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Compliance Hotline

By ALM Staff | Law Journal Newsletters |
April 27, 2006

DOL ARB Upholds Whistleblower, Ruling, But Allows Appeal

A Department of Labor Administrative Review Board has upheld an Administrative Law Judge's 'preliminary order of reinstatement' against a SOX whistleblower, but also ordered that the former employer would have 10 days to move for a stay of that order. Welch v. Cardinal Bankshares Corp., ARB No. 06-062, ALJ No. 2003-SOX-15 (ARB Mar. 31, 2006).

The ALJ had previously ordered the reinstatement of the SOX whistleblower, but because the ALJ issued a merits decision and then a second decision on damages, erroneously placing a notice of appeal rights on the earlier merits decision, there was confusion over when the matter became ripe for appeal to the ARB, and whether the reinstatement order was merely recommended. When the employee sought enforcement of the reinstatement order, however, the federal district court concluded that the employer did not, under the circumstances, have adequate notice, and that the ALJ's reinstatement order could not be enforced without the employer having had the opportunity to seek a stay from the ARB. The district court therefore dismissed the enforcement action, but indicated that the dismissal was without prejudice to file a new motion to seek enforcement if the ARB denied a stay on the merits.

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