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SOX Retaliation Case Tossed

In a recent decision by the Fourth Circuit in Feldman v. Law Enforcement Services Corporation, the Court upheld dismissal of a SOX Whistleblower Retaliation case on the ground that the temporal proximity between the complaint and adverse employment action was too remote.

In doing so, the Court reiterated the well-known standard for Plaintiffs to make out a prima facie case of retaliation under SOX:  “(1) she engaged in protected activity;  (2) the employer knew that she engaged in the protected activity; (3) she suffered an unfavorable personnel action; and (4) the protected activity was a contributing factor in the unfavorable action.”  While the burden to establish a prima facie case is “relatively light,” the Court nevertheless determined that the 20 month gap between the employee’s complaint and the adverse employment action was too temporally remote to support Plaintiff’s claim.

While SOX is, by design, a more forgiving whistleblower statute for plaintiffs in general, it is not surprising that the Court determined that a 20 month time-period between complaint and adverse employment action was too great.  This is especially true in light of the fact that the employee and company had a great deal of animosity toward one another in the 20 month time-period at issue, suggesting an intervening cause for the termination.

Interestingly, before reaching the merits of the case, the Court first had to address, sua sponte, a jurisdictional issue.  Plaintiff’s Amended Complaint to OSHA fell outside the requisite 180 day period, and so the Court questioned whether administrative remedies had been properly exhausted.  Ultimately, however, the Court determined that the relation-back doctrine applied to confer jurisdiction for appellate review.

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