Canned Whistleblowing GC Wins $11 Million Retaliation Suit
After more than two decades as general counsel at Bio-Rad Laboratories, Sanford Wadler was fired from the company after he attempted to report corrupt practices to the company's board, Wadler says. So he sued.
Last week, Wadler won his lawsuit -- and nearly $11 million. A federal jury awarded Wadler $2.9 million in back pay and stock options and $5 million in punitive damages. That award will increase another $3 million under the Dodd-Frank Act, which allows double back pay for damages in whistleblower retaliation cases.
Allegations of Bribery
Wadler's suit argued that he was terminated after he discovered evidence of bribery in the company's dealings with China. In 2013, when management failed to act on his reports, Wadler sent a memo to Bio-Rad's audit committee, calling for an investigation. Wadler was fired. And while an eventual investigation into the Chinese bribery found no wrongdoing, Bio-Rad paid $55 million to settle a DOJ and SEC action against it over potential Foreign Corrupt Practices Act violations in its dealings with Russian, Thai, and Vietnamese officials.
Wadler argued that his internal whistleblowing was protected under the Sarbanes-Oxley Act. Wadler went on to win the right to present otherwise privileged information and, last Monday, the case itself.
The Smoking Metadata
Bio-Rad had argued that Wadler was attempting to use his whistleblowing on alleged Chinese bribery to make up for failures surrounding FCPA violations elsewhere. "Mr. Wadler decided to reinvent himself; to go from an FCPA slacker to an FCPA whistleblower," Bio-Rad's attorney argued.
The jury didn't seem to buy that argument, however. It didn't help that Bio-Rad CEO Norman Schwartz admitted on the stand that he back-dated a performance review that attempted to document Wadler's failings. The review was dated April 15, 2013, but the document's metadata showed that it was created on July 9th, a month after Wadler was fired. Schwartz said he was simply memorializing, in digital form, notes that he had taken months before.
The jury spent less three hours deliberating before returning a verdict for Wadler.
- BioRad Attorney Wins $11 Million in Whistleblower Trial (Courthouse News Service)
- General Counsel's Whistleblower Trial Proceeds Against Ex-Employer (FindLaw's In House)
- Attorney-Client Privilege Waived in Whistleblower Suit (FindLaw's In House)
- If In-House Counsel Is the Whistleblower, What Can Be Disclosed? (FindLaw's In House)