Panel Decides Whistleblower Claims Can Be Arbitrated

Lora Bentley

New developments on the Sarbanes-Oxley whistleblower front: Last week, the U.S. Court of Appeals for the Second Circuit decided that claims brought under the Sarbanes-Oxley Act whistleblower provisions can be arbitrated.

 

Former Aetna auditor Linda Guyden said the company fired her because she was working to increase internal oversight. When she filed suit under the Sarbanes-Oxley whistleblower provision, the U.S. district court dismissed her claim and compelled arbitration according to a previously signed agreement between the company and Guyden.

 

On appeal, the Second Circuit judges disagreed with Guyden's argument that there is an "inherent conflict" between Sarbanes-Oxley's goals of increasing accountability and the "mechanism of arbitration."

 

Law.com quotes the opinion as follows:

The provision's focus on the plaintiff's state of mind rather than on the defendant's conduct is inconsistent with what Guyden argues is the statutory purpose -- to employ SOX retaliation litigation as a vehicle for publicizing corporate misconduct. It is far more consistent with a statutory purpose to provide a strong compensatory mechanism for employees subjected to adverse employment action as a result of their whistleblowing conduct.


Add Comment      Leave a comment on this blog post
Oct 7, 2008 12:17 PM DUI Nick DUI Nick  says:
What a bunch of bolgna! Reply

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