There was a whistleblower retaliatory termination action filed against Siemens A.G.by Meng-Lin Liu, who was a Division Compliance Officer for Siemens China, which is a subsidiary of Siemens A.G. Liu alleged that Siemens China was engaged in a kickback scheme to sell medical imaging equipment to public hospitals in China and North Korea through intermediaries who would send a portion of the proceeds to the officials who granted the contracts to Siemens China. Liu made a number of attempts to change the company policies and reported the possibility of corruption to a number of different people within the company. Over a period of time, Siemens China stripped responsibilities from Liu and eventually informed him that he should not report to work for the remainder of his employment contract and that the contract would not be renewed.
Liu brought a whistleblower retaliation action against Siemens A.G. under the provisions of the Dodd-Frank Act and its anti-retaliation provisions as related to reports of wrongdoing pursuant to the Sarbanes-Oxley Act and other regulations under the umbrella of the Securities Exchange Commission (SEC). Siemens argued that the whistleblower protections did not apply because Liu only reported the problems internally while an employee of Siemens China. Liu only went to the SEC after he was terminated. For a variety of reasons, including the fact that the whistleblower protections at issue did not extend to extraterritorial retaliation terminations, the complaint was dismissed with prejudice. However, the court did not rule on the question of whether the Dodd-Frank protections extended to whistleblowers who reported company improprieties internally, but did not go to the SEC with the reports of wrongdoing. The case is now back in the courts.
The SEC has been indicating for some time that it was going to begin to take action against companies that retaliated against employees who reported improprieties internally, but did not pursue an external report. In the Siemens case, the SEC filed an amicus brief, known as a “friend of the court” filing, in which the SEC asserted that its interpretation of the provision in Dodd-Frank that protected against retaliation extended the protection to employees who only followed internal reporting protocols.
Although the SEC has been giving warnings that it intended to wade into this battle for some time, the filing of the amicus brief outlining its position on the application of the Dodd-Frank whistleblower protections to internal whistleblowers. This position may provide additional security for employees who are considering reporting company wrongdoing.
The outcome of this court case can have serious repercussions on the development of internal policies. If the court were to decide that Siemens’ assertions are correct, it could signal a new company policy where the company would be motivated to terminate an employee who reported improprieties as quickly as possible before he had a chance to go to the SEC and report the problems.
When an employee discovers that the company for which he works has done something wrong, he has a difficult decision to make. If he reports the problem, he incurs the risk of losing his job. Whistleblower protections are intended to ensure that an employee can do the right thing while being assured that he will not lose his livelihood. If you are facing a retaliation termination, the knowledgeable and committed whistleblower and qui tam attorneys at Barrett Law PLLC will work with you to develop an effective legal strategy. We will sit down with you during a free initial evaluation. To schedule an appointment, please call us at (601) 790-1505. We only receive a fee if we succeed in getting you a payment on your claim.
