A recent federal court decision allowing our client’s whistleblower lawsuit to move forward underscores the far-reaching whistleblower protections under the Sarbanes-Oxley Act (SOX).
Outten & Golden’s client worked for a U.S. subsidiary of Coupang, a South Korean e-commerce company, as the head of its anti-money laundering compliance unit. In January 2022, Coupang terminated our client after he identified transactions with Iranian entities and pushed for the company to disclose them to the Securities and Exchange Commission (SEC).
Our client filed a SOX complaint with the Occupational Health and Safety Administration (OSHA) in 2022, followed by a whistleblower lawsuit in federal court in 2023. On March 25, 2025, U.S. District Judge Richard A. Jones denied Coupang’s motion to dismiss the Plaintiff’s claims, ruling in his favor on three complex questions.
The whistleblower is represented by Jennifer Schwartz and Cassandra Lenning, partners at Outten & Golden.
The Sarbanes-Oxley Act
A sweeping corporate reform statute, SOX was enacted in 2002 in response to major corporate scandals including those at WorldCom and Enron. A key provision of SOX prohibits public companies from retaliating against whistleblowers who report violations of the federal securities laws. Companies that violate SOX can incur substantial financial penalties, including back pay, attorneys’ fees, and “special damages” for emotional and other harm to whistleblowers.
SOX has limitations, particularly with respect to the timing of claims. It only offers whistleblowers a short widow to file claims—180 days. In addition, whistleblowers must first file with OSHA, a regulatory agency of the U.S. Department of Labor (DOL). If the DOL does not issue a final decision within 180 days, the whistleblower may then file a lawsuit in federal court. In addition, the law only applies to individuals who report violations of certain laws, SEC rules and regulations, or shareholder fraud.
Breaking Down the Court’s Decision
There are three main issues the Court considered before denying Coupang’s motion to dismiss.
- Timeliness of Claims. SOX requires whistleblowers to file claims with OSHA within 180 days of the retaliatory action. In this case, Coupang tried to argue that the clock started running when it placed Plaintiff on administrative leave and offered him a separation agreement in September 2021, and therefore he did not meet the 180-day deadline.
The Court found that, although the severance agreement strongly suggested Plaintiff was going to be fired, Coupang kept him on the payroll and refused to confirm his employment status for several months. Therefore, for statute of limitations purposes, the Court found that he didn’t know he was going to be terminated until he received a formal termination letter in January 2022.
- Extraterritorial Reach of SOX. Coupang argued that because our client worked for the company in South Korea, he was not entitled to SOX protections. The Court disagreed for a number of reasons, including that our client is a U.S. citizen; his employment agreement was governed by California law; the company was incorporated in the U.S.; he worked with company employees in the U.S.; and the alleged retaliatory conduct occurred in the U.S.
- Protected Activity. To qualify for legal protections under SOX, an employee must have engaged in “protected activity” by reporting one of the laws, rules, or regulations that SOX covers. Coupang argued that Plaintiff only reported risks related to certain Iranian transactions and that his complaints did not amount to protected activity. However, the Court found that Plaintiff sufficiently alleged that he reported violations of SEC regulations regarding disclosure controls and internal controls over financial reporting.
Key Takeaways for Whistleblowers
Employees who experience retaliation for reporting securities law violations have recourse, but the window to file claims is short. There are several other factors that need to be weighed before a whistleblower files a SOX complaint, such as where the employee lives, how much of the relevant conduct took place in the U.S., and whether the employee engaged in qualified protected activity.
To be sure, SOX is a powerful tool in the whistleblower’s arsenal. But there are other vehicles for a whistleblower to report misconduct, including through the SEC Whistleblower Program, which includes robust anonymity and employment protections and substantial monetary awards. It is critical to talk to a whistleblower lawyer to best understand the benefits of key statutes, and how and when to report misconduct.
A recognized leader in employment law, Outten & Golden has a robust Whistleblower & Retaliation practice, led by Co-chairs Tammy Marzigliano and Dave Jochnowitz. Contact us for more information on employee rights and protections.
