A Massachusetts district court has addressed two thorny issues confronting employers defending against whistleblower claims brought under Sarbanes-Oxley: Who’s protected under the statute and whether whistleblowers are entitled to a so-called second bite at the apple.
A March 31 combined ruling by U.S. District Judge Douglas Woodlock addressed motions to dismiss in two separate cases alleging unlawful retaliation against employees of non-public companies in the mutual fund industry who complained of improper business activities by their employers. Judge Woodlock denied motions to dismiss by the defendants, Fidelity Investments and Fidelity Management, which argued that as employees of privately held companies, the plaintiffs aren’t covered by the SOX whistleblower provision.
