## Facts

- Linda C. Guyden was hired by Aetna in January 2004 as Director of Internal Audit.
- Guyden alleged Aetna’s Internal Audit Department lacked independence and was ineffective, risking inaccurate SOX-related representations about internal controls over financial reporting.
- Guyden reported these concerns to senior management and claimed Aetna responded by marginalizing her and then terminating her employment.
- Guyden filed an administrative whistleblower complaint under 18 U.S.C. § 1514A and later filed suit in federal court after the administrative period elapsed.
- Guyden’s employment agreement required employment disputes to be resolved under Aetna’s arbitration policy, which included limited discovery, no required verbatim record, and confidentiality.

## Issues

1. Whether SOX whistleblower retaliation claims under 18 U.S.C. § 1514A are categorically non-arbitrable.
2. Whether Aetna’s arbitral procedures (including limited discovery, no transcript requirement, and confidentiality) prevent effective vindication of SOX rights such that the arbitration agreement is unenforceable.

## Decision

- The Second Circuit affirmed the dismissal of the federal court action in favor of arbitration.
- The court held that SOX § 1514A claims are arbitrable because Congress did not clearly preclude arbitration in the statute’s text, legislative history, or purpose.
- The court held that Aetna’s arbitration procedures, on their face, did not deny Guyden a fair opportunity to pursue SOX remedies.
- The court rejected challenges based on the absence of a verbatim record, concluding neither SOX nor the FAA requires one.
- The court rejected challenges based on limited discovery where the agreement left discovery to the arbitrator’s discretion and the asserted prejudice was speculative.
- The court rejected challenges to confidentiality, holding SOX does not require public adjudication if the employee can obtain the relief Congress authorized.

## Legal Principles

- Under the FAA, statutory claims are arbitrable unless Congress clearly indicates otherwise through statutory text, legislative history, or an inherent conflict between arbitration and the statute’s purposes.
- An arbitration clause is unenforceable only if it operates as a prospective waiver of statutory rights or if procedures, as a practical matter, prevent effective pursuit of statutory remedies.
- SOX § 1514A does not bar arbitration or forbid waiver of a judicial forum; the statute’s district-court action mechanism does not itself establish non-arbitrability.
- Typical arbitral features—streamlined discovery, limited recordmaking, and confidentiality—do not invalidate arbitration of federal statutory claims absent a concrete showing that they impede the claimant’s ability to obtain statutory relief.

## Conclusion

The Second Circuit required arbitration of a SOX whistleblower retaliation claim because Congress did not clearly preclude arbitration and because the challenged arbitral procedures, considered facially, still permitted the claimant to pursue the full range of SOX remedies before a neutral decisionmaker.


Guyden v. Aetna, Inc., 544 F.3d 376 (2d Cir. 2008)