The Sixth Circuit of Appeals confirmed financial planner Michael Rhinehimer’s $250,000 award in his lawsuit against his former employer, U.S. Bancorp, for retaliation against a complaint.
Through affirming Rhinehimer’s case, the Sixth Circuit has upheld Section 1514A of the Sarbanes-Oxley Act, which allows a whistleblower to act and be protected if the individual has reasonable belief that fraud is taking place.
Rhinehimer claimed that when he went on disability leave in 2009, his replacement knowingly placed a client’s investments into unsuitable securities. Upon learning of the activity, Rhinehimer addressed the company and was instructed to not get involved. When he hired a lawyer, U.S. Bancorp allegedly placed Rhinehimer on a probationary performance plan. The company then claimed Rhinehimer failed to meet the performance standards of the plan and fired him from his position.
Following the termination, the financial planner filed a lawsuit against his former employer. A jury found that Rhinehimer was fired in retaliation for issuing his complaint. U.S. Bancorp then filed an appeal, alleging that the plaintiff did not have evidence or substantial reasonable belief supporting his claims that specific acts of securities fraud took place. Upon hearing the case, the Sixth Circuit ruled in Rhinehimer’s favor.
The Sixth Circuit’s ruling was founded in the Department of Labor’s interpretation of the Sarbanes-Oxley Act, which allows for reasonable belief of unlawful activity to be just cause for filing a complaint. In further agreement with the interpretation, the court stated that requiring detailed factual evidence of misconduct defeats the intent of the Sarbanes-Oxley Act. Section 1514A of the Act protects a whistleblower with reasonable belief whether it ultimately is related to subsequent fraud or not.
If you have experienced whistleblower retaliation and would like professional guidance on the parameters of the Sarbanes Oxley Act, speak with Steve Kardell at Whistleblower Law for Managers today.