The article surveys experts, including Mr. Marshall, regarding the effects of the Stone v. Instrumentation Laboratory, Co. decision, which affirmed that SOX complainants can file suit in federal court after 180 days.
In a January 12, 2010, article entitled "Court Ruling Opens Door to Whistleblower Litigation," Compliance Week described the key Sarbanes-Oxley ("SOX") whistleblower retaliation decision in Stone v. Instrumentation Laboratory, Co. The case, decided on December 31, 2009, affirmed the idea that SOX whistleblowers have the right to file suit in federal district court if the Department of Labor has not issued a final decision within 180 days after the whistleblower filed an initial complaint.
In Stone, the plaintiff had filed a SOX whistleblower retaliation complaint with the Occupational Safety and Health Administration ("OSHA"), who found in favor of the employer. Stone appealed the decision to the Administrative Law Judge ("ALJ"), who also found in favor of the employer based on the merits of the case. Stone then appealed the ALJ's decision to the Administrative Review Board ("ARB"). One month before his initial brief before the ARB was due - and more than 180 days after he had filed his initial complaint - Stone filed notice with the ARB that he intended to bring an action in federal district court, which he did. The district court granted the employer's motion to dismiss on the ground Stone had already had an opportunity to fully litigate his claims before the ALJ. The Fourth Circuit Court of Appeals did not agree, however, and held that because 180 days had passed while Stone's appeal was pending, he had the right under SOX to litigate his claim in federal court as if he had filed it there originally, without regard to the ALJ's decision (i.e. de novo review).
In its article, Compliance Week quotes KMB partner David J. Marshall, who noted that the Stone decision makes it clear that Congress meant what it said when it allowed SOX complainants to effectively remove whistleblower retaliation cases to federal court after 180 days. Mr. Marshall went on to say that Stoneis significant in that it came from the Fourth Circuit Court of Appeals, which has generally been very strict in its interpretation of SOX, suggesting that it is unlikely other courts of appeals will decide differently.
The article is reproduced and attached here: Court Ruling Opens Door to Whistleblower Litigation