The Third Circuit denied Tyco Electronics Corporation’s petition for en banc review of its ruling that revived a former accountant’s whistleblower claims and adopted a worker-friendly standard of protected activity under the Sarbanes-Oxley Act (“SOX”). Wiest v. Lynch, 710 F.3d 121 (3d Cir. 2013). In its petition for en banc review, Tyco argued that the decision conflicts with nine other federal appellate circuit courts. In a 2-1 panel decision, the Third Circuit found that a lower court had erred by holding that former Tyco accountant Jeffrey Wiest had to allege that his disclosures to supervisors “definitively and specifically” related to an existing violation of a particular anti-fraud law. The majority held that whistleblowers only need a “reasonable belief” that their employer has violated or may violate the law or the SEC rules. According to Tyco’s petition for en banc review, the majority created “an intercircuit conflict of a compelling and exceptionally important nature” and allowed the “uncertainty of administrative decision-making” to define the scope of the analysis federal courts perform when ruling on a motion to dismiss. Wiest had sued in 2010, claiming that he had been retaliated against after raising internal questions about certain corporate expenditures. After the trial court dismissed his complaint without prejudice, Wiest filed an unsuccessful motion for reconsideration, arguing that the Administrative Review Board (“ARB”) of the Department of Labor (“DoL”) had rejected the “definitively and specifically” standard in Sylvester v. Parexel. The district court denied the motion, but the Third Circuit reversed, holding that the ARB’s rejection of the standard was entitled to deference because its interpretation was based on a permissible construction of the law. Tyco’s en banc petition argued that the panel majority should not have deferred, as it conflated the standard for reviewing district court decisions (like the dismissal of Wiest’s complaint) with the standard for reviewing a final agency decision, and improperly allowed the ARB’s Sylvester decision to reform federal pleading standards. One of the appellate rulings Tyco’s petition cited is the Sixth Circuit’s ruling in Riddle v. First Tennessee Bank, Nat’l Ass’n, 497 F. App’x 588 (6th Cir. 2012). There, the Sixth Circuit endorsed the “definitively and specifically” standard and affirmed summary judgment for the employer. Tyco’s petition also pointed to similar decisions from the First, Second, Fourth, Fifth, Seventh, Eighth, Ninth, and Eleventh circuits. The Third Circuit’s decision not to review the Tyco decision en banc means that there is a Circuit split as to the standard to be applied for SOX whistleblower claims.
Register now for your free, tailored, daily legal newsfeed service.
Questions? Please contact email@example.comRegister
3rd Circuit ruling creates circuit split over SOX whistleblower standard
Popular articles from this firm
If you would like to learn how Lexology can drive your content marketing strategy forward, please email firstname.lastname@example.org.
Related topic hubs
“Let me add some more positive feedback. I love the newsstand!”