Employers got some good news Dec. 3 when the 4th U.S. Circuit Court of Appeals released two Sarbanes-Oxley decisions that favored the businesses.
In the first case, Platone v. U.S. Dep’t of Labor, former airline official Stacy Platone appealed the Department of Labor’s reversal of her whistleblower award, one of the few whistleblower wins since SOX was adopted in 2002.
Platone had a split result at the agency level, with the ALJ finding SOX protection for Platone’s complaint about a scheme involving pilots’ efforts to game a system for “flight loss pay” for union work, a complaint that contributed to her dismissal. But the DOL Administrative Review Board reversed, holding that Platone’s complaint lacked specificity.
The 4th Circuit agreed with the ARB, saying that just alerting management of a billing discrepancy, without more, does not equal fraud.
The second case, Grissom v. The Mills Corp. , was not such a clear win for the employer, whose $130,000 Rule 68 offer of judgment already had been accepted by the SOX plaintiff, Kenneth Grissom. But then there was the $325,484 award of costs and fees by Alexandria U.S. District Judge Gerald Bruce Lee to Grissom’s lawyer, Elaine Bredehoft.
Yes and no, said the 4th Circuit panel. Yes, Grissom was a “prevailing party” pursuant to SOX’s fee-shifting provision, because the district court entered an enforceable judgment in his favor.
No to the fee award, first because the district court erred in awarding Grissom fees and costs accrued after the date of the Rule 68 offer, whose clear language covered only fees and costs up to the offer.
The appellate panel also found lead counsel Bredehoft’s requested fees of $400-$450 per hour a little steep. The panel said the Laffey Matrix, a schedule of fee rates used in the Baltimore-Washington metro area, was not sufficient proof of prevailing rates, and the district court abused its discretion in awarding the requested rate without evidence that the hourly rates for plaintiff’s firm matched market rates.
By Deborah Elkins