Northrop Grumman Systems Corp. v. US Department of Labor

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 17-1811

NORTHROP GRUMMAN SYSTEMS CORP.,

Petitioner,

v.

UNITED STATES DEPARTMENT OF LABOR, ADMINISTRATIVE REVIEW

BOARD,

Respondent,

v.

CRISELL SEGUIN,

Intervenor.

On Petition for Review of the Orders of the United States Department of Labor,

Administrative Review Board. (15-038; 15-040; 16-014)

No. 17-2204

NORTHROP GRUMMAN SYSTEMS CORP.,

Petitioner,

v.

UNITED STATES DEPARTMENT OF LABOR, ADMINISTRATIVE REVIEW

BOARD,

Respondent,

v.

CRISELL SEGUIN,

Intervenor.

On Petition for Review of the Orders of the United States Department of Labor,

Administrative Review Board. (15-038; 16-014)

Argued: March 21, 2019 Decided: June 13, 2019

Before AGEE, KEENAN, and QUATTLEBAUM, Circuit Judges.

Granted, vacated and remanded with instructions by published opinion. Judge

Quattlebaum wrote the opinion, in which Judge Agee and Judge Keenan joined.

ARGUED: David William Ogden, WILMER CUTLER PICKERING HALE AND

DORR LLP, Washington, D.C., for Petitioner. Sarah Kay Marcus, UNITED STATES

DEPARTMENT OF LABOR, Washington, D.C., for Respondent. ON BRIEF: Lincoln

O. Bisbee, P. David Larson, MORGAN, LEWIS & BOCKIUS LLP, Washington, D.C.;

Kelly P. Dunbar, Emily F. Gomez, WILMER CUTLER PICKERING HALE AND

DORR LLP, Washington, D.C., for Petitioner. Kate S. O’Scannlain, Solictor of Labor,

Jennifer S. Brand, Associate Solicitor, William C. Lesser, Deputy Associate Solicitor,

Megan E. Guenther, Counsel for Whistleblower Programs, Office of the Solicitor,

UNITED STATES DEPARTMENT OF LABOR, Washington, D.C., for Respondent.

2

QUATTLEBAUM, Circuit Judge:

In 2002, Congress passed the Sarbanes-Oxley Act (“SOX”). 1 SOX provides

several provisions protecting shareholders in public companies, including whistleblower

protection. The whistleblower protection provision prohibits employers in public

companies from firing an employee for providing information to a person with

supervisory authority over the employee relating to mail fraud, wire fraud, bank fraud,

securities fraud, a violation of any SEC rule or regulation or fraud against shareholders. 2

18 U.S.C. § 1514A(a)(1).

This case involves the scope of SOX’s whistleblower protection provision.

Intervenor Crisell Seguin alleges that she was terminated by Northrop Grumman Systems

Corporation (“Northrop”) in violation of 18 U.S.C. § 1514A. Because we conclude that

Seguin does not qualify for whistleblower protection under 18 U.S.C. § 1514A, we

1

SOX was passed, at least in part, in response to several instances of high profile

corporate fraud, including the Enron scandal. See Lawson v. FMR LLC, 571 U.S. 429,

432 (2014). In addition to instances of corporate fraud, the economic challenges facing

the United States at the turn of the 20th century were numerous. The emergence and

maturation of the internet led to an explosion of growth of companies engaged in

internet-related businesses in the 1990s that became known as the dot com bubble. The

excessive valuation of many of these companies reversed course in the early 2000s

bursting the bubble. Then, after the September 11 attacks on our country, the stock

market was shut down for four days and the markets further declined. Thus, after the

prosperity and growth of the 1990s, the United States entered into a recession in the early

2000s.

2

An employee may also provide information to a Federal regulatory or law

enforcement agency or any Member of Congress or any committee of Congress. 18

U.S.C. § 1514A(a)(1).

3

vacate the administrative orders and remand the case with instructions for the dismissal

of Seguin’s complaint and entry of judgment for Northrop.

I.

A.

SOX requires an employee asserting a whistleblower claim to establish: (1) the

employee 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) the circumstances were sufficient to raise the inference that the protected activity

was a contributing factor in the adverse action. 29 C.F.R. § 1980.104(e)(2). To show that

she engaged in protected activity, an employee must show that she had a subjective belief

and an objectively reasonable belief that the conduct she complained of violated one of

the six enumerated categories of § 1514A(a)(1). Welch v. Chao, 536 F.3d 269, 275 (4th

Cir. 2008). 3 Those categories are mail fraud, wire fraud, bank fraud, securities fraud, any

SEC rule or regulation or any federal law relating to fraud against shareholders.

3

In Welch, this Court held that “an employee must show that his communications

to his employer ‘definitively and specifically relate[d]’ to one of the laws listed in

§ 1514A.” 536 F.3d at 275 (quoting Platone v. FLYi, Inc., No. 04-154, 2006 WL

3193772, at *9 (U.S. Dept. of Labor Sept. 29, 2006)). Since Welch, the DOL concluded

that the definitive and specific standard was applied too strictly and held that the proper

standard is “whether the employee reported conduct that he or she reasonably believes

constituted a violation of federal law.” Sylvester v. Parexel Int’l LLC, No. 07–123, 2011

WL 2165854, at *15 (U.S. Dept. of Labor May 25, 2011) (emphasis in original). Because

we conclude that Seguin fails to satisfy either standard, we need not resolve whether

Welch’s imposition of the stricter definitive and specific evidentiary standard remains

good law in light of Sylvester.

4

Significantly, all six categories relate to fraud. See, e.g.¸ Livingston v. Wyeth, Inc., 520

F.3d 344, 351 n.1 (4th Cir. 2008).

The requirement that the information provided relate to one of the six specified

categories is crucial. The whistleblower protection provision does not extend protection

to every employee complaint about possible improper or even illegal conduct. The

provision prohibits retaliation only if the employee provides information regarding

conduct that he or she reasonably believes violates one of six categories listed by

Congress in § 1514A(a)(1). Villanueva v. United States Dept. of Labor, 743 F.3d 103,

109 (5th Cir. 2014).

B.

With these legal principles in hand, we turn to the facts and procedural history of

this case. Although Seguin’s alleged protected activity occurred in 2011, the origins of

Seguin’s complaints against Northrop can be traced back to 2007 when Seguin filed suit

against Northrop in Virginia state court. In this defamation suit, Seguin alleged that her

supervisor at Northrop knowingly and recklessly made false statements about her in a

performance review. In response to Seguin’s lawsuit, Northrop filed a motion to compel

arbitration pursuant to its arbitration policy. The Virginia state court granted Northrop’s

motion.

Seguin appealed the state court’s order to the Supreme Court of Virginia, arguing

that Northrop’s arbitration policy was not binding on her because she never accepted the

arbitration policy. The Supreme Court of Virginia dismissed Seguin’s appeal for lack of

5

jurisdiction and denied her petition for rehearing. Seguin’s subsequent petition for a writ

of certiorari to the United States Supreme Court was denied in 2010.

Throughout this period, Seguin maintained that she was not bound by Northrop’s

arbitration policy, contained in Northrop Corporate Procedure H103A, which sets out the

requirements of Northrop’s employee mediation/binding arbitration program. The

arbitration policy covered employees’ claims which arose, related to or were associated

with their employment. The policy expressly did not apply to certain claims, including

claims “as to which an agreement to arbitrate . . . is prohibited by law . . . .” J.A. 1535.

Seguin also raised objections to Northrop corporate policies and procedures

allegedly linked to the arbitration policy. Specifically, she objected to portions of an

annual ethics training and, in fact, refused to sign Northrop’s C-196 Conflict of Interest

form (“Conflict of Interest form”). The Conflict of Interest form requires the disclosure of

“any known relationships or activities that may cause a real or perceived business conflict

of interest.” J.A. 1281. Seguin asserted that these policies and procedures surreptitiously

attempted to bind employees to Northrop’s arbitration policy.

In January and February 2011, Seguin sent four emails to Northrop executives

communicating her concerns about these policies and procedures. 4 In an email from

January 14, 2011, Seguin raised concerns about both a time and labor charging module

4

For purposes of the proceeding before the Administrative Law Judge (“ALJ”),

the parties stipulated that only four email communications from January and February

2011 would be evaluated as alleged protected activities under SOX. Although Seguin

subsequently requested that the stipulation be rejected, the ALJ declined to do so.

6

(“Charging Module”) and the Conflict of Interest form. The Charging Module was a

training module that was part of Northrop’s 2010 ethics training. Seguin alleged that the

Charging Module forged corporate records and tricked employees into agreeing to

Northrop’s arbitration policy. She also asserted that the Conflict of Interest form bound

employees to Northrop’s arbitration policy.

In a February 14, 2011 email, Seguin reiterated her opposition to Northrop’s

arbitration policy and argued that she was exempted from the policy by senior Northrop

executives. In the same email, she suggested that this alleged exemption rendered

Northrop’s SEC filings inaccurate.

On February 28, 2011, Seguin was suspended for refusing to complete the Conflict

of Interest form. She was reinstated to her position once she completed the form.

Northrop decided to institute a reduction in force in January 2011 after monthly

forecasts showed lower demand for the work of Seguin’s department. On May 3, 2011,

Northrop notified Seguin that her employment would be terminated effective May 17,

2011, due to a reduction in force for her department.

Seguin filed a complaint with the Occupational Safety and Health Administration

(“OSHA”) on May 16, 2011, in which she alleged that her termination violated SOX.

OSHA dismissed the complaint. Seguin appealed the dismissal of her complaint to a

Department of Labor (“DOL”) Administrative Law Judge (“ALJ”). A hearing and

briefing followed.

In 2015, the ALJ issued a decision and order finding that Northrop terminated

Seguin in violation of the SOX whistleblower provision. The ALJ ordered Northrop to

7

reinstate Seguin and awarded her back pay, front pay and damages. Although the

decision is not a model of clarity, the ALJ noted that “[t]he primary issue in this case is

whether [Seguin’s] refusal to sign a company C-196 Form . . . and facts surrounding her

refusal constitute protected activity in this claim and if so, whether they were a

contributing factor in the adverse personnel action.” J.A. 49. In determining Seguin

engaged in protected activity, the ALJ found that the January 14, 2011 email alone

constituted protected activity under 18 U.S.C. § 1514A(a)(1). The ALJ noted that the

email raised multiple concerns about unlawful conduct, including concerns about the

Charging Module and the Conflict of Interest form. Regarding the Charging Module, the

ALJ found that Seguin held an objectively reasonable belief that Northrop was

committing fraud through the manipulation of time records in that module.

The ALJ’s determination regarding the lawfulness of the Conflict of Interest form

rested on several critical findings. First, the ALJ determined that the form incorporated

Northrop’s arbitration policy by reference. Second, the ALJ found that 18 U.S.C.

§ 1514A(e), which prohibits the arbitration of SOX claims, was effective at the time of

the January 14, 2011 email. Third, the ALJ concluded that several of Seguin’s SOX

whistleblower claims, including SOX claims intertwined in her state lawsuit, were

pending at the time of the January 14, 2011 email. Consequently, the ALJ reasoned that

Seguin’s refusal to sign the Conflict of Interest form raised concerns about Northrop’s

unlawful attempts to arbitrate her SOX whistleblower claims.

8

Based on these determinations, the ALJ entered an award of attorney’s fees and

costs requiring Northrop to pay Seguin $507,821.12 for litigation costs, expert witness

fees and reasonable attorney’s fees.

In May 2017, the DOL Administrative Review Board (“ARB”) affirmed the ALJ’s

decision. The ARB found that “the ALJ’s factual findings in support of his conclusion

[that Seguin engaged in SOX-protected activity] are supported by substantial evidence of

record.” J.A. 20. Summarizing these findings, the ARB noted that the ALJ determined

that Seguin engaged in protected activity, including her complaints about the Conflict of

Interest form. In explaining how Seguin’s complaints about the form constituted

protected activity, the ARB noted that Seguin “concluded that Northrup [sic] Grumman,

by requiring employees to sign this Form, effectively secured an employee’s agreement

to the company’s mandatory arbitration policy, which Seguin contended violated the

SOX prohibition against pre-dispute arbitration agreements.” J.A. 19. The ARB also

affirmed the ALJ’s award of attorney’s fees and costs for services performed before the

ALJ.

On July 11, 2017, Northrop filed a timely petition for review of ARB orders. This

Court has jurisdiction to decide the petitions for review under 49 U.S.C.

§ 42121(b)(4)(A), 18 U.S.C. § 1514A(b)(2), and 29 C.F.R. § 1980.112(a). 5

5

On October 4, 2017, the ARB granted Seguin $136,777.50 in attorney’s fees and

costs associated with her appeal before the Board. Northrop filed a timely petition for

review of that order, and this Court consolidated all of Northrop’s petitions into this

appeal.

9

II.

A.

Before examining the merits of Northrop’s appeal, we first discuss the applicable

standard of review. The ARB’s determinations are “the agency’s final decision and [are]

reviewable in federal court under the standards stated in the Administrative Procedure

Act, 5 U.S.C. § 706.” Lawson, 571 U.S. at 437. Under the Administrative Procedure Act,

an appellate court “may only disturb the ARB’s decision if it was ‘arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law.’” Welch, 536 F.3d at

275–76 (quoting 5 U.S.C. § 706(2)(A)). Questions of law are reviewed de novo with

deference usually given to the agency’s interpretation of § 1514A. Id. at 276. The

agency’s findings of fact are upheld if supported by substantial evidence. Id.

This standard is deferential to the ARB, as it should be. However, it does not make

this Court’s review a rubber stamp. Dickinson v. Zurko, 527 U.S. 150, 162 (1999). On the

contrary, this Court is required to conduct a meaningful review of agency action. Id. As a

part of this review, this Court must conduct an “objective assessment of the sufficiency of

the evidence.” Dorsey Trailers, Inc. v. NLRB., 233 F.3d 831, 840 (4th Cir. 2000).

B.

Applying this standard, we address Northrop’s argument that the ARB erred in

holding that Seguin engaged in protected activity. Although the ARB affirmed the ALJ’s

determination that Seguin engaged in protected activity by complaining about Northrop’s

arbitration policy, Charging Module and SEC filings, the DOL advances only one theory

10

of protected activity on appeal. 6 According to the DOL, Seguin objected to Northrop’s

arbitration policy because she believed Northrop’s arbitration policy violated § 1514A(e)

of the SOX whistleblower provision, which prohibits pre-suit arbitration of SOX claims.

The DOL argues that as a result of this belief, Seguin refused to sign the Conflict of

Interest form because she believed that doing so was tantamount to consenting to the

arbitration policy.

As noted above, and as the DOL acknowledges, an employee engages in protected

activity only when she provides information regarding conduct that she reasonably

believes violates one of six categories listed by Congress in § 1514A(a)(1)—mail fraud,

wire fraud, bank fraud, securities fraud, any SEC rule or regulation or any federal law

relating to fraud against shareholders. Villanueva, 743 F.3d at 109. Here, the DOL

contends that § 1514A(e) is a provision of “Federal law relating to fraud against

shareholders”—the sixth enumerated category of § 1514A(a)(1). Consequently, the DOL

argues that Seguin’s complaints that Northrop’s conduct violated § 1514A(e) constitutes

protected activity under SOX because the complained of conduct falls under the sixth

6

The DOL has apparently abandoned the arguments that Seguin engaged in

protected activity by complaining about the Charging Module and the SEC filings. As an

intervening party, Seguin has maintained her argument that her complaints about the SEC

filings are protected activity. Whether abandoned or not, we find that that Seguin’s

complaints about the Charging Module and SEC filings are not protected activity under

§ 1514A(a)(1). Substantial evidence does not support the conclusion that it was

objectively reasonable for Seguin to believe that the challenged conduct—Northrop’s

SEC filings or Charging Module—violated any of the six enumerated categories of

§ 1514A(a)(1).

11

enumerated category of § 1514A(a)(1). 7 The DOL further contends that Seguin’s belief

that Northrop’s arbitration policy violated § 1514A(e) was reasonable. We address these

arguments in turn.

1.

We first evaluate the DOL’s argument that violations of the SOX whistleblower

provision itself, specifically violations of § 1514A(e), constitute shareholder fraud under

§ 1514A(a)(1). 8 In considering this interpretation, we begin, where we must, with the text

of § 1514A(a)(1). That provision provides “[n]o company . . . may discharge . . . an

employee . . . because of any lawful act done . . . to provide information . . . which the

employee reasonably believes constitutes a violation of . . . any provision of Federal law

relating to fraud against shareholders. . . .” 18 U.S.C. § 1514A(a)(1). By the plain

language of the statute, the sixth category of § 1514A(a)(1) applies only to information

provided that concerns shareholder fraud. It is not a broad, catchall provision.

7

Northrop contends that the ARB and ALJ orders could be vacated because the

DOL’s theory on appeal was not “invoked when [the agency] took action.” Michigan v.

E.P.A., 135 S. Ct. 2699, 2710 (2015). Although the ALJ decision is not entirely clear on

the issue, we find that the ARB and ALJ orders viewed § 1514A(e) as a component of the

theory of protected activity. See Deltek, Inc. v. Dept. of Labor, Administrative Review

Bd., 649 F. App’x 320, 330 n.5 (noting that agency decisions need not provide ideal

clarity but only a rational bridge between the record findings and legal conclusions).

8

Because neither the ARB nor the ALJ explicitly articulated the DOL’s

interpretation of § 1514A below, we need not afford Chevron deference to the DOL’s

post hoc interpretation. Miller v. Clinton, 687 F.3d 1332, 1342 (D.C. Cir. 2012). This

interpretation may be entitled to deference under Skidmore v. Swift & Co., 323 U.S. 134

(1944) but only such deference as its power to persuade commands. Pub. Citizen, Inc. v.

United States. Dept. of Health and Human Servs., 332 F.3d 654, 661–62 (D.C. Cir.

2003).

12

Shareholder fraud involves false representations of material fact intended to

deceive shareholders and reliance by shareholders on those false representations to their

detriment. Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 341–42 (2005). The

basic elements of the claim include: a material misrepresentation (or omission), scienter,

a connection with the purchase or sale of a security, reliance, economic loss, and loss

causation. Id. Neither Seguin’s complaints about Northrop’s arbitration policy nor her

complaints about violations of § 1514A(e) involve any of these elements. Simply put, the

DOL’s interpretation is contrary to law. Complaints like Seguin’s do not constitute

shareholder fraud and, thus, are not afforded whistleblower protection under § 1514A.

2.

Even if we were to accept the DOL’s interpretation of the sixth enumerated

category, for the DOL’s argument to prevail, there must be substantial evidence to

support the ALJ’s conclusion that Seguin’s beliefs were objectively reasonable. Given the

DOL’s theory of protected activity, Seguin’s beliefs that (1) Northrop’s arbitration policy

violated § 1514A(e) and (2) the violation constituted shareholder fraud must both be

reasonable. Welch, 536 F.3d at 275. To satisfy the objective reasonableness requirement,

an employee must show that “a reasonable person in his position would have believed

that the conduct constituted a violation.” Livingston, 520 F.3d at 352.

a.

A reasonable person in Seguin’s position, however, could not believe that

Northrop’s conduct violated § 1514A(e) for at least two independently sufficient reasons.

First, a reasonable person could not believe that the Conflict of Interest form incorporated

13

Northrop’s arbitration policy. The form does not even mention Northrop’s arbitration

policy. The form references Northrop’s Standards of Business Conduct, but that

document likewise does not mention the arbitration policy. There is no substantial

evidence in the record from which Seguin could reasonably believe that the Conflict of

Interest form had the effect of tricking her into agreeing to the arbitration policy. The

DOL’s reasoning, which the ARB also adopted, conflates the subjective and objective

belief requirements in a way that renders the objective reasonable belief requirement

meaningless. That reasoning is inconsistent with the law.

This objectively reasonable understanding was confirmed when Northrop

employees explicitly reiterated to Seguin that the Conflict of Interest form has “nothing

to do” with the arbitration policy. J.A. 1241–42. Seguin’s alleged belief to the contrary

was all the more objectively unreasonable in light of this confirmation. Day v. Staples,

Inc., 555 F.3d 42, 58 (1st Cir. 2009) (Putative whistleblower’s “beliefs were not initially

reasonable as beliefs in shareholder fraud and they became less reasonable as he was

given explanations [by company employees].”).

Second, even if the Conflict of Interest form incorporated Northrop’s arbitration

policy—which it does not––a reasonable person in Seguin’s position could not believe

that the policy violated § 1514A(e). As noted above, § 1514A(e) prohibits arbitration of

SOX whistleblower claims. The plain language of Northrop’s arbitration policy indicates

it does not apply to claims “as to which an agreement to arbitration . . . is prohibited by

law . . . .” J.A. 1535. By its own terms, the arbitration policy does not apply to SOX

14

whistleblower claims. Even under a substantial evidence review, it was objectively

unreasonable for Seguin to believe otherwise.

b.

Additionally, even if Seguin could reasonably believe a violation of § 1514A(e)

occurred, no reasonable person in Seguin’s position could believe that Northrop’s alleged

violation of § 1514A(e) constituted shareholder fraud. To be objectively reasonable, a

whistleblower is not required to strictly plead all the elements of a shareholder fraud

cause of action. However, the reasonableness of an employee’s belief must be considered

in the context of what is required to establish shareholder fraud. This reading of the

statute is consistent with the reading adopted by other circuits and our own. See

Rocheleau v. Microsemi Corp., Inc., 680 F. App’x 533, 535 (9th Cir.), cert. denied, 138

S. Ct. 166 (2017) (noting that a complaining employee’s theory of securities fraud is

objectively reasonable only if it approximates the basic elements of a securities fraud

claim); Jones v. Southpeak Interactive Corp. of Delaware, 777 F.3d 658, 668 (4th Cir.

2015) (noting that a whistleblower’s theory of fraud should at least approximate the basic

elements of fraud); Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 222 n.6 (2d Cir. 2014)

(“Thus, the statutory language suggests that, to be reasonable, the purported

whistleblower’s belief cannot exist wholly untethered from these specific provisions.”);

Day, 555 F.3d at 55. 9 Consequently, an employee, like Seguin, who asserts protected

9

In Sylvester, the ARB questioned this approach to the protected activity

requirement, finding that courts improperly “merged the elements required to prove a

violation of a fraud statute . . . with the requirements a whistleblower must allege or

(Continued)

15

status on the basis of complaints about shareholder fraud must, at a minimum, “have an

objectively reasonable belief that the company intentionally misrepresented or omitted

certain facts to investors, which were material and which risked loss.” Day, 555 F.3d at

55. As discussed in Section II.B.1 above, none of Seguin’s complaints about Northrop’s

arbitration policy approximate these elements. Consequently, we find that substantial

evidence 10 does not support the conclusion that it was objectively reasonable to believe

that a violation of § 1514A(e) constitutes shareholder fraud. 11

prove to engage in protected activity.” 2011 WL 2165854, at *20. The ARB insisted that

an employee can have an objectively reasonable belief of a violation of the laws in

§ 1514A(a)(1) even if the employee did not prove or approximate the specific elements of

fraud. Id. The response to Sylvester has been varied. Some circuits have followed

Sylvester’s approach, affording the decision varying degrees of deference. See Beacon v.

Oracle America, Inc., 825 F.3d 376, 380 (8th Cir. 2016) (adopting Sylvester without

specifying a level of deference); Rhinehimer v. United States Bancorp Inves., Inc., 787

F.3d 797, 806 (6th Cir. 2015) (adopting Sylvester applying Skidmore deference); Wiest v.

Lynch, 710 F.3d 121, 133 (3d Cir. 2013) (adopting Sylvester applying Chevron

deference). In contrast, the Second Circuit emphasized that Sylvester’s approach runs

contrary to the statutory language of § 1514A(a)(1). Nielsen, 762 F.3d at 222 n.6. Other

circuits, including this Court, have continued to insist on approximating the elements of

fraud without addressing the impact of Sylvester. Rocheleau, 680 F. App’x at 535; Jones,

777 F.3d at 668. Regardless of the deference afforded to the ARB (and Welch indicates

that this Court should afford Chevron deference to ARB decisions interpreting § 1514A),

the plain text of the statute compels us to conclude that the 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.

10

To the extent Seguin may have subjectively believed another statutory provision

in § 1514A(a)(1) was violated, substantial evidence does not support a conclusion that it

was objectively reasonable to believe that a violation of § 1514A(e) constitutes a

violation of any of the other five enumerate categories of § 1514A(a)(1).

11

Northrop also argued that the ARB erred in holding that Seguin’s alleged

protected activity was a contributing factor in her termination and that the ARB applied

(Continued)

16

III.

In conclusion, the SOX whistleblower provision provides important protections

for shareholders of public companies. But Congress limited the categories of activity to

which the provision applies. The DOL’s position would in effect ignore the parameters of

the statute and improperly expand the scope of the provision beyond the plain limitations

in its text. Because we conclude that Seguin did not engage in protected activity under

§ 1514A(a)(1), we grant Northrop’s petitions for review, vacate the orders of the ARB

and the ALJ and remand the case to the ALJ with instructions to dismiss Seguin’s

administrative complaint and enter judgment in favor of Northrop. 12

GRANTED, VACATED AND REMANDED with INSTRUCTIONS

the wrong legal standard in assessing Northrop’s defense. Because we conclude that

Seguin did not engage in protected activity under § 1514A(a)(1), we need not reach these

issues.

12

We also deny Seguin’s motion to dismiss Northrop’s case as untimely.

17