In Platone v. FLYi, Inc., 25 IER Cases 278, 287 (U.S. Dept. of Labor Sept. 29, 2006), the Administrative Review Board of the Department of Labor ("ARB") held that, to constitute protected activity under Sarbanes-Oxley, an "employee's communications must `definitively and specifically' relate to [one] of the listed categories of fraud or securities violations under 18 U.S.C.[] § 1514A(a)(1)." The three circuits that have addressed the issue have all agreed with the ARB's interpretation, see Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009) ("The employee must show that his communications to the employer specifically related to one of the laws listed in § 1514A."); Welch v. Chao, 536 F.3d 269, 275 (4th Cir. 2008) ("[A]n employee must show that his communications to his employer definitively and specifically relate to one of the laws listed in § 1514A.") (internal alteration and quotation marks omitted); Allen v. Admin. Review Bd., 514 F.3d 468, 476 (5th Cir. 2008) ("We agree with the ARB's legal conclusion that an employee's complaint must definitively and specifically relate to one of the six enumerated categories found in § 1514A.") (internal quotation marks omitted), and we similarly defer to the ARB's reasonable interpretation of the statute. We agree with the district court that Shawn's conversations with Brown and Pennington satisfy this "definitively and specifically" standard.
The Court of Appeals cases cited by the District Court in support of its application of the “definitive and specific” standard either relied upon or cited with approval Platone 's standard. See Van Asdale v. Int'l Game Tech., 577 F.3d 989, 996–97 (9th Cir.2009) (deferring to Platone's “definitive and specific” standard as a reasonable interpretation of the statute); Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir.2009) (quoting the Fourth Circuit's opinion affirming the ARB's decision in Platone in which the court employed the “definitive and specific” standard); Allen v. Admin. Review Bd., 514 F.3d 468, 476–77 (5th Cir.2008) (“We agree with the ARB's legal conclusion that an employee's complaint must ‘definitively and specifically relate’ to one of the six enumerated categories found in” Section 806). In Sylvester, however, the ARB abandoned the “definitive and specific” standard announced in Platone.Sylvester, 2011 WL 2165854, at *15.
Specifically, “SOX protects ‘whistleblower' employees of publicly-traded companies by prohibiting employers from retaliating against employees because they provided information about specified potentially unlawful conduct.” Day v. Staples, Inc., 555 F.3d 42, 52 (1st Cir. 2009). Before turning to the merits, this Court must first consider the applicable standard for analyzing the Wirth's claim.
To set forth a prima facie case under the whistleblower protection provision of Sarbanes–Oxley, a plaintiff must plead, and ultimately prove, that: (1) the employee engaged in a protected activity or conduct; (2) the employer knew or suspected that the employee engaged in the protected activity; (3) the employee suffered an adverse employment action; and (4) the circumstances were sufficient to raise the inference that the protected activity was a contributing factor in the unfavorable action. See29 C.F.R. § 1980.104(e)(2); Day v. Staples, Inc., 555 F.3d 42, 53 (1st Cir.2009); Wiest v. Lynch, 710 F.3d 121, 129 (3rd Cir.2013); Lockheed Martin Corp. v. Administrative Review Bd., 717 F.3d 1121, 1129 (10th Cir.2013); Van Asdale v. Int'l Game Technology, 577 F.3d 989, 996 (9th Cir.2009). In 2002, Congress enacted the whistleblower provision in order to “encourage and protect [employees] who report fraudulent activity that can damage innocent investors in publicly traded companies.”
This "whistleblower" protection "serves to 'encourage and protect [employees] who report fraudulent activity that can damage innocent investors in publicly traded companies.'" (Day v. Staples, Inc. (1st Cir. 2009) 555 F.3d 42, 52.) "Whistleblower" protections such as that provided by Sarbanes-Oxley reflect fundamental and substantial public policy concerns.
OSHA has promulgated regulations regarding § 1514A in its capacity as the body with delegated authority to enforce its provisions.We accepted in dicta in Day v. Staples, Inc., 555 F.3d 42, 54 & n. 7 (1st Cir.2009), that certain DOL regulations concerned with a two-part test for what constituted “reasonable belief” under SOX were entitled to Chevron deference. That test was also contained in the relevant case law.
The purpose of SOX is to "[protect] 'whistleblower' employees of publicly-traded companies by prohibiting employers from retaliating against employees because they provided information about specified potentially unlawful conduct." Day v. Staples, Inc., 555 F.3d 42, 52 (1st Cir. 2009) (internal citation omitted). As explained in Day:
To demonstrate a violation of section 1514A, a plaintiff bears the initial burden of setting forth a prima facie case. See Day v. Staples, Inc., 555 F.3d 42, 53 (1st Cir.2009). To establish a prima facie case, the plaintiff must demonstrate by a preponderance of the evidence that: (1) she engaged in protected activity; (2) the employer knew of the protected activity; (3) she suffered an unfavorable personnel action; and (4) circumstances exist to suggest that the protected activity was a contributing factor to the unfavorable action.
As several courts have observed, the employee's allegations of wrongdoing must resemble the allegations of shareholder fraud. See Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009); Van Asdale, 577 F.3d at 1001 (9th Cir. 2009); but see O'Mahony v. Accenture Ltd., 537 F. Supp. 2d 506, 517 (S.D.N.Y. 2008) (reading Section 1514A as applying to any conduct which violates 18 U.S.C. §§ 1341, 1343, 1344, or 1348 even if it does not relate to shareholder fraud). In addition, "the complaining employee's belief that his employer's conduct violated one of the enumerated categories must be both objectively and subjectively reasonable."
The First Circuit has recently concluded that the term "reasonable belief" has both a subjective and objective component. Day v. Staples, Inc., 555 F.3d 42, 54 (1st Cir. 2009). To demonstrate an objectively reasonable belief, the plaintiff does not need to cite a particular code provision, but the plaintiff "must show that his communications to the employer specifically related to one of the laws listed in § 1514A."