District Court Rules That Amending OSHA SOX Complaint Does Not Restart 180-Day Clock For Removal To Federal Court

On March 30, 2010, the U.S. District Court for the District of Connecticut held that when a Sarbanes-Oxley whistleblower amends his complaint, he need not wait an additional 180 days at OSHA before removing his claim to federal court.  In 2006, Richard Trusz, the managing director of valuations at UBS Realty, butted heads with management after he complained about understaffing and warned of potentially overvalued property.  In 2007, two properties were discovered to be overvalued by $3 million and $1.7 million.  Trusz insisted that UBS make disclosures to clients and return excess management funds.  In retaliation, UBS diminished Trusz’s responsibilities, restricted him from having contact with clients, and prevented him from attending an annual client meeting.  After continued conflict, Trusz filed a complaint with OSHA in April 2008 alleging that UBS violated the Sarbanes-Oxley Act. 

In June 2008, independent appraisers found the need to write down over $55 million in assets due to overvaluation.  Angry at Trusz for his comments during a meeting about the findings, UBS placed Trusz on unpaid leave.  While on leave in July, Trusz sent a critical email to management after learning that the company would not be following through with the write-downs.  Two weeks later, Trusz was terminated.  Trusz filed an amended complaint with OSHA on September 3, alleging new instances of retaliation including termination.  In November 2008, Trusz requested that OSHA dismiss his complaint so he could file in federal court. 

After Trusz filed his complaint in federal court, UBS moved to dismiss, claiming that Trusz failed to exhaust his administrative remedies before OSHA.  Under SOX, a complainant may remove his claim to federal district court only after he has been before the Department of Labor for more than 180 days without a final judgment.  UBS argued that the 180-day clock restarted when Trusz amended his complaint in September.  The court denied the motion, finding that Trusz merely “alleged facts and subsequent developments related to the conduct alleged in his original complaint,” and thus OSHA had opportunity to resolve the case as required. 

A copy of the opinion is available here.  For more information about The Employment Law Group® law firm’s Sarbanes-Oxley Whistleblower Practice, click here.

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