Wednesday, September 21, 2016

JP Morgan retaliation case goes to trial

This plaintiff sued JP Morgan Chase for retaliation under the Sarbanes-Oxley Act because she was fired one week after she blew the whistle on what she reasonably thought was illegal activity. The case was dismissed on a motion for summary judgment in the district court, but the Second Circuit reinstates the claim.

The case is Sharkey v. JP Morgan Chase, a summary order issued on September 12. This summary order has limited precedential value, but it gives us some insight into how the Second Circuit views these bread-and-butter retaliation claims where the issues are often quite simple and do not require extended discussion.

The district court said plaintiff could not make out a prima facie case of retaliation because she could not show her protected activity was a contributing factor in  her termination. The protected activity was her recommendation to management that JP Morgan end its relationship with a client about whom she had communicated concerns of possible illegal activity. While plaintiff was fired only a week after this protected communication, the district court said she had no case because there was an intervening factor that led to her termination: she had purportedly lied to a superior about communicating with a different client.

You'll see this defense from time to time. The plaintiff has what appears be a decent retaliation case, but management argues that something  happened along the way that really explains the plaintiff's termination. We call this the "legitimate intervening basis" defense. It is not enough for JP Morgan in this case. Even assuming that a legitimate intervening basis can defeat an inference of causation, "it could not do so as a matter of law here because Sharkey disputes lying to her superior about the client communications, pointing to her own contrary deposition testimony." This is an issue for the jury, not a court on a motion for summary judgment.

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