Litigation: Whistleblower retaliation claims

Two trends in whistleblower activity have created new hazards for companies

The laws protecting and rewarding corporate whistleblowers have increased in scope and number in recent years, as we described in our most recent article. Even more dramatically, courts and lawmakers have broadened the definition of protected whistleblower activity—that is, the type of conduct that triggers legal protection against retaliation. These two trends taken together have broadened the universe of potential whistleblowers and heightened the risk of corporate liability for claimed retaliation.  

In March 2013, the U.S. Court of Appeals for the 3rd Circuit handed down the most expansive definition of protected whistleblower activity to date, ruling in Wiest v. Lynch that an employee who expresses “reasonable belief” of an accounting irregularity is a whistleblower under the securities laws, even if his statement lacks any clear connection between the accounting error and shareholder fraud.

Contributing Author

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Jonathan S. Sack

Jonathan S. Sack is a principal of Morvillo Abramowitz Grand Iason & Anello PC He formerly served as Chief of the Criminal Division, U.S. Attorney’s...

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Contributing Author

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Ester Murdukhayeva

Ester Murdukhayeva is an associate at Morvillo Abramowitz Grand Iason & Anello PC.

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