|Jottings By An Employer's Lawyer|
Wednesday, June 06, 2007
Not With a Bang, But A Whimper - 1st SOX "Reinstated" Employee Loses on Merits
Although not over, as there is still the possibility of an appeal by Welch to the 4th Circuit, it certainly does not present the best case for SOX's procedural remedy that (at least theoretically) empowers reinstatement of whistleblowers based on an interim determination either by the DOL or as in this case, the ALJ. It also leaves unresolved the question of whether that enforcement scheme is viable.
For earlier discussions of the procedural wrangling over reinstatement see my earlier posts, Whistleblower Still Whistling in the Dark, 1st Test of SOX Preliminary Reinstatement Saga Continues , and Latest Step in First SOX Reinstatement Case.
How long has it been going? Welch was terminated in October 2002. Although one can understand the thought that leads to interim remedies, this case clearly shows the dangers. Here if Cardinal Bankshares had taken the frequent path of employers under similar statutes, they would have economically reinstated Welch and continued his pay for the duration of this fight. In fact, the ARB had itself suggested such an action in one of its earlier rulings during the procedural battle over reinstatement. If Cardinal had done so, but prevails following Welch's expected appeal, what realistic remedy would it have of recovering those sums, which my guess is would be in excess of $500,000?
Labels: Sarbanes Oxley