Beacom v. Oracle America, Inc., No. 15-1729 (8th Cir. 2016)
Annotate this CasePlaintiff filed suit under Sarbanes-Oxley, 18 U.S.C. 1514A(a)(1)(C), and Dodd-Frank, 15 U.S.C. 78u-6(h)(1)(A)(iii), after Oracle terminated his employment in retaliation for reporting that Oracle was falsely projecting sales revenues. The district court granted summary judgment to Oracle. The court joined the Second, Third, and Sixth Circuits and adopted the "reasonable belief" standard in Sylvester v. Parexel Int’l LLC standard, rejecting Platone v. FLYI, Inc.'s "definite and specific" standard, in determining that the employee must simply prove that a reasonable person in the same factual circumstances with the same training and experience would believe that the employer violated securities laws. Under the Sylvester standard, the court concluded that plaintiff's belief that Oracle was defrauding its investors was objectively unreasonable where missed projections by no more than $10 million are minor discrepancies to a company that annually generates billions of dollars. The court also concluded that plaintiff's claim under Dodd-Frank fails because he did not make a disclosure protected under Sarbanes-Oxley. Accordingly, the court affirmed the judgment.
Court Description: Benton, Author, with Smith and Bye, Circuit Judges] Civil case - Sarbanes-Oxley and Dodd-Frank. In action by former employee alleging Oracle had terminated him in retaliation for challenging Oracle's revenue projections, the court adopts the test set out in Sylvester v. Parexel Int'l LLC, ARB No. 07-123, 2011 WL 2165854 (ARB May 25, 2011) which holds that to satisfy the objective component of the "reasonable belief" standard, an employee must simply prove that a reasonable person in the same factual circumstances with the same training and experience would believe that the employer violated securities laws; under the standard, the missed projections were minor discrepancies and plaintiff's belief that Oracle was defrauding its investors was objectively unreasonable; the district court did not err, therefore, in granting Oracle summary judgment on plaintiff's Sarbanes-Oxley claim; since plaintiff did not make a disclosure protected by Sarbanes-Oxley, his termination did not violate Dodd-Frank.
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