UNEMPLOYMENT
INSURANCE / SOCIAL SECURITY
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A compliance manager's disclosures to supervisors were not significantly related to shareholder fraud so as to constitute protected activity under the Sarbanes-Oxley Act of 2002. The plaintiff had not specifically "referred to fraud, shareholders, securities, statements to the SEC or SOX in his exchanges" with company officials and OSHA, a federal district court explained, granting the employer's motion to dismiss the plaintiff's SOX retaliation claim (Fernando Portes v Wyeth Pharmaceuticals, Inc., SDNY 2007, August 20, 2007).
The plaintiff, Fernando Portes, was hired by Wyeth Pharmaceuticals on September 22, 2003, to manage the company's Pearl River, NY, compliance program. Portes was terminated on February 23, 2005. Portes filed a SOX whistleblower claim with OSHA on March 23, 2005, alleging that his termination was in retaliation for protected disclosures he had made to company officials and to OSHA regarding quality control for vaccine testing.
On October 26, 2005, the Secretary of Labor issued a notice affirming Portes' statutory right to pursue the claim in district court because a final determination had not been made by the Secretary within 180 days of the claim's filing. In the district court claim, Portes also asserted that Wyeth's response "contained false allegations regarding his work performance."
The court found that Portes' disclosures were "outside the scope of protected reporting under SOX." As a chemist and project manager of Wyeth's compliance program, he was responsible for reporting violations of pharmaceutical manufacturing regulations, not for uncovering and reporting investor fraud.
In this case, the disclosures involved a consent decree intended to ensure that Wyeth kept its quality control commitments to the Food and Drug Administration. The decree had been issued for Wyeth's failure to comply with good manufacturing practice (GMP) regulations. The decree was announced by the FDA on October 3, 2000, and was signed by Wyeth and three of its top corporate executives. As the district court explained, SOX was not implicated where "[t]he purported violations involved the Consent Decree, FDA regulations, EU regulations, and other drug manufacturing guidelines."
In addition, the court noted that Portes allegations that Wyeth had "harassed [him] in response to his OSHA complaint could not have been included in his original complaint" and, therefore, could not be asserted in federal court. However, Portes was granted leave to replead the SOX retaliation claim within fourteen days.
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