Judge Issues First-of-Its-Kind Ruling Since Expanded Whistleblower Protection of Dodd-Frank Act

WASHINGTON, Sept. 26, 2012 /PRNewswire/ -- Nicholas Woodfield, principal at The Employment Law Group® law firm, states the Kramer v. Trans-Lux case as a pivotal expansion of whistleblower protections under the Dodd-Frank Act. Yesterday's ruling by a judge in the U.S. District Court will continue the case in tandem with a related Sarbanes-Oxley filing.

In Kramer v.Trans-Lux, Judge Stefan R. Underhill ruled that part of Kramer's whistleblower claim can go forward despite defense counsel's protests. Kramer filed a whistleblower claim against Trans-Lux Corporation after his termination following the notification of the Trans-Lux's board of directors and the U.S. Securities and Exchange Commission that his supervisors were violating pension plan rules at the company. Those rules' violations allegedly cost taxpayers millions of dollars. Trans-Lux offers a portfolio of products in digital display solutions for financial, sports and entertainment, gaming, leasing and a myriad of other industries. Mr. Kramer worked at Trans-Lux for 18 years and had served as their vice president of human resources and administration. Kramer's supervisors reportedly stripped him of his duties, reassigned subordinates, and terminated his employment in retaliation for his Qui Tam reporting of defrauding the US government.

Trans-Lux argued in its motion to dismiss that Kramer did not report Trans-Lux's violations in the manner that the SEC requires and therefore did not meet the definition of a "whistleblower." Kramer argued that individuals who make disclosures that are required or protected under the Sarbanes-Oxley Act or the Securities Exchange Act of 1934 meet this definition regardless of the manner in which they make their disclosure. Judge Underhill agreed with Kramer's argument, citing to a final rule promulgated by the SEC on August 12, 2011. The court explained:

Trans-Lux's interpretation would dramatically narrow the available protections available to potential whistleblowers. In order to have provided information in the manner provided by the SEC, an individual would have either had to submit the information online, through the Commission's website, or by mailing or faxing a Form TCR (Tip, Complaint or Referral). Mailing a regular letter is insufficient.... Such a reading seems inconsistent with the goal of the Dodd-Frank Act, which was to "improve the accountability and transparency of the financial system," and create "new incentives and protections for whistleblowers."

Judge Underhill also determined that Kramer's disclosures were required under Sarbanes-Oxley and related to violations of securities laws and therefore are protected under Dodd-Frank regardless of the manner in which they were made.  The court further clarified that the Dodd-Frank Act expands the protections of Sarbanes-Oxley and that this expansion is a permissible construction of the statute. 

"This ruling recognizes the expanded protections Dodd-Frank affords whistleblowers, and the fact that it is the first and only Dodd-Frank retaliation case to get beyond the motion to dismiss stage in federal court says volumes about the claims of those who opposed passing the Dodd-Frank Act that it would unleash a torrent of litigation," stated Nicholas Woodfield, principal, The Employment Law Group® law firm.

The Employment Law Group® law firm represents whistleblowers in disclosures under Dodd-Frank and Sarbanes-Oxley, recovering millions on behalf of claimants while assisting in the broadening of state and federal protections for whistleblowers and employees.

Oral arguments for the case begin in March 2013.

About The Employment Law Group

The Employment Law Group® law firm is one of the premier employment law firms representing individuals from all over the United States and around the world in EEOC, Sarbanes-Oxley and other whistleblower cases against the government and publicly held U.S. corporations. The firm's attorneys have more than 70 years of experience litigating on behalf of individuals against employers who disregard federal and state whistleblower and employment laws.

CONTACT: Kipp Lanham 202-449-9807

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SOURCE The Employment Law Group Law Firm