November 22, 2014

Fifth Circuit Court Affirms Halliburton Retaliated Against Whistleblower

The Fifth Circuit Court of Appeals affirmed a U.S. Department of Labor Administrative Review Board ruling that found the firm retaliated against whistleblower Anthony Menendez. Menendez questioned some of Halliburton’s accounting practices. Later, he submitted a confidential complaint with the Securities and Exchange Commission

Menendez filed a complaint under Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes - Oxley Act (SOX) on May 8, 2006. The Department of Labor Administrative Law Judge dismissed Menendez’s complaint after finding Halliburton did not retaliate against Menendez after he engaged in SOX-protected activity.

The Department of Labor Administrative Review Board remanded the case on appeal after finding the Administrative Law Judge made a error concluding that Halliburton’s breach of Menendez’s confidentiality with regard to his complaint filed with Halliburton’s audit committee was not adverse action.

Bert Cornelison, Halliburton's general counsel, sent an e-mail that identifying Menendez as the whistleblower behind the SEC's investigation. Coworkers began to avoid Menendez and treat him differently. The SEC closed its investigation without taking action

The Department of Labor determined Halliburton’s conduct constituted illegal retaliation under the 2002 Sarbanes-Oxley Act, which prohibits retaliation against staffers that report certain kinds of suspected wrongdoing.

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