The Fifth Circuit recently issued an important ruling concerning the grounds for Sarbanes-Oxley Act (SOX) retaliation claims. The case involved the following facts: Anthony Menendez was hired by Halliburton, Inc. as its director of technical accounting research and training out of its Houston office. Menendez raised concerns about some of the company’s accounting practices, including some revenue recognition that did not conform with accepted accounting principles. He was criticized by the individual above him for raising the concerns, and Halliburton ultimately concluded their practices were proper. Menendez tried to raise the issue again but was denied.
As a result, Menendez filed a complaint with the SEC alleging that Halliburton was engaging in questionable accounting practices. He additionally filed an internal complaint, as was the practice established by the audit committee. The SEC contacted Halliburton’s general counsel concerning the complaint, and the general counsel determined that Menendez was the source of the complaint. He then forwarded an email to several employees and managers within the company informing them that the SEC had opened an inquiry based on Menendez’s allegations.
Menendez reported that after that email circulated, he was treated differently. Others avoided him and the work environment caused him to miss work frequently, ultimately requesting paid administrative leave. The SEC did not find that action was necessary against Halliburton, but Menendez filed a SOX complaint with the U.S. Department of Labor (DOL) claiming that Halliburton retaliated against him because of his complaints with the SEC by disclosing his identity as a whistleblower to his colleagues.
The district court found that Halliburton had retaliated against Menendez and awarded him $30,000. The Fifth Circuit upheld this decision. The court found that Halliburton’s disclosure of Menendez’s identity as a whistleblower did constitute an adverse event because it created an environment in which Menendez could be ostracized and prevented from opportunities for advancement.
This decision is an important one for employers and employees alike. Employers should be aware that coworkers are likely to distance themselves from whistleblowers either out of insult, in an attempt to retaliate against the coworker, or simply to avoid additional accusations. It is imperative that the identity of whistleblowers be protected. Employers should avoid name dropping and take all precautions to protect the identity of whistleblowers.
For employees, this case creates additional potential grounds for the filing of SOX complaints. If you are a whistleblower whose employer has revealed your identity and this has created an adverse environment or avoidance by coworkers, you may have an actionable claim. Any employee who finds him or herself in this position should consult with a whistleblower attorney as soon as possible to protect their legal rights. Your attorney will review the action of your employer to uncover whether you have a case for a SOX violation or other retaliation claim.
Barrett Law PLLC: Experienced Whistleblower Attorneys Assisting in a Variety of Whistleblower and Retaliation Claims Across the State
Whistleblowers serve a vital function in our society, uncovering fraud and wrongdoing and protecting American taxpayers in doing so. As a result, it is imperative that the identity of whistleblowers remain protected until the law requires it be disclosed. Disclosing the whistleblower’s identity at the time of initial complaints to coworkers can create a negative environment for the employee. If you are an employee who has been retaliated against due to your whistleblowing activity, the Mississippi Whistleblower Attorneys at Barrett Law PLLC can help. We assist whistleblowers across the state in a wide variety of actions. Call the seasoned whistleblower attorneys at Barrett Law PLLC today at 1 (800) 707-9577 to schedule your free consultation.