By Thomas F. Howley and Dov Kesselman

Seyfarth Synopsis: The DOL’s ARB rejected an employee’s SOX retaliation claim where he inadvertently provided information to his employer and only “hinted” that he was filing a SOX-protected complaint. The ARB seems unwilling to accept retaliation claims where the employee fails to report to, or actively conceals information from, the statutory entities under SOX.

On October 31, 2019, the United States Department of Labor’s Administrative Review Board (ARB) affirmed the dismissal of a whistleblower retaliation claim under the Sarbanes-Oxley Act (SOX), holding that the employee did not engage in protected activity by inadvertently providing information to his employer or by “hinting” at filing a complaint. Hoptman v. Health Net of California, ARB No. 2017-0052, ALJ No. 2017-SOX-00013 (ARB Oct. 31, 2019) (per curiam). This decision highlights SOX’s goal of encouraging open disclosure.


Complainant was a claims representative for Respondent, a health maintenance organization. He allegedly discovered systematic overpayments by Respondent’s plan members and began texting with a plan member (the “Member”) to expose Respondent’s actions. Complainant asked the Member to fill out a HIPAA release so he could gather information. He also told her he did not have enough money to continue his investigation and suggested that he would share any reward money if she helped. At Complainant’s suggestion, the Member filed a complaint with California’s Department of Managed Health Care (DMHC) about her overpayments and provided the text messages that Complainant sent her.

Complainant later met with one of the Respondent’s HR managers on a separate matter and mentioned that he had read an online article about Respondent owing significant back taxes to the IRS. He hinted that Respondent was “going to be in a lot of trouble” and that he had a “complaint in the works.” Complainant, however, did not mention fraudulent activity or filing a complaint with the SEC during this conversation.

A few days later, DMHC sent Respondent the text messages that it received from the Member. After reviewing them, Respondent suspended and then terminated Complainant for soliciting assistance and possible financial assistance from a client, engaging in private communications with a client on a personal device, misleading a client to sign a HIPAA form for Complainant’s personal use, and offering to share a reward with the Member.

Complainant filed a SOX retaliation complaint alleging that he was terminated because he was about to file a complaint with a federal agency. The Administrative Law Judge (ALJ) granted Respondent’s motion for summary decision, finding Complainant failed to demonstrate that he engaged in protected activity. On appeal, Complainant argued that Respondent should have known from the text messages that he would file a complaint and that his conversation with the HR manager “hinted” that he was about to file a complaint.

The ARB’s Holding

The ARB affirmed the ALJ’s decision, finding that Complainant did not engage in protected activity. SOX protects employees who provide information, or cause information to be provided, to one of three entities: (a) a Federal regulatory or law enforcement agency, (b) any Member of Congress or any committee of Congress, or (c) a person with supervisory authority over the employee. 18 U.S.C. § 1514A(a)(1). SOX also protects employees who file or cause to be filed a proceeding, or assist in such a proceeding, with the employer’s knowledge. 18 U.S.C. § 1514A(a)(2).

It was undisputed that Complainant did not provide information to one of the three statutory entities directly. The ARB also found that his texts to the Member were not sent with any expectation that they would “cause information to be provided” to one of the entities. It emphasized that he “deliberately concealed” the text messages, which “inadvertently reached” Respondent, and that he was “quite surprised” the Member shared his texts with DMHC.

Complainant’s conversation with Respondent’s HR manager also failed to show he was “about to file” a complaint. The ARB found that the manager could not reasonably ascertain SOX-protected content from Complainant’s summary of an online article and vague references to a complaint “in the works.” It further held that, even after Respondent received the texts from DMHC, it did not, in context, establish a genuine issue of material fact as to whether Complainant engaged in protected activity. The ARB concluded that Complainant’s communications were “too attenuated and conflated with other non-SOX protected conduct to convey to a reasonable person that he was about to file a complaint protected under SOX.”


This decision highlights SOX’s and the ARB’s goal of encouraging open disclosure, rather than an employee’s attempt to use a “gotcha” strategy for his or her own benefit. The ARB focused on the fact that the employee deliberately concealed information and that the employer lacked any notice that he engaged in SOX-protected activity. Based on this decision, the ARB seems unlikely to find protected activity where the complainant fails to report to, or actively conceals information from, the appropriate entities under SOX.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Whistleblower & Corporate Internal Investigations, the Workplace Counseling & Solutions Team, or the Workplace Policies and Handbooks Team.