A federal appeals court breathed new life into a Sarbanes-Oxley whistle-blower retaliation claim, and the plaintiff could take it to trial eight years after his termination.
Carl Genberg, a former executive at pharmaceutical company Ceragenix, claimed he was fired in retaliation for reporting securities law violations in a pair of emails to the company’s board of directors. He also claimed the compay’s CEO, Steven Porter, defamed him in the wake of his firing. The Colorado federal district court previously granted Porter’s motion for summary judgment on both claims.
In a majority decision published Feb. 22, the 10th Circuit Court of Appeals reversed the district court in part and allowed Genberg’s retaliation claim to move forward but affirmed the defamation claim’s demise. The 10th Circuit, by applying a broader standard of what constitutes SOX-protected activity, reopened the path to a trial presuming the case doesn’t get first get reviewed by the appeals court en banc.
“We’re very excited to have this victory and to have the opportunity to try the case,” said Clayton Wire, who argued the appeal for Genberg. He noted that the 10th Circuit majority, which applied the Sylvester v. Parexel “reasonableness” standard in this case, had done so previously but only in an un-published opinion. “This is precedent setting,” Wire said.