An ex-Vice President with JP Morgan, Shaquala Williams, initiated a lawsuit in federal court alleging that the bank fired her in retaliation for whistleblowercomplaints that are protected by the Sarbanes-Oxley Act of 2002 (SOX). In particular, she said that JP Morgan lacked adequate internal controls to detect fraud and that the bank had violated its agreements with the U.S. Department of Justice and the Securities and Exchange Commission. Her case is a telling example of why it is imperative that whistleblowers and employers take note of and comply with SOX.
Williams worked in the bank’s Global Anti-Corruption Compliance (GACC) organization for approximately one year. During her work in GACC, she claims she reported concerns about JP Morgan maintaining inaccurate internal records, which resulted in misleading disclosures to regulators like the SEC. Likewise, Williams asserts that she complained about a lack of invoice controls, which are designed to ensure that the bank was not funding corruption by labeling corrupt third-party payments as legitimate business expenses. And her lawsuit states that she also complained about the lack of independent oversight within the bank’s compliance department as well as deficient due diligence review procedures. Her lawsuit lays out a complete summary of her claims.
Because of her complaints/protected activities, Williams contends that JP Morgan retaliated against her by, among other things:
- Removing significant job responsibilities
- Providing an inaccurate and negative job performance review
- Excluding her from meetings
- Issuing a written warning for allegedly unprofessional behavior and poor job performance
- Ultimately firing her in November 2019
- Failing to confirm her employment with a prospective employer
In November 2021, Williams filed her lawsuit in the United States District Court Southern District of New York, where the case has been assigned to Judge Jed S. Rakoff. JP Morgan has not yet filed its Answer to Williams’ complaint.
Proving Whistleblower Retaliation Under SOX
Congress enacted SOX to prohibit publicly traded companies from firing or otherwise retaliating against an employee for reporting conduct that the employee reasonably believes constitutes mail, wire, bank, or securities fraud, a violation of any SEC rule or regulation, or a violation of any provision of federal law relating to fraud against shareholders.
To establish a retaliation claim under SOX, a whistleblower like Williams must show:
- they engaged in protected activity
- the employer knew they engaged in the protected activity
- they suffered an adverse employment action
- the protected activity was a “contributing factor” in the adverse employment action
Note that the “contributing factor” causation standard is favorable to employees/whistleblowers when compared to other workplace laws. A “contributing factor” is a factor which, alone or with other factors, in any way affects the outcome of a decision. By contrast, other employment laws, such as the Age Discrimination in Employment Act (ADEA), apply a “but for” causation standard that is more difficult for the employee to prove.
If the whistleblower makes this “contributing factor” showing by a preponderance of the evidence, then the employer must prove by “clear and convincing evidence” that it would have taken the same adverse employment action even if the employee had not engaged in protected activity.
How To File A Sox Whistleblower Complaint
An employee must file a complaint with the Department of Labor’s Occupational Safety and Health Administration (OSHA) within 180 days after a violation of SOX (0r 180 days after after the employee became aware of the violation). An employee who believes that they have been retaliated against in violation of SOX may file a complaint with OSHA.
After it receives the complaint, OSHA will ensure that it is a valid complaint allegation (e.g., timeliness or jurisdiction). All complaints are then investigated as directed by the statutory requirements. See 29 CFR Part 1980.104.
After OSHA issues its findings, either party may request a hearing before a Department of Labor administrative law judge (ALJ). The ALJ’s decision and order may be appealed to the Department of Labor’s Administrative Review Board. If a final agency order is not issued within 180 days from the date the employee’s complaint is filed, then the employee may file the complaint in the appropriate United States/federal district court.
Remedies Available Under SOX
In her lawsuit, Williams seeks various remedies to address the damages she says JP Morgan’s retaliation caused. Under SOX, a whistleblower can receive the following remedies if they experience retaliation:
- reinstatement with the same seniority status that the employee would have had, but for the retaliation;
- back pay, with interest; and
- compensation for any special damages sustained as a result of the retaliation, including emotional distress, litigation costs, expert witness fees, and reasonable attorney fees.
Notably, the emotional distress damages available under SOX are uncapped (unlike some other anti-retaliation laws).
SOX remains one of the most effective tools to prevent retaliation against corporate whistleblowers and it will be worth watching how this JP Morgan case develops in court.