A case before the Third Circuit Court of Appeals is poised to shape the fate of corporate whistleblowers. Lindsey Gulden and Damian Burch v. Exxon Mobil Corporation considers whether a district court can enforce Department of Labor (DOL) orders advocating the preliminary reinstatement of whistleblowers under the Sarbanes-Oxley Act (SOX).

Case background

Dr. Lindsey Gulden and Dr. Damian Burch, two scientists employed at Exxon Mobil, blew the whistle in 2019 regarding a financial disclosure made by Exxon. They alerted Exxon's H.R. department about projections in the disclosure that overstated potential oil output from Exxon's Texas and New Mexico drilling sites. Both scientists believed that this exaggeration lacked empirical evidence and suspected its purpose was to amplify Exxon's public filings. Subsequent to their actions, both were terminated from their positions.

In October 2022, the DOL, following an inquiry conducted by the Occupational Safety and Health Administration (OSHA) whistleblower program, deemed that Exxon had unlawfully dismissed the two scientists for their whistleblower actions, violating the SOX provisions. The DOL directed Exxon to temporarily reinstate Dr. Gulden and Dr. Burch. Exxon refused the order.

The two scientists pursued legal recourse, but a district court declared it lacked the jurisdiction within SOX to enforce DOL’s order for their preliminary reinstatement. This decision is now under appeal.

Third Circuit decision implications

Siri Nelson, the Executive Director of the National Whistleblower Center (NWC), emphasized the significance of the forthcoming Third Circuit decision. According to Nelson, a failure to overturn the district court's jurisdiction denial would critically undermine the power of the preliminary reinstatement remedy, exposing countless employees to potential retaliatory actions.

The NWC’s brief in the case strongly argues that curbing the enforcement of such reinstatement orders is contrary to the primary objective of SOX - the protection of corporate whistleblowers. The district court’s ruling could intensify retaliation risks for corporate whistleblowers and deter potential whistleblowers from coming forward due to fears of non-reinstatement.

For more information about your whistleblower rights, contact a trusted whistleblower attorney at Kardell Law Group today.