In yesterday's post, we covered the background of Tuesday's Supreme Court decision in Lawson v. FMR, LLC, and took an in-depth look at Justice Ginsburg's majority opinion.  Today, we look at what the other Justices had to say.

Justice Scalia, joined by Justice Thomas, signed on to Justice Ginsburg's opinion in principal part, but also authored his own opinion.  Justice Scalia and Justice Thomas subscribe to the position that a judge, in reading and interpreting a statute, should not examine what Congress said in places other than the statutory language, such as in committee reports and floor speeches.  Based on that judicial philosophy, Justice Scalia criticized Justice Ginsburg for her “occasional excursions beyond the interpretative terra firma of text and context, into the swamps of legislative history.” 

• Civil Litigation
• Sarbanes-Oxley Act
• Whistleblowers

On Tuesday, the Supreme Court issued an opinion that may have sweeping implications for whistleblowers and employers.  In Lawson v. FMR LLC, the Court decided that the anti-retaliation provision of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1514A) allows an employee to bring a claim even if that employee works for a private contractor or subcontractor of a public company.  The Court’s decision could lead to a wide range of Sarbanes-Oxley lawsuits by outside counsel, private accountants, cleaning services, and others.

Lawson was a split decision.  Justice Ginsburg, joined by Chief Justice Roberts, Justice Breyer, and Justice Kagan, and by Justices Scalia and Thomas “in principal part,” wrote for the majority.  Justice Scalia wrote a separate concurrence, joined by Justice Thomas.  And in an unusual grouping, Justice Sotomayor authored the dissent, joined by Chief Justice Roberts and Justice Alito.  Today, we'll tackle Justice Ginsburg's opinion; tomorrow, we'll take a look at what Justices Scalia and Sotomayor had to say.

But first, a little background.

• Civil Litigation
• Motions to Dismiss
• Sarbanes-Oxley Act
• Whistleblowers

Here at our polar vortex bunker in the freezing Nation’s Capital, supplies are running short and we’re vigorously debating whether we should make a mad dash to the Suits by SuitsMobile and drive straight down to visit our colleagues in Tampa, Florida, or just tough it out and pray/chant/hope that the cold will ultimately break.  In the meantime, we’ve defrosted the following interesting bits of news from the world of executive employment issues: 

• • • Non-competes down in Dixie: this analysis looks at how North Carolina courts enforce non-competes after a merger, this one looks at Florida’s statute governing those agreements, and this one discusses two recent Tennessee cases about them – and the author concludes non-competes are “alive and well (and enforceable)” in the Volunteer State. 
    • And from about as far from Dixie as you can get – Anchorage, Alaska – comes this thoughtful article about how small business owners and departing employees should look at non-competes. It notes that execs who leave to set up their own businesses in violation of a non-compete face the customary lawsuit as well as a unique risk: they will have “proved themselves dishonorable and word travels fast in Alaska.”
    • Arthur Laffer, please call your office and bring your famous curve: Hungary’s Constitutional Court struck down that country’s 98% tax on severance payments, finding it conflicted with EU rulings and regulations aimed at protecting property ownership.
    • The bounties offered to tipsters under Dodd-Frank haven’t yet turned into the problem big companies feared, the Wall Street Journal reports.    
    • The Title VII case involving retailer Abercrombie & Fitch’s prohibition on employees wearing hijabs – which we’ve written about before – led to a relatively rare split decision in the Tenth Circuit Court of Appeals this week, on the procedural point of whether all of the justices of that court should reconsider a ruling in Abercrombie’s favor made by three of the justices (if you’re a fan of appellate practice and/or French, this was a petition for rehearing en banc).  Some pundits say this split could motivate the Supreme Court to take the case; others say no.  

• The Inbox

Non-lawyers often wonder why folks in our profession spend so much time and money poring over the documents and e-mails each side usually has to produce in litigation.  Sometimes, these document reviews are the legal equivalent of looking for the proverbial needle in a haystack.

And sometimes, you find the proverbial needle – or needles.  And when you do, and the success or failure of the case turns on that e-mail, or set of e-mails, then the time and money spent on the search for those things turns out to have been a wise and necessary investment. 

Take the case of TBA Global, LLC v. Proscenium Events, LLC.  TBA is an event planning company that “produces live event programs and marketing presentations for companies and branded products.”  In the course of its work, it hired three senior employees – Santoro, Shearon, and Cavanaugh.  While the exact terms of their agreements differ from each other, all three signed non-compete agreements with TBA that provided that if they ever left the company, they would not “directly or indirectly, communicate with clients or prospective clients” of the company for a period of time (one year for two of the executives, and two years for the other).  

• Discovery
• Noncompete Agreements ‎
• Summary Judgment

There’s often a fine line between being a bona fide whistleblower and being just an angry plaintiff suing for wrongful termination.  The plaintiff’s allegations of whistleblowing conduct can often be very similar to the conduct that gave rise to him or her being fired – setting up something of a Rorschach blot test for the court that is trying to figure out what’s really going on. 

That’s the position doctor Mark Fahlen found himself in.  Doctor Fahlen was fired by his employer, a group of doctors working at a hospital in California.  The doctor said he was fired, in part, because he complained – as a whistleblower – about nurses in the hospital failing to provide adequate care for his patients because they failed to follow his instructions.  The group of doctors fired Fahlen after the hospital revoked his privileges (apparently a necessary part of being a member of the group) because it said Fahlen had angry fights with those same nurses – and, therefore, he was fired because he wasn’t a suitable employee.  So, essentially the same factual allegations could be whistleblowing or a basis for termination.  

• Whistleblowers
• Wrongful Termination

Here at the Suits by Suits Worldwide Operations Center, weather continues to have us flummoxed, vexed, and annoyed: even though a famous Pennsylvania rodent discerned that we would have six more weeks of our brutal winter, we’ve had a pleasant warm spell that is about to come to a crushing end due to a storm front that goes by the curious name of "Texas Hooker" (we did not make that up).  And we’re about to be plunged back into the depths of the polar vortex yet again – although our earlier bouts with the grim chill may have wiped out our area’s growing population of stink bugs.   

In any event, we always take shelter from the storms, the cold, and the heat by digging into our Inbox of interesting developments in executive employment disputes and the issues that surround them, including:

• The Securities and Exchange Commission has filed an amicus brief in the Second Circuit, arguing that its interpretation of a “whistleblower” under Dodd-Frank – essentially an employee who reports wrongdoing either internally or to the SEC – should be followed.  We’ve covered this case, Liu v. Siemens, before, for an earlier ruling holding that Dodd-Frank’s whistleblower protections don’t apply overseas. 
• Staying with the whistleblower theme for a minute: government contractor Kellogg Brown & Root is being attacked by a whistleblower, who has complained to the SEC and the Justice Department that employees are forced to sign confidentiality agreements that prevent them from ever disclosing allegations of wrongdoing.  This one could be interesting…
• Auto retailer Carmax is defending the arbitration clause in its employment agreement in a California appellate court, urging it to reject an employee’s argument that the clause is illusory because Carmax reserved the right to amend it at any time. 
• The bankruptcy trustee for real estate company Grubb & Ellis is trying to claw back $650,000 from a former executive, alleging the payments in stock and paid time off were fraudulent. 
• Finally, while we write a lot about non-compete agreements between executives and employers generally, we rarely see them between divorcing spouses – but a California court of appeal ruled on just such an issue this week.  The court held that a judge’s order prohibiting one spouse from working in the same field – the rum importing business – as the other spouse didn’t violate California’s general ban on non-compete agreements because the order was an order, and not an agreement.  It remanded the case, however, finding its five-year, worldwide ban on the one spouse getting into the rum importing business was overbroad. 

• Bankruptcy
• Dodd-Frank Act
• The Inbox
• Whistleblowers

Yesterday, we reviewed a recent decision by a federal court in Richmond in the case of Vanterpool v. Cuccinelli (yes that one), and when firing a government employee for speech or political affiliation may be okay under the First Amendment.  The answer is that it may be okay if the employee is in a policymaking position.  The court’s decision spells out why and what it means to have such a position.  The case is also a helpful reminder that staking out one position in litigation may undermine another. 

In her first complaint, Vanterpool apparently did not want to say that she posted the comment criticizing Cuccinelli on the Washington Post because she had denied doing so when she was confronted about the comment by one of Cuccinelli’s deputies, Charles E. James, Jr., who was also a defendant in the case.  James later questioned Vanterpool’s credibility and asked her to resign or be terminated.  If Vanterpool alleged in the complaint that she personally posted the comment, then that could have bolstered a defense by Cuccinelli and James that she wasn’t fired for speaking freely but for being dishonest.    

• Civil Litigation
• First Amendment
• Government Employers and Employees
• Motions to Dismiss
• Social Media

Earlier this month, a federal court in Richmond dismissed the lawsuit  of a lawyer named Samantha Vanterpool who worked in the Virginia Office of Attorney General when Republican Ken Cuccinelli was Virginia’s AG and was running to be governor.  (Democrat Terry McAuliffe won last November in a race that made national headlines.)  Vanterpool claimed that she was fired on the basis of her political affiliation in violation of the First Amendment. 

Vanterpool is a Republican but apparently not a Cuccinelli fan.  She was fired after she allegedly posted a comment to a May 2012 Washington Post story about Bill Bolling, who was then challenging Cuccinelli for the Republican nomination.  You can still see the comment (from “bzbzsammy”), which accuses “Cuccinelli of promoting Cuccinelli” while “Bolling is helping the GOP,” and of “NEVER [being] in the AG’s office and solely us[ing] the position for self promotion.”  

• Civil Litigation
• First Amendment
• Government Employers and Employees
• Motions to Dismiss
• Social Media

Love is in the air as couples celebrate Valentine’s Day with chocolates, flowers and romantic dinners.  But there’s no love lost between some employers and their executives, as this week’s Inbox shows:

• BLR.com reports on a fascinating case involving Bruce Kirby, former CEO of Frontier Medex.  In a lawsuit in Maryland federal district court, Kirby alleged that he was the beneficiary of a change-in-control severance plan and that Frontier kept him on for over a year solely for the purpose of defeating his severance benefits, even though it told him it was going to terminate him before that.  The court ruled that he was not contractually entitled to severance, but could pursue a claim that Frontier interfered with his benefits, violating ERISA.
• Retired Ohio Bureau of Workers’ Compensation attorney Joe Sommer is asking the Ohio Supreme Court to review a decision that limited the application of whistleblower protections in that state.  He believes that the Franklin County Court of Appeals overly limited whistleblower claims when it ruled that an employee had to report criminal conduct in order to be protected from retaliation.
• According to Benefits Pro, the EEOC “slammed” CVS over its severance deals in a lawsuit against the company in Illinois federal court.  The lawsuit alleges that CVS required employees to sign severance agreements with five pages of small print, some of which bargained away the employees’ rights to communicate to agencies about practices that violated the law.  CVS says that nothing in those agreements barred employees from going to the EEOC with complaints.
• Hook ‘em, Mack!  Former Texas football coach Mack Brown, who resigned after this season, did get some love from his employer, as the San Francisco Chronicle reports that he will receive $2.75 million that he was owed under his contract in event of termination.  He will also get a cushy $500k job this year as special assistant to the president for athletics.
• John O’Brien of Legal News Line reports that a California appellate court will allow a whistleblower’s claim of retaliation under the False Claims Act to be heard in state court.  Dr. Scott Driscoll, a radiologist, claims that he was fired for complaining that his employer was committing Medicare fraud.  When the employer sued him in state court, Driscoll counterclaimed for FCA violations.  The California court decided that it had jurisdiction to hear the claim, rejecting the employer’s argument that federal courts have exclusive jurisdiction over FCA retaliation claims.

• Change-in-Control Provisions
• Executive Compensation
• The Inbox
• Whistleblowers
• Wrongful Termination

For those of us who follow whistleblower law, Wednesday was a big day – and a good one for employers.  In two separate federal appellate decisions, courts affirmed the dismissal of whistleblower actions based on very different issues.  For potential whistleblowers and employers alike, the decisions demonstrate yet again the importance of the particular requirements and scope of the law that a whistleblower relies on to support his claim.

The first decision, Villanueva v. Department of Labor, No. 12-60122 (5th Cir. Feb. 12, 2014), comes to us from the Fifth Circuit. It involves William Villanueva, a Colombian national who worked for a Colombian affiliate of Core Labs, a Netherlands company whose stock is publicly traded in the U.S.  Villanueva claimed that he blew the whistle on a transfer-pricing scheme by his employer to reduce its Colombian tax burden, and that his employer passed him over for a pay raise and fired him in retaliation for his whistleblowing.

• Dodd-Frank Act
• Sarbanes-Oxley Act
• Whistleblowers
• Wrongful Termination