On July 13, 2022, the First Circuit reversed a denial of summary judgment, finding plaintiff could not satisfy his burden of showing he engaged in protected activity under the SOX whistleblower protection provision. Baker v. Smith & Wesson, No. 21-2019 (1st Cir. 2022). The decision affirms that protected activity under SOX is limited to reporting violations of “any rule or regulation” of the SEC, which does not include federal statutes like the Foreign Corrupt Practices Act (“FCPA”).

Background

Plaintiff filed a complaint against his former employer, Smith and Wesson (“S&W”), alleging S&W retaliated against in violation of SOX for reporting allegedly illegal conduct by S&W employees. S&W moved for summary judgment, arguing Plaintiff failed to show that he engaged in protected activity. Plaintiff responded that he reasonably believed the reported conduct violated 15 U.S.C. § 78m(b)(2), (5) of the FCPA, and that the FCPA is a “rule or regulation of the SEC” (and thus falls under the protected activity provision of SOX). The district court agreed with Plaintiff and denied S&W’s motion for summary judgment.

Ruling

On appeal, the First Circuit disagreed with the district court’s interpretation of the “any rule or regulation of the SEC” provision in SOX, finding that the statute’s plain text makes clear that the FCPA is not a rule or regulation of the SEC. Section 806 limits protections of whistleblower claims to violations of (1) sections 1341, 1343,...

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