their employees for disclosing information regarding certain alleged illegal conduct undertaken by the employer to their supervisors, federal regulatory or law enforcement agencies or Congress. The district court found that the act that served as the basis for the auditors’ termination—the leaking of confidential information to the media—was not a protected act under the Sarbanes-Oxley Act.
The Boeing employees in question were auditors who performed testing on information technology controls at the company. The tests being performed by the auditors were undertaken in compliance with the Sarbanes-Oxley Act’s mandate that publicly traded companies review their controls over financial reporting. After making several complaints to supervisors about perceived auditing deficiencies, the auditors provided information and documentation regarding the alleged deficiencies to a reporter at the Seattle Post-Intelligencer. The auditors were fired soon thereafter.
In arguing in favor of whistleblower protection, the auditors claimed that they were fired not because of the media leak as Boeing asserted, but rather in response to their frequent complaints to their supervisors regarding Boeing’s Sarbanes-Oxley Act non-compliance—complaints that fall within the Sarbanes-Oxley Act’s protections for whistleblowers. The district court rejected the auditors’ argument on the ground that even if they did engage in protected activity, it was clear that leaking information to the media is not protected activity under the Sarbanes-Oxley Act, and Boeing was within its rights to terminate the auditors on this ground. (Tides v. The Boeing Co., C08-1601-JCC (W.D. Wa. Feb. 2, 2010))