Dodd-Frank reformed Sarbanes-Oxley, which is legislation intended to protect employees of corporate subsidiaries from retaliation by employers.
Judge J. Paul Oetken said that such a retroactive application were “a clarification of Congress’s intent” regarding whistleblowers, JDJournal reports.
The case involved Phillip Leshinksy, a former employee of the non-public Caseta unit of Telvent GIT, a Spanish technology company. At the time of Leshinsky’s employment, Telvent had more than 30 units. Leshinsky sued over what he maintains was wrongful termination from the company in July 2008 after he objected to the use of fraudulent information related to Caseta’s bid for a contract with New York City’s Metropolitan Transportation Authority.
Telvent denied that Leshinsky was fired because of his whistleblowing actions as well as his allegations that the company was attempting to defraud the MTA, according to JDJournal.
The court ruled, however, that by implementing Dodd-Frank reforms, Congress had noted that its intentions included the protection of whistleblowers who reported fraudulent activities within “large, complexly structured” companies.
“In light of the fact that corporate malfeasance can—and often does—occur within subsidiaries of a public company, and that such malfeasance was precisely what precipitated the passage of Sarbanes-Oxley, it is certainly reasonable to infer that, in enacting whistleblower protections, Congress intended to protect the employees of a corporation’s subsidiaries in addition to employees of the parent itself,” Oetken said, JDJournal reports.