Retaliation Sarbanes-Oxley Whistleblower

Guyden sued the employer, asserting a whistleblower claim under the Sarbanes-Oxley Act (SOX). The trial court dismissed, based on the parties’ arbitration agreement. The 2nd Circuit affirmed.

We need not determine what our decision would be under those circumstances, however, because this Agreement gives the arbitrator the power to order additional discovery upon a showing by Guyden that such discovery is necessary to enable her to present her claim. The
FAA also provides the arbitrator with further authority to compel the production of evidence and
witnesses at a pre-merits hearing. Guyden thus has both a contractual and a statutory basis for further discovery should it prove necessary for her claim. Although Guyden asserts that she will be unable to make the showing of necessity the arbitrator will require, her challenge assumes that, in violation of her contractual and statutory rights, an arbitrator will deny her needed discovery. Guyden has introduced no evidence that her fears are well-founded, however, and we must enforce the Agreement unless and until the record proves otherwise.

The court held that SOX claims are subject to arbitration. The court rejected Guyden’s argument that there exists an “inherent conflict” between SOX’s underlying purpose (the public dissemination of information about a corporate employer’s fraudulent activities) and arbitration. The court observed that “[t]ellingly … both Houses of Congress, acting separately, rejected versions of SOX that would have prohibited mandatory arbitration of whistleblower claims.” Guyden made a similar argument regarding a confidentiality clause in the arbitration agreement, but the court rejected that as well. With respect to that conclusion, the court stated “[w]e agree … with the Fifth Circuit’s observation that confidentiality clauses are so common in the arbitration context that Guyden’s ‘attack on the confidentiality provision is, in part, an attack on the character of arbitration itself.'”

The Second Circuit’s decision in Guyden v. Aetna