Employees Have 4 Years To File SOX Litigation and DC Council Clarifies New Wage Law By: Lawrence P. Postol, Vice President For Legislative AffairsLpostol@seyfarth.comFour Years To Sue On SOX Claim Withdrawn From OSHA The United States Court of Appeals For the Fourth Circuit (which includes Virginia) recently ruled that a Sarbanes-Oxley Act (SOX) claim, initially timely filed with OSHA (within the 180 day time period to file with OSHA) and then withdrawn, falls within 28 U.S.C. 1658(a), the catch-all limitations period, which provides a four year limitations period. Jones v. SouthPeak Interactive Corp. of Del., No. 13-2399 (4th Cir., 1/26/15).In this case, SouthPeak Interactive Corp. (SouthPeak), a video game publishing company, fired its chief financial officer after she raised concerns about an alleged misstatement on one of the companys filings with the Securities and Exchange Commission (SEC). At trial, the jury found that the company and two of its senior officers violated the anti-retaliation provisions of SOX, and the district court awarded the chief financial officer more than half a million dollars in back pay and emotional distress damages.In reaching the merits of the claim, the district court rejected SouthPeaks argument that a two-year limitations period for private actions that involve a claim of fraud in violation of federal securities laws applied to complaints that have been timely filed with OSHA, but then withdrawn under the so-called kickout provision of SOX. SOXs kickout provision allows a claimant to withdraw an unresolved complaint from OSHAs administrative process as a matter of right after 180 days. In the SouthPeak case, the plaintiff timely filed the claim with OSHA, but then withdrew her claim and did not file in the district court until almost three years after her termination and over two years after withdrawal.The Appellate Court found that the plaintiffs SOX retaliation claim was subject to 28 U.S.C. 1658(a), the catch-all limitations period, and because the plaintiff brought her suit within that sections four-year window, her claim is not barred.The court also rejected SouthPeaks argument that emotional distress damages arent available on successful SOX retaliation claims. The Fourth Circuit noted that the statute expressly entitles a prevailing plaintiff to receive all relief necessary to make [her] whole, citing to 18 U.S.C. 1514A(c)(1), which states that an employee prevailing in any action under [the Act] shall be entitled to all relief necessary to make the employee whole. Two federal Circuit Courts as well as the Administrative Review Board of the Department of Labor had previously concluded that emotional distress damages are available. See Halliburton, Inc. v. Administrative Review Board, 771 F.3d 254 (5th Cir. 2014), and Lockheed Martin Corp. v. ARB, 717 F.3d 1121 (10th Cir. 2013); Kalkunte v. DVI Financial Svs., Inc., 2004-SOX-056, ARB Case Nos. 05-139 & 05-140 at * 15 (Feb. 27, 2009) (upholding an ALJs award of compensatory damages under SOX for pain, suffering, mental anguish . . . and humiliation.); Brown v. Lockheed Martin Corp., 2008-SOX-0049 (Jan. 15, 2010) (awarding complainant $75,000 in compensatory damages under SOX for depression and loss of self-esteem).It important to note that the plaintiff here did file an administrative complaint within the time periods provided under SOX, and then withdrew the administrative complaint after 180 days, as permitted by SOX. Nothing in the Fourth Circuits decision obviates the need for a plaintiff to initially file with OSHA within 180 days. However, once the complaint is withdrawn, the Fourth Circuit has concluded that there is no immediate timeframe within which the claim must then be filed in federal court as long as it is filed within four years after the claim accrues.Better Late Than Never: DC Council Clarifies New Wage Law Requirements Just in time, the DC Council passed an emergency amendment to clarify several ambiguous provisions in the Wage Theft Prevention Amendment Act of 2014 (WTPAA), which is currently under Congressional review with a projected effective date of February 26, 2015.The language of the WTPAA was anything but clear when it came to what was required of employers, and seemed to require an employer to record and retain work hours for exempt employees who are paid a salary. Of course, since they are paid a salary and thus are not eligible for overtime, most employees do not record work hours for exempt employees The DC Council eliminated this requirement for exempt employees by enacting the Wage Theft Prevention Clarification Emergency Amendment Act of 2015. Recording of Precise Time WorkedAs originally enacted, the WTPAA required employers to maintain records of the precise time worked each day and each workweek by all employees. As written, this left employers with the daunting task of implementing a time keeping system and policies for recording the precise hours worked by exempt employees, with the threat of civil penalties for any failure to comply. Employers can now breathe a sigh of relief, however, as the Emergency Amendment amended the WTPPA so that employers are now required only to maintain records of the precise time worked each day and each workweek by non-exempt employees.

Payment Notice RequirementAs originally enacted, the WTPAA also required employers provide all new and existing employees a written notice, in English and in the employees primary language, containing:The employers name, address, and telephone number; The employees rate of pay and regular payday; and Any other information deemed material and necessary by DC. While the WTPPA made it clear the Mayors office would issue a template notice in English, it was not clear if the Mayors office would provide non-English templates or if employers would be left to translate the template notice and accept the risk for any information lost in translation. The Emergency Amendment now requires employers to provide employees with a written notice in a second language only if the Mayor has issued a translated notice in that second language available. Employers still must provide all existing employees a copy of the notice in English within 90 days of the laws effective date, while new employees must receive the notice upon hire once the law goes into effect. While the Emergency Amendment answered some of the biggest questions facing employers, others are likely to arise. For example, does the requirement that employers include the hours worked during each pay period on paystubs apply to exempt employees? In light of the Emergency Amendment, the answer would seem to be no, but only time will tell the answer to this and other remaining questions. 2015 by Lawrence PostolMr. Postol is the Vice President for Legislative Affairs on the NOVA SHRM Board, and a partner in the Washington, D.C. office of Seyfarth Shaw LLP. If you have any questions about the information in this article, you may e-mail Mr. Postol at Lpostol@seyfarth.com or call him at 202-828-5385.Disclaimer: This newsletter does not provide legal or other professional services. This newsletter is made available by the lawyer publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By reading this newsletter you understand that there is no attorney-client relationship between you and the newsletter publisher. The newsletter should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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