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# J eff r e y W ies t v . Thom a s L y nch

P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de n t i al

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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

_____________

No. 11

- 4257

_____________

JEFFREY A. WIEST; LAURA E. WIEST, HIS WIFE,

Appellants

v.

THOMAS J. LYNCH, Chief Executive Office r and Director of Tyco Electronics Corporation; TERRENCE CURTIN, Executive Vice President and Chief Financial Officer of Tyco Electronics Corporation; CHARLES POST, ESQUIRE, Senior Labor & Employment Counsel; CHARLES DOUGHERTY, President, Wireless Systems, A Tyco Business Unit; TYCO ELECTRONICS CORPORATION

___________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania (D.C. Civil No. 2

- 10

- cv

- 03288 ) District Judge: Honorable Gene E.K. Pratter

___________
Argued October 5, 20122 Before: McKEE

, Chief Judge

, JORDAN and VANASKIE

,

Circuit Judges

(Filed : March 19, 2013 )

Richard C. Angino, Esq. ( A rgued) Daryl E. Christopher, Esq. Angino & Rovner, P.C.
4503 North Front Street Harrisburg, PA 17110 Counsel for Appellants

Stephen M. Kohn, Esq. ( Ar gued) Kohn, Kohn & Colapinto 3233 P. Street, N.W. Washington, D.C. 20007 Counsel for Amicus Curiae National Whistleblowers
Center

Michael A. Finio

, Esq. ( A rgued) Amy C. Foerster, Esq. Cory S. Winter, Esq. Saul Ewing LL P
2 North 2nd Street
7th Floor Harrisburg, PA 17101 Counsel for Appell ees

Eugene Scalia, Esq. Gibson, Dunn & Crutcher LLP 1050 Connecticut Avenue, N.W. Washington, D.C. 200363 Counsel for Amicus Curiae Chamber of Commerce of the United States of America

___________

OPINION OF THE COURT

___________

VANASKIE, Circuit Judge.

Appellant Jeffrey Wiest brought an action under the whistleblower protection provisions set forth in Section 806
of the Sarbanes

- Oxley Act (“SOX”) , 1 8 U.S.C. § 1514A, and under Pennsylva nia law against Appellees Tyco Electronics Corporation and several officers and directors of Tyco
Electronics (collectively

, “Tyco ” )

. T he Dis tri ct Court granted Tyco‟s M otion to D ismiss the federal whistleblower claims, declined to exercise supplemental j urisdiction over the state law claims, and denied Wiest‟s M otion for R econsideration. Concluding that the District Court erred in requiring that Wiest allege that his communications to his supervisors “definitively and specifically relate to” an existing violation of a particular anti

- fraud law, as opposed to expressing a reasonable belief that corporate managers are taking actions that could run afoul of a particular anti

- fraud law

, we will

reverse , in part , the dismissal of the federal whistleblower
clai ms and vacate the dismissal of the state law claim

.

I.

A. Background

According to the C omplaint, Wiest worked for approximately thirty

- one years in Tyco‟s accounting4 department until his termination in April 2010. For Wiest‟s last ten years of employment, his office was under “a high level of audit scrutiny” due to the well

- known corporate scandal involving its former parent company, Tyco
International , and its CEO, Dennis Kozlowski . (App. 42, ¶ 31.) Around 2007, Wiest “established a pattern of rejecting and questioning expenses ” that failed to satisfy accounting
standards or securities and tax laws. ( Id. at 43 , ¶ 33 .)

1. The Atlantis Resort Event

I n mid

- 2008, Wiest refused to process a payment and
sent an emai l to his supervisor regarding an event that Tyco
intended to hold at the Atlantis Resort in the Bahamas

, which was similar to a corporate party under Kozlowski‟s management that had drawn significant criticism. Expenses
for the $350,000 Atlantis event included “Mermaid Greeters”
and “Costumed Pirat es/Wenches” at a cost of $3,000; a
“Ta t too Artist (includes tattoos)” and “Limbo” and “Fire” at a cost of $2,350; chair decorations at a cost of $2,500; and hotel room rentals ranging from $475 to $1,000 per night. ( Id. at 45, ¶ 41.) In an email to his s upervisor , Wiest expressed his
belief that the costs were inappropriately charged entirely as advertising expenses . He asserted that the costs needed to be
detailed and charged as income to attending employees
because the employees were bringing guests, a nd the expenses needed to “be reviewed for potential disallowance by a taxing authority based on excessive/extravagant spend [sic] levels.” ( Id. at 84, Ex. E.) Following Wiest‟s email, Tyco ‟s management determined that the five

- day event included only a single one

- and

- one

- half hour business meeting. As a result, they determined that processing the payment “would have resulted in a misstatement of5 accounting records and a fraudulent tax deduction

, ” and that Tyco needed to treat the event as income for att ending employees. ( Id. at 43

- 4 4, ¶ 35. ) Tyco decided to proceed with the event and to compensate the attendees for the additional tax liability by increasing (i.e., “grossing

- up”) their
bonuses.

2. The Venetian Resort Event

Also in mid

- 2008 , Wiest recei ved a request to process
a payment of $218,000 for a conference at the Venetian Resort in Las Vegas, Nevada. The request lacked both sufficient documentation for tax purposes and proper approval pursuant to Tyco‟s “ d elegation of a uthority

. ” Additionally, the request included inaccurate accounting and
tax treatment information. At Wiest‟s direction, one of his

s ubordinate s sent an email to the Tyco employee who
submitted the request

, explaining that the accounts payable department could not process the re quest until it had received an agenda and business purpose for the event, correct accounting treatment for various expenses, and approval pursuant to Tyco‟s d elegation of a uthority. The tax department eventually concluded that the conference served a
busi ness purpose, and the accounts payable department subsequently allowed the payment.

3. The Wintergreen Resort Event

I n late 2008, Wiest was presented with a request for approval o f a conference at the Wintergreen Resort in Virginia in the amount of $335,0 00 . Like the Venetian
Resort request , the Wintergreen expense request lacked both sufficient documentation and proper approval from Tyco‟s CEO. Wiest emailed his supervisor

, explaining that he6 believed T yco‟s internal policies required that the CEO be

no tified about the transaction . To the best of Wiest‟s knowledge, Tyco processed the payment without the CEO‟s approval, in violation of Tyco‟s internal policies.

4. Other Matters

W iest also alleges that h e questioned other events between 2007 and 2009. In particular, he questioned expenses for a “relatively lavish „holiday party,‟” a $52,000 audit team meeting, and an employee baby shower. ( Id

. at 49

, ¶ 55 .) He also sent an email to management when he received an expense request from an employee that inc luded duplicate entries, additional nights of hotel bills, and undocumented expenses. He informed management that processing that improper expense request would constitute invalid or undocumented business expenses if Tyco was not
reimbursed or if the amou nt was not reported as i ncome on the employee‟s W

- 2 form

.

5. Termination of Employment

Wiest allege s that Tyco became frustrated with his persistence in following proper accounting procedures. In September 2009, two human res ources employees met with
Wie st and informed him that he was under investigation for incorrectly reporting the receipt of two basketball game tickets in August 2009, for having a relationship with a co

worker ten years earlier, and for allegedly making sexually

oriented comments to co

- workers. After Wiest learned of the investigation, his health declined and he went on medical leave. Seven months later, Tyco terminated his employment.

B. Procedural History7 On July 7, 2010, Wiest sued the Tyco Defendants, asserting that his discharge was in retaliation for his reports of improper expenditures, in violation of Section 806 of SOX

. That section prohibits certain employers from discriminating against employees for reporting information that they reasonably believe constitutes a violation of one of several enumerated provision s relating to fraud and securities regulations

. See 18 U.S.C. § 1514A. 1 Wiest also presented state law claims, including intentional infliction of emotional
dis tress and wrongful termination, and his wife brought a
claim for l oss of consortium. Tyco m oved to dismiss under Federal Rule of Civil Procedure 12(b)(6) , asserting that W iest failed to state a prima facie claim under Section 806

.
As to the threshold question for a prima facie case in a
retaliation case under Section 806

– whether the Complaint sufficiently allege s that the plaintiff had engaged in “protected activity ,” see 29 C.F.R. § 1980.104(e)(2)(i)

– the
District Court determined that Wiest had to allege that his
communications (a) “ definitively and specifically ” related to
a statute or rule listed in Section 806 ; (b) express ed “ „ an objectively reasonable belief that th e company intentionally misrepresented or omitted cert ain facts to investors, which were material and which risked loss; ‟ ” and (c) “reflect [ ed ] a reasonable belief of an existing violation.” Wiest v. Lynch

, Civil Action No. 10

- 3288, 2011 WL 2923860, at *4 (E.D. Pa. July 21, 2011) (citations omitted)

. In concluding that a

1 The enum erated provisions are mail fraud, wire fraud, bank fraud, securities fraud, “any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders . . . .” 18
U.S.C. 1514A.8 communication must “definitively and specifically” relate to a
violation of a statute or rule listed in Section 806, the District Court relied upon the decision of the U.S. Department of Labor Administrative Review Board (“ARB”) in Platone v. FLYI, Inc. , ARB 04

- 154, 2006 WL 3246910, at *8 (Dep‟t of Labor Sept. 29, 2006)

, aff’d 548 F.3d 322 (4th Cir. 2008), and
court decisions that endorsed Platone ‟s “ definitive and specific ” standard. Finding that the allegations of the Complaint failed to satisfy this standard, the District Court
did not reach the other elements of a prima facie Section 806

case, declined to exercise supplemental jurisdiction over the
state law claims , and dismissed the C omplaint without prejudice

.

The District Court‟s O rder dismissing the C omplaint granted Wiest leave to file an amended complaint

. Rather than filing an amended complaint, Wiest, on August 10, 2011, presented a motion entitled “Motion for Reconsideration Nunc Pro Tunc By the Eastern District Court En Banc of Judge Pratter Memorandum Opinion of July 21, 2011, Or, In the Alternative, Motion to Dismiss Plaintiffs‟ Complaint with Prejudice and Enter a Fina l Appealable Order and Judgment ” (“Motion for Reconsideration”)

. In his Motion for

R econsideration, Wiest raised for the first time the argument that the ARB overruled Platone ‟s “defi nitive and specific”
standard in favor of a “reasonable belief” standard in Sylvester v. Parexel Int’l LLC , AR B 07

- 123, 2011 WL 2165854, at * 11 (Dep‟t of Labor May 25, 2011) (en banc)

. Wiest argued that he was entit led to reconsideration because Sylvester was a n intervening change in controlling law, and
that the District Cour t‟s reliance on the ARB ‟s prior Platone
decision was a clear error of law.9 The District Court disagreed, reasoning that Sylvester was not an intervening decision because

, although th e ARB
issued Sylvester after the parties completed briefing on Tyco ‟s M otion to D ismiss, the opinion preceded the District
Court‟s ruling

. Additionally, the District Court determined
that Sylvester was not controlling precedent, and that even if
it was bi nding, reconsideration was not warranted because (1)
its initial decision relied on cases other than Platone , and (2) Sylvester ‟s alteration of the standard for demonstrating protected activity did not change its conclusion that Wiest
failed to establish t hat he communicated an objectively reasonable belief that Tyco‟s conduct violated any statute or rule listed in Section 806

.
Wiest filed a notice of appeal on November 23, 2011, to appeal the District Court‟s Order denying his Motion for
Reconsideration. Wiest did not exp ressly indicate whether he
also w as appealing the District Court‟s initial Order dismissing the C omplaint.

II.

The District Court had jurisdiction under 28 U.S.C. §
1331 and w e have appellate jurisd iction under 28 U.S.C. §
1291

.

A. Proce dural Issues

Before turning to the merits, we must address t hree procedural issues. Fi rst, Tyco argues that, because Wiest
filed his Motion for Reconsideration twenty days after the
District Court entered its dismissal O rder, the M otion was untimely unde r E.D. Pa. L.R. 7.1(g), which establishes a10 fourteen day period to file motions for reconsideration. 2 As a result, Tyco asserts that we lack jurisdiction over W ies t‟ s appeal from the District Court‟s denial of reconsideration.

We see no jurisdictional b ar due to Wiest ‟ s failure to
move for reconsideration within the time constraints established by a local rule of court. We have recognized that,
in the context of a Federal Rule of Civil Procedure 59(e) motion to alter or amend a judgment, the prescribed time
limits are claims

- processing rules, rather than jurisdictional
rules. Lizardo v. United States , 619 F.3d 273, 276

- 77 (3d Cir. 2010). If the time limit contained within Rule 59(e) is not jurisdictional, we cannot see how the time limit contained
with in Local Rule 7.1(g) is jurisdictional. In any event, w e need not address the consequences of an untimely motion for
reconsideration under a local rule because we construe
Wiest ‟ s m otion as one under Rule 59(e). See, e.g.

, Fed. Kemper Ins. Co. v. Rausche r , 807 F.2d 345, 348 (3d Cir. 1986) ( “For purposes of Rule 4(a) of the Federal Rules of Appellate Procedure, we view a motion characterized only as a motion for reconsideration as the functional equivalent of a Rule 59(e) motion to alter or amend a judgmen t.” ) (internal quotation marks omitted)) ; s ee also Green v. Drug Enforcement Admin. , 606 F.3d 1296, 1299 (11th Cir. 2010) ( noting the prevalence of courts construing motions for
reconsider ation as Rule 59(e) motions ); Auto Servs. C o. v. KPMG, LLP , 537 F.3d 853, 856 (8th Cir. 2008) (“A „motion
for reconsideration‟ is not described in the Federal Rules of Civil Procedure, but such a motion is typically construed as

2 The District Court noted that the Motion for Reconsideration was untimely under Local Rule 7.1(g), but
nonetheless decided the motion on the merits.11 either a Rule 59(e) motion to alter or amend t he judgment or as a Rule 60(b) motion for relief from judgment .” )

. Because
Wiest filed his Motion for Reconsideration within Rule 59(e)‟s twenty

- eight day time limit, we conclude that the motion was timely.

Tyco also argues that the scope of our review is
limited to the District Court‟s November 2011 Order denying
reconsideration because Wiest did not des ignate for appeal the District Court‟s July 2011 Order granting Tyco‟s Motion
to Dismiss. When a party appeals only a specified judgment, we acquire juri sdiction to review only that judgment or a judgment “ „ fairly inferred ‟ ” by the notice of appeal. Sulima v. Tobyhanna Army Depot , 602 F.3d 177, 184 (3d Cir. 2010) (quoting Elfman Motors, Inc. v. Chrysler Corp. , 567 F.2d 1252, 1254 (3d Cir. 1977)). Yet, we have also held that we “liberally construe[] notices of appeal. ” Id. ( internal quotations marks omitted ). We may exercise appellate jurisdiction over orders not specified in the n otice of a ppeal
where : “ (1) there is a connection between the specified an d unspecified orders; (2) the intention to appeal the unspecified order is apparent; and (3) the opposing party is not prejudiced and has a full opportunity to brief the issues.” Id. (internal quotation marks omitted).

Here, there is an adequate connectio n between the District Court‟s Order denying reconsideration and its underlying Order gran ting Tyco‟s Motion to Dismiss because Wiest requested the District Court to reconsider the legal standard it applied to his Section 806 claims in the original
dismiss al O rder. Second, because the two O rders of the District Court were intertwined, we infer that Wies t intended to appeal the underlying dismissal O rder. Wiest ‟ s intention12 was apparent in his principal brief

, in which he argues that the
District Court erre d in granting Tyco‟s Motion to Dismiss
because it rel ied on the Platone standard rather than Sylvester
and cites the District Court‟s dismissal O rder throughout the
brief

. Third, we find no prejudice t o Tyco in reviewing the underlying dismissal O rder as Tyco has had a full opportunity

to brief the corresponding issues

. 3 As a result, we exercise jurisdiction over both the District Court‟s November 2011 Order denying Wiest ‟ s Motion for Reconsideration and its July 2011 Order granting Tyco‟s Motion to Dismi ss

.
Finally

, we also reject T yco‟s third procedural argument that Wies t waived any argument s based on Sylvester because he failed to raise those arguments in his
brief in opposition to Tyco‟s Motion to Dismiss. A lthough
the District Court noted that W iest first brought Sylvester to its attention in his Motion for Reconsideration and that a motion for reconsideration should not raise new arguments that the party could have made previously, the District Court proceeded to address Sylvester in its reconsidera tion ruling.

T he District Court evidently did not deem Wiest to have
waived any arguments based on Sylvester

, and neither do we.

B

. Standard of Review

We have held that “a proper Rule 59(e) motion . . . must rely on one of three grounds: (1) an intervenin g change

3 In addition, we have also held more plainly that “[a] timely appeal from a denial of a Rule 59 motion to alter or

amen d „brings up the underlying judgment for review.‟” Fed. Kemper Ins. Co. v. Rauscher , 807 F.2d 345, 348 (3d Cir. 1986) (quoting Quality Prefabrication, Inc . v. Daniel J. Keating Co. , 675 F.2d 77, 78 (3d Cir. 1982)).13 in controlling law; (2) the availability of new evidence; or (3) the need to correct clear error of law or prevent manifest injustice.” Lazaridis v. Wehmer , 591 F.3d 666, 669 (3d Cir. 2010) (citing N. River Ins. Co. v. CIGNA Reinsurance Co.

, 52
F .3d 1194, 1218 (3d Cir. 1995) ). We generally r eview a
district court‟s denial of reconsideration for abuse of
discretion. Max’s Seafood Cafe v. Quinteros

, 176 F.3d 669, 673 (3d Cir. 1999) (citing N. River Ins

. , 52 F.3d at 1203). An “errant conclusion of law, an improper application of law to fact, or a clearly erroneous finding of fact” may result in an
abuse of discretion. McDowell v. Phila. Housing Auth. , 423 F.3d 233, 238 (3d Cir. 2005 )

. More specifically, when a
district cou rt predicates its denial of reconsideration on an issue of law, our review is plenary, and when it bases its
denial on an issue of fact, we review for clear error

. Id.

In addition, we review a district court‟s dismissal
pursuant to Rule 12(b)(6) de novo

. Phillips v. Cnty. of Allegheny , 515 F.3d 224, 230 (3d Cir. 2008)

. In Long v. Atlantic City Police Department , 670 F.3d 436 (3d Ci r. 2012), we concluded that the standards of review for an underlying
dismissal order and for the denial of a motion for reconsideration of the dismissal order are functionally equivalent, because we exercise plenary review of the
dismissal order as well a s of the legal questions in the denial
of reconsideration. Id. at 446 & n.20, 447. B ecause the issue
here is whether the District Court applied the correct legal standard to a claim under Section 806 of SOX, our review is plenary regardless of whether we review the District Court‟s application of the standard in its initial dismissal O rder or its subsequent O rder denying reconsideration.

C

. Whistleblower Claims U nder Section 806 of S OX14 SOX Section 806 prohibits public ly traded companies and their emplo yees from retaliating against an employee
who

provide[s] information, cause[s]

information to be provided, or otherwise assist[s] in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail
fraud ]

, 1343 [ wire, radio, or
television fraud ]

, 1344 [ bank
fraud ]

, or 1348 [ securities and commodities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders

, when t he information is provided to or the investigation is conducted by . . . a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate
misconduct )

. . . .

18 U.S.C. § 1514A . To establish a prima facie case for a
Section 806 claim, the employee must allege that he or she (1) “engaged in a protected activity;” (2) “[t]he respondent15 knew or suspected that the employee engaged in the protected activity;” (3) “[ t]he employee suffered an adverse action;” and (4) “[t]he circumstances were sufficient to raise the inference that the protected activity was a contributing factor in the adverse action.” 29 C.F.R. § 1980.104(e)(2)(i)

- (iv).

Section 806 provides that an e mployee alleging discrimination in violation of SOX may file a complaint with the Secretary of Labor, who may issue a final order

. 18 U.S.C. § 1514A(b)(1)(A) , (2) (incorporating the Department of Labor complaint procedures under 49 U.S.C. § 42121(b)). If the Secretary fails to issue a final decision within 180 days of the filing of the complaint, the complainant may also file a
civil action in federal district court. Id. § 1514A(b)( 1)(B)

. T he Secretary of Labor has delegated the authority to review appeals under Section 806 and issue final agency decisions to the ARB. Delegation of Authority and Assignment of Responsibility to the Administrative Review Board, 75 Fed. Reg. 3924 , 3924

- 25 (Jan. 25, 2010).

Focusing on the “protected activity” prong in its Memorandum accompanying its Order granting Tyco‟s Motion to Dismiss, the District Court invoked the ARB‟s opinion in Platone and concluded that “[f]or a communication to be protected, it must „definitively and specifically‟ relate to one of the statutes or rules listed in ”
Section 806. Wiest

, 2011 WL 2923860, at *4. The Court of Appeals cases cited by the District Court i n support of its application of the “definitive and specific ” standard either relied upon or cited with approval Platone ‟s standard

. See Van Asdale v. Int’l Game Tech. , 577 F.3d 989, 996

- 97 (9th Cir. 2009) (deferring to Platone ‟s “definitive and specific ” standard as a reasonable interpretation of the statute); Day v.16 Staples, Inc.

, 555 F.3d 42, 55 (1st Cir. 2009) ( quoting the Fourth Circuit‟s opinion affirming the ARB‟s decision in
Platone in which the court employed the “definitive and specific” standard ); Allen v. Admin. Review Bd.

, 514 F.3d 468, 476

- 77 (5th Cir. 2008) (“We agree with the ARB‟s legal conclusion that an employee‟s complaint must „definitively and specifically relate‟ to one of the six enumerated categories found in” Section 806 ).

In Sylvester

, however, the ARB abandoned the “definitive and specific” standard announced in Platone

. Sylvester , 2011 WL 2165854, at *15. The ARB noted that
the test adopted in Platone originated in cases under the whistleblower provision in the Energy Reorganization Act

, 42 U.S.C. § 5851 (“ERA”). Id. at *14

. T he ARB explained that

, in addition to enumerating specific activities for which employers cannot retaliate against employees , the whistleblower provision of the ERA contains a catch

- all provision to protect employees who “ assist or participate in „ a proceeding ... or any other action [designed] to carry out the purposes of this chapter or the Atomic Energy Act of 1954, as
amended.” Id. (quoting 42 U.S.C. § 5851(a)(1)(F) ). According to the ARB, because the ERA does not define “any other action to carry out the purposes of this chapter,” courts interpreted that p hrase to require that an employee‟s activity definitively and specifically implicate safety because of the ERA‟s purpose of protecting employee actions involving nuclear safety. Id.

As the ARB recognized in Sylvester , th e SOX whistleblower provision does not contain language similar to the ERA ‟s catch

- all provision

. Id. I nstead, it expressly
enumerates the laws and rules to which it applies. T herefore,17 the ARB concluded that the importation of the definitive and specif ic standard is “inapposite to the question of what constitutes protected activity under SOX‟s whistleblower protection provision.” Id. Moreover, the ARB determined that the definitive and specific standard potentially c onflicts
with the statutory language of Section 806 , which prohibits retaliation against employees for reporting information that he
or she reasonably believes violates SOX. Id. 4

4 In decisions issued subsequent to Sylvester , the ARB has asserted that the definitely and specifically standard does in fact conflict with the language of Section 806. See Zinn v.
Am. Commerci al Lines, Inc. , ARB No. 10

- 029, 2012 WL 1102507, at *4 n.33 (Dep‟t of Labor March 28, 2012) (“[T]he „definitive and specific‟ standard employed in prior ARB cases is inconsistent with the statutory language of Section 806.”); Prioleau v. Sikorski Aircraft Corp. , ARB No. 10

- 060, 2011 WL 6122422, at *6 n.3 (Dep‟t of Labor Nov. 9, 2011) (“In Sylvester , we made clear that the “definitive and specific” standard that the ARB had employed in prior ARB cases . . . was inconsistent with Section 806‟s statutory langu age.”); Reamer v. Ford Motor Co. , ARB No. 09

- 053, 2011 WL 3307575, at *3 n.3 (noting that the ARB “has criticized the use of „definitively and specifically‟ as a standard for an employee‟s reasonable belief of a violation of
the laws listed under Section 8 06.”); Inman v. Fannie Mae

, ARB No. 08

- 060, 2011 WL 2614298, at *6 (Dep‟t of Labor June 28, 2011) (finding error in the ALJ‟s use of the “definitive and specific” standard because it is inconsistent with the statutory language of Section 806); Mara v. Semp ra Energy Trading, LLC , ARB No. 10

- 051, 2011 WL 2614345, at *7 (Dep‟t of Labor June 28, 2011) (same).18 SOX does not define what constitutes a “r easonable
belief.” The ARB interprets the phrase to require that the plaintiff have a subjective belief that the employer‟s conduct
violates a provision listed within Section 806 and that the belief is objectively reasonable. Id. at *11

- 12. Indeed, as t he
ARB noted in Sylvester , the legislative history of Section 806 provides that Congress intended this reasonable belief standard to “impose the normal reasonable person standard
used an d interpreted in a wide variety of legal contexts ( See generally

, Pass aic Valley Sewerage Commissioners v. U.S. Department of Labor , 992 F.2d 474, 478 [3d Cir. 1993]).” Id. at *11 (quoting S. Rep. No. 107

- 146, at 19 (2002)).

The ARB opined that to meet the subjective element, the plaintiff must actually have believed that t he conduct in question violated the laws enumerated in SOX. Id. The ARB

e xplained that “the legislative history of Sarbanes

- Oxley makes clear that its protections were „intended to include all good faith and reasonable reporting of fraud, and there shoul d be no presumption that reporting is otherwise.‟ ” Id. (alteration omitted) (quoting Van Asdale v. Int’l Game Tech.

, 577 F.3d 989, 1002 (9th Cir. 2009) (quoting 148 Cong. Rec.
S7418

- 01, (daily ed. July 26, 2002) ) ). Regarding the objective element, t he AR B clarified that the plaintiff‟s belief
“is e valuated based on the knowledge available to a reasonable person in the same factual circumstances with the same training and experience as the aggrieved employee

. ” I d.
at *12 ( quoting Harp v. Charter Commc’ns, Inc. , 588 F.3d 722, 723 (7th Cir. 2009) ).

We conclude that the ARB‟s rejection of Platone ‟s

“ definitive and specific” st andard is entitled to Chevron
deference. See Chevron, U.S.A., Inc. v. Natural Res. Def.19 Council , 467 U.S. 837, 842

- 43 (1984) (“If . . . the court determines Congress has not directly addressed t he precise question at issue . . . the question for the court is whether the agency‟s answer is based on a permissible construction of the statute.”). As previously discussed, Section 806 provides that an employee seeking whistleblower protection under SOX may file a complaint with the Secretary of Labor, who may
i ssue a final order. 18 U.S.C. § 1514A(b)(1)(A) . The Secretary of Labor has delegated the authority to review appeals under Section 806 and issue final agency decisions to
the ARB. Delegation of Authority and Assignment of Responsibility to the Administrative Review Board, 75 Fed. Reg. 3924 , 3924

- 25 (Jan. 25, 2010). In United States v. Mead Corp. , 533 U.S. 218 (2001) , the Supreme Court recognized that “express congressional authorizatio ns to engage in the process of . . . adjudication that produces

. . . rulings for which deference is claimed,” is “a very good indicator of delegation meriting Chevron treatment . . . .” Id. at 229. The Court further explained that “[i]t is fair to assume generally that Congress contemplates administrative action with the effect of law when it provides for a relatively formal administrative procedure,” including formal adjudica tion. Id.
at 230 & n.12

. Applying Mead

, the Ninth Circuit held that the ARB‟s interpretation of Section 806 warranted Chevron
deference based on this statutory and administrative delegation

. Welch v. Chao , 536 F.3d 269, 276 & n.2 (9th Cir. 2008)

. We agree and hold that t he ARB‟s interpretation of
the “reasonabl e belie f

” standard is entitled to Chevron
deference.

The fact that the ARB reconsidered and abandoned the
“definitiv e and specific ” standard does not preclude our
deferenc e to the reasonable belief standard it subsequently20 announced in Sylvester

. In National Cable &
Telecommunications Ass’n v. Brand X Internet Services , 545 U.S. 967 (2005), the Court explained that “[a]gency inconsistency is not a basis for declining to an alyze the agency‟s interpretation under the Chevron framework.” Id. at 981. The Court elaborated that “if the agency adequately explains the reasons for a reversal of policy, change is not invalidating, since the whole point of Chevron is to leave the
di scretion provided by the ambiguities of a statute with the implementing agency.” Id. (internal quotation marks omitted). Here , the ARB thoroughly explained why it reversed the course it previously set in Platone

. S ee Sylvester , 2011 WL 2165854, at *14

- 1 5 . T herefore

, Chevron
deference applies.

Whi le agreeing that the definitive and specific standard should be jettisoned, amicus curiae National Whistleblower
Center (“NWC”) contends that the objective belief standard
established in Sylvester is too string ent. NWC argues that Section 806 protects an employee as long as he or she has a good faith belief in the existence of a violation

. For support,
NWC relies on our decision in Passaic Valley Sewerage Commissioners v. U.S. Department of Labor , 992 F.2d 474 (3d Cir. 1993).

In Passaic Valley

, we interpreted the whistleblower provision of the Clean Water Act, which protect s employees
who have “filed, instituted, or caused to be filed or instituted any proceeding under” the Clean Water Act. Id. at 478 (quoting 33 U.S.C. § 1367(a)). At issue was whether the term “proceeding” included internal complaints. Id. at 475. We noted that, if the whistleblower provision was to accomplish the goals of the statute, then “employees must be free from21 threats to their job security in retaliation for their good faith assertions of corporate violations of the statute.” Id. at 478. Affording Chevron deference to the Secretary‟s interpretation, we upheld his construction that “all good faith intracorporate allegations are ful ly protected f rom retaliation under” the Clean Water Act‟s whistleblower provision. Id. at 480.

Because the legislative history of Section 806
reference s Passaic Valley in stating Congress‟s intention “to impose the normal reasonable person standard used and interpreted in a wide variety of legal contexts,” S. Rep. No.
107

- 146, at 19 (2002), NWC contends that Congress intended to adopt Passaic Valley ‟s good faith belief test as the only
standard to meet in bringing a claim under Section 806. We disagree. First, at issue in Passaic Valley was the meaning of the term “proceeding,” Passaic Valley , 992 F.2d at 478, not the phrase “reasonably believes

. ” As a result, its standard
does not control the issue at hand

. Second, a good faith belief goes to the empl oyee‟s subjective belief that a violation occurred, which is only one element of the reasonabl e be lie f
standard applicable to Section 806

. Therefore, w hatever guidance Passaic Valley provides, it relates only to the subjective element of a reasonable beli ef test

. As explained
in Sylvester , the reasonable belief standard also includes an objective element. Sylvester , 2011 WL 2165854, at *11. As
we did in Passaic Valley , and as explained above, we defer to the administering agency‟s reasonable interpretat ion of the

statute . As a result, an employee must establish not only a subjective, good faith belief that his or her employer violated a provision listed in SOX, but also that his or her belief wa s objectively reasonable. Id. at *11

. A belief is objecti vely
reasonable when a reasonable person with the same training22 and experience as the employee would believe that the conduct implicated in the employee‟s communication could
rise to the level of a violation of one of the enumerated provisions in Section 8 06. Id. at *11

- 12.

The Dissent contends that we have adopted an internally inconsistent test by recognizing that an employee must have an objectively reasonable belief of a violation of
one of the listed federal laws but not a reasonable belief that
each element of a listed anti

- fraud law is satisfied. We perceive no inconsistency because we do not think Congress intended such a formalistic approach to the question of whether an employee has engaged in “protected activity.” As so aptly stated by our diss enting colleague, the purpose of “[w]histleblower statutes like SOX § 806 [is] to protect people who have the courage to stand against institutional pressures and say plainly, „what you are doing here is wrong‟ . . . in the particular way identified in the statue at issue.” (Dissenting Op. Typescript at 1.) By identifying conduct that falls within the ample bounds of the anti

- fraud laws, an employee has done just that. That employee should not be unprotected from reprisal because she did not have access to information sufficient to form an objectively reasonable
belief that there was an intent to defraud or the information communicated to her supervisor was material to a shareholder‟s investment decision. “Congress chose statutory language which ensures that „an employee‟s reasonable but mistaken belief that an employer engaged in conduct that constitutes a violation of one of the six enumerated categories [set forth in § 806] is protected.‟” Van Asdale , 577 F.3d at 1001 (quoting Allen , 514 F.3d at 477 ). An employee‟s lack of knowledge of certain facts that pertain to an element of one
of the anti

- fraud laws would be relevant to, but not dispositive23 of, whether the employee did have an objectively reasonable
belief that a listed anti

- fraud law had been violated. Indeed, whether an employee has an objectively reasonable belief may not alway s be decided as a matter of law. S ee Allen , 514
F.3d at 477

- 78 . Indeed, this issue would generally not be amenable to adjudication on the basis of the averments of a complaint that concerns a communication that relates in an understandable way to one of the anti

- fraud provisions listed in § 806

.
In addition to rejecting the definitive and specific standard that the District Court relied upon in granting Tyco‟s
Motio n to Dismiss

, Sylvester c onflicts with two additional legal conclusions reached by the District Court relating to protected activity under Section 806

. First, in dismissing
Wiest ‟ s Complaint, the District Court concluded that an “employee‟s communication must convey that his concern with any alleged misconduct is linked to „an objectively reasonable belief that the company intentionally misrepresented or omitted certain facts to investors, which
were material and which risked loss.‟” Wiest , 2011 WL
292386 0, at *4 (quoting Day v. Staples, Inc. , 555 F.3d 42 , 56 (1st Cir. 2009 ) ). Sylvester expressly rejected such an interpretation. Observing that “[s]ome courts have misinterpreted [ Platone ‟s] analysis as a requirement that SOX complainants must allege elem ents of a securities fraud claim for protection,” the ARB reasoned that “requiring a complainant to prove or approximate the specific elements of a securities law violation contradicts the statute‟s requirement that an employee have a reasonable belief of a violation of the
enumerated statues.” Sylvester , 2011 WL 2165854, at *18. The ARB further explained, “a complain ant can engage in protected activity under Section 806 even if he or she fails to24 allege or prove materiality, scienter, reliance, economic loss,
or loss causation.” Id. We find th is interpretation to be reasonable because there is nothing in the statutory text that suggests that a complainant ‟s communications must assert the
elements of fraud in order to express a reasonable belief that
hi s or her employer is violating a provision listed in Section
806

. Therefore, the District Court erred by requiring that an employee ‟s communication reveal the elements of securities fraud, including intentional misrepresentation and materialit y.

Second, the District Court concluded that to constitute protected activity, the information contained within an employee‟s communication must implicate “a reasonable
belief of an existing violation.” Wiest , 2011 WL 2923860, at
*4 (emphasis added) (citing Livingst on v. Wyeth , 520 F.3d 344, 352 (4th Cir. 2008)). Sylvester rejected th is requirement
as well. T he ARB held that Section 806 protects an employee‟s communication about a violation that has not yet occurred “as long as the employee reasonably believes that the violation is likely to happen.” Sylvester , 2011 WL 2165854, at *13. We fi nd this interpretation of the “reasonably believes” statutory phrase, 18 U.S.C. § 1514A(a)(1), to be reasonable given the statute‟s purpose to combat corporate wrongdoing

. S ee S. Rep. No. 107

- 146, at 5 (2002) ( “Th[e] „corporate code of silence‟ not only hampers investigations, but also creates a climate where ongoing wrongdoing can occur with virtual impunity.” )

. It would
frustrate that purpose to require an employee , who know s that a violation is imminent, to wait for the actual violation to

occur when an earlier report possibly could have prevented it

.
Contrary to our dissenting colleague‟s assertion, we are not “ignor[ing] the need for a whistleblower‟s employer to25 actually perceive that a whistle has been blown.” (Dissent ing Op. Typescript at 4 .) We agree with the Dissent that, in order for an employer to “know or suspect that the whistleblower

plaintiff is engaged in protected conduct . . . the plaintiff‟s
intra

- corporat e communications [must] relate in an understandable way to one of the stated provisions of federal law [in § 806].” ( Id. ) But the whistleblower‟s communication need not ring the bell on each element of one of the stated provisions of federal law to suppo rt a n inference that the employer knew or suspected that the plaintiff was blowing the whistle on conduct that may fall within the ample
reach of the anti

- fraud laws listed in § 806. To hold that an employer could not have suspected that the plaintiff was engaged in protected activity because the communication did not recite facts showing an objectively reasonable belief in
the satisfaction of each element of one of the listed anti

- fraud provisions would eviscerate § 806. An employee may not
have access t o information necessary to form a judgment on certain elements of a generic fraud claim, such as scienter or materiality, and yet have knowledge of facts sufficient to alert the employer to fraudulent conduct. When an employee
communicates these facts to a supervisor, the employer has a sufficient basis to suspect that the employee is protected against reprisal for communicating that information.

Moreover, whether an employee‟s communication is indeed “protected activity” under § 806 is distinct from
whet her the employer had reason to suspect that the communication was protected. To show that the communication is protected, the employee must have both a subjective and an objective belief that the conduct that is the subject of the communication relates to an existing or prospective violation of one of the federal laws referenced in26 § 806. The communication itself need not reveal all the facts that would cause a reasonable person with the whistleblower‟s training and background to conclude that a
reference d federal law has been or will be violated. That determination should be based upon all the attendant circumstances, and not be limited to the facts conveyed by a whistleblower to the employer. If the communication itself had to convey facts sufficient t o support an objectively reasonable belief of a violation of one of the referenced laws, Congress would not have imposed liability upon an employer who merely “suspected” that the communication is protected from reprisal.

In this case, the District Court did not decide this matter on the ground that Wiest‟s pleadings failed to support a plausible inference that Tyco knew or suspected that Wiest had engaged in protected activity. Instead, the District Court decided that Wiest‟s Complaint was inadequate be cause the communications did not “definitively and specifically” relate to a statute or rule listed in § 806 and failed to articulate facts that supported a reasonable belief of actionable fraudulent
conduct directed at investors. Consistent with accordin g Chevron deference to the ARB‟s holding in Sylvester , we have found that the standards used by the District Cour t were too stringent. We now turn to Wiest‟s Complaint to ascertain whether it states a § 806 claim for relief under the standard
announced in Sylvester

.

D. Application of Sylvester ‟s Reasonable Belief Standard

Although we hold that the District Court applied the wrong legal standard in analyzing Wiest ‟ s claims under Section 806, dis missal is still appropriate if Wiest nevertheless failed to p lead sufficient facts to state a claim.27 See Tourscher v. McCullough , 184 F.3d 236, 240 (3d Cir. 1999) ( “We may affirm the district court on any ground supported by the record.” ). “To survive a motion to dismiss, a complaint must contain sufficient factua l matter, accepted as true, to state a claim to relief that is plausible on its face.” McTernan v. City of York, Pa. , 577 F.3d 521, 530 (3d Cir. 2009) (alter ation omitted) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (internal quotation marks omitted).

1. The Atlantis Resort Event

The Complaint alleges that Wiest refused to p rocess a payment for an d questioned the legitimacy of an extravagant
event to b e held at the Atlantis Resort. In particular, in a June 3, 2008 email to his supervisor, Wiest explained, among other

concerns, that “[a]s submitted, the costs are charged enti rely to advertising expense which seems inappropriate and does not address the issue of breaking out the meals and entertainment portions which we feel would fall into the 50%
deduct i b ility classification for tax purposes.” (App. 84, Ex. E.) The Complain t also alleges that Wiest, like many others

,
w as aware of a similar event held during Kozlowski ‟s tenure

. Wiest‟s email to his supervisor expressed his concerns about Tyco treating the costs of the event as business expenses and
his belief that certain co sts should be treated as income for the
guests. Because of his communication, a review of the expenses revealed that if Tyco had processed the transaction as originally submitted, it “would have resulted in a misstatement of accounting records and a fraud ulent tax deduction . . . .” (App. 43, ¶ 35. )

These facts are sufficient to support a plausible
inference that Wiest reasonably believed that Tyco‟s conduct
would v iolate one of the provisions in Section 806 because he28 foresaw a potentially fraudulent tax deduction and misstatement of accounting records if he did not bring that information to the attention of his supervisors. Furthermore, Tyco‟s decision to “gross

- up” its employees‟ income by compensating them for extra tax liabilities due to the Atlantis trip not being considered a business expense also plausibly
created a reasonable belief in Wiest that a SOX violation would occur, given Wiest‟s familiarity with Kozlo wski having used the “grossing

- up” method during the Tyco
scandal

.

We find that the alle ged facts show not only that Wiest subjectively believed that Tyco‟s conduct may have violated a provision listed in Section 806, but also support an inference that his belief was objectively reasonable. A reasonable person in Wiest‟s position who had see n the expense request for the extrav agant Atlantis event could have believed that treating the Atlantis event as a business expense violated a provision of Section 806, especially given the scrutiny Tyco received during the Tyco International scandal
under Kozlowski

. We find

, therefore, that Wiest pled
sufficient facts to establish that his communication relating to the Atlantis event was protected activity under Section 806. As a result, we reverse the District Court‟s dismissal Order with respect to Wie st‟s communication relating to the Atlantis

event. 5

5 The Dissent asserts that the accounting treatment of the Atlantis event does not suggest fraudulent conduct, characterizing the manner in which the even t‟s expenses were originally to be treated as an “error” or “mistake.” (Dissenting Op. Typescript at 1 6 n. 12 .) That characterization29 2. The Venetian Resort Event

Wiest also allege s that he directed an expense request for an event at the Venetian Resort to be held while the tax department evaluated the business purpose of the event and until his department received proper documenta tion and accounting treatment. After receiving a revised agenda, the tax department eventually approved the event as a business

expense. In an email chain attached to the Complaint relating
to the Venetian ev ent, t he only reference to Wiest indicates
that he asked his subordinate to forward a colleague
additional information that Wiest‟s department had received
about the event

. That particular email also reveals that although the accounts payable department re quested
additional review of the expenses, the department “believe[d] the information provided substantiates this [event] as a business expense . . . .” (App. 114, Ex. M.)

ignores the fact that we are dealing solely with the allegations of a complaint, which must be viewed in the light most
f avorable to Wiest. See Phillips , 515 F.3d at 233 (holding that, in the wake of Bell Atlantic Corp. v. Twombly , 550 U.S. 544 (2007), courts are still correct to “construe the complaint in the light most favorable to the plaintiff, and [to] determine
whethe r, under any reasonable reading of the complaint, the plaintiff may be entitled to relief” (internal quotation marks omitted)). In any event, the issue is not whether the contemplated accounting treatment was or was not part of a
scheme to defraud. The i ssue is whether such accounting treatment could reasonably be believed by Wiest to be fraudulent. Given the Kozlowski scandal, a jury could find that Wiest reasonably believed that the sins of Kozlowski were being repeated.30 Even if the facts in the Complaint established that
Wiest subjectively believed the expense request for the Venetian event could have violated a provision i n Section 806, we conclude that, objectively, a reasonable person in Wiest‟s position would not have believed that the expense request that initially lacked a detailed agenda and break down of expenses would constitute a violation of one of the provisions listed in Section 806. Therefore, we affirm the
District‟s dismissal Order with respect to Wiest ‟ s communications relating to the Venetian event.

3. The Wintergreen Resort Event

Regard ing the $355,000 event that took p lace at the Wintergreen Resort, Wiest allege s that the initial invoice lacked sufficient documentation and accounting breakdowns

. In addition

, Wiest allege s that a pla n ned attendee of the event had approved the request in stead of Defendant Thomas Lynch, the CEO

, as required by Tyco‟s delegation of

aut hority. Emails relating to the event show that Wiest twice indicated to management that Lynch needed to approve the request. In the first email, Wiest requested clarificatio n from
the C FO , Defendant Terrence Curtin, that he was approving
the entire cost of the event and asked that Curtin copy Lynch
on his response to communicate his approval. After Curtin apparently responded by giving his approval without copying Lynch , Wie st then emailed his supervisor reiterating that he
still believed that Lynch should be informed about the matter because Curtin could only approve up to $100,000 for events

. Curtin failed to copy Lynch

.
The averments of the Complaint support an inference
that Wiest subjectively believed that the lack of the CEO‟s approval, which contravened internal control procedures

,31 would violate one of the provisions enumerated in Section
806

. Furthermore, it is plausible that a reasonable person in Wiest‟s position c ould have believed that the event‟s approval by an attendee of the event, who would therefore directly benefit from that approval, instead of by the CEO a s required by in ternal control procedures

, may have violated one of the provis ions contained in Sectio n 806

. 6 Therefore, w e reverse the District Court‟s dismissal Order with respect to Wiest‟s communications relating to the Wintergreen event.

4. Other Matters

Wiest emailed management in 2007 about an employee who submitted improper expenses to inform

mana gement that if it wished to claim the expenses as business expenses then either Tyco would have to be reimbursed or the charges would have to be reported as income for the employee. The allegation and corresponding

6 The Dissent questions whether unauthorized expenditures for the Wintergreen Resort event could support
a claim under one of the anti

- fraud laws listed in § 806. Approval authorities exist to ensure that large expenditures are undertaken for appropriate business purposes. Expenditure s for which required approvals have not been obtained raise the specter that they are not undertaken for an appropriate business purpose. Once again, such expenditures could plunder corporate assets for the benefit of those attending lavish events, maskin g personal income. We believe that the Complaint alleges sufficient facts to plausibly support an inference that Wiest had an objectively reasonable
belief that the absence of the CEO‟s authorization for the Wintergreen Resort Event was part of a fraudule nt scheme.32 email show only that Wiest expla i n ed to management the potential tax consequences relating to the expenses

. Without

more, the Compl aint lacks sufficient facts to establish that Wiest reasonably believed that Tyco‟s handling of the matter
constituted a violation o f a law listed in Section 806.

I n addition, Wiest alleges that he “raised question s”

a bout proper accounting treatment of other events that occurred between late 2007 and September 2009 , including a “lavish” holiday party, a team meeting that did not break out entertainment and meal expe nses, and a baby shower for an employee. Aside from stating that it took several attempts to confirm that the baby shower would be treated as a business expense, Wiest fails to allege any facts suggesting that he reasonably believed these events violated an enumerated provision in Section 806. The Complaint does not specify anything about the nature or content of his communications. By itself, t he allegation that Wiest “raised questions” does not create a plausible inference that he or any reasonable per son in his position would believe that expenditures on the events rose to the level of a violation of a provision in Section 806. As a result, we affirm the District Court‟s dismissal Order with respect to Wiest‟s communication s relating to th e improper b usiness expense claims of an individual employee
as well as the holiday party, team meeting, and baby shower

events.

III.

In sum, we hold that the reasonable belief test is the appropriate standard with which to analyze the
communications that Wiest conten ds constitute “protected activity.” As explained in Sylveste r , that standard requires
that an employee‟s communication reflect a subjective and33 objectively reasonable belief that hi s employer‟s conduct
constitutes a violation of an enumerated provision in Section
806. The District Court erred in dismissing Wiest‟s Complaint by employing the “definitive and specific”
standard

, by interpreting Section 806 to require that an employee ‟s alleged “protected activity” reveal the elements of
securities fraud

, and by requiring that his or her
communication reference an existing violation. We find that Wiest has pled adequate facts to show that his
communication s relating to the Atlantis and Wintergreen

events w ere protected activity under Section 806

. We agree
wi th the District Court, however, that Wiest cannot establish
that his communication s relating to the other alleged matter s constituted protected activity.

For the foregoing reasons, we reverse the District
Court‟s Order denying Wiest‟s Motion for Reconsider ation.
See McDowell v. Phila. Housing Auth. , 423 F.3d 233, 238 (3d Cir. 2005) (explaining that an errant conclusion of law may result in an abuse of discretion). We also reverse the District
Court‟s Order granting Tyco‟s Motion to Dismiss as to Wiest‟s c ommunications relating to the Atlantis and Wintergreen events and a ffirm the dismissal as to Wiest‟s communications relating to the other events. 7 We remand
this matter to the District Court for further proceedings
consistent with this opinion

.

7 In light of the reinstatement of the SOX Section 806 claims, the District Court‟s decision to decline to exercise supplemental jurisdiction will be vacated.1 Wiest, et al. v. Lynch, et al., No. 11

- 4257

JO RDAN, Circuit Judge

, Dissenting

Because I believe the District Court properly
determined that the W i e sts fail ed to establish that Mr. Wiest
held or communicated an objectively reasonable belief that
the acti ons of Tyco officials constituted a violation of one or

more of the laws referenced in § 806 of the Sarbanes

- Oxley
Act of 2002 (“ SOX” ), Pub. L. No. 107

- 204, 116 Stat. 74 5 (codified at 18 U.S.C. § 1514A )

, I resp ectfully dissent.

W hi stleblower statutes like SOX § 806 seek to protect people who have the courage to stand against institutional

pressure s and say plainly

, “what you are doing here is wrong ”

– n ot wrong in some abstract or philosophical way, but wrong in the particular way indentified in the statut e at issue

. See Day v. Staples , Inc. , 555 F.3d 42, 55 (1st Cir. 2009) (requiring that an employee‟s Section 806 complaint “be measured against the basic elements of the laws specified in the statute”). The protection of § 806 depend s upon the
whistleblow er identifying wrongdoing made ille gal by federal
laws target ing fraud, especially fraud against the holders of publicly traded securities

. To qualify as a whistleblower under § 806, the employee must have p rovid e d information regarding conduct “which the employee reasonably believes
constitutes a violation of [18 U.S.C. §§] 1341 [mail fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law r elating to fraud against shareholders ... .” 18 U.S.C. § 1514A (a)(1) . Section
806 thus defines protected con duct not by reference to the2 statute in which it is contained

, 1 but by reference to four
federal fraud statutes , SEC rules and regulations, and othe r federal law that is circumscribed as “relating to fraud against
shareholders.”

As the Majority notes, t he elements of a § 806
retaliation claim are that (1) the employee “engaged in a protected activity,” (2) the employer “knew or suspected that
the e mployee engaged in t he protected activity,” (3) the employee “suffered an adverse action,” and (4) the
circumstances were “sufficient to raise the inference that the

1 In contrast to § 806

, other whistleblower statutes often identify the targeted wrongdoing within the same statutory scheme. See, e.g.

, 42 U.S.C. § 7622 (a)(1) ( defining protected conduct pursuant to the Clean Air Act as having “commenced, caused to be commenced, or [to be] about to commence ... a proceeding” under the Act or testifying or assisting in such a proceeding ) ; 42 U.S.C. § 5851 (a)(1) ( defining protected conduct pursuant to the Energy Reorganization Act as having notifi ed an employer of a violation of the Act, refusing to engage in practices prohibited by the Act, or commencing or testifying in a proceeding regarding violations of the Act ); 30 U.S.C. § 815(c)(1) ( defining protected conduct pursuant to the Federal Mine
Sa fety and Health Act as having “filed or made a complaint
under or related to” the Act ); 29 U.S.C. § 158(a)(4) ( defining protected conduct pursuant to the National Labor Relations Act as having “filed charges or given testimony” under the Act) ; 31 U.S.C. § 3730(h)(1) (defining protected conduct under the False Claims Act as “lawful acts done by the employee[] ... in furtherance of an action under [the Act] or other efforts to stop 1 or more violations of [the Act]”).3 protected activity was a contributing factor in the adverse

ac t ion.” 29 C.F.R. § 1980.104 (e)(2); see also Day , 555 F.3d
at 53 (noting that the “requirements for a prima facie [§ 806 ] case are articulated in the DOL regulations” (citing 29 C.F.R. § 1980.104))

. For purposes of the first, second, and fourth
ele ments

, the term “ p rotected activity ” means “ to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of” one of the laws referenced in § 806. 11 U.S.C. § 1514A(a)(1 ).
To establish a reasonable belief that such a violation has taken place

, “ an employee must show that he had both a subjective belief and an objectively reasonable belief that the conduct he complained of constituted a violation of relevant
law.” Welch v. Chao , 536 F.3d 269, 275 (4th Cir. 2008) (internal quotation marks omitted)

. Thus, g eneral allegations of misconduct by corporate officers, even if that misconduct
rela tes to financial matters, are not sufficient to state a § 806
claim. See Day , 555 F. 3d at 56

- 57 (noting that “violations of „general accounting principles‟” do not constitute “shareholder fraud” that gives rise to SOX

- protected activity).

The second element of a SOX retaliat ion claim
confirms that conclusion . It is difficult to see ho w a defendant, such as a whistleblower‟s supervisor, can know or
suspect that the whistleblower

- plaintiff is engaged in protected conduct if the plaintiff‟s intra

- corporate communications do no t relate in an understandable way to one of the stated provisio ns of federal law

. W hat matters is not what is locked inside the plaintiff‟s mind or how the plaintiff may later describe his actions; it is what is communicated to the employer that counts

. See Welch , 536
F.3d at 277 (“[T]he relevant inquiry is what an employee4 actually communicated to [his] employer prior to the ... termination; it is not what [is] alleged in [the employee ‟ s] OSHA complaint.” (alterations in original) (internal quotation marks omitted)). Both the Department of Labor‟s
Administrative Review Board (“ AR B ”) and the Majority effectively bypass that element of a SOX retaliation claim and

concentrate their focus on the complainant ‟s frame of mind
and after

- the

- fact spin

. In doing so, they ignore the need for a whistleblower‟s employer to ac tually perceive that a whistle
has been blown

. 2

The imperative that the whistleblower sound off with clarity was the subject of the ARB‟s opinion in Platone v. FLYi, Inc. , 25 IER Cases 278 (Sept. 29, 2006)

. That opinion, the reasoning of which was adopte d by several courts of appeals, 3 required that “ the [complaining] employee‟s

2 The Majority contends that “whether an employee‟s communication is indeed „protected activity ‟ under § 806 is distinct from whether the employer had reason to suspect that
the commun ication was protected.” (Majority Op. at 2 5 .) That, however, is contradicted by what the Majority acknowledges is the second element of a § 806 claim, namely that the employer “knew or suspected that the employee engaged in the protected activity.” ( Id. at 15 (internal quotation marks omitted).) The communication of a suspected fraud is the protected activity.

3 See, e.g.

, Van Asdale v. Int’ l Game Tech. , 577 F.3d 989, 996

- 97 (9th Cir. 2009) (deferring to the ARB‟s determination that an “employee‟ s communications must „definitively and specifically‟ relate to [one] of the listed categories of fraud or securities violations under [§ 1514A]”); Day v. Staples, Inc.

, 555 F.3d 42, 55 (1st Cir. 2009) (“The5 communications must „definitively and specifically‟ relate to any of the listed categories of fraud or securities violations under [ § 806] .” 25 IER Cases at 287. I n essence, the ARB
established something like a pleading standard for intra

corporate communications. But Platone has been supplanted by the ARB‟s recent opinion in Sylvester v. Parexel
International LLC , 32 IER Cases 497, 505 (U.S. Dep‟t of Labor May. 25, 2011) (en ba nc), which jettisons the requireme nt that SOX whistleblowers definitively and specifically tie with their disclosure s to the kinds of fraud
listed in § 806.

The ARB evidently viewed that standard as too stringent . When confronted in Sylvester with co mplainants
who alleged that their intra

- corporate communications concerning compliance with FDA testing protocols were actually allegations of securities fraud

, 4 the ARB in effect said “good enough .” More precisely, it said:

employee must show that his communications to the employer specifically related to one of the laws listed in § 1514A.”); Welch v. Chao

, 536 F.3d 269, 275 (4th Cir. 2008) (“[A]n employee must show that his communications to his employer definitively and specifically relate [d] to one of the laws listed in § 1514A.” (internal alteration and quotation marks omitted)); Allen v. Admin. Review Bd.

, 514 F.3d 468, 476 (5th Ci r. 2008) (“We agree with the ARB‟ s le gal conclusion that an employee‟ s complaint must definitively and specifically relate to one of the six enumerated categories found in § 1514A .” (internal quotation marks omitted) )

.

4 Th e rather tenuous connection bet ween the company‟s conduct and “fraud against shareholders” that the Sylvester employees asserted was that, “by covering up6 [b] ecause a complainant need not prove a violation of the substantive laws, ... a [SOX] complainant can have an objectively reasonable belief of a violation of the laws in Section 806 ... even if the complainant fails to allege, prove, or approximate specific elements of fraud, which woul d be required under a fraud claim against the defrauder directly. In other words, a complainant can engage in protected activity under Section 806 even if he or she fails to allege or prove materiality, scienter, reliance, economic loss,
or loss causation

.

Sylvester , 32 IER Cases at 512 (emphasis added)

. Ponder that: without “alleg[ing]” or “prov[ing]” or even “approximat[ing]” a charge of fraud, the complaints of a so

called whistleblower are, in the ARB‟s view, supposed to put a company on notice that a fraud has been identified. The
rationale the ARB offered for that conclusion was the ipse
dixit that “ the purposes of the whistleblower protection provision will be thwarted

, ” i d. at 512, if a § 806 complainant proceeding on a theory of underlying share holder fraud must
actuall y say something pointing out such fraud.

clinical research fraud ... Parexel engaged in fraud against its shareholders, financial institutions, and others” because
disclosure of the compliance failures would have been “at the expense of the long

- term financial performance of the company ... [and] would have significantly reduced Parexel‟s revenue and reputation.” Sylvester v. Parexel In t’ l LLC , 32 IER Cases 497, 50 1 (U.S. Dep‟t of Labor May. 25, 2011) (en banc)

.7 To discredit the “definitive and specific” requirement

, the ARB said that the requirement had been erroneously
drawn from a different statute. The whistleblowing provision in the Energy R eorganization Act (“ERA”), 42 U.S.C. § 5851, protects a n employee who participates in any “proceeding or in any other action to carry out the purposes” of that statute. 42 U.S.C. § 5851(a)(1) (F). The ARB reasoned that the “importation” of a pleading stan dard
derived from the ERA‟s catch

- all provision “is inapposite to the question of what constitutes protected activity under
SOX‟s whi stleblower protection provision” because “ the SOX whistleblower protection provision contains no similar language, and inst ead expressly identifies the several laws to which it applies. ” 32 IER Cases at 509.

My colleagues in the Majority conclude that “the ARB‟s rejection of Platone ‟s „definitive and specific‟
standard is entitled to Chevron deference” (Majority Op. at
18 ) because “the ARB thoroughly explained why it reversed the course it previously set in Platone ” ( id. at 20 ). With all due respect, I cannot agree with that generous
characterization of the ARB‟s work product. Sylvester’s rejection of Platone is hardly ex plained and far from persuasive

. 5 It is strange, for example, to hear the ARB claim

5 Chevron deference extends only to reasonable agency interpretations of ambiguous statutory language. See Chevron U.S.A., Inc. v. Natural Res. Def. Counsel , 467 U.S. 837, 843 (1984) (“[I]f the statute is silent or ambig uous ..., the question for the court is whether the agency‟s answer is based on a permissible construction of the statute.”). For
several reasons , including those discussed herein, I question whether the ARB‟s interpretation of the requirements of a8 that the greater specificity of § 806 makes the “definitive and specific” standard inappropriate but then hear it say in the
next breath that one need not bother with alle ging, proving, or even approximating a statement showing that the specifics of § 806 have been satisfied.

Moreover, t he r easoning behind the “definitive and specific ” standard applies with at least equal force to § 806 as it does to the pertinent provisi on of the ERA

. I agree with
the ARB at least to the extent that it observed that c ourts have
construed the ERA catch

- all provision “in light of [that statute‟s] overarching purpose of protecting acts implicating nuclear safety

, ” and thus courts have requi r ed “that an employee ‟ s actions implicate safety „definitively and specifically‟” to constitute protected activity. Sylvester , 32
IER Cases at 509. In the same way, the overarching purpose
of SOX is to expose and therefore deter fraud against
shareholder s of companies w hose shares are publicly traded,

s ee Cohen v. Viray , 622 F.3d 188, 195 (2d Cir. 2010) (noting
that “ [ SOX ] ... outlaws fraud and deception by managers in the auditing process ” (quoting S. Rep. No. 107

- 205, at 23 (2002) (inte rnal quotation ma rks omitted)), and, just as the ERA cases call for a definitive and specific linkage to that statute‟s purpose, so a SOX whistleblower was, once upon a time, required to demonstrate “definitively and specifically”
that the subject of his alle gedly protect e d communication implicated the kind of unlawful activity targeted by SOX

. 6

§ 806 c laim, as expressed in Sylvester , represents a reasonable and thus permissible construction of the statute.

6 As the ARB sees it , the “plain language” of § 806
somehow demands a different result from the one it previously insisted on in Platone

. See Sylves ter , 32 IER9 At the end of the day, though, the fate of the “definitive and specific” standard is not the main issue. That standard is just one way of practically addressing the requirement tha t a SOX whistleblower demonstrate a
reasonable belief that the kinds of unlawful behavior identified in § 806 have occurred or are threatened. Of particular importance here is the “objective reasonableness ” component of the reasonable belief requirement. The ARB
reaffirmed that component in Sylvester , noting that “[t]he second element of the „reasonable belief‟ standard, the objective component, „is evaluated based on the knowledge available to a reasonable person in the same factual
circumstances with th e same training and experience as the aggrieved employee.‟” 32 IER Cases at 507 (quoting Harp v. Charter Commc’ns Inc. , 558 F .3d 722, 723 (7th Cir. 2009)). 7

Cases at 508 (saying that “the ALJ failed to focus on the plain language of the SOX whistleblower protection provision”). Quoting not the statute, but its l egislative history, the ARB

sa ys that § 806 protects “„all good faith and reasonable

re porting of fraud.‟” See id. (quoting 148 Cong. Rec. S7418

- 01, S7420 (da ily ed. July 26, 2002)). T hat broad statement does not support the standardless liability imposed by Sylvester , but, more to the point, we are not trying to apply legislative history. Our job is to interpret and apply the statute itself. The plain language of § 806 protects only reporting of conduct that an employee “reasonably believes” constitutes a violation of one of four specific fraud provisions
set forth in federal criminal la w, or certain SEC rules and regulations, or, at the catch

- all level, any other provision of federal law that targets “fraud against shareholders.” 18

U .S.C. § 1514A(a)(1).

7 Moreover, prior to Sylvester , our sister ci rcuits treated10 Unfortunately, Sylvester provides no guidance as to what, if anything, a § 806 claimant is requir ed to allege. In its efforts
to lower the bar , the ARB has provid ed little more tha n a recitation of what is not required for an employee to allege protected conduct. See 32 IER Cases at 512 (“[A] complainant need not prove a violation of the substantive
law s ...”); id. (“[A] complainant can engage in protected activity under Section 806 even if he or she fails to allege or prove materiality, scienter, reliance, economic loss, or loss causation.”); id. ([A] complainant ... [need not] allege, prove,

the “definitive and specific ” requirement as separate from the statutory requirement of reasonable belief. See, e.g.

, Welch

, 536 F.3d at 275 (“To ... establish that he engaged in protected activity, an employee must show that he had both „a subjective belief and an objectivel y reasonable belief‟ that the conduct he complained of constituted a violation of relevant law. Additionally, an employee must show that his communications to his employer „definitively and specifically relate[d]‟ to one of the laws listed in § 1514A.”); Van Asdale
v. Int’l Game Tech. , 577 F.3d 989, 10 0 0 (9th Cir. 2009) (noting, after determining that the plaintiffs satisfied the “definitively and specifically” standard from Platone , that they must al so have a reasonable belief concerning a violation
of a listed law in order “to trigger the protections of the Act”); Day , 555 F.3d at 54 (treating the “definitively and specifically” requirement and “reasonable belief” requirement separately); Allen

, 514 F.3d at 477 (same). Consequently, although the ARB elim inate d the “definitive and specific”
standard as “ an inappropriate test

... [that] is often applied too strictly,” 32 IER Cases at 509, the determination of the objective reasonableness of a SOX complainant‟s belief remains a necessity.11 or appro ximate that the reported irregularity or misstatement satisfies securities law „materiality‟ standards, was done intentionally, was relied upon by shareholder s , and that shareholders suffered a loss because of the irregularity.”). 8

Trying to apply the imp ossibly vague “ standard ” of Sylvester , the Majori ty has adopted an intern ally inconsistent
test. On one hand, my colleagues rightly reject the argument offered by our amicus , the National Whistleblower Center

, that no more than an employee‟s own subjectiv e good faith belief is required to allege a § 806 violation. ( See Majority Op. at 2 1 (“As explained in Sylvester , the reasonable belief standard also includes an objective ele ment.”).) On the other hand, the y go on to conclude that the ARB “expressly rej ected” the District Court‟s interpretation of § 806 as requiring that Wiest demonstrate “„an objectively reasonable belief that the company intentionally misrepresented or
omitted certain facts to investor s which were material and
which risked loss.‟” (Maj ority Op. at 2 3 (quoting Wiest v. Lynch , No. 10

- 3288, 2011 WL 2923860, at *4 (E.D. Pa. July 21, 2011) ).) Those two conclusions see m to me to be in
tension , and one is left to wonder what the objective standard is for measuring whether a complainant‟s beli ef is reasonable if it is not the existing rules of law expressly noted in § 806

. 9

8 The Majority foll ows the ARB‟s approach, concluding that a “whistleblower‟s communication need not ring the bell on each element of one of the stated prov isions
of federal law in [ § 806 ]” (Majority Op. at 2 5 ), without specifying which, if any, bells must be rung.

9 The M ajority perceives no inconsistency because it

“ do[es] not think Congress intended such a formalistic approach to the question of whether an employee has engaged12 Pre

- Sylvester case law from federal courts made it
clear that “[t] he reasonableness of [a SOX complain an t‟s ]
bel ief for purposes of § [806] must be measured against the
ba sic elements of the laws specified in the statute.” Day

, 555
F.3d at 55. Logically, that ought still to be the case. Section
806 references iden tifiable pieces of positive law. They are not mere generalities and they do not open the door to
whistleblow er relief to anyone with vague feelings of unease or even specific discomfort with something other than that which is identified in § 806. Particularly pertinent here

, “„[f]raud‟ itself has defined legal meanings and is not, in the

cont ext of SOX, a collo quial term. ” Id. 10 Section 806 thus

in „protected activity.‟” (Majority Op. at 2 2 .) I do not agree that requiring that an allege dly protected communication clearly relate to one of the laws enumerated in § 806 is an exercise in formalism. But even if it were, Congress has expressed its intent in the text of the statute, which sets forth the particular laws that may give rise to a SOX whistleblower
claim.

10 The Majority correctly points out that an employee‟s reasonable belief may not always be determined as a matter
of law or on the basis of averments in a complaint. However,
a SOX whistleblower ‟s claim must be based on allegation s of mail, wire, and securities fraud , which are required to be pled with specificity pursuant to Feder al Rule of Civil Procedure 9(b ) or are subject to the heightened pleading standards of the Private Securities Litigation Reform Act (PSLRA), Pub. L.
No. 104

- 67, 109 Stat. 737 (1995). Rule 9(b) “gives defendants notice of the claims against them, provides an increased measure of protection for their reputations, and reduces the number of frivolous suits,” In re Burlington Coat Factory Sec. Litig. , 114 F.3d 1410, 1418 (3d Cir. 1997), while13 requires a SOX whistleblower to demonstrate that he has
done more than criticize un desirable corporate conduct. H e is required to demonstrate that his protected communication
concerned a “ violation ” of one of the liste d statutes or of an SEC rule or regulation or other Federal law relating to fraud
on share holders. A violation can only be said to “ relat [ e ] to

... fraud against shareholders ” if it manifests at least some of
the elements of fraud as defined in the securi ties context, such

as falsity, scienter , and materiality

. Cf. In re Cabletron Sys.,

Inc. , 311 F.3 d 11, 34 (1st Cir. 2002) (“M erely stating in conclusory fashion that a company‟s books are out of compliance with GAAP would not in itself demonstrate

the PSLRA is intended to “curb frivolous lawyer

- driven litigation, while preserving the [plaintiffs‟] ability to recover on meritorious claims,” Winer Family Trust v. Queen , 503 F.3d 319, 326 (3d Cir. 2007). Notwithstandi ng the ARB ‟s
conclu sion that those sorts of heightened pleading requirements “should not be applied to SOX whistleblower
claims

, ” Sylvester

, 32 IER Cases at 505 , t he same concerns that gave rise to those requirements suggest that
communications that serve as the basis of a claim under § 806 should contain something more than vague allegations concerning a possible fraud. I am not suggesting the importation of pleading standards to the review of a whistleblower‟s allegedly protected communications. I am

su ggesting that it is not too much to ask for some specificity, especially since SOX whistleblower protection has the effect of shielding an employee from any disciplinary action and should not be lightly granted.14 liabili ty under section 10(b) or Rule 10b

– 5.”); DSAM Global Value Fund v. Altris Software, Inc. , 288 F .3d 385, 390 (9th Cir. 2002) (“ [T]he mere publication of inaccurate accounting figures, or a failure to follow GAAP, without mo re, does not
establish scienter ” i n a securities fraud action (internal quotation marks omitted)); Novak v. Kasaks , 216 F.3d 300, 309 (2d Cir. 2000) (“[A]llegations of GAAP violations or accounting irregularities, standing alone, are insufficient to state a securities fraud claim. Only wh ere such allegations are coupled with evidence of „corresponding fraudulent intent,‟ might they be sufficient.” (internal quotation marks omitted)). The many cases to that effect cannot with propriety be swept away by the f ederal bureaucracy deciding
it w ould like SOX to reach beyond the frauds specified in the

statute

. 11

11 We are not required to follow

– and argu ably are constitutionally compelled to reject

– an agency‟s reversal of
course that contradicts prior judicial interpretations of a

statute

. “Article III courts do not sit to render decisions that can be reversed or ignored by executive officers.” Nat’l
Cable & Telecommc’ns Ass’n v. Brand X Internet Servs. , 545 U.S. 967, 1017 (2005) (Scalia, J., dissenting) (citing Chicago
& S. Air Lines In c . v. Waterman S.S. Corp. , 333 U.S. 103 (1948)). “Once [a court] ha[s] determined a statute‟s meaning, [it] adhere[s ] to [its] ruling under the doctrine of
stare decisis , and [it] assess[es] an agency‟s later interpretation of the statute against that settled law.” Neal v. United States, 516 U.S. 284, 295 (1996). In this case, numerous courts of appeals, see supra not e 3 , have construed SOX § 806 as requiring that a complainant‟s communications
include the elements of one or more of the referenced laws. Under the Majority‟s approach, the ARB will be “able to15 In this case, t he application of a test of objective

re asonableness that looks to the elements of securities fraud
shows Wiest‟s allegedly protected communications for what they are: a boo kkeeper‟s sensible inquiries about proper accounting for expenses , not allegations of frau d

. Wiest ‟s
statements about t he Atlantis Resort Event prove the point.

T he Majority concludes that “[a] reasonable person in Wiest‟s position who had seen the expen se request for the extravagant Atlantis event could have believed that treating the Atlantis

even t as a business expense may have violated a provision of Section 806 ... .” (Majority Op. at 2 8 .) A fair question is “which one?” Wiest does not claim that he reasonably believed that “extravagance” or the possible reporting of employee expenses as advertising expenses constituted mail fraud, wire fraud, or bank fraud. He alleges rather that

, “if Tyco had processed the transaction as originally submitted, it

„ would have resulted in a misstatement of accounting records and a fraudulent tax deduction.‟” (Majority O p. at 2 7 (quoting App. at 43).) That would seem to point to a violation of 18 U.S.C. § 1348

, which involves fraud in
connection with a sale of securi ties, or of a “rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders.” 18 U.S.C. § 1514A(a)(1). However, Wiest‟s communication with Tyco about t he Atlantis Event contains non e of the
elements of a securities fraud. In particular, it contains no

disregard that construction and seek Chevron deference for its contrary construction the next time around.” Nat’l Cable &
Telecommc’ns Ass’n , 545 U.S. at 1017 (Scalia, J., dissenting)

. Stare decisis is not a straitjacket, but it must mean something
more than “this is the law until the executive branch unilaterally changes its mind.”16 hint of falsity but rather suggests that an accounting judgment was faulty and needed to be corrected, which it was

. 12

12 My colleagues in the Majori ty appear to have been persuaded by an allegation in Wiest‟s complaint that, but for his intervention, t he Atlantis Event would have resulted in “a
misstatement of accounting records and a fraudulent tax deduction.” (Majority Op. at 5 (quoting App. at 43

- 44) (internal quotation marks omitted).) Following the Majority‟s
instruction that the determination of reasonable belief “should be based upon all of the atte ndant circumstances, and not be limited to the facts conveyed by a whistleblower to the employer” ( id. at 26), Wiest‟s Atlantis Event all egation is belied by the record and is inconsistent with applicable tax law. Wiest‟s email regarding the Atlantis Even t simply requested that “the relevant tax department resources” review the proposed co sts to determine if some would not have been fully deductible as business expenses but rather would have to be treated as employee compensation and report ed as income

to employees attending

. ( See App. at 102 (suggesting that the “meal and entertainment portions” might “fall into the 50% deductibility classification for tax purposes” and that expenses associate d with spouses and friends attending the
event should be “recor ded as income to the employees attending”).) As Wiest himself admits in his complaint, the result of that review was that Tyco determined that “[t]he trip did not qualify as a business expense per IRS guidelines and[]
... would have to be treated as an aw ard and as income to the attendees and reported on their W

- 2s.” (App. at 45.) Compensation to employees is treated as a business expense for federal tax purposes, see I.R.C. § 162(a)(1), so the cost would have been deductible for Tyco under either scenar io. The classification of the cost of the Atlantis Event, while17 The supposed connection between Wiest‟s
communications regarding t he Wintergreen Resort E vent and a violation of a statute or regulation referenced in § 806 is

even more strained . The Majority concludes that “a reasonable person in Wiest‟s position could have believed that the event‟s approval by an attendee of the eve nt[] ... instead of by the CEO as required by internal control procedures, may have violated one of the provisions
contain ed in Section 806.” (Majority Op. at 31 .) Assuming the unspecified violation is again securities fraud, there is still
the glaring q ues tion of how his communication with the company indicated any fraud. Unlike his allegations concerning t he Atla ntis Resort Event, Wiest does not claim that expenses from th at event were not recorded correctly

, n or does he alle ge that any public financial d isclosure was at issue . As a result, it is impossible to identify a securities
fraud. The Majority simply suggests that it was reasonable
for Wiest to believe that there had been such a violation because “the event‟s approval [was] by an attendee of the event, who would therefore directly benefit from that

ap proval ... .” ( Id. ) Leaving aside th e fact that the re is no explanation of what the “direct benefit ” was, that allegation goes only to motivation and does nothing to establish a violation of any of the laws referenced in § 806.

Given the present record, two final observations
should be made about the Majority‟s application of the

significant to employees for whom it represented taxable compensation, was irrelevant for purposes of Tyco‟s public financial statements, and, even if the error had gone uncorrected, it is a huge stretch to say that such a mistake
would constitute shareholder fraud.18 objective reasonableness standard . First, even Sylvester acknowledged that objective reasonableness “is evaluated
based on the knowledge available to a reasonable person in the same factual circumstances with the same training and experience as the aggrieved employee.” 32 IER Cases at 507 (quoting Harp , 558 F.3d at 723 ) (internal quotation marks omitted). When an employee is a licensed CPA, and thus able to distinguish between violations of accounting rules and violations of SEC rules or regulations, a failure to do so tends

to show his asserted belief t hat a violation of the latter has
occurred to be less than objectively re asonable. Cf. Allen

, 514 F.3d at 477 (finding that, although a violation of an SEC accounting bulletin could fall within the general “fraud against shareholder ” category of § 1514A, the complainant CPA‟s belief as to the violation was not objectively

reas onable)

. Wiest is a trained accountant who had more than thirty years experience in Tyco‟s accounting department, which, as the Majority points out, had been under “a high level of audit scrutiny” for the last decade. (Majority Op. at
4 . (quoting App. at 42) (internal quotation marks omitted) .) The Majority itself observes that Wiest had knowledge of both “accounting standards ... and securities and tax laws.” ( Id. ) Therefore, Wiest should be held to a “higher [objective reasonableness] standard” than s omeone of “limited
education.” Sylvester , 32 IER Cases at 507 (citing Parexel Int’l Corp. v. Feliciano , 28 IER Cases 820, 2008 WL 5101642, at *3 & n.6 (E.D. Pa. 2008 )). Since h is alle gedly protected communications d o not meet even an objective standard g eared to the general public, they certai nly do not

meet a heightened standard applicable to someone of his training and experience

.19 Second, as the ARB acknowledged in Sylvester

, “many
of the laws listed in § [806] of SOX contain materia lity requirements

, ” and “ [i] t may well be that a complainant‟ s complaint concerns such a trivial matter that he or she did not engage in protected activity under Section 806. ” 32 IER
Cases at 512. For t hat grudging acknowledgement of a materiality requirement to be consist ent with existing law concerning fraud against shareholders, a SOX complainant
must believe that there is “ a substantial likelihood that the disclosure of the omitted fact would have been viewed by
the reasonable investor as having significantly altered th e „total mix‟ of information made available.” Basic

, Inc. v.
Levinson , 485 U.S. 224, 23 1

- 32 (1988) (quoting TSC Indus., Inc. v. Northway, Inc. , 426 U.S. 438, 44 9 (1976) (int ernal quotation marks omitted)); see als o TSC Indus. , 426 U.S. at 448 ( acknowledgi ng that certain information concerning corporate developments is of “ dubious significance ” ). Wiest‟s allegedly protect ed communication s concerned
transactions wi th no financial impact on Tyco

, see supra note 12

, or internal control practices that are not financial in nature
and are not reported to shareholders

. The subjects of Wiest‟s communications were not material, and c ontrary to the Majority‟s conclusion , t hose communications do not demonstrate an objecti vely reasonable belief that a
shareholder fraud was being threatened.

The essence of Wiest ‟s assertion that the conduct he found objectionable “relates to” fraud against shareholders for purposes of § 806 is , as his a ttorney put it to the District
C ourt, that “every time you improperly allocate money to something that is improper, you are affecting the value of the company, and the value of the company is determined by individuals who buy and sell stoc k.” ( App. at 290

- 91. ) That20 sweeping statement , which even the attorney attempted to walk back at oral argument before us

, underscores the flaw in the Majority‟s approach to post

- Sylvester objective
reasonablene ss. I f it is unnecessary to measure a SOX complainant‟s reasonable belief against at least some of the
elements of securities fraud

, like materiality, then virtually any internal questioning of an accounting mistake or a judgment call turns the questioner into a SOX whistleblower

, and that c annot be right

.

As the District Court correctly noted, Wies t “failed ... to plead facts reflecting [his] reasonable belief that his communications regarding the tax treatment of certain company expenses related

– in any way, definitively and specifically, or otherwise

– to shareholder fraud or a violation
of one of the sta tutes or rules listed in § [806] .” Wiest v. Lynch , No. 10

- 3288, 2011 WL 55 72608, at *4 (E.D. Pa. Nov. 16, 2011)

. T he District Court recognized that the protection
afforded SOX whistleblowers is limited to communications
that relate to violation s o f the law specified in § 806

, and it assessed the reasonableness of Wiest‟s alleged be lief
consistent with the explicit scope of § 806

. T he thoughtful opinion of the District Court is entirely sound in that regard

, and I would therefore affirm the judgmen t against the Appellants

.