On May 29, 2018, the U.S. District Court for the Northern District of Alabama granted a motion to dismiss in part Plaintiff’s whistleblower retaliation claims under SOX on the grounds that the Plaintiff failed to exhaust his administrative remedies against the Defendant CEO.  Wingo v. S. Co., 17-cv-01328.

Background.  Plaintiff, a Project Manager, informed his supervisor that a project was on track for a delayed Commercial Operation Date (“COD”).   Plaintiff alleged that after he informed his supervisor of his findings, management pressured employees to take dangerous shortcuts and continued to tout that an on-time COD was possible, because governmental and private incentives were contingent on a timely execution of the project.  Plaintiff allegedly reiterated his concerns to management and ultimately expressed his concerns to the CEO.  Plaintiff alleged that management began to retaliate against him and he was subsequently terminated.  Plaintiff then submitted a report to the SEC and filed a SOX whistleblower retaliation complaint with OSHA.  He then filed suit in federal district court, naming his employer and the CEO as defendants. 

Rulings.  The CEO moved to dismiss the SOX claim against him individually, arguing that Plaintiff’s OSHA filings poorly communicated his charges and failed to properly reference him, despite naming him as a defendant.  The court agreed, concluding that OSHA was not on notice that it should investigate the CEO’s alleged conduct.  Thus, the court granted the CEO’s motion to dismiss.   

Implications.  This decision is a favorable result for individual defendants in SOX cases, who are sometimes improperly named as parties and where claims against them in OSHA complaints are lacking.