## Facts

- Jeffrey A. Wiest worked for Tyco Electronics Corporation in accounting/accounts payable for decades and was employed there until his termination in 2010.
- From 2007 to 2009, Wiest objected to and at times refused to process certain company expenditures and reimbursement requests he viewed as improper or inconsistent with company policy and federal regulations.
- Wiest sent internal emails to supervisors questioning the expenditures and recommending review to ensure proper accounting and tax treatment.
- In 2009, Tyco initiated an internal investigation into alleged workplace misconduct by Wiest, including improper receipt of baseball tickets, sexually suggestive comments, and an improper relationship with another employee.
- Tyco terminated Wiest’s employment following the investigation.
- Wiest alleged the stated reasons for termination were pretextual and that he was fired in retaliation for his internal complaints about accounting treatment of expenditures.
- Wiest sued Tyco and certain officers and employees, asserting a federal whistleblower retaliation claim under Sarbanes-Oxley Act § 806 (18 U.S.C. § 1514A) and related Pennsylvania state-law claims.

## Issues

1. Whether Wiest’s internal objections and emails about expenditures and accounting/tax treatment constituted “protected activity” under SOX § 806, 18 U.S.C. § 1514A.
2. Whether a SOX § 806 complaint must allege that the employee’s communications “definitively and specifically” relate to an existing violation of an enumerated anti-fraud or securities law.
3. If the SOX claim is dismissed at the pleading stage, whether the court should retain supplemental jurisdiction over related state-law claims.

## Decision

- The court granted defendants’ Rule 12(b)(6) motions to dismiss the SOX § 806 claim for failure to state a claim.
- The court held the complaint did not adequately plead protected activity because Wiest’s communications did not “definitively and specifically” relate to an existing violation of an enumerated anti-fraud or securities provision covered by § 1514A.
- The SOX claim was dismissed with prejudice as pled.
- The court declined to exercise supplemental jurisdiction over the Pennsylvania state-law claims and dismissed them without prejudice.

## Legal Principles

- To plead a SOX § 806 retaliation claim, a plaintiff must allege engagement in protected activity within the scope of 18 U.S.C. § 1514A.
- Under the standard applied by the court, protected activity required allegations that the employee’s communications “definitively and specifically” related to an existing violation of: mail fraud, wire fraud, bank fraud, securities fraud, an SEC rule or regulation, or federal law relating to fraud against shareholders.
- Internal complaints framed as concerns about expense approvals, accounting classifications, or tax/accounting treatment—without a sufficiently specific connection to the enumerated fraud or securities categories—do not satisfy the protected-activity element under that standard.
- When the federal claim providing original jurisdiction is dismissed at the pleading stage, a federal court may decline supplemental jurisdiction over related state-law claims and dismiss them without prejudice.

## Conclusion

The court dismissed Wiest’s SOX § 806 whistleblower retaliation claim because his internal accounting-related objections were not pled as communications that “definitively and specifically” related to an enumerated fraud or securities-law violation, and it dismissed the state-law claims without prejudice after declining supplemental jurisdiction.


Wiest v. Lynch, No. 10-3288, 2011 WL 2923860 (E.D. Pa. July 21, 2011)