Whistleblowing General Counsel Wins $11 Million Against Ex-Employer
Author: David B. Weisenfeld, XpertHR Legal Editor
February 22, 2017
A federal jury in California has awarded nearly $11 million in damages to the former general counsel of Bio-Rad Laboratories in a whistleblower retaliation lawsuit involving potential bribery in China. The claim was brought under the Sarbanes-Oxley Act of 2002 (SOX).
The jury found that Sanford Wadler engaged in protected activity when he sent a memo to Bio-Rad's audit committee calling for an investigation into possible bribery that could involve senior management. The company fired him a few months later in June 2013.
Wadler's attorney cited a "fake job review" as a key factor in the verdict. In a declaration to the Department of Labor, Bio-Rad's CEO called a negative job review of Wadler a true and correct copy of his performance evaluation. The review was dated April 15, 2013. However, the document's metadata reportedly showed that it was created in July 2013, at least one month after Wadler's termination.
The former general counsel also claimed that his firing occurred shortly before the company was about to present findings from its internal investigation into bribery in other countries, including Russia, Thailand and Vietnam. Bio-Rad later settled a case with the Department of Justice and the Securities and Exchange Commission, which found that it paid $7.5 million in bribes in order to increase profits.
The company claimed during trial that it fired Wadler for bad behavior, which included yelling at co-workers, as well as failing to notify colleagues of critical information.
The jury award includes $2.96 million in back pay and $5 million in punitive damages, but because the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) (which enhanced SOX's anti-retaliation protections) allows back pay awards to be doubled, that brings the total award to nearly $11 million.
This whistleblower case is a reminder that employers should create a culture of compliance, in which employees do not fear retaliation and feel confident that their concerns will be dealt with appropriately.