5th Circuit: Outing Whistleblower Equals Adverse Action

On November 12, 2014, in Halliburton, Inc. v. Admin. Review Bd., 5th Cir. No. 13-cv-60323, the Fifth Circuit affirmed an ARB's decision that disclosing the identity of a whistleblower may constitute an "adverse action" under Section 806 of SOX.  This decision presents a number of risks for employers—even when they are acting conscientiously and in good faith—and is mandatory reading for in-house employment counsel and compliance professionals.

Background

Anthony Menendez (Plaintiff), an employee of Halliburton (Company), used the Company's internal procedures to submit a complaint to management about what he allegedly believed to be "questionable" accounting practices.  He also lodged a complaint about the Company's accounting practices with the SEC, which led the SEC to contact the Company and instruct it to retain certain documents during the pendency of the SEC's investigation.  Although the SEC did not specify who had reported the Company's accounting