Sunday Read: Preliminary Reinstatement Brief

National Whistleblower Center ’s central mission is to advocate for the legal protection of whistleblowers who report fraud and illegal conduct for the betterment of our government and corporations. Part of this mission is achieved through filing?amicus curiae?briefs, such as the one?submitted on August 16th, concerning the Congressional intent of the Sarbanes-Oxley Act (SOX). This brief outlines how imperative it is for the Third Circuit to reverse a district court's?denial of jurisdiction over the preliminary order of reinstatement?issued under SOX in the case of Lindsey Gulden and Damian Burch v. Exxon Mobil Corporation.

In this week’s Sunday Read, we will break down the brief to better understand the drastic consequences the actions, or lack thereof, of the district court will have on whistleblowing and corporate accountability, and in consequence, public safety. The protections outlined in SOX and the authority of the U.S. Department of Labor (DOL) provide economic and professional protections that encourage whistleblowers to come forward. The refusal of the district court to enforce the DOL’s preliminary order of reinstatement is cause for the National Whistleblower Center to take up the defense for these protective laws and explore the importance and impact of preliminary order of reinstatement.

Lindsey Gulden and Damian Burch v. Exxon Mobil Corporation — What You Need to Know

Corporate employees are protected under the Sarbanes-Oxley Act of 2002, which states that, terminated employees who have come forward as whistleblowers are entitled to have their employment reinstated — if it was determined that their initial termination was as a result of their whistleblowing. This allows the employees to be protected economically and, in tandem, allows the whistleblowers to continue to monitor the company. In short, preliminary reinstatement holds corporations accountable for their actions and keeps all of us safer in the long run.

The case prompting this briefing is between two employees of Exxon Mobil who felt “pressured by Exxon management to manipulate data concerning oil output in order to boost the company’s public filings” and were subsequently terminated, with Exxon’s then refused to reinstate them as ordered by the Secretary of Labor, under the Sarbanes-Oxley Act of 2002. Then Gulden and Burch seek justice in the district court, where their claims are dismissed based on that court’s interpretation of SOX asserting that they do not have the jurisdiction to enforce the Department of Labor’s precedent of reinstatement. Gulden and Burch now appeal that decision in the Third Circuit.

At this point, the best outcome for whistleblowers Gulden and Burch would be that the Third Circuit reverses the district court decision and that court finds that Exxon must honor the Department of Labor and SOX orders and reinstate these whistleblowers. If the Circuit Court rules that the district court’s decision is legitimate in their refusal to reinstate the employees per the wishes of Exxon Mobil, this case may end up in front of the Supreme Court. However, the longer these proceedings take, the longer Guilden and Burch are not able to keep tabs on Exxon Mobil and ensure that the practices they blew the whistle on in the first place are not being repeated behind closed doors.

Congressional Intention

The intent of Congress under the Sarbanes-Oxley Act of 2002 is what is primarily being called into question in this case. As stated in the brief, the district court claims that they have no jurisdiction over the topic of preliminary reinstatement because it is not specifically outlined in Sarbanes-Oxley. The district court claims that it enforces final orders, but has less control over preliminary ones. However, this preliminary order functions and was intended to function differently than others. The Congressional intention behind SOX is to make preliminary reinstatement immediately enforceable in order to protect whistleblowers — from the beginning — to encourage whistleblowers to come forward and keep corporations accountable.

Congress has been attentive when adding language to the law in order to avoid instances like the one we are seeing in this case.?Section 405 of the Surface Transportation Assistance Act of 1982?“protects employees in the commercial motor transportation industry” if they refuse to operate a vehicle they believe to be unsafe and are subsequently terminated as a result. This statute allows the Secretary of Labor to investigate the firing and gives the Secretary power to issue an order of reinstatement if it is found that the termination was in violation of this act. To cement this whistleblower protection even further into corporate practices, language was added to the?Wendell H. Ford Aviation Investment Reform Act?for the 21st Century that the filing of an objection to the preliminary order “shall not operate to stay a reinstatement remedy contained in the preliminary order.” (49 U.S.C. 42121(b)(2)(A). The district court’s claim that they do not have the jurisdiction to reinstate these employees is effectively causing a stay, further proof to the Third Circuit that this issue must be resolved as it is written by Congress and reverse the district court’s decision.

The Impact of this Case on Whistleblowers

The reversal of the district court’s ruling regarding this case is imperative to Whistleblower protections throughout the county. District courts look to each other to make informed decisions whenever there are complicated legal issues. If this court’s claims that they do not have jurisdiction to enforce preliminary reinstatement are sustained, other districts will likely follow suit. This will cause a chilling effect among whistleblowers.

If employment protections cannot be guaranteed, there is too much to lose and not enough to gain by coming forward. Additionally, whistleblowers keep the public safe. By maintaining employment in a company being accused of illegal activity, whistleblowers can maintain surveillance and ensure that the company is not continuing the behaviors that were called out in the first place.

Whistleblowers consistently make our lives safer. There are protections written into our laws that allow them to come forward without fear of wrongful termination and a total career shutdown. Cases like?Lindsey Gulden and Damian Burch v. Exxon Mobil Corporation?have the potential to rattle these protections and discourage whistleblowers from coming forward. NWC has a commitment to whistleblower protections and has filed this?amicus brief?to help prevent this and encourage the continued use of SOX, STAA, and other legal contributions to safe and accountable corporations.

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NWC is committed to judicial advocacy for whistleblowers and the defense of whistleblower protections. As a 501(c)(3) non-profit, our awareness-building work is made possible with the support of our generous donors. Please consider?donating $75 today?to help us continue to educate the public about whistleblower experiences and the impact of whistleblower protections on our everyday safety.

This story was researched and drafted by NWC Intern,? Belle Flanegan , a fourth-year majoring in Drama and Sociology at University of California, Irvine.