Jeffrey Wiest v. Thomas Lynch
710 F.3d 121
| 3rd Cir. | 2013Background
- Wiest, Tyco Electronics’ accounting employee for ~31 years, was terminated in 2010 amid post-scandal scrutiny.
- He challenged his firing as retaliatory for raising concerns about extravagant and potentially improper expenses.
- Atlantis Resort event: Wiest questioned costs and classified them as advertising; later Tyco treated as income to attendees, with gross-up compensation.
- Venetian Resort event: Wiest directed a payment request; after review, the event was later approved as a business expense.
- Wintergreen Resort event: Wiest warned management that CEO approval was required; internal controls were not followed, and the event proceeded.
- District Court dismissed the federal SOX §806 claims using a ‘definitive and specific’ standard and declined supplemental jurisdiction over state-law claims; Wiest sought reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What standard governs protected activity under §806? | Wiest argues Sylvester’s reasonable-belief standard applies. | Tyco/defendants argued for the Platone ‘definitive and specific’ standard. | Sylvester reasonable-belief standard applies; standard reviewed de novo. |
| Did Wiest plead protected activity for the Atlantis event? | Wiest’s email showed a reasonable belief of potential tax fraud and misstatement. | Atlantis concerns were not tied to listed §806 fraud provisions. | Atlantis event communications stated a plausible §806 protected activity; reversed dismissal for this claim. |
| Did Wiest plead protected activity for the Venetian event? | Wiest believed lack of documentation could implicate §806 protections. | Initial lack of agenda/details did not show a §806 violation. | Venetian event not plausibly protected activity; affirmed dismissal for this claim. |
| Did Wiest plead protected activity for the Wintergreen event? | Lack of CEO approval and internal-control deviations could trigger §806 protections. | Issues did not clearly map to enumerated §806 violations. | Wintergreen event communications plausibly protected activity; reversed dismissal for this claim. |
| Did Wiest plead protected activity for other matters (holiday party, etc.)? | General questioning of expenses could indicate §806 protection. | No explicit connection to enumerated fraud provisions. | Dismissal affirmed for other matters; not protected activity under §806. |
Key Cases Cited
- Day v. Staples, Inc., 555 F.3d 42 (1st Cir. 2009) (requires protected activity to relate to listed statutes)
- Van Asdale v. Int’l Game Tech., 577 F.3d 989 (9th Cir. 2009) (definitive and specific link; reasonable-belief standard discussion)
- Welch v. Chao, 536 F.3d 269 (4th Cir. 2008) (subjective and objective belief required for protected activity)
- Allen v. Admin. Review Bd., 514 F.3d 468 (5th Cir. 2008) (requires objective element in reasonable-belief standard)
- Passaic Valley Sewerage Comm’rs v. U.S. Dep’t of Labor, 992 F.2d 474 (3d Cir. 1993) (normal reasonable-person standard guiding §806 interpretation)