Shawn and Lena Van Asdale were initially hired for the position of Associate General Counsel of International Game Technology (IGT).?? ?In September?? 2002,?? Shawn?? was?? promoted?? to Director of Strategic Development, a position in which? he? was? generally? responsible? for overseeing IGT?s IP litigation.?? Similarly, Lena was promoted in the spring of 2003 to Director of IP Procurement, and was responsible for the transactional side of IGT?s IP division, which included? managing? IGT?s? patents,? trademarks, and copyrights.
In 2001, IGT began merger negotiations with Anchor Gaming (?Anchor?).?? The Van Asdales contend they were terminated for reporting possible? shareholder? fraud? in? connection? with that merger.? They also claim that their protected activity involved communications protected by the attorney-client privilege. ?Summary judgment was entered in favor of the defendant, and the Ninth Circuit reversed.
After distinguishing Illinois law, where plaintiffs were admitted to practice, the Court ruled that attorney-client? confidentiality? concerns? alone? do not warrant dismissal of the Van Asdales? claims. Rather, ?the appropriate remedy is for the District Court to use the many ?equitable measures at its disposal? to minimize the possibility of harmful disclosures, not to dismiss the suit altogether.?
In a case of first impression in the Ninth Circuit, the Court addressed the elements required to prove a claim under Sarbanes-Oxley (SOX). ?In order to survive summary judgment, a claimant is first required to make a prima facie case of retaliatory discrimination.?? If the plaintiff meets this burden, the???? employer??? ?assumes??? ?the??? ?burden??? ?of demonstrating, by clear and convincing evidence, that it would have taken the same adverse employment action in the absence of the plaintiff?s protected activity. ?Regulations promulgated by the Department of Labor set forth four required elements of a prima facie case under ? 1514A: (a) ?[t]he employee engaged in a protected activity or conduct?; (b) ?[t]he named person knew or suspected, actually or constructively, that the employee engaged in the protected activity?; (c) ?[t]he employee suffered an unfavorable personnel action?;?? and?? (d)?? ?[t]he?? circumstances?? were sufficient to raise the inference that the protected activity? was ?a ?contributing? factor ?in? the unfavorable action.???????????? ?29???? ?C.F.R. ? ?1980.104(b)(1)(i)-(iv).
In?? order? ?to? ?constitute? ?protected? ?activity,? ?an ?employee?s? communications? must? ?definitively and specifically? relate to [one] of the listed categories of fraud or securities violations under 18 U.S.C.[ ] ? 1514A(a)(1).? ?Neither the word fraud nor any specific code section must be cited or used. Overruling the District Court?s exclusion of an inconsistent affidavit, and discussing it at length, the ?Court ?found ?that ?plaintiffs? ?communications involved disclosures ?definitively and specifically? related to shareholder fraud.?? The Court of Appeals further held that the plaintiffs must have (1) a subjective belief that the conduct being reported violated a listed law, and (2) this belief must be objectively reasonable.
To prove causation, the Ninth Circuit relied upon familiar jurisprudence that allows an inference of discriminatory intent based upon the temporal proximity of the protected activity, and the adverse? employment? action.?? ?The? Court? also ruled that the employer had not shown by clear and convincing evidence that it would have taken the same adverse employment action, even in the absence of protected activity.
Van Asdale v. International Game Technology,577 F.3d 989 (9th Cir. August 13, 2009) (Bybee, Wallace, Thomas).