High Court Won't Hear Boeing Workers' Media Leak Case

SOX Doesn't Cover Employees' Media Leaks: 9th Circ. Boeing SOX Plaintiffs Seek Supreme Court Review 9th Circ. SOX Ruling May Curb More Than Media Leaks SOX Doesn't Protect Boeing Auditors' Media Leak: Judge Another Ousted Boeing Auditor Sues Over Retaliation

By Django Gold

Law360, New York (October 31, 2011, 2:29 PM ET) -- The U.S. Supreme Court on Monday refused to consider the Ninth Circuit's ruling in a case brought by Boeing Co. workers that the whistleblower protections of the Sarbanes-Oxley Act do not apply to employees who leak information to the news media.

The high court's refusal to grant certiorari marks the end of the appeals process for two former Boeing employees who sued the company after being fired for leaking complaints about Boeing's auditing procedures to the press.

“Obviously, I'm disappointed, but I'm not surprised,” plaintiffs' attorney John Jacob Tollefsen told Law360 on Monday. “Nobody likes whistleblowers.”

Tollefsen said the Ninth Circuit's ruling would stand unless another appeals court made an opposing ruling, at which point the Supreme Court would intervene.

“I don't know if anyone's going to have the courage to be a whistleblower, but if someone has the patience and the courage to pursue it through another circuit, we might see something,” Tollefsen said. “Meanwhile, you better not go to the press."

In May, the Ninth Circuit ruled that though the Sarbanes-Oxley Act of 2002 grants retaliation protection to employees who disclose evidence of employer fraud to federal and law enforcement agencies, Congress, or the employees' supervisors, it does not protect those employees who go to the media.

The Ninth Circuit determined that Sarbanes-Oxley is not broad enough to protect employees who leak confidential internal information to the press, pointing to the Senate Judiciary Committee's analysis of the act's scope.

“Nowhere in the committee’s report is there any indication that Congress intended [Sarbanes-Oxley] to be interpreted so broadly as to protect employee disclosures to members of the media,” the appeals court said.

The employees at the heart of the case, Nicholas P. Tides and Matthew C. Neumann, worked as auditors who tested Boeing's information technology controls. The auditors said in a 2008 lawsuit filed in Washington that they only went to the press after having made several complaints to management about the company's perceived auditing deficiencies.

Following the employees' tip, the Seattle Post-Intelligencer wrote an investigative report on the issue. Several months later, Tides and Neumann were fired for violating a company policy prohibiting employees from releasing information to the media without approval from the communications department.

The plaintiffs argued that providing information to the press was one way to get it to federal agencies and lawmakers, and should therefore fall under Sarbanes-Oxley.

“This is the end of the road for them,” Tollefsen said Monday. “After making 26 complaints with Boeing, they talked to the media with the understanding that it would be kept anonymous. And then they lost their careers."

“You can't use the media to call an issue to the attention of Congress and federal agencies,” he said.

The plaintiffs are represented by John Jacob Tollefsen of the Tollefsen Law Office PLLC.

Boeing is represented by Jonathan P. Harmon and Eric B. Martin of McGuireWoods LLP, and in-house counsel Eric B. Wolff.

The case is Tides v. Boeing, case number 11-309, in the U.S. Supreme Court.