On May 20, 2016, the Fourth Circuit affirmed the decision of the ARB, finding that a former employee of Deltek, Inc. (Company) was retaliated against in violation of Section 806 of SOX and entitled to four years’ worth of front pay. Deltek, Inc. v. Dep’t of Labor, No. 14-cv-2415 (unpublished).
Following her discharge, Plaintiff filed a complaint with the DOL under Section 806 of SOX. An ALJ found that the Company retaliated against her and awarded her four years of front pay and required the Company to maintain its tuition reimbursement program for Plaintiff. The front pay award amounts to $300,352 and the tuition reimbursement benefits are valued at $30,000. The ARB affirmed, and the Company appealed to the Fourth Circuit. The Fourth Circuit affirmed in whole. It found there was substantial evidence to support the conclusion that Plaintiff’s protected activity contributed to Plaintiff’s termination. With regard to damages, the court disagreed with the Company that the front pay award was speculative.
The Dissent criticized the Majority on both its causation- and damages-related findings. The Dissent was concerned that the Majority rubberstamped the decision of the lower tribunal, failing to account for the Company’s explanations for discharging Plaintiff. It also found that the damages awarded were “rankly speculative” and amounted to a windfall.
This decision underscores the risk of oversized front-pay awards in SOX cases and highlights the degree to which some courts may defer to the ARB and ALJs.