Reckoning with Retaliation: Objective Reasonableness in SOX Whistleblower Cases

I.  Introduction

Enron’s sudden collapse exposed significant deficiencies in federal law, leaving whistleblowers unprotected from retaliation and unlikely to report fraudulent conduct.1 Congress soon recognized that reform was necessary to protect whistleblowers, who, as firsthand witnesses to corporate malfeasance, are essential in uncovering and preventing large-scale financial disasters.2 This reform manifested in the Sarbanes-Oxley Act of 2002 (SOX),3 which Congress ensured included historic anti-retaliation protections.4 However, despite this sweeping reform, the Act’s success in actually protecting whistleblowers from retaliation has been called into question.5 An empirical analysis indicates that specific “legal hurdles” often prevent complainants from prevailing in retaliation claims.6 One of these “legal hurdles”—establishing whether the employee engaged in a “protected activity”7 —has become the subject of a circuit split.

Under SOX, publicly traded companies are prohibited from retaliating against an employee who provides information to a supervisor, law enforcement, or Congress, or otherwise assists in an investigation, regarding any conduct that the employee “reasonably believes” constitutes a violation of specific enumerated laws, rules, and regulations.8 Currently, there is a circuit split among the U.S. Courts of Appeals regarding what an employee must show to establish an objectively reasonable belief that his employer’s conduct violated § 1514A.

The First, Fourth, Fifth, and Ninth Circuits apply the most stringent standard. These circuits require a whistleblower’s theory of fraud to approximate the elements of the underlying fraud at issue for the whistleblower to demonstrate an objectively reasonable belief that their employer’s conduct violated an enumerated provision of § 1514A.9 By contrast, the Third, Sixth, and Eighth Circuits have adopted a much more lenient approach. In these circuits, whistleblowers must only identify “conduct that falls within the ample bounds of the anti-fraud laws”10 and need not approximate the elements of fraud to establish an objectively reasonable belief.11 Finally, the Second and Eleventh Circuits opt for approaches that fall somewhere in between the two aforementioned standards. In these circuits, although a whistleblower’s claim “cannot exist wholly untethered”12 from § 1514A, complainants are not explicitly required to approximate the elements of the fraud at issue.13

As establishing objective reasonableness is a hurdle all complainants must clear to qualify for protection, the standard courts utilize for determining objective reasonableness has strong potential to influence whether employees ultimately blow the whistle. Recent research has highlighted the need for robust anti-retaliation protections that will assuage whistleblowers’ fear of retaliation.14 Over 80% of financial professionals who suspect or become aware of fraudulent activity do not report it, and nearly 50% of employees claim potential retaliation is a key deterrent when contemplating whether to come forward.15 A stricter standard has the potential to substantially weaken whistleblower protections and amplify whistleblowers’ fear of retaliation. This, in turn, would strongly disincentivize prospective whistleblowers from coming forward and heighten the risk of countless future financial disasters.

This Comment begins with a brief overview of SOX’s legislative history to illustrate Congress’s primary considerations in designing SOX and to underscore the type of corporate misconduct it was enacted to prevent. It then details how whistleblowers file a complaint and establish a prima facie case of retaliation. Next, this Comment details the Administrative Review Board’s (ARB) evolving interpretation of § 1514A to provide the necessary context for understanding the existing circuit split. After analyzing the split, this Comment argues that some circuit courts have adopted an overly stringent standard due to a misinterpretation—or improper extension—of an ARB ruling in contravention of SOX’s purpose. After unpacking this issue, weighing the costs and benefits of the dominant approaches, and examining objective reasonableness in an analogous context, this Comment proposes a unifying framework for evaluating objective reasonableness in SOX retaliation claims. This proposal strikes a balance between the two dominant approaches. It incorporates key aspects of the otherwise irreconcilable prevailing standards and is best aligned with SOX’s text, design, and purpose. It would require a complainant to have sufficient information to form an objectively reasonable belief as to at least one of the underlying elements of the fraud at issue, rather than all or none. This proposal has strong potential to unite the circuits as it dispenses with the nebulous language at the core of the existing split, concretizes a clear procedure for evaluating objective reasonableness, and addresses the key concerns of all circuit courts.

II.  Background

A.  The Historical Background, Legal Procedure of SOX Retaliation Claims, and Statutory Requirements

1.  The legislative history of Sarbanes-Oxley

Most legislation aimed at protecting whistleblowers has been passed in the wake of “disastrous events.”16 SOX was no different. In the early 2000s, America’s securities markets were besieged by a series of financial catastrophes.17 Perhaps none were more prominent than what the Senate Report for SOX would refer to as “the largest corporate bankruptcy in the history of the United States”—the collapse of Enron.18 The bankruptcy resulted in estimated losses of $74 billion,19 cost more than 50,000 jobs,20 and served as the first of many corporate scandals that would send the economy into a “downward tailspin.”21

In the immediate aftermath of Enron’s fall, investigators soon learned that many employees had tried to “blow the whistle” on the ongoing fraud.22 However, Enron’s culture of retaliatory behavior had a chilling effect on individuals’ willingness to come forward. Sherron Watkins, a Vice President of Corporate Development at Enron, attempted to report “accounting irregularities at the highest levels of the company.”23 Rather than investigating the accounting issues, Enron’s response was to seek advice on “the legality of discharging the whistleblower.”24 Another senior Enron employee claimed he was prevented from accessing internal financial information after “repeatedly warning” of questionable accounting practices.25 A partner at Enron’s accounting firm, Arthur Anderson, was taken off the account after voicing concerns about Enron’s financial practices.26 Subsequent investigations indicate that these were hardly isolated incidents, as a vast number of Enron employees were aware of the ongoing fraud, but extremely few reported it, externally or internally.27

Whistleblowers’ value in detecting and preventing systemic fraud became evident in subsequent congressional hearings when Sherron Watkins provided information vital to unraveling the fraud endemic at Enron.28 Seeking to promote greater disclosure and end the “code of silence”29 that plagued corporate culture and perpetuated this fraudulent activity, Congress enacted SOX.30 At the time, most anti-retaliation laws required reports to be made externally for whistleblowers to qualify for protection.31 However, as the Enron disaster illustrated, existing law dissuaded employees from reporting fraudulent activity not only externally, but internally as well.32 To rectify this, Congress designated internal reporting (reports made by employees directly to supervisors within the company) as a protected channel.33

Congress’s decision to include such protections has been validated by recent research and has become increasingly salient in light of evolving case law. Over an eight-year period, whistleblowers utilized an internal channel in more than 90% of retaliation claims filed under Dodd-Frank and SOX.34 However, in Digital Realty Trust, Inc. v. Somers,35 the Supreme Court held that whistleblowers who only report fraudulent activity internally do not qualify for whistleblower protection under Dodd-Frank.36 This leaves SOX as the only federal avenue for whistleblowers to receive protection from retaliation based solely on internal reporting. We now turn to the procedure for these internal complaints.

2.  Procedure for filing a complaint

Section 806 of SOX details the legal procedure for filing a retaliation claim under the Act.37 Congress delegated authority to the Secretary of Labor to receive whistleblower retaliation claims under SOX.38 The Secretary of Labor subsequently delegated oversight authority to the Occupational Safety and Health Administration (OSHA).39 If an employee wishes to file a claim for retaliation, he must file a complaint with OSHA within 180 days of the alleged retaliation.40 The complaint will be dismissed if the complainant has failed to make a prima facie showing of retaliation where “a protected activity was a contributing factor in the adverse action alleged in the complaint.”41 Moreover, even if the complainant has made the requisite prima facie showing, the complaint will still be dismissed if the “respondent demonstrates by clear and convincing evidence that it would have taken the same adverse action in the absence of the complainant’s protected activity.”42

If the complaint is not dismissed, OSHA will open an investigation.43 Within sixty days of the initial filing, OSHA must determine whether there is “reasonable cause to believe” that the employer committed retaliation in violation of SOX,44 and if so, it will issue relief.45 Within thirty days of this determination, a party may request a hearing overseen by an Administrative Law Judge (ALJ).46 The ALJ will review and render a decision, which becomes final unless a party files a petition with the ARB within fourteen days.47 If the ARB declines to review the case within thirty days of the petition filing, then the ALJ’s determination constitutes the final order of the agency.48 Within sixty days of issuing a final order, a party may petition for review in the United States Court of Appeals.49 Alternatively, if a final decision is not issued within 180 days of when the original complaint was filed, then employees may bring an action in federal district court.50

3.  Establishing a prima facie case of retaliation

Under § 1514A of SOX, public companies are prohibited from retaliating against an employee who provides information “regarding any conduct which the employee reasonably believes constitutes a violation” of the enumerated laws and regulations.51 The enumerated laws and regulations include § 1341 (mail fraud), § 1343 (wire fraud), § 1344 (bank fraud), § 1348 (securities fraud), any Securities and Exchange Commission (SEC) rule, or “any provision of Federal law relating to fraud against shareholders.”52 To prevail on a SOX retaliation claim, a plaintiff must first make a prima facie showing by proving, by a preponderance of the evidence, that:

(1) he engaged in [a] protected activity, (2) the employer knew or suspected that the employee engaged in a protected activity, (3) the employee suffered an adverse action, and (4) an inference could be made that the protected activity was a contributing factor in the unfavorable action.53

Circuit courts agree that “whether an employee reasonably believes his employer’s conduct is violative is determined by a mixed subjective and objective test.”54 Furthermore, circuit courts also agree that to satisfy the subjective test, the “employee himself” must have believed the company’s conduct violated SOX.55  The objective component is where the crux of the circuit split lies. To satisfy the objective test, the employee’s belief must be objectively reasonable.56 However, SOX does not define what a “reasonable belief” is.57

B.  The Administrative Review Board’s Evolving Interpretation of § 1514A Triggered a Circuit Split

As the Department of Labor has been charged with administering SOX, the ARB’s shifting interpretations of § 1514A’s protected activity prong have become central to the existing circuit split.58 Almost every circuit court has either applied a form of administrative deference to or generally adopted the ARB’s interpretations of § 1514A. In Loper Bright Enterprises v. Raimondo,59 the Supreme Court overruled Chevron deference.60 However, as all relevant cases were decided before Loper Bright—and because the circuits applied different modes of deference to different ARB rulings—a brief explanation of these forms of administrative deference is essential to understanding the split.

Under Chevron deference, if Congress delegated authority to an agency to make determinations with “the force of law,”61 a court was required to defer to the agency’s interpretation of a statute if two conditions were met. First, the statute needed to be ambiguous, and second, the agency’s interpretation must have been reasonable.62 Under Skidmore deference, however, an agency’s interpretation of a statute is not “controlling,” but the court may be persuaded to adopt an agency’s interpretation depending on the “thoroughness evident in its consideration, the validity of its reasoning,” and its “consistency with earlier and later pronouncements.”63

The Third, Fourth, and Tenth Circuits have all, at one point, applied Chevron deference to the ARB’s interpretation of § 1514A.64 By contrast, the Second and Sixth Circuits have applied the less deferential Skidmore deference to the ARB’s interpretations of § 1514A.65 Finally, the Fifth, Eighth, and Ninth circuits have adopted or deferred to the ARB’s interpretation without specifying the level of deference used.66

1.  The Platone “definitively and specifically” standard

The genesis of this circuit split can be traced to the ARB’s ruling in Sylvester v. Parexel,67 in which the ARB abrogated the more rigid standard it had adopted in Platone v. FLYi, Inc.68 for establishing whether an employee engaged in a protected activity by reporting their employer’s conduct.

In Platone, Stacy M. Platone alleged that her employer, Atlantic Coast Airlines Holdings, Inc. (ACA Holdings), illegally retaliated against her after reporting a fraudulent billing scheme.69 Platone discovered billing discrepancies regarding “flight pay loss.”70 This was a process where the pilots’ union would reimburse the airline when pilots had to miss scheduled flights to attend union business.71 Platone uncovered that the pilots were deliberately scheduling flights on days they had mandatory union meetings,72 resulting in them receiving compensation for flights they never intended to fly.73 Platone communicated these concerns to her superiors, and she was fired.74

Platone filed a complaint with OSHA, but it was denied because OSHA determined that Platone had failed to establish that she engaged in a protected activity.75 The reviewing ALJ disagreed and concluded that Platone had indeed engaged in a protected activity when reporting her suspicions to her superiors.76

Upon review, the ARB reversed the ALJ’s decision.77 First, the ARB reasoned that Platone’s protected communications needed to relate “definitively and specifically” to 18 U.S.C. § 1514A(a)(1)’s enumerated categories.78 The ARB concluded that because Platone “did not provide[] her employer with specific information” relating to a violation under § 1514A, she failed to establish that she engaged in a protected activity.79 Additionally, the ARB noted that Platone failed to meet this standard because her communications to her supervisors did “not even approximate any of the basic elements of a claim of securities fraud—a material misrepresentation (or omission), scienter, a connection with the purchase, or sale of a security, reliance, economic loss, and loss causation.”80

Accordingly, Platone establishes two fundamental holdings. First, whistleblower-protected “communications must relate ‘definitively and specifically’” to a violation of one of the categories of laws enumerated in § 1514A.81 Second, to satisfy the “definitively and specifically” standard, the whistleblower must also approximate the elements of fraud at issue in their communications.82

2.  The Sylvester standard

In Sylvester, the ARB was again confronted with interpreting the protected activity prong of § 1514A.83 Neuschafer, a clinical research nurse employed by Paraxel, claimed to observe her co-workers reporting “false clinical data” for a study that generated substantial revenue for the company.84 Neuschafer voiced her concerns to the coordinator of the study,85 but her coordinator rebuffed her, stating that it was “no big deal.”86 Sylvester, a department manager, reported the same allegations of fraudulent conduct to the coordinator and her supervisor.87 In response, Paraxel issued formal warnings to both Neuschafer and Sylvester.88 Shortly after the warnings, both were terminated.89 Parexel’s justification? The company claimed that Sylvester was let go for not being a “team player,” and that Neuschafer was fired for having a “personality [that] did not fit in.”90

Both filed retaliation claims with OSHA, alleging that Paraxel’s decision to fire them amounted to illegal retaliation under SOX.91 After OSHA dismissed their complaints, they requested a hearing before an ALJ.92 The ALJ granted Paraxel’s motions to dismiss, reasoning that Sylvester’s and Neuschafer’s reports did not “definitively and specifically” relate to the laws enumerated in § 1514A and that the actions detailed in their reports could not be reasonably construed as illegal under SOX.93

The ARB reversed and remanded the ALJ’s decision on several grounds.94 First, the ARB emphasized that a complainant “need only express a ‘reasonable belief’ of a violation to engage in a SOX-protected activity.”95 The ARB reasoned that this standard “requires an examination of the reasonableness of a complainant’s beliefs, but not whether the complainant actually communicated the reasonableness of those beliefs to management or the authorities.”96 Furthermore, the ARB determined that the ALJ misapplied the reasonable belief standard by discounting as “irrelevant and immaterial” what the complainants might have believed and focusing entirely on the communications they made to their superiors.97 The ARB then addressed the applicability of the “definitively and specifically” standard in the SOX context.98 Specifically, the ARB reasoned that prescribing what must be included in a whistleblower’s communication was beyond the scope of, and in conflict with, § 1514A’s reasonable belief standard.99 Although the ARB conceded that the “definitively and specifically” standard had been utilized in several past ARB and circuit court decisions, it felt that the standard had “evolved into an inappropriate test and [was] often applied too strictly.”100

Following its rejection of the “definitively and specifically” standard, the ARB then addressed whether a complainant’s theory of fraud must approximate the elements of the SOX violation at issue to establish their belief was objectively reasonable.101 The ARB noted that the ALJ and several circuit courts had “misinterpreted” Platone when asserting that complainants needed to allege the specific elements of the underlying fraud at issue to be protected by SOX’s anti-retaliation provisions.102 It reasoned that mandating complainants “prove or approximate” the elements of a SOX violation contradicted the statute’s reasonable belief standard, as complainants are not required to “prove a violation of the substantive laws” underlying their claim.103 The ARB concluded that a “complainant can have an objectively reasonable belief of a violation of the laws in Section 806 . . . even if the complainant fails to allege, prove, or approximate specific elements of fraud.”104

Accordingly, Sylvester established three core holdings. First, Sylvester rejected the “definitively and specifically” standard.105 Second, in doing so, Sylvester rejected the requirement derived from the “definitively and specifically” standard that a whistleblower must approximate the elements of the fraud at issue in their communications to their superiors.106 Third, Sylvester rejected the requirement that a whistleblower’s theory of fraud must approximate the elements of the fraud at issue to establish objective reasonableness.107

III.  Status of Current Law

A.  The Circuit Split

Circuit courts have responded to the ARB’s holding in Sylvester in various ways. However, their standards can be broadly categorized into three approaches.

1.  The First, Fourth, Fifth, and Ninth Circuits apply a modified “definitively and specifically” standard and require approximation of the elements

In the Fourth, Fifth, and Ninth Circuits, the “definitively and specifically” standard seemingly remains operative.108 However, in recent years, each of these circuit courts has been hesitant to apply it. Instead, these circuit courts—and the First Circuit—require a complainant’s theory of fraud to approximate the elements of the fraud at issue to establish their belief is objectively reasonable. This is a subtle but significant shift from how a complainant must approximate elements under the “definitively and specifically” standard.

As discussed above, under the “definitively and specifically” standard, a complainant must approximate the elements of the fraud at issue in their communications to their superiors. By contrast, under this modified approach, a complainant need not approximate elements in their communications but instead must approximate the elements of the fraud at issue to establish objective reasonableness. Circuit courts have provided limited guidance as to what an employee must show to sufficiently approximate the elements of a given claim. However, as will be discussed below, the language used to describe the modified approach, as well as circuit courts’ application of it, indicates that whistleblowers must possess sufficient information to form an objectively reasonable belief as to each element of the underlying fraud at issue.

This modified approach originates from the First Circuit’s opinion in Day v. Staples, Inc.109 Despite the First Circuit never officially adopting the “definitively and specifically” standard, the First Circuit’s influence on how the Fourth and Ninth Circuits analyze objective reasonableness warrants its placement in this category. The Day court seemingly invented this modified approach by announcing that a “complaining employee’s theory” of fraud must “at least approximate the basic elements” of fraud to form an objectively reasonable belief that the employer engaged in fraudulent conduct.110 This standard’s application in Day provides invaluable insight into its operation.

In Day, Day suspected his employer had committed shareholder fraud.111 To establish securities fraud under section 10(b) and Rule 10b-5, the following elements must be satisfied: “(1) a material misrepresentation or omission; (2) scienter; (3) connection with the purchase or sale of a security; (4) reliance; (5) economic loss; and (6) loss causation.”112 The First Circuit reasoned that for Day’s theory of fraud to approximate the elements of securities fraud, he “must have an objectively reasonable belief that the company intentionally misrepresented or omitted certain facts to investors, which were material and which risked loss.”113 The conjunctive phrasing used in describing the standard implies that an employee must have a reasonable belief as to each element of securities fraud. Moreover, despite supplying several reasons as to why Day’s belief was not objectively reasonable,114 the court’s analysis indicates that Day’s inability to demonstrate materiality was dispositive in showing his belief was objectively reasonable.115 Indeed, the First Circuit concluded that Day’s complaints failed to “meet the materiality requirement” for establishing objective reasonableness.116 Although at least one district court in the First Circuit has since rejected this approach following Sylvester,117 the First Circuit has not revisited its prior holding in Day.

The Ninth Circuit’s approach to objective reasonableness mirrors the First Circuit’s. In Rocheleau v. Microsemi Corp.,118 the Ninth Circuit declined to determine whether it should defer to the ARB’s rejection of the “definitively and specifically” standard it had adopted in a prior holding.119 However, it held, like the First Circuit, that to have “an objectively reasonable belief” of fraud, the “employee’s theory of such fraud must at least approximate the basic elements” of the fraud at issue.120 The Ninth Circuit’s description of the standard,121 as well as its application of it, further supports the notion that to establish objective reasonableness under the modified approach, a complainant must have a reasonable belief as to each element of the fraud at issue.122

Rocheleau suspected their employer had engaged in shareholder fraud.123 When conducting its objective reasonableness analysis, the Ninth Circuit noted that Rocheleau was required to demonstrate an objectively reasonable belief that shareholders would suffer “significant losses”—referring to the economic loss element of a 10(b) violation—“to establish a prima facie case of reasonable belief in shareholder fraud.”124 The Ninth Circuit made a similar claim concerning materiality, concluding that the complainant’s belief was also not objectively reasonable because the information she had fell “far short of the materiality standard for shareholder fraud.”125

The Fourth Circuit has followed a seemingly identical path to the Ninth Circuit. In Welch v. Chao,126 the Fourth Circuit applied Chevron deference to the ARB’s interpretation of § 1514A from Platone.127 Then, in Northrop Grumman Systems Corp. v. United States Department of Labor,128 the Fourth Circuit was given the opportunity to revisit the standard following the ARB’s holding in Sylvester. Ultimately, the Fourth Circuit declined to resolve whether the “definitively and specifically” should be overruled,129 but it took a much stronger position relating to the approximation of elements. Despite having deferred to the ARB’s interpretations of § 1514A in the past, it reasoned that the “plain text of the statute” requires measuring the reasonableness of an employee’s belief against the laws enumerated in § 1514A.130 To satisfy this requirement, the Fourth Circuit held that complainants must “approximat[e]” the elements of the fraud at issue.131

Similar to the Ninth and Fourth Circuits, the Fifth Circuit, in Wallace v. Tesoro Corp.,132 declined to reconsider the “definitively and specifically” standard133 it had adopted in Allen v. Administrative Review Board.134 Despite not directly addressing whether a whistleblower’s theory of fraud must approximate the elements of the fraud at issue in Wallace, the Fifth Circuit supported a similar methodology in Allen.135 Presumably, it remains a requirement in the Fifth Circuit.

In conclusion, despite the First, Fourth, Fifth, and Ninth circuits applying a modified “definitively and specifically” standard, the Fourth, Fifth, and Ninth circuits have nonetheless declined to formally overrule the original “definitively and specifically” standard. Moreover, while the modified approach lowers legal hurdles for complainants compared to the “definitively and specifically” standard, it still requires an approximation of elements—albeit in a different form—and thus continues to contravene the ARB’s holding in Sylvester.

2.  The Third, Sixth, and Eighth Circuits exclusively rely on a totality of circumstances standard to measure objective reasonableness

The Third, Sixth, and Eighth Circuits are situated on the opposite side of the split. In Wiest v. Lynch,136 the Third Circuit applied Chevron deference to the ARB’s holding in Sylvester, repudiating the “definitively and specifically” standard established in Platone.137 The Third Circuit also agreed with the ARB’s reasoning in Sylvester that requiring any approximation of specific elements would contradict the statute’s enumerated “reasonable belief” standard.138 The Third Circuit explained that an “employee may not have access to information necessary to form a judgment on certain elements of a generic fraud claim such as scienter or materiality, and yet have knowledge of facts sufficient to alert the employer to fraudulent conduct.”139 It emphasized that an employee should not be “unprotected from reprisal because she did not have access to information sufficient to form an objectively reasonable belief” that specific elements of a statutory provision were satisfied.140 Finally, the Third Circuit endorsed a broad test in evaluating objective reasonableness, concluding that a belief is objectively reasonable when a person with the “same training and experience as the employee would believe that the conduct implicated in the employee’s communication could rise to the level of a violation of one of the enumerated provisions in Section 806.”141

In Rhinehimer v. U.S. Bancorp Investments, Inc.,142 the Sixth Circuit also rejected the “definitively and specifically” standard143 and applied Skidmore deference to the entirety of the ARB’s holding in Sylvester.144 The Sixth Circuit, like the Third Circuit, also rejected the modified approach developed in Day.145 Instead, the Sixth Circuit reasoned that an employee’s reasonable belief must be evaluated under the totality of the circumstances “known (or reasonably albeit mistakenly perceived) by the employee at the time of the complaint,” which must consider the employee’s training and experience.146 The Sixth Circuit’s application of the Sylvester standard warrants a thorough examination as it demonstrates its stark contrast with the modified approach (applied by the First, Fourth, and Ninth Circuits) and provides much-needed clarity into its operation. Additionally, the facts of this case are critical in Part IV, as they are used to demonstrate the efficacy of this Comment’s proposed standard.

Rhinehimer was a financial advisor at U.S. Bancorp Investments Inc. (USBII) who advised Purcell on estate planning.147 Rhinehimer worked on Purcell’s behalf for ten years and considered him to be a “conservative investor.”148 In 2009, Rhinehimer went on disability leave, leaving the management of his client’s funds to his colleague Patrick Harrigan.149 However, Purcell had reached his mid-90s, and Rhinehimer noticed that Purcell was showing signs of cognitive decline.150 Rhinehimer testified that in light of Purcell’s “diminished capacity,” he told Harrigan not to execute trades on his behalf.151 Despite these warnings, Rhinehimer was notified that Harrigan purchased $250,000 worth of a fund that was inconsistent with Purcell’s investment strategy, but more profitable to the firm.152

After learning about this transaction, Rhinehimer called his supervisor, Jeff Harper.153 He told Harper the trades were “unsuitable” for Purcell and that they “could reflect poorly on everyone involved.”154 Harper dismissed Rhinehimer’s concerns and told him to “stay out of it.”155 Soon after, Rhinehimer was notified of another trade placed by Harrigan on Purcell’s behalf, this time for $650,000 in an allegedly riskier fund.156 Rhinehimer contacted Harper and testified he was again told to “stay out of this matter.”157 He then emailed the supervising principal, Susan Gattermeyer, writing that the “trades should have NEVER been placed let alone approved.”158 When Rhinehimer returned, he was given a formal warning from Harper and Gattermeyer.159 John Eckman, the division manager, then asked Rhinehimer whether he “liked his job” and if he had “consulted an attorney.”160 After Rhinehimer conceded that he had, he was told his career at the firm was “over” and that if he pursued legal action, he would be unable to find employment anywhere in the city.161 Rhinehimer was then hastily given a demanding performance improvement plan, failed to meet its target numbers, and was terminated.162

Rhinehimer alleged that he was fired in retaliation for reporting unsuitability fraud.163 USBII’s primary contention was that Rhinehimer did not have sufficient information to “form a reasonable belief that USBII intentionally or with reckless disregard misrepresented or omitted material facts” to Purcell.164

Although the Sixth Circuit conceded that Rhinehimer “had no specific knowledge” of Harrigan’s intent or whether he omitted or misrepresented material facts, it held that such deficiencies were “immaterial.”165 It noted the proper focus was on the “employee’s reasonable belief” and that such a belief “required no subset of findings that the employee had a justifiable belief as to each of the legally-defined elements of the suspected fraud.”166 Ultimately, the Sixth Circuit concluded that, considering the totality of the circumstances, Rhinehimer had sufficient information to form an objectively reasonable belief that the trades constituted unsuitability fraud.167

Finally, in Beacom v. Oracle America Inc.,168 while the Eighth Circuit did not thoroughly analyze what constitutes an objectively reasonable belief under SOX, it adopted Sylvester.169

In sum, these circuits fully adopted the Sylvester standard, both overruling the “definitively and specifically” standard in their respective circuits and rejecting the modified approach outlined above.

3.  The Second and Eleventh Circuits apply a relaxed version of the modified “definitively and specifically” standard

In the wake of Sylvester, the Second Circuit seemingly opted for a middle approach—landing in between the modified “definitively and specifically” standard and the Sylvester standard. In Nielsen v. AECOM Technology Corp.,170 the Second Circuit afforded Skidmore deference to the ARB’s rejection of the “definitively and specifically” standard in Sylvester.171 However, unlike the Third and Sixth Circuits, the Second Circuit was “less certain whether the ARB was correct in concluding that a § 1514A complaint need not even ‘approximate specific elements’ of the enumerated provisions allegedly violated . . . .”172 Although the Second Circuit conceded that a departure from the “definitively and specifically” standard was necessary as “[m]any employees are unlikely to be trained to recognize legally actionable conduct,”173 it maintained that the reasonableness of the whistleblower’s belief “cannot exist wholly untethered” from § 1514A’s specific provisions.174

In Ronnie v. Office Depot,175 the Eleventh Circuit took a similar approach. The Eleventh Circuit rejected that an employee must “‘definitively and specifically’ prove each element of fraud”176 and endorsed an approach that merely requires “some showing of scienter, materiality, reliance or loss” to receive protection under SOX.177 Although the Eleventh Circuit attributed this interpretation to the Second and Fourth Circuits,178 full attribution to the Fourth Circuit appears slightly misplaced. As discussed above, the wording of the Fourth Circuit’s standard implies a requirement of approximating each of the elements of a fraud claim rather than just some.179 This is further supported by: (1) the Fourth Circuit’s standard originating from the First Circuit’s holding in Day;180 (2) a recent district court opinion within the First Circuit interpreting Day as requiring an employee “approximate each element of fraud”;181 and (3) the Fourth Circuit noting that its interpretation aligns with the Ninth Circuit’s application in Rocheleau, which relied on the First Circuit’s interpretation when describing its own standard.182

At bottom, both circuits unequivocally reject the “definitively and specifically” standard but fall short of fully adopting the ARB’s holding in Sylvester. Moreover, although these circuits emphasize the need to reference § 1514A’s statutory provisions in an objective reasonableness inquiry, they also decline to explicitly adopt the modified approach.

IV.  Courts Should Reject the Dominant Standards and Adopt a Unifying Approach

This Comment advances three key arguments. First, it argues that the ARB’s conclusion—that the “definitively and specifically” standard should be abrogated—is “persuas[ive]” and thus entitled to Skidmore deference.183 Second, it contends that both the modified approach and the Sylvester standard are misaligned with SOX and exhibit fundamental flaws that undermine their practical application. Third, this Comment proposes a unifying framework, arguing that circuit courts should adopt a totality of the circumstances test, which would require an employee to present sufficient information to form an objectively reasonable belief as to at least one of the essential elements of the suspected fraud.

A.  Courts Should Unequivocally Reject the “Definitively and Specifically” Standard

The first unavoidable step in unifying the existing circuit split is a blanket rejection of the “definitively and specifically” standard.

The remaining circuit courts that have declined to repeal the “definitively and specifically” standard—the Fourth, Fifth, and Ninth Circuits—should adopt the ARB’s rejection of the “definitively and specifically” standard as persuasive under Skidmore. To be clear, this Comment does not advocate that Skidmore deference be applied to the ARB’s entire holding in Sylvester, but rather that such deference should be afforded solely to the ARB’s rejection of the “definitively and specifically” standard. This limited application of Skidmore deference is justified when only certain aspects of an opinion are “persua[sive].”184 This also mirrors the Second Circuit’s approach in Nielsen.185 Section IV.B.2 will thoroughly address why Skidmore deference should not be applied to the remainder of the Sylvester opinion. This section, however, focuses only on why the ARB’s rejection of the “definitively and specifically” standard should be entitled to Skidmore deference.

As discussed above, over half of the U.S. Courts of Appeals have applied some form of administrative deference to the ARB’s interpretations of § 1514A, including the Fourth Circuit. Although in Loper Bright,186 the Supreme Court overruled Chevron,187 it left Skidmore intact, emphasizing that courts may “seek aid from the interpretations of those responsible for implementing particular statutes.”188 Indeed, the persuasiveness of the ARB’s reasoning in Sylvester—in rejecting the “definitively and specifically” standard—is precisely why such an interpretation of § 1514A similarly falls neatly within the Court’s analytical framework espoused in Loper Bright.189 Simply put, SOX’s text, design, and purpose all preclude the “definitively and specifically” standard from remaining good law.

The ARB’s rejection of the “definitively and specifically” standard is an excellent candidate for Skidmore deference. As discussed above, the critical inquiry in evaluating whether an agency interpretation is entitled to Skidmore deference is determined by its “power to persuade.”190 Courts often focus on whether the agency’s interpretation is consistent with the “statute’s text and design” and “congressional purpose” of the Act.191  The ARB’s reasoning and conclusion that the “definitively and specifically” standard should be abrogated readily clears these hurdles.

First, a brief examination of the statute’s text illustrates a clear contradiction between the “definitively and specifically” standard and the plain language of § 1514A. The requirement that whistleblowers must—in their protected communications—reference a specific violation or category of violations enumerated under § 1514A and approximate the elements of that violation in those communications far exceeds the bounds of a “reasonable belief” standard. As explained by the ARB in Sylvester, the “reasonable belief standard requires an examination of the reasonableness of the complainant’s beliefs, but not whether the complainant actually communicated the reasonableness of those beliefs to management or the authorities.”192 The Act’s legislative history further supports this interpretation, as Congress explicitly stated that the reasonable belief standard in § 1514A “is intended to impose the normal reasonable person standard.”193

The “definitively and specifically” standard’s incompatibility with SOX can be explained, in part, by examining the origins of the standard. As identified by the ARB, the “definitively and specifically” standard was developed in “cases arising under the Energy Reorganization Act” (ERA).194 Broadly speaking, the ERA is similar to SOX in protecting whistleblowers from retaliation for engaging in specific activities enumerated in the statute.195 However, unlike SOX, the ERA includes a catch-all provision protecting employees who “assist or participate in . . . ‘any other action [designed] to carry out the purposes’” of the Act.196 In light of the broad reach of the catch-all provision, courts interpreted it as requiring that “an employee’s actions implicate safety ‘definitively and specifically’” for those actions to qualify as a whistleblower-protected activity.197

However, no catch-all provision can be found in SOX’s § 1514A provision, which lists the applicable laws and regulations.198 Applying the “definitively and specifically” standard to a statutory scheme devoid of an analogous provision—which served as the standard’s primary justification—is inappropriate. Put plainly, this standard conflicts with SOX’s textual language and statutory design.

Finally, this stringent standard is also in tension with SOX’s purpose, as it inhibits the Act’s goal of detecting and preventing financial catastrophes. As discussed above, one of Congress’s fundamental objectives in enacting SOX was not only to “expose existing fraud, i.e., conduct satisfying the elements of a fraud claim, but also to prevent potential fraud in its earliest stages.”199 Such a purpose is undermined by requiring a complainant to (1) have the knowledge of a securities lawyer to know what specific statute or category of rules under § 1514A should be referenced in their communications, (2) understand the underlying elements of a given statute, and (3) have sufficient information to “approximate” each element of the claim before an actual violation may have even occurred.200 Even if one were convinced that, at a minimum, objective reasonableness requires approximation of the elements, this would still not justify requiring approximation at the reporting stage. Indeed, such a requirement would, at best, delay or, at worst, eliminate the reporting of potentially imminent and catastrophic fraud by incentivizing employees to wait until they were certain that any concern they conveyed would check every box of a fraud claim.

One potential counterargument is that the ARB’s interpretation should be given limited weight as it remains unclear—or at the very least unsettled—which agency has interpretive authority over § 1514A. Despite many circuit courts having applied Chevron deference in the past to the ARB’s interpretations of § 1514A, in Lawson v. FRM LLC,201 the Supreme Court “declined to decide whether ARB’s interpretations of the statute were entitled to Chevron deference”202 because it agreed with ARB’s conclusions in the case.203 In dissent, Justice Sonja Sotomayor went even further, insisting that it is the SEC, not the Department of Labor, that has interpretive authority over § 1514A.204

Nonetheless, several mitigating factors weigh in favor of Skidmore’s applicability. First, as the adjudicator of SOX claims, the ARB’s interpretations of § 1514A certainly implicate their expertise. Second, the arguments made by the ARB are persuasive. Third, in Lawson, even Justice Sotomayor maintained that the ARB’s interpretation of § 1514A—albeit on a different issue—could be entitled to “respect” under Skidmore provided their interpretation was persuasive.205 Finally, Skidmore’s applicability is supported by circuit court precedent. As discussed above, the Second and Sixth Circuits applied Skidmore deference to the ARB’s rejection of the “definitively and specifically” standard.206

Another argument against affording Skidmore deference is that the ARB’s rejection of the “definitively and specifically” standard represents a complete reversal in position. As discussed above, inconsistency between “earlier and later pronouncements” weighs against Skidmore’s application.207 However, this concern is mitigated by the fact that the ARB has only reversed its position once, and by the Second and Sixth Circuits’ application of Skidmore deference to this very issue despite the change in position.208

Finally, it may be argued that rejecting the “definitively and specifically” standard ignores the necessity for an employer “to actually perceive that a whistle has been blown.”209 There is no denying that a potential consequence of rejecting the “definitively and specifically” standard is that it may make it more difficult for employers to discern when reports of troubling conduct actually rise to the level of fraud. It may be argued that, without more clarity, SOX’s effectiveness at preventing disasters would be undermined. After all, if an employer is not truly on notice of a potential crisis, how can they prevent it? As legitimate as these concerns are, they may be alleviated by simply requiring that a complainant’s “intra-corporate” communications “relate in an understandable way to one of the stated provisions” in § 1514A.210 This ensures that employers will still be alerted to potential fraud while also ensuring employees will not be dissuaded from reporting it.

In sum, the ARB’s rejection of the “definitively and specifically” standard is aligned with SOX’s plain language, design, and purpose. Accordingly, it should be adopted by other circuits as persuasive under Skidmore.

B.  Both the Modified Approach and the Sylvester Standard Must Be Abandoned

1.  The modified approach inappropriately extends a complete “approximation of the elements” requirement for analyzing objective reasonableness

Having established that the conventional “definitively and specifically” standard must be abandoned, the focus shifts to determining whether courts should require a whistleblower’s “theory of fraud” to approximate the elements of a fraud claim to be objectively reasonable. One argument for abandoning this modified approach is that it rests on a shaky legal foundation, as it’s rooted in the First Circuit’s “misinterpret[ation]” of the ARB’s holding in Platone.211 It appears the First Circuit “extended” the now widely rejected “definitively and specifically” standard—which addressed an employee’s communications to their employer—to evaluate the objective reasonableness of an employee’s belief.212 Indeed, upon close examination of the First, Fourth, and Ninth Circuits’ opinions on the matter, it becomes clear that a subtle but significant change occurred when the First Circuit in Day seemingly adopted the ARB’s holding in Platone.

As discussed above, the notion that an employee must approximate elements originates from the ARB’s holding in Platone. However, in Platone, the ARB discussed the complainant’s failure to approximate elements in the context of the employee’s “revelations” to her superiors.213 By contrast, in Day, the First Circuit declared that “[t]o have an objectively reasonable belief there has been shareholder fraud, the complaining employee’s theory of such fraud must at least approximate the basic elements of a claim of securities fraud.”214 Although Platone was not cited by the First Circuit in support of this proposition, the statement’s uncanny resemblance to Platone’s language caught the attention of the Sixth Circuit. Indeed, the Rhinehimer court noted that “[t]he First Circuit borrowed Platone’s language” when it announced the aforementioned rule, “extend[ing] the ARB’s reasoning to inform the standard for establishing the objective reasonableness of an employee’s belief.”215 Following Day, the Fourth and Ninth Circuits proliferated this interpretation in their respective circuits by relying heavily on Day,216 or quoting Day word-for-word,217 when establishing their own standards.

In addition to its questionable origins and uncertain application, even this more limited approach is in tension with Sylvester. In Sylvester, the ARB specifically questioned this novel interpretation, stating the modified approach constituted a “misinterpret[ation]” of Platone.218 Indeed, as noted by the Sixth Circuit, in Sylvester, the ARB “specifically rejected the requirement that a complainant’s theory of impropriety must closely imitate the elements of the pertinent fraud.”219 However, more critical than this standard’s inconsistency with the ARB’s latest interpretation of § 1514A is that it shares a fundamental flaw associated with the “definitively and specifically” standard: it is misaligned with SOX’s purpose.

Specifically, the modified approach likewise disincentivizes the reporting of imminent fraud and substantially increases the requisite information an employee must have to satisfy an objective reasonableness inquiry. Rhinehimer demonstrates this deficiency, as it is a clear example of an employee observing extremely alarming conduct while lacking sufficient knowledge to approximate each element of the fraud at issue. Rhinehimer lacked any specific knowledge of scienter and materiality.220 His retaliation claim would have, in all likelihood, failed under the modified approach’s objective reasonableness standard. Yet, Rhinehimer illustrates the paradoxical position similarly situated employees face under the modified standard.

Specifically, if one were in Rhinehimer’s position, how would it have even been possible to acquire information sufficient to form an objectively reasonable belief as to scienter or materiality? Rhinehimer explicitly told his colleague not to execute trades on his client’s behalf due to his client’s “declining faculties.”221 He then discovered his colleague purchased $250,000 worth of a fund inapposite to his client’s investment strategy.222 Rhinehimer immediately reported this to his supervisor, only to be told to “stay out of it.”223 When the colleague purchased another $650,000 worth of an even riskier fund, Rhinehimer “immediately” called his supervisor again.224 The response? He was told, once again, to “stay out” of the matter.225 A mere three days following his return, he was issued a warning for reporting this alarming conduct,226 and soon after, was terminated.227

Returning to the initial question: at what juncture could Rhinehimer have acquired sufficient information to form an objectively reasonable belief about his colleague’s intent or whether the advice provided to his client constituted a material misrepresentation? Rhinehimer went well beyond what could reasonably be expected of an investment advisor in his position. He reported every instance of troubling conduct, consistently demanded more information, and was rebuffed time and time again. Perhaps, without knowledge of his colleagues’ intent or knowledge of whether any representations made were material, he may have been mistaken. However, as even the Fifth and Ninth Circuits concede, “Congress chose statutory language which ensures that ‘an employee’s reasonable but mistaken belief’”228 is protected under SOX.

Consider what an employee like Rhinehimer would do knowing he could never obtain the information necessary to be protected from retaliation. The modified approach overlooks the basic realities of working within a complex corporate entity where employees who voice concerns about fraudulent activity can be shut out or pushed out before they can gather enough information to satisfy the objective reasonableness standard. It takes little imagination to envision the disastrous consequences that may ensue if employers could shield themselves from liability simply by cutting off information flow or firing employees who raise concerns about a potentially fraudulent transaction. Indeed, as discussed above, this behavior was endemic at Enron, and the precise reason Congress included historic anti-retaliation protections for whistleblowers in SOX. On the other hand, despite its origins, this modified test may present a realistic compromise between the diametrically opposed standards articulated in Platone and Sylvester.

2.  The Sylvester standard is not sufficiently tethered to SOX’s statutory provisions

One legitimate concern regarding the Sylvester standard is that it is “impossibly vague.”229 Indeed, in Sylvester, the ARB focused almost exclusively on “what is not required for an employee to allege protected conduct” rather than describing what, if anything, an employee must allege.230 As previously noted, the statutory language unequivocally requires an employee to have a reasonable belief that their employer violated one of § 1514A’s enumerated provisions. It is hard to imagine how this could conceivably be the case if a SOX complainant’s theory of fraud does not approximate a single element of any enumerated provision. As elucidated by the dissent in Wiest, under the Sylvester standard, “virtually any internal questioning of an accounting mistake or judgment call” would effectively make an employee a protected whistleblower under SOX.231 This echoes the concerns conveyed by the Second Circuit that it seems untenable for a whistleblower’s belief to exist “wholly untethered” from § 1514A’s specific provisions.232 Indeed, the ARB’s reasoning in Sylvester that a court’s objective reasonableness analysis can be completely siloed from the underlying elements of § 1514A’s statutory provisions is precisely why the Second Circuit did not feel comfortable affording Skidmore deference to the entirety of the Sylvester holding.233 The Supreme Court’s objective reasonableness analysis in the Title VII context further demonstrates why this aspect of the Sylvester holding is problematic and ultimately unpersuasive under Skidmore.

As the “concept of ‘reasonable belief’” used in the whistleblower context was “imported” from “retaliation law under Title VII,” case law in this area can provide uniquely valuable guidance in addressing this confounding issue.234 In Clark County School District v. Breeden,235 the Supreme Court assessed whether an individual reasonably believed their employer violated Title VII.236 When the Supreme Court conducted its objective reasonableness inquiry, it unequivocally measured the reasonableness of the employee’s belief against the standard for establishing a substantive violation of Title VII.237 Although the Supreme Court was not explicit in requiring the complainant to approximate each element of the alleged underlying Title VII violation, the Court’s analysis nonetheless lends strong support to the argument that courts must at least consider the elements of a fraud claim when evaluating objective reasonableness. This, in conjunction with the practical issues inherent in the Sylvester standard discussed above, forecloses affording Skidmore deference to the entirety of the Sylvester holding.

However, fundamental differences in the circumstances typically faced by Title VII retaliation complainants compared to SOX retaliation complainants warrant careful consideration. As in Breeden, a Title VII retaliation complainant is often not only the subject of alleged retaliation but also the subject of the underlying conduct that the employee claims they were retaliated against for reporting. Consequently, producing sufficient information to form an objectively reasonable belief as to the elements of a Title VII violation—assuming the claim has merit—is not as practically difficult. They are experiencing the violative conduct firsthand.

By contrast, in a SOX retaliation claim, although the complainant likewise alleges retaliation, they are, without exception, not the subject of the underlying violative conduct. Put simply, a SOX whistleblower alleging they were fired in retaliation for reporting securities fraud is not the individual being defrauded. Functionally, the SOX whistleblower acts more akin to a conscientious objector to an employer’s actions, as opposed to the actual victim reporting the employer’s conduct. This dynamic, paired with complex corporate structures that can silo employees from key decisions and complete information, creates far higher barriers for SOX complainants to acquire sufficient information to form a reasonable belief as to the elements of the violative conduct at issue—even when legitimate concerns exist. Although these practical considerations do not justify a complete departure from measuring objective reasonableness against the elements of § 1514A’s statutory provisions, they highlight the need for increased flexibility in evaluating objective reasonableness in the SOX context to be sufficiently aligned with the Act’s purpose.

In sum, both the overly stringent approach currently utilized by the First, Fourth, Fifth, and Ninth Circuits and the excessively lenient approach employed by the Third, Sixth, and Eighth Circuits exhibit flaws that undermine their alignment with SOX and practical application. Accordingly, a compromise must be explored to bridge this divide and, ultimately, unite the circuit courts.

C.  Courts Should Adopt a Unifying Standard That Accounts for the Deficiencies Evident in the Prevailing Approaches

The crux of formulating the optimal objective reasonableness standard is ensuring the proposed standard would address the legitimate concerns of circuit courts situated on opposite sides of the split. The proposed solution must address: (1) the statutory grounding concerns of the Sylvester standard voiced by circuits who employ the “definitively and specifically” standard or modified approach, (2) the judicial administrability issues at the heart of the Sylvester standard, (3) the practical issues whistleblowers face surrounding information gaps inherent in the modified approach, and (4) proper alignment with the fundamental disaster prevention purpose of SOX.

In light of these considerations, when evaluating objective reasonableness, circuit courts should adopt a totality of the circumstances test where an employee must present sufficient information to form an objectively reasonable belief as to at least one of the essential elements of the fraud at issue. To be clear, this requirement would function as a necessary but not sufficient condition. In other words, establishing objective reasonableness as to a single element of the underlying fraud would not guarantee that a retaliation claim would succeed. As objective reasonableness is “necessarily fact-dependent, varying with the circumstances of the case,” the totality of the circumstances must be considered on a case-by-case basis to ensure a whistleblower’s belief is reasonable.238 However, a claim would not be thrown out by mere failure to form an objectively reasonable belief as to each element of the fraud at issue—as would be the case under the modified approach. Conversely, a claim would be barred if the whistleblower failed to show sufficient information to form an objectively reasonable belief regarding any element of the fraud at issue—which may not necessarily be the case under the Sylvester standard.

Precedent supports the proposed standard in both SOX-specific and analogous contexts. First, while the proposed standard’s specificity and mechanics are unique, it merely formalizes the approach outlined in Ronnie, which requires “some showing of scienter, materiality, reliance, or loss in order to enjoy SOX protection.”239 The natural inference to be drawn from this disjunctive phrasing is that a complainant would need to present sufficient evidence to demonstrate an objectively reasonable belief as to at least one of the elements of the fraud at issue, not each element. Of course, given the litany of issues stemming from the ARB’s and circuit courts’ inconsistent and ambiguous interpretations of § 1514A, a clearly defined standard is essential.

Moreover, as discussed above, the “concept of ‘reasonable belief’” in SOX stems from retaliation law in the Title VII context.240 The Court’s analysis in Breeden aligns with the proposed standard because it tethered its objective reasonableness analysis to the substantive law at issue, but it also recognized the importance of context in an objective reasonableness inquiry. In Breeden, although the Court assessed the reasonableness of the respondent’s belief in light of the relevant substantive law, it did not hold that Title VII complainants must demonstrate a reasonable belief as to every discrete element of the underlying violation.241 Indeed, the Court in Breeden “evaluated both the underlying substantive law as well as what a reasonable person would believe about the law,”242 underscoring the importance of context and looking beyond a rigid element-by-element approach. Moreover, the Tenth Circuit, when discussing Breeden, observed that “[a]t some point . . . if the substantive law directs and solely determines the inquiry, an objectively reasonable belief requires an actual violation.”243 This acknowledges the unfair burden placed on complainants by imposing an element-by-element analysis for evaluating objective reasonableness.

In sum, by requiring that courts measure the employee’s belief against the provisions of § 1514A, this approach is sufficiently aligned with the Supreme Court’s objective reasonableness analysis in the Title VII context, yet adaptive to the practical difficulties whistleblowers face in the SOX context.

Applying this standard to the facts of Rhinehimer will provide clarity and demonstrate the efficacy of such an approach. In Rhinehimer, as discussed above, the plaintiff alleged his termination was retaliation in response to his reports of unsuitability fraud.244 The Rhinehimer court did not list all the elements required to prove a claim of unsuitability fraud, but the case it cited245 in providing its broad definition is more explicit:

A § 10(b) unsuitability claim has five elements: (1) that the securities purchased were unsuited to the buyer’s needs; (2) that the defendant knew or reasonably believed the securities were unsuited to the buyer’s needs; (3) that the defendant recommended or purchased the unsuitable securities for the buyer anyway; (4) that, with scienter, the defendant made material misrepresentations (or, owing a duty to the buyer, failed to disclose material information) relating to the suitability of the securities; and (5) that the buyer justifiably relied to its detriment on the defendant’s fraudulent conduct.246

Applying the proposed standard to the facts of the case, Rhinehimer’s belief would have been objectively reasonable. Under the proposed standard, Rhinehimer would only need sufficient information to form an objectively reasonable belief as to at least one of the elements of unsuitability fraud. Although he did not have sufficient information to form an objectively reasonable belief as to materiality or scienter, based on his ten-year relationship with Purcell and intimate knowledge of Purcell’s investment strategy, he certainly would have had sufficient information to reasonably believe the purchases were unsuitable to Purcell’s needs. Likewise, given his preemptive communications with Harrigan, Rhinehimer would also likely have sufficient information to form a reasonable belief that Harrigan knew or reasonably believed the securities were unsuited to Purcell’s needs. Having satisfied this initial inquiry, the focus would shift to a standard totality of the circumstances analysis. As explained by the Sixth Circuit, “[b]ased on the totality of these circumstances, the evidence was more than sufficient” to find that Rhinehimer “reasonably believed the trades constituted unsuitability fraud.”247

This brief exercise illustrates several unique advantages of the proposed standard. First, by mandating that whistleblowers have sufficient information to form an objectively reasonable belief as to at least one element of the fraud at issue, the proposed standard would assuage concerns expressed by the Second and Fourth Circuits that a whistleblower’s belief “cannot exist wholly untethered”248 from the enumerated provisions in § 1514A. In sum, this ensures alignment with the text and design of § 1514A.

Second, by setting a clear floor for establishing objective reasonableness, the proposed standard alleviates the dissent’s fears in Wiest of an “impossibly vague” standard that could lead to an unwarranted rise in claims qualifying under the SOX.249 As the single-element requirement is more stringent than the Sylvester standard, it ensures that frivolous or baseless claims are promptly dismissed. Additionally, the proposed standard’s well-defined structure provides courts with much-needed clarity from an administrability perspective.

Third, the proposed standard alleviates the central concerns expressed by the Third and Sixth Circuits. Admittedly, the single-element requirement imposes a modest increase in what a whistleblower must show compared to the Third and Sixth Circuits’ standard. However, it still addresses their primary concerns. As demonstrated in the example above, a complainant will not be prevented from receiving protection under SOX merely because they do not have “access to information sufficient to form an objectively reasonable belief” as to any particular element of the fraud at issue.250 Moreover, under the proposed standard’s flexibility as it relates to approximating elements, a whistleblower’s “reasonable but mistaken belief” will still be protected.251

Fourth, the proposed standard aligns with the disaster prevention purpose of SOX. The broad scope of the proposed standard will protect a far greater number of whistleblowers from retaliation than the modified approach. This, in turn, will incentivize whistleblower reporting and reduce the likelihood of another crisis like Enron.

V.  Conclusion

The precise evil Congress aimed to address in enacting SOX was systemic fraud. Although the harm that can be created from a single instance of securities fraud or unsuitability fraud should not be minimized, the dangers of systemic fraud are far greater. Like a virus, systemic fraud spreads well beyond one victim, infecting potentially thousands of other employees within a company, as well as its shareholders and clients. When left unchecked by a “corporate code of silence” exacerbated by an overly stringent legal standard, the danger it poses only escalates. Whistleblowers serve as our society’s first line of defense. They are the very first to see the symptoms of systemic fraud. When these symptoms arise, employees must feel comfortable reporting them, even in the absence of complete information. The proposed standard achieves these goals while operating well within the bounds of § 1514A’s statutory language.

• 1S. Rep. No. 107-146, at 10 (2002).
• 2Id.
• 3Pub. L. No. 107-204, § 806, 116 Stat. 745, 802–04 (2002) (codified at 18 U.S.C. § 1514A).
• 4Richard E. Moberly, Unfulfilled Expectations: An Empirical Analysis of Why Sarbanes-Oxley Whistleblowers Rarely Win, 49 Wm. & Mary L. Rev. 65, 67 (2007).
• 5See id.
• 6Id. at 153.
• 7Id. at 113.
• 818 U.S.C. § 1514A(a)(1).
• 9See Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009) (“To have an objectively reasonable belief there has been shareholder fraud, the complaining employee’s theory of such fraud must at least approximate the basic elements of a claim of securities fraud.”); Northrop Grumman Sys. Corp. v. U.S. Dep’t of Labor, 927 F.3d 226, 235 n.9 (4th Cir. 2019) (“[T]he reasonableness of an employee’s belief must be measured against the specific statutory provisions in § 1514A(a)(1) requiring approximation of the elements of shareholder fraud in this case.”); Rocheleau v. Microsemi Corp., 680 Fed. Appx. 533, 535 (9th Cir. 2017) (“[T]o have an objectively reasonable belief there has been shareholder fraud, the complaining employee’s theory of such fraud must at least approximate the basic elements of a claim of securities fraud.” (quoting Van Asdale v. Int’l Game Tech., 577 F.3d 989, 1001 (9th Cir. 2009) (quoting Day, 555 F.3d at 55))).
• 10Wiest v. Lynch, 710 F.3d 121, 132 (3d Cir. 2013).
• 11Seeid. at 133 (“[R]equiring a complainant to prove or approximate the specific elements of a securities law violation contradicts the statute’s requirement that an employee have a reasonable belief of a violation of the enumerated statues.” (quoting Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *53)); Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 811 (6th Cir. 2015) (agreeing with the Third Circuit that an employee need not approximate elements); Beacom v. Oracle Am., Inc., 825 F.3d 376, 380 (8th Cir. 2016) (adopting the Sylvester standard).
• 12Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 n.6 (2d Cir. 2014).
• 13See Ronnie v. Off. Depot, LLC, 81 F.4th 1345, 1351 (11th Cir. 2023).
• 14See Geoff Schweller, New Study Shines Light on Chilling Effect of Whistleblower Retaliation, Whistleblower Network News (May 21, 2024), https://whistleblowersblog.org/corporate-whistleblowers/new-study-shines-light-on-chilling-effect-of-whistleblower-retaliation/ [‌p‌e‌r‌m‌a‌.‌c‌c‌/‌F‌8‌9‌K-2KW5]; see generally Jawad Khan et al., Examining Whistleblowing Intention: The Influence of Rationalization on Wrongdoing and Threat of Retaliation, 19 Int’l. J. Env’t. Res. Pub. Health 1752 (2022).
• 15Schweller, supra note 14.
• 16Elletta Sangrey Callahan et al., Whistleblowing: Australian, U.K., and U.S. Approaches to Disclosure in the Public Interest, 44 Va. J. Int’l L. 879, 882 (2004).
• 17See Michael A. Perino, Enron’s Legislative Aftermath: Some Reflections on the Deterrence Aspects of the Sarbanes-Oxley Act of 2002, 76 St. John’s L. Rev. 671, 671 (2002).
• 18S. Rep. No. 107-146, at 3 (2002).
• 19CNN Editorial Research, Enron Fast Facts, CNN (Apr. 10, 2024), h‌t‌t‌p‌s‌:‌/‌/‌w‌w‌w‌.‌c‌n‌n‌.‌c‌o‌m‌/‌2013/07/02/us/enron-fast-facts/index.html [perma.cc/V7EZ-6KT2].
• 20Levin Center, Portraits in Oversight: Congress and the Enron Scandal, https://levin-center.org/what-is-oversight/portraits/congress-and-the-enron-scandal/ [perma.cc/5RYT-‌Q‌7‌H‌R‌]‌.
• 21Carol Graham et al., Cooking the Books: The Cost to the Economy, Brookings Inst. (Aug. 1, 2002), https://www.brookings.edu/articles/cooking-the-books-the-cost-to-the-economy/ [‌p‌e‌r‌m‌a‌.‌c‌c‌/‌8‌2‌3T-8RYZ].
• 22S. Rep. No. 107-146, at 4–5 (2002).
• 23Id. at 5.
• 24Id.
• 25Id.
• 26Id.
• 27Richard E. Moberly, Sarbanes-Oxley’s Structural Model to Encourage Corporate Whistleblowers, 2006 BYU L. Rev. 1107, 1108 (2006).
• 28Moberly, supra note 4, at 74–75.
• 29S. Rep. No. 107-146, at 5 (2002).
• 30Pub. L. No. 107-204, § 806, 116 Stat. 745, 802–04 (2002) (codified at 18 U.S.C. § 1514A).
• 31Terry Morehead Dworkin, SOX and Whistleblowing, 105 Mich. L. Rev. 1757, 1760 (2007).
• 32S. Rep. No. 107-146, at 5 (2002).
• 33See Dworkin, supra note 31.
• 34Geoff Schweller, Internal Whistleblowers Make up over 90% of Corporate Retaliation Cases, Whistleblower Network News (Jan. 16, 2024), https://whistleblowersblog.org/corporate-whistleblowers/sec-whistleblowers/internal-whistleblowers-make-up-over-90-of-corporate-retaliation-cases/ [perma.cc/XB89-NP92] (citing Stephen M. Kohn et al., Whistleblower Disclosures: An Empirical Risk Assessment (Feb. 13, 2024) (unpublished working paper) (on file with Social Science Research Network)).
• 35583 U.S. 149 (2018).
• 36See id. at 152.
• 37Pub. L. No. 107-204, § 806, 116 Stat. 745, 802–04 (2002) (codified at 18 U.S.C. § 1514A).
• 3818 U.S.C. § 1514A(b)(1)(A).
• 39Delegation of Authority and Assignment of Responsibility to the Assistant Secretary for Occupational Safety and Health, 77 Fed. Reg. 3912, 3912–13 (Jan. 25, 2012).
• 4018 U.S.C. § 1514A(b)(2)(D).
• 4129 C.F.R. § 1980.104(e)(1) (2015).
• 42See id. § 1980.104(e)(4).
• 43See generally id. § 1980.104.
• 44See id. § 1980.105(a).
• 45See id. § 1980.105(a)(1).
• 4629 C.F.R. § 1980.106(a).
• 47See id. § 1980.110(a).
• 48See id. § 1980.110(b).
• 49See id. § 1980.112(a).
• 5018 U.S.C. § 1514A(b)(1)(B).
• 51Id. § 1514A(a)(1).
• 52Id.
• 53Ronnie v. Off. Depot, LLC, 81 F.4th 1345, 1351 (11th Cir. 2023) (citing 29 C.F.R. 1980.104(e)(1)–(2)).
• 54See id.; Wiest v. Lynch, 710 F.3d 121, 134 (3d Cir. 2013); Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 811 (6th Cir. 2012); Northrop Grumman Sys. Corp. v. U.S. Dep’t of Labor, 927 F.3d 226, 229 (4th Cir. 2019); Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 (2d Cir. 2014).
• 55Ronnie, 81 F.4th at 1351 (emphasis in original) (citing Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *30–33).
• 56Id.
• 57Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47, at *30–33.
• 58Id. at *52 (noting some circuit courts had “misinterpreted” the ARB’s prior holding in Platone leading to a divergence in how courts analyze objective reasonableness in SOX retaliation claims).
• 59603 U.S. 369 (2024).
• 60Id. at 412.
• 61United States v. Mead Corp., 533 U.S. 218, 226–27 (2001).
• 62See Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 843 (1984).
• 63Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).
• 64See Wiest v. Lynch, 710 F.3d 121, 131 (3d Cir. 2013) (applying Chevron deference to Sylvester); Welch v. Chao, 536 F.3d 269, 276 n.2 (4th Cir. 2008) (applying Chevron deference to the ARB’s interpretation of § 1514A); Dietz v. Cypress Semiconductor Corp., 711 Fed. Appx. 478, 482 (10th Cir. 2017) (applying Chevron deference to ARB’s interpretation of § 1514A).
• 65See Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 220 (2d Cir. 2014) (applying Skidmore deference to ARB’s rejection of the “definitively and specifically” standard); Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 809 (6th Cir. 2015) (applying Skidmore deference to the ARB’s interpretation of § 1514A).
• 66Allen v. Admin. Rev. Bd., 514 F.3d 468, 476 (5th Cir. 2008) (agreeing that “an employee’s complaint must ‘definitively and specifically relate’” to the violations in § 1514A); Van Asdale v. Int’l Game Tech., 577 F.3d 989, 997 (9th Cir. 2009) (deferring to the ARB’s interpretation of § 1514A without specifying the level of deference); Beacom v. Oracle Am., Inc., 825 F.3d 376, 380–81 (8th Cir. 2016) (adopting Sylvester).
• 67ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *1.
• 68ARB No. 04-154 (2006), 2006 DOL Ad. Rev. Bd. LEXIS 89, at *1.
• 69Id. at *20.
• 70Id. at *7.
• 71Id. at *6–7.
• 72Id. at *9.
• 73Id.
• 74Platone, 2006 DOL Ad. Rev. Bd. LEXIS 89, at *10–20.
• 75Id. at *21–22.
• 76Id. at *23.
• 77Id. at *33.
• 78Id.
• 79Id. at *43.
• 80Platone, 2006 DOL Ad. Rev. Bd. LEXIS 89, at *43–44.
• 81Id. at *33 (emphasis added).
• 82Id. at *43–44.
• 83Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *3–4.
• 84Id. at *4–7.
• 85Id. at *5.
• 86Id.
• 87Id. at *3–5.
• 88Id. at *6.
• 89Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47, at *9.
• 90Id.
• 91Id.
• 92Id. at *12.
• 93Id. at *13.
• 94Id. at *57.
• 95Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47, at *30.
• 96Id. at *34 (emphasis added).
• 97Id. at *35–36.
• 98Id. at *42–43.
• 99See id. (explaining the “definitively and specifically” standard “presents a potential conflict with the express statutory authority of § 1514A.”).
• 100Id. at *43.
• 101Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47, at *51.
• 102Id. at *52 (citing Day v. Staples, Inc., 555 F.3d 42, 55–56 (1st Cir. 2009); Allen v. Admin. Review Bd., 514 F.3d 468, 479–80 (5th Cir. 2008); Van Asdale v. Int’l Game Tech., 577 F.3d 989, 1001 (9th Cir. 2001)).
• 103Id. at *53.
• 104Id.
• 105Id. at *43–44.
• 106See id.
• 107Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47, at *51–52.
• 108Northrop Grumman Sys. Corp. v. U.S. Dep’t of Labor, 927 F.3d 226, 229 n.3 (4th Cir. 2019) (“[W]e need not resolve whether Welch’s imposition of the stricter definitive and specific evidentiary standard remains good law in light of Sylvester.”); Wallace v. Tesoro Corp., 796 F.3d 468, 479 (5th Cir. 2015) (“We need not decide how [the definitively and specifically] standard applies . . . .”); Rocheleau v. Microsemi Corp., 680 Fed. Appx. 533, 535 n.2 (9th Cir. 2017) (declining “to address the issue” of whether the court should abrogate the “definitively and specifically” standard).
• 109555 F.3d 42 (1st Cir. 2009).
• 110Id. at 55.
• 111Id. at 46.
• 112Id. at 56 (quoting Ezra Charitable Trust v. Tyco Int’l, Ltd., 466 F.3d 1, 6 (1st Cir. 2006)).
• 113Id. (emphasis added).
• 114Id. at 57.
• 115Day, 555 F.3d at 57.
• 116Id. (emphasis added).
• 117See Wirth v. Salesforce, Inc., No. 23-CV-11718-AK, 2024 U.S. Dist. LEXIS 165163, at *9 (D. Mass. Sept. 13, 2024).
• 118680 Fed. Appx. 533 (9th Cir. 2017).
• 119See id. at 535 n.2 (citing Van Asdale v. Int’l Game Tech., 577 F.3d 989, 996–97 (9th Cir. 2009)).
• 120Id. at 535 (quoting Van Asdale, 577 F.3d at 1001).
• 121Id. at 536 (“To hold a reasonable belief . . . Rocheleau needed to believe that they approximated the elements of securities fraud: ‘material misrepresentation or omission, scienter, a connection with the purchase or sale of a security, reliance, economic loss, and loss causation.’”).
• 122See id.
• 123Id.
• 124Rocheleau v. Microsemi Corp., 680 Fed. Appx. 533, 536 (9th Cir. 2017).
• 125Id.
• 126536 F.3d 269 (4th Cir. 2008).
• 127Id. at 276 n.2.
• 128927 F.3d 226 (4th Cir. 2019).
• 129Id. at 229 n.3.
• 130Id. at 235 n.9.
• 131Id.
• 132796 F.3d 468 (5th Cir. 2015).
• 133Id. at 479 (“We need not decide how [the definitively and specifically] standard applies to this case because the district court did not base the dismissal on a failure to meet it.”).
• 134514 F.3d 468, 476 (5th Cir. 2008).
• 135See id. at 480 n.9 (“[T]he objective reasonableness of the employee’s belief is evaluated in part through reference to the elements of a Rule 10b-5 claim.”).
• 136710 F.3d 121 (3d Cir. 2013).
• 137Id. at 131.
• 138Id. at 133 (quoting Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *53).
• 139Id. at 134.
• 140Id. at 132.
• 141Id. (citing Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47, at *11–12).
• 142787 F.3d 797 (6th Cir. 2015).
• 143Id. at 806.
• 144Id. at 811.
• 145Id. (quoting Wiest, 710 F.3d at 132).
• 146Id. at 812 (citing Wiest, 710 F.3d at 135).
• 147Id. at 801–02.
• 148Rhinehimer, 787 F.3d at 802.
• 149Id.
• 150Id.
• 151Id. at 802–03.
• 152Id.
• 153Id. at 803.
• 154Rhinehimer, 787 F.3d at 803.
• 155Id.
• 156Id.
• 157Id.
• 158Id. at 803–04.
• 159Id. at 804.
• 160Rhinehimer, 787 F.3d at 804.
• 161Id.
• 162Id.
• 163Id. at 801.
• 164Id. at 806.
• 165Id. at 812.
• 166Rhinehimer, 787 F.3d at 812.
• 167Id. at 806.
• 168825 F.3d 376 (8th Cir. 2016).
• 169Id. at 380–81.
• 170762 F.3d 214 (2d Cir. 2014).
• 171Id. at 220.
• 172Id. at 221 n.6.
• 173Id. at 221.
• 174Id. at 221 n.6.
• 17581 F.4th 1345 (11th Cir. 2023).
• 176Id. at 1351.
• 177Id. (emphasis added).
• 178See id. at 1351 n.2 (citing Northrop Grumman Sys. Corp. v. U.S. Dep’t of Labor, 927 F.3d 226, 235 n.9 (4th Cir. 2019); Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 n.6 (2d Cir. 2014)).
• 179Compare id. at 1351 (claiming the Fourth Circuit merely requires a complainant “make some showing of scienter, materiality, reliance, or loss in order to enjoy SOX protection” (emphasis added)), with Northrop Grumman Sys. Corp., 927 F.3d at 235 (stating an employee must “have an objectively reasonable belief that the company intentionally misrepresented or omitted certain facts to investors, which were material and which risked loss.” (emphasis added) (quoting Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009))).
• 180Northrop Grumman Sys. Corp., 927 F.3d at 235 (quoting Day, 555 F.3d at 55).
• 181Wirth v. Salesforce, Inc., No. 23-CV-11718-AK, 2024 U.S. Dist. LEXIS 165163, at *11 (D. Mass. Sept. 13, 2024) (emphasis added) (“[T]he First Circuit has not since reconsidered whether an employee must approximate each element of fraud to establish a violation of the SOX whistleblower provision.”).
• 182Northrop Grumman Sys. Corp., 927 F.3d at 234–35 (“This reading of the statute is consistent with the reading adopted by other circuits and our own.” (citing Rocheleau v. Microsemi Corp., Inc., 680 F. Appx. 533, 535 (9th Cir. 2017))).
• 183Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).
• 184See Gonzales v. Oregon, 546 U.S. 243, 256 (2006) (describing an agency’s interpretation under Skidmore as “‘entitled to respect’ only to the extent it has the ‘power to persuade’” (emphasis added) (quoting Skidmore, 323 U.S. at 140)).
• 185Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 (2d Cir. 2014) (“[T]he ARB’s reasoning in Sylvesterto the effect that the “definitively and specifically” requirement of Platone should be abrogated is persuasive and accordingly, this determination is entitled to Skidmore deference.” (emphasis added)).
• 186603 U.S. 369 (2024).
• 187Id. at 412.
• 188Id. at 371 (citing Skidmore, 323 U.S. at 140).
• 189Id. at 394 (“[C]ourts must exercise independent judgment in determining the meaning of statutory provisions. In exercising such judgment, though, courts may—as they have from the start—seek aid from the interpretations of those responsible for implementing particular statutes.”).
• 190Skidmore, 323 U.S. at 140.
• 191Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 810 (6th Cir. 2015) (quoting S. Rehab. Grp., PLLC v. Sec’y of Health & Human Servs., 732 F.3d 670, 685 (6th Cir. 2013)).
• 192Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *34 (emphasis in original).
• 193Id. at *31 (quoting S. Rep. No. 107-146, at 19 (2002)).
• 194Id. at *40.
• 195Id.
• 196Id. (citing 42 U.S.C. § 5851(a)(1)(F)).
• 197Id. at *41 (citations omitted).
• 198Sylvester, 2011 DOL Ad. Rev. Bd. LEXIS 47 at *41.
• 199Id. at *53–54; see also S. Rep. No. 107-146, at 2 (2002) (stating that one of Congress’s objectives in enacting SOX was “to prevent and punish corporate and criminal fraud.”).
• 200See Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 811 (6th Cir. 2015).
• 201571 U.S. 429 (2014).
• 202Rhinehimer, 787 F.3d at 809 (citing Lawson, 571 U.S. at 439 n.6).
• 203Lawson, 571 U.S. at 439 n.6.
• 204Id. at 477 (Sotomayor J., dissenting).
• 205Id. at 479.
• 206SeeNielsen v. AECOM Tech. Corp., 762 F.3d 214, 220 (2d Cir. 2014); Rhinehimer, 787 F.3d at 811.
• 207Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).
• 208Rhinehimer, 787 F.3d at 809 (citing Lawson, 571 U.S. at 439 n.6).
• 209Wiest v. Lynch, 710 F.3d 121, 139 (2013) (Jordan J., dissenting).
• 210Id. at 134 (majority opinion).
• 211Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *52.
• 212See Rhinehimer, 787 F.3d at 807.
• 213Platone v. FLYi, Inc., ARB No. 04-154 (2006), 2006 DOL Ad. Rev. Bd. LEXIS 89, at *43.
• 214Day v. Staples, Inc., 555 F.3d 42, 55 (1st Cir. 2009) (emphasis added).
• 215Rhinehimer, 787 F.3d at 807.
• 216Northrop Grumman Sys. Corp. v. United States Dep’t of Labor, 927 F.3d 226, 234–35 (4th Cir. 2019) (“[A] complaining employee’s theory of securities fraud is objectively reasonable only if it approximates the basic elements of a securities fraud claim.” (citing Jones v. Southpeak Interactive Corp. of Delaware, 777 F.3d 658, 668 (4th Cir. 2015) (quoting Day, 555 F.3d at 55))).
• 217Rocheleau v. Microsemi Corp., 680 Fed. Appx. 533, 535 (9th Cir. 2017) (“[T]o have an objectively reasonable belief there has been shareholder fraud, the complaining employee’s theory of such fraud must at least approximate the basic elements of a claim of securities fraud.” (quoting Van Asdale v. Int’l Game Tech., 577 F.3d 989, 1000 (9th Cir. 2009) (quoting Day, 555 F.3d at 55))).
• 218Sylvester v. Parexel Int’l LLC., ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *52.
• 219Rhinehimer, 787 F.3d at 808 (emphasis added).
• 220Id. at 812.
• 221Id. at 803.
• 222Id. at 802–03.
• 223Id. at 803.
• 224Id.
• 225Rhinehimer, 787 F.3d at 803.
• 226Id. at 804.
• 227Id.
• 228Van Asdale v. Int’l Game Tech., 577 F.3d 989, 1001 (9th Cir. 2009) (quoting Allen v. Admin. Rev. Bd., 514 F.3d 468, 477 (5th Cir. 2008) (citations omitted)).
• 229Wiest v. Lynch, 710 F.3d 121, 142 (3d Cir. 2013) (Jordan, J., dissenting).
• 230Id.
• 231Id. at 146.
• 232Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 n.6 (2d Cir. 2014).
• 233Id.
• 234Sylvester v. Parexel Int’l LLC, ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *84.
• 235532 U.S. 268 (2001).
• 236See id. at 270–71.
• 237See id.
• 238Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 811 (6th Cir. 2015).
• 239Ronnie v. Off. Depot, LLC., 81 F.4th 1345, 1351 (11th Cir. 2023) (emphasis added).
• 240Sylvester v. Parexel Int’l LLC., ARB No. 07-123 (2011), 2011 DOL Ad. Rev. Bd. LEXIS 47, at *33 (citing Allen v. Admin. Rev. Board, 514 F.3d 468, 477 (5th Cir. 2008)).
• 241See generally, Clark Cnty. Sch. Dist. v. Breeden, 532 U.S. 268 (2001).
• 242Reznik v. inContact, Inc., 18 F.4th 1257, 1262 (10th Cir. 2021) (citing Breeden, 532 U.S. at 270–71) (emphasis added).
• 243Id. at 1261 (emphasis added).
• 244Rhinehimer v. U.S. Bancorp Invs., Inc., 787 F.3d 797, 801 (6th Cir. 2015).
• 245Id. at 806 (citing Banca Cremi, S.A. v. Alex. Brown & Sons Inc., 132 F.3d 1017, 1032 (4th Cir. 1997)).
• 246Banca Cremi, 132 F.3d at 1032 (emphasis omitted).
• 247Rhinehimer, 787 F.3d at 812.
• 248Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 n.6 (2d Cir. 2014); see Northrop Grumman Sys. Corp. v. United States Dep’t of Labor, 927 F.3d 226, 235 (4th Cir. 2019) (citing Nielsen, 762 F.3d at 221 n.6).
• 249Wiest v. Lynch, 710 F.3d 121, 142 (3d Cir. 2013) (Jordan J., dissenting).
• 250Rhinehimer, 787 F.3d at 811 (quoting Wiest, 710 F.3d at 132).
• 251Id. at 812 (citing Wiest, 710 F.3d at 132).