We are very pleased to report a recent victory for a whistleblower client. A unanimous panel of the Fifth Circuit U.S. Court of Appeals issued a decision last Friday reinstating Plaintiff Kevin Wallace’s Sarbanes-Oxley Act (SOX) whistleblower claim against Tesoro Corp.

A unanimous panel of the Fifth Circuit U.S. Court of Appeals issued a decision last Friday reinstating Plaintiff Kevin Wallace’s Sarbanes-Oxley Act (SOX) whistleblower claim against Tesoro Corp.

Wallace worked for the petroleum company Tesoro as Vice President of Pricing and Commercial Analysis. He discovered structural flaws in Tesoro’s accounting system that garbled important financial results and tax reporting used by management, the Board of Directors, and Tesoro’s public filings. Wallace confirmed his findings with company experts and reported them internally. On March 12, 2010, Wallace reported internally that he was being retaliated against by management. He was fired within hours of this report.

The district court had previously dismissed the case based on several procedural motions filed by Tesoro. Tesoro argued that the case needed to be plead pursuant to FRCP 9(b)'s strict fraud pleading requirements. Tesoro also argued that the lawsuit raised factual issues that had not been presented with particularity to OSHA (the administrative agency charged with conducting initial investigation into SOX charges).

The Fifth Circuit reversed the dismissal and remanded the case back to district court for further proceedings and discovery.

Download: Wallace v. Tesoro Corp., No. 13-51010 (5th Cir. 7-31-2015).

Advocate or Opponent

Former employee sues disability rights group for alleged failure to accommodate

Mary Alice Robbins, Texas Lawyer December 15, 2003

An organization funded by the U.S. government to advocate for the rights of persons with disabilities is the defendant in a disability discrimination suit filed recently by one of its former employees.

Dian Cox alleges in her complaint in Cox v. Advocacy Inc., filed on Nov. 17 in the U.S. District Court for the Western District in Austin, that the "threatening and harassing behavior" of Advocacy representatives and the organization's "utter failure" to make a serious effort to accommodate her psychiatric disabilities forced her to leave her job with the organization in May 2000 -- allegations that Advocacy denies.

"This action by Advocacy Inc. illustrates the failure of this organization to protect its own employees with psychological disabilities from unfair employment practices and represents a failure of the group to carry out its own mission," alleges Christopher J. McKinney, who represents Cox.

Advocacy's 2002 annual report shows that the bulk of the organization's funding is provided by the federal government under the Developmental Disabilities Assistance and Bill of Rights Act, the Protection and Advocacy for Individuals With Mental Illness Act and other federal statutes.

McKinney, a labor and employment shareholder in San Antonio's McKinney & Webster, says he typically sues private employers for alleged discriminatory practices. This is the first time he has filed a suit against an organization that advocates for persons with disabilities, McKinney says.

"I wish I hadn't had to this time," he says.

Cox alleges in her original complaint that in 1998, after a decade on Advocacy's staff, her psychiatric illness caused her to take an extended leave from her job assisting mental health consumers with their rights, self-advocacy skills and other training. She has been diagnosed over a period of time as suffering from major depression, bipolar disorder, obsessive-compulsive disorder and attention deficit hyperactivity disorder, according to her complaint.

Cox further alleges in the complaint that when she returned to work in September 1999, Advocacy officials offered her a part-time position on a probationary basis, although her previous full-time position had not been filled, and removed her from various teams that made management and policy decisions for the organization. Advocacy officials told her that she could return to her full-time position in January 2000 if she performed adequately, Cox alleges in the complaint.

In her complaint, Cox also alleges that Advocacy set a rigid start time for her, even though the organization's practice had been to allow flexibility in the work schedules of its professional employees. As alleged in the complaint, requiring an exact time for them to arrive at work creates significant distress for persons with psychiatric illnesses because they experience difficulties in the morning due to their medication regimen and other factors.

Cox alleges in the complaint that on May 31, 2000 -- after many months of trying to set up a meeting with Advocacy officials to discuss reinstatement to her full-time position -- then-executive director James Comstock-Galagan refused to reinstate her to the full-time position and offered her a choice between a contract position that would provide no health benefits or continuing as a part-time employee, which would result in the loss of her Social Security Disability Income payments. Cox also alleges that Comstock-Galagan "took this final opportunity to again threaten" her, stating that if she opted to stay on as a part-time employee, she would be subject to termination if she were even one minute late for work.

McKinney contends that Advocacy constructively discharged Cox because she could not afford to continue working part time or accept a contract position that would not provide her with health insurance.
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Cox has cleared the first hurdle in her case. On Aug. 22, the U.S. Equal Employment Opportunity Commission issued a determination that there is "reasonable cause" that Cox was discriminated against because of her disability, in that she was not granted a reasonable accommodation in her arrival time. The commission also said in the determination, signed by Pedro Esquivel, EEOC district director in San Antonio, that Cox was constructively discharged.
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