New SOX Decision By The U.S. Department Of Labor's ARB Expands Whistleblower Protection Yet Again, Including Protection For Theft fFom Employer's Computer System

In the case of an employee who admitted to stealing personal identifying information of coworkers and confidential business documents from the company computer system, the Department of Labor's Administrative Review Board (ARB) held recently that: (1) theft of confidential personal and corporate information may be protected activity, depending on the circumstances surrounding the theft; (2) the Sarbanes-Oxley Act's ("SOX") anti-retaliation provision protects employees who make disclosures to the Internal Revenue Service (IRS) under the IRS Whistleblower Rewards Program; and (3) an employee need not allege shareholder fraud for SOX protection to apply.

The ARB remanded Vannoy v. Celanese Corp., ARB Case No. 09-118 (Sept. 28, 2011), to an Administrative Law Judge (ALJ) for an evidentiary hearing on whether the employee's admitted theft of data in violation of both company policy and a written confidentiality agreement was protected under SOX section 806.

Background

Celanese hired the complainant, Matthew Vannoy, to reconcile problems with the company's corporate employee expense reimbursement system, known internally as "the U.S. Bank Card program." In June 2005, the company retained a consultant that reviewed the U.S. Bank Card program and recommended that the company implement a new electronic reimbursement system. Company management recognized throughout 2005 and 2006 that the U.S. Bank Card program was not working correctly. In December 2006, the company implemented the new system recommended by the consultant. The complainant was involved in the evaluation of the old system and the implementation of the new one. His job also included securing necessary information to substantiate expense reports. The complainant allegedly appeared to be aggressive in his dealings with employees submitting expense documentation that he found inadequate, and he ended up in several confrontations with employees about expense reimbursements. He was counseled to refrain from engaging in confrontational behavior with employee cardholders and to report serious disagreements to his supervisor.

In February 2007, after the new and improved expense reimbursement system had been implemented, the complainant filed an internal complaint, pursuant to the Celanese Business Conduct Policy, alleging misuse and abuse of employee credit cards and describing the financial risk he thought the old system posed for the company. He also consulted an attorney. In April of that year, the complainant went on...