Whistleblower Appeals to 3rd-Level District Court

Is it justice when two courts review a case and determine the same outcome, and the plaintiff continues to appeal? How many levels of de novo review should be allowed?

That is the question regarding a whistleblower who worked for the defendant, URS Corporation (URS), until she was laid off in January of 2011. The woman claimed that she was terminated after reporting accounting inaccuracies that she observed after URS had acquired another company in 2009, the Lopez Garcia Group (LGG). She reported the inaccuracies to both internal staff and to the OSHA.

Over the next year or so, the woman was demoted and then in January 2011, she was terminated from her position. In May, she filed suit against the company under the Whistleblower SOX Act. She claims she was terminated for exposing the accounting practices. URS claims the plaintiff was demoted due to her performance and then terminated when the company downsized, eliminating a number of positions.

The OSHA investigative report, which was released the following October, stated that there was not a reasonable cause to show that URS was responsible for any willful violations to the SOX Act. The plaintiff then filed an appeal in November 2011 with the Department of Labor (DoL). The case went before an administrative law judge and was again denied in March 2013.

The plaintiff filed a third appeal with the ARB later in the same month. It was accepted by the ARB on March 26, 2013; however, the plaintiff went on to file another petition for a de novo review with the District Court in the Northern District of Texas. This prompted the URS to request a dismissal of the woman's petition for lack of subject matter; however, the district court denied URS's motion.

The URS objects to the continued appeals from the plaintiff because it requires continued action on their part regarding discovery and disclosure of evidence - tasks which they have incurred in the previous hearings. Whistleblower cases can be drawn out and complex. Employers should be prepared for the possibility of this type of litigation in any business. It may be long-lasting, but the system must allow each individual their right to appeal a decision to a higher court.

Source: mondaq.com, "United States: Texas Federal Court Gives SOX Whistleblower Another Big Bite At The Apple" Steven J. Pearlman, Harris M. Mufson and Noa M. Baddish, Oct. 10, 2013

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