Just when employers thought that the anti-retaliation provision of the Sarbanes-Oxley Act of 2002 (SOX), 15 U.S.C. § 1514A, already covered a broad range of protected conduct, the Department of Labor’s Administrative Review Board (ARB), the appellate body that reviews Administrative Law Judge (ALJ) decisions, potentially broadened the scope of conduct that is protected from retaliation under SOX’s anti-retaliation provision.
In Timothy C. Dietz v. Cypress Semiconductor Corp., ARB 15-107 (Mar. 30, 2016) the ARB affirmed an ALJ ruling that awarded a former program manager for Cypress more than $250,000 in back pay and benefits under the SOX anti-retaliation provision, 15 U.S.C. § 1514A, finding protected activity where the employee raised state law violations that could demonstrate fraudulent conduct.
In 2012, Complainant Timothy Dietz (Dietz) worked for Ramtron International Corporation (Ramtron). In September 2012, Cypress acquired Ramtron and ultimately hired Dietz as a program manager. Cypress required certain employees to participate in a Design Bonus Plan (Bonus Plan). Dietz was not subject to the plan, but many of the former Ramtron employees, including those who worked under Dietz’s supervision at Cypress in Colorado, were subject to it.
Under the Bonus Plan, Cypress deducted 10 percent of participants’ salaries. These deductions were mandatory. At the end of each calendar quarter, Cypress calculated the employees’ “bonus” and some employees received less than the amount that was deducted from their compensation. Payouts were based on team performance and not individual performance. Cypress communicated this plan to the former Ramtron employees via a website, email, and video conferencing. None of the former Ramtron employees were notified about the Bonus Plan prior to taking their jobs with Cypress.