In a critical legal decision, the U.S. Court of Appeals for the Eleventh Circuit upheld the Department of Labor’s Administrative Review Board’s denial of an employee’s Sarbanes-Oxley Act (SOX) retaliation claim. This ruling came about on September 25, 2023, affirming that the employee had not taken part in protected activity as they were unable to substantiate that they carried an objective, rational belief that their employer was involved in behavior that breached SOX. The decision bore the reference Ronnie v. Office Depot, LLC, No. 20-14214.
The Sarbanes-Oxley Act, often shortened to SOX, created a federal whistleblower protection law. It primarily protects employees of publicly traded companies who report violations of securities laws or violations of federal laws relating to fraud against shareholders. For an employee to be protected under SOX, they need to have a reasonable belief that their employer is in violation of these laws.
The court’s decision in Ronnie v. Office Depot, LLC therefore provides significant legal precedent in helping solidify the standards for an employee’s “reasonable belief” that their employer is in violation of SOX. This clearly indicates that the subjectivity of an employee’s claim alone will not target it for protection under SOX unless the claim can be validated as objectively reasonable.
Legal professionals in large corporations and law firms will now need to review and potentially recalibrate their understanding of what constitutes ‘protected activity’ under SOX. This could lead to a re-evaluation of the guidelines provided to employees regarding the necessity of thorough substantiation when making SOX breach claims against their employers.
More details of the ruling can be found at JD Supra.