On behalf of the National Whistleblowers Center (NWC), David Colapinto and I filed a friend-of-the-court brief last week arguing that the Sarbanes-Oxley Act (SOX) can protect corporate whistleblowers who make disclosures through the media. We filed the brief with the U.S. Court of Appeals for the Ninth Circuit in the case of Tides v. The Boeing Company, Case No. 10-35238. The brief examines the history of how whistleblowers have used the public attention of the media to spur government action on matters of public concern. In the 1970’s, Congress began enacting statutes to protect whistleblowers. Courts and the Department of Labor quickly recognized that when whistleblowers use media outlets to raise their safety concerns, their use of the media can and should be protected. It is now one of the recognized ways in which whistleblowers can “cause” information to be disclosed to law enforcement agencies and others who can correct violations or set enforcement policy. This case law was well developed when Congress enacted SOX in 2002, and is fully consistent with the legislative purposes behind SOX.
Matt Neumann and Nick Tides worked in Boeing’s Corporate Audit department doing information technology (IT) audits. In 2007, they were frustrated that management resisted their efforts to improve Boeing’s SOX compliance program. Tides contacted a reporter for the Seattle Post Intelligencer (PI) and confirmed that Boeing had serious SOX compliance issues. The reporter contacted Neumann who also confirmed the compliance problems. Surprise! Boeing fired them both for violating the company’s confidentiality policy, and Neumann and Tides filed a SOX whistleblower complaint with the U.S. Department of Labor (OSHA). When OSHA failed to issue a final order within 180 days, Tides and Neumann filed a complaint in federal court in Seattle. The District Court judge dismissed their case, holding that the news media are not among the protected recipients specifically listed in the SOX statute. The judge concluded that SOX can never protect disclosures to the media. This is the issue for which NWC filed its amicus brief. NWC argues that courts should use a balancing test to determine if media disclosures are protected. The Ninth Circuit has previously used such a balancing test under Title VII and the ADEA. It balances “the purpose of the Act to protect persons engaging reasonably in activities opposing . . . discrimination, against Congress’ equally manifest desire not to tie the hands of employers in the objective selection and control of personnel.” Wrighten v. Metropolitan Hosp., Inc., 726 F.2d 1346, 1355 (9th Cir. 1984) (holding a press conference is protected). NWC urges the Ninth Circuit Court to use the same balancing test for all whistleblower cases.
NWC’s brief had assistance from interns Harsh Voruganti and Kevin Heade, and also from NWC Executive Director Stephen M. Kohn. Boeing’s attorneys would not consent to NWC filing the amicus brief, so we also filed a motion with the Court asking for leave to file the brief.