BNA Reports on DOL Decision to Maintain Sarbanes-Oxley Liability Against Bankrupt Firm

In an article titled, “ARB Upholds Bankrupt Firm’s SOX Liability But Recalculates Retaliatory Discharge Award,” BNA reports on the Labor Department’s holding in Kalkunte v. DVI Financial Services, Inc., ARB NO. 05-139 (February 27, 2009), where the Administrative Review Board (“ARB”) in a 2-1 decision, found substantial evidence to support a finding that Ms. Kalkunte’s whistleblowing activity, i.e. her disclosure that senior management had provided false information to lenders, board members, and the Securities and Exchange Commission was a contributing factor in her discharge from DVI Financial Services.  The article highlights the extent to which the burden-shifting framework under the Sarbanes-Oxley Act (“SOX”) is very favorable to employees. Finding that the stated reasons for Kalkunte’s discharge “were a pretext, and that the real reason for her discharge was her ongoing preoccupation with the status of the Arnold & Porter investigation” into her disclosures about financial improprieties, the ARB affirmed the Administrative Law Judge’s (“ALJ”) decision that DVI and APS were both liable for whistleblower retaliation.  The ARB also affirmed the ALJ’s award of damages for pain, suffering, mental anguish, and humiliation. 

Ms. Kalkunte was represented by R. Scott Oswald and Nicholas Woodfield of The Employment Law Group® law firm.  For more information about the firm’s Sarbanes-Oxley Whistleblower Practice, click here.

Tagged: Sarbanes-Oxley Act (SOX), Whistleblower Laws (Federal)