Whistleblower Suit Features Mermaids, Pirates, but No Causation
The Third Circuit dealt the final blow to a long-running whistleblower suit last Tuesday. Jeffrey Wiest, a former accounts payable manager for Tyco Electronics, alleged that he had been illegally terminated in retaliation for raising concerns over expenditures on lavish parties featuring mermaid greeters, pirate performers and fire dancers. He sued, claiming that his firing months later violated the anti-retaliation provisions of the Sarbanes-Oxley Act.
The Third Circuit wasn't convinced, however, finding that Wiest had failed to show that his termination was connected to his mermaid expenditures complaints, rather than a later, independent sexual harassment investigation.
That's Not How We Usually Pay Our Fire Dancers
As accounts payable manager, Wiest oversaw expenses and invoices connected to Tyco retreats in the Bahamas and Virginia. Those retreats were relatively lavish, featuring thousands of dollars spent on performers and the like. When Wiest received the expense reports, he questioned whether the payments really served a business purpose or were actually taxable compensation for attending employees.
Wiest describes the back and forth over the expenditures as an "anguished field battle" between himself and Tyco's management, according to the Third Circuit. But Tyco alleges that Wiest's actions were no battle at all; they were not even an inconvenience. Wiest was publicly praised twice during that time.
But shortly after Wiest raised concerns over company spending, the company began investigating him for sexual harassment. That investigation stemmed from Wiest's alleged sexual comments with several employees and relationships with other Tyco workers. Following about two months of investigation, Wiest was terminated.
Yes, You Were Fired, but Not for Whistleblowing
A unanimous Third Circuit panel found that Wiest had not demonstrated a causal connection between his protected activity and his termination. In order to prove his retaliation claim, Wiest would have to show that his protected activity was a "contributing factor" to an adverse employment action under section 806 of the Sarbanes-Oxley Act.
This case is the first time the Third Circuit has addressed "contributing factors" under Sarbanes-Oxley. The court defined such factors as "any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision."
That's a pretty broad definition, but it's not one Wiest met when the standard was applied to him. The court noted that there were well-demonstrated intervening events between Wiest's protected activity and his termination -- the sexual harassment investigation -- and those events involved people who were almost entirely disconnected from Wiest's expenditures complaints. Wiest simply could not prove a causal connection between his protected activity and his termination.
- Fired Tyco Accountant Lacks SOX Act Retaliation Claim (Bloomberg)
- No Qualified Immunity for School District's Firing of Whistleblower (FindLaw's U.S. Third Circuit Blog)
- Unsolicited Internal Complaints Not Protected Under ERISA's Anti-Retaliation Provision (FindLaw's U.S. Third Circuit Blog)
- No Victim Needed for Workplace Discrimination, Says NJ Sup Ct (FindLaw's U.S. Third Circuit Blog)
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