Wiest v. Lynch

Jeffery Wiest was employed under the accounts payable department of Tyco Electronics Corporation (“TYCO”) when he refused to process multiple expenditures that he believed to be violations of both company and federal policy. Wiest contacted his supervisor several times about these expenditures and suggested a review of proper tax and accounting procedure. In 2009, TYCO opened an investigation regarding complaints made against Wiest such as sexually suggestive commentary and improper management of receipts. This type of investigation is known as a retaliatory tactic that companies often use against whistleblowers, in an attempt to silence them. This investigation led to Wiest being fired from his job.

The instant case is an example of a Sarbanes-Oxley Act (“SOX”) violation. The SOX Act is designed to protect whistleblowers from retaliation following a claim. This case raised the question of whether the Court should approach cases of this nature using the “reasonable belief” standard for determining protection activity, or whether it should affirm the district court’s narrow “definitively and specifically” standard.

On February 15, 2016, the National Whistleblower Center (“NWC”) filed an amicus brief to the Third Circuit Court in support of Wiest. The brief argues that Wiest should be protected by the SOX under the participation clause. It highlights how Wiest was under no obligation to inform management about the basis for his reasonable belief. The brief points out that the SOX is a necessary tool in the protection of whistleblowers. Without it, the government would lose access to the insight which helps safeguard and protect the U.S economy. Moreover, the brief explains that it would go against Congress’s intent to restrict the SOX in the manner proposed.

The District Court sided with the company, and denied Wiest’s attempts at appeals. However, the Fourth Circuit Court concluded that,

“the District Court erred in requiring that Wiest allege that his communications to his supervisors “definitively and specifically relate to” an existing violation of a particular anti-fraud law, as opposed to expressing a reasonable belief that corporate managers are taking actions that could run afoul of a particular anti-fraud law.”

To learn more about the current legal interpretation of SOX and how the law can be used by whistleblowers, click here.

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