JANET C. HALL, District Judge.
Plaintiff, Mary Barker, brings this case against UBS AG and its wholly-owned subsidiary, UBS Securities, LLC (collectively "defendants" or "UBS"), alleging that defendants terminated her employment in violation of the Sarbanes-Oxley Act's whistleblower provision (hereafter "SOX"), 18 U.S.C. § 1514A.
Barker began working at UBS in 1998, and at the time of her termination, worked as an Associate Director in the Business Management Group of the Equities Chief Operating Officer's office. L.R. 56(a)(1) Stmt. ¶¶ 21-22; L.R. 56(a)(2) Stmt. ¶¶ 21-22. Barker completed her undergraduate degree while working full-time for UBS. L.R. 56(a)(1) Stmt. ¶ 26; L.R. 56(a)(2) Stmt. ¶ 26. In working towards her degree, Barker completed several entry level accounting courses, a law course, an advanced business management course, and a course on market risk. Id. In addition, while working at UBS, Barker completed an internal online compliance requirement
Traditionally, a firm must own a minimum number of "exchange seats" on a given trading exchange, such as the New York Stock Exchange (hereafter "NYSE"), in order to trade on that exchange. See L.R. 56(a)(1) Stmt. ¶¶ 50-51; L.R. 56(a)(2) Stmt. ¶¶ 50-51. In early 2006, UBS's proprietary trading desk (hereafter "Prop Desk") began acquiring, as an investment, additional seats on exchanges that were becoming privately held companies and converting exchange seats into shares in the newly formed corporation. See L.R. 56(a)(1) Stmt. ¶ 53; L.R. 56(a)(2) Stmt. ¶ 52. Ownership in the new corporation was allocated based on exchange seat ownership. See id. These types of changes were occurring on numerous trading exchanges around this time, resulting in changes to the minimum number of exchange seats or exchange shares necessary to trade on various exchanges. See L.R. 56(a)(1) Stmt. ¶ 56; L.R. 56(a)(2) Stmt. ¶ 56. In 2006, in connection with her responsibilities concerning the administration of UBS's Prop Desk's exchange holdings, Barker assisted in reconciling the NYSE exchange seats held by the Prop Desk only into one consolidated inventory. L.R. 56(a)(2) Stmt. ¶ 55.
Defendants assert that, due to these changes in the industry, Equities senior management sought to better understand UBS's exchange holdings on a uniform, consolidated basis and assigned Barker to reconcile the holdings (hereafter "the reconciliation project"). See L.R. 56(a)(1) Stmt. ¶¶ 58, 60. Barker asserts that the reconciliation project came about after she obtained information regarding firm-wide holdings from each of the exchanges as part of her work with the Equities Exchange Traded Derivatives Desk and discovered reporting discrepancies. See L.R. 56(a)(2) ¶ 58; 67. Barker asserts that she assembled a team of individuals who worked to reconcile the portfolio of UBS's exchange assets which were unaccounted for, and that over the course of May 2007, the team accumulated a list of discrepancies for exchange seats, shares, or both not accounted for on UBS's balance sheet. See L.R. 56(a)(2) Stmt. ¶ 62.
Until around June 2007, Barker reported directly to Angela Sinni and indirectly to Gerald Hees. See L.R. 56(a)(2) Stmt. ¶ 29. Barker then began reporting directly to Hees. See id. Around July 2007, Hees became directly responsible for overseeing Barker's work on the reconciliation project and maintained that supervision until he was terminated in May 2008. See L.R. 56(a)(2) Stmt. ¶ 28-29. In the fall of 2007, Kevin Milgram became Barker's supervisor. See L.R. 56(a)(1) Stmt. ¶ 28; L.R. 56(a)(2) Stmt. ¶ 28.
In addition to Barker, at least ten UBS employees worked on the reconciliation project. L.R. 56(a)(1) Stmt. ¶ 63; L.R. 56(a)(2) Stmt. ¶ 63. Barker asserts that senior management first became aware of the project after Hees updated them in September 2007, following a meeting where he discussed how to "spin" the errors and omissions related to the firm's exchange holdings with another employee. See L.R. 56(a)(2) Stmt. ¶ 66. In August 2007, Barker provided Hees with a draft "gap analysis," a report regularly prepared at UBS to identify a gap in processes. L.R. 56(a)(1) Stmt. ¶¶ 76-77; L.R. 56(a)(2) Stmt. ¶¶ 76-77. The parties dispute whether Hees provided any edits to Barker with regard to this gap analysis. L.R. 56(a)(1) Stmt. ¶ 78; L.R. 56(a)(2) Stmt. ¶ 78.
The parties dispute whether Hees ever instructed Barker to refrain from discussing the reconciliation project with UBS's Operational Risk Control group. L.R. 56(a)(1) Stmt. ¶ 83; L.R. 56(a)(2) Stmt.
John Ingrilli became the Chief Operating Officer of Equities around September 2007. L.R. 56(a)(2) Stmt. ¶ 85. On September 19, 2007, Hees presented the results of the reconciliation project to UBS senior executives, including Ingrilli. See L.R. 56(a)(2) Stmt. ¶ 92. On September 24, 2007, Hees instructed Barker that she should not discuss the reconciliation project with Ingrilli directly. See L.R. 56(a)(1) Stmt. ¶ 97; L.R. 56(a)(2) Stmt. ¶ 97. UBS asserts that this instruction was prompted by Ingrilli's dissatisfaction with Barker's work product; however, Barker contends that she had not presented any work product to Ingrilli prior to receiving this instruction from Hees. See L.R. 56(a)(1) Stmt. ¶ 92; L.R. 56(a)(2) Stmt. ¶ 92.
Barker admits that she did not use the words "fraud" or "violation of securities laws" in her gap analysis, or when reporting her work to various superiors. See L.R. 56(a)(1) Stmt. ¶¶ 103-04, 106-07; L.R. 56(a)(2) Stmt. ¶¶ 103-04; 106-07. The exchange holdings identified in Barker's gap analysis totaled less than $200 million. L.R. 56(a)(1) Stmt. ¶ 25; L.R. 56(a)(2) Stmt. ¶ 125. As a result of the reconciliation project, UBS sold some of its exchange holdings, resulting in over $50 million in revenue. See L.R. 56(a)(1) Stmt. ¶¶ 136-37; L.R. 56(a)(2) Stmt. ¶¶ 136-37. Hees nominated Barker for a "Thank You Award" for her work on the reconciliation project, which Barker received on November 23, 2007. L.R. 56(a)(1) Stmt. ¶¶ 138-40; L.R. 56(a)(2) Stmt. ¶¶ 138-40.
During a March 26, 2008 meeting with Milgram, Barker informed him that she felt that Hees was overlooking her for projects and not adequately supporting her, resulting in her feeling that she was being retaliated against or constructively discharged. L.R. 56(a)(1) Stmt. ¶ 128; L.R. 56(a)(2) Stmt. ¶ 128-29. An internal investigation found that no unfair treatment had occurred. L.R. 56(a)(1) Stmt. ¶ 132; L.R. 56(a)(2) Stmt. ¶ 132. On or about May 6, 2008, UBS conducted a large-scale reduction in force, which resulted in Barker's termination. L.R. 56(a)(1) Stmt. ¶ 10; L.R. 56(a)(2) Stmt. ¶ 10.
A motion for summary judgment "may properly be granted ... only where there is no genuine issue of material fact to be tried, and the facts as to which there is no such issue warrant judgment for the moving party as a matter of law." In re Dana Corp., 574 F.3d 129, 151 (2d Cir.2009). Thus, the role of a district court in considering such a motion "is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists." Id. In making this determination, the trial court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. See Loeffler v. Staten Island Univ. Hosp., 582 F.3d 268, 274 (2d Cir.2009).
"[T]he moving party bears the burden of showing that he or she is entitled to summary judgment." United Transp. Union v. Nat'l R.R. Passenger Corp., 588 F.3d 805, 809 (2d Cir.2009). Once the moving party has satisfied that burden, in order to defeat the motion, "the party opposing summary judgment ... must set forth `specific facts' demonstrating that there is `a genuine issue for trial.'" Wright v. Goord, 554 F.3d 255, 266 (2d Cir.2009) (quoting Fed.R.Civ.P. 56(e)). "A dispute about a `genuine issue' exists for summary judgment purposes where the evidence is
Section 1514A of Title 18 the United States Code makes it unlawful for publicly traded companies to:
To demonstrate a violation of section 1514A, a plaintiff bears the initial burden of setting forth a prima facie case. See Day v. Staples, Inc., 555 F.3d 42, 53 (1st Cir.2009). To establish a prima facie case, the plaintiff must demonstrate by a preponderance of the evidence that: (1) she engaged in protected activity; (2) the employer knew of the protected activity; (3) she suffered an unfavorable personnel action; and (4) circumstances exist to suggest that the protected activity was a contributing factor to the unfavorable action. See Vodopia v. Koninklijke Philips Electronics, N.V., 398 Fed.Appx. 659, 662 (2d Cir.2010). Courts have construed whistleblower protection broadly. See, e.g., Mahoney v. KeySpan Corp., 2007 WL 805813, at *5 (E.D.N.Y. Mar. 12, 2007) ("Given that SOX is a statute designed to promote corporate ethics by protecting whistleblowers from retaliation, it is reasonable to construe the statute broadly."). If the plaintiff meets her burden, the defendant may then avoid liability if it can prove by clear and convincing evidence that it would have taken the same personnel action in the absence of the protected activity. See Day, 555 F.3d at 53.
UBS first argues that Barker cannot establish a prima facie case because she cannot show that she engaged in protected activity. To demonstrate protected activity, a plaintiff must show that she "had both a subjective belief and an objectively reasonable belief that the conduct [s]he complained of constituted a violation of relevant law." See Welch v. Chao, 536 F.3d 269, 275 (4th Cir.2008) (internal quotation omitted). The employee's communications "`must definitively and specifically relate to [one] of the listed categories of fraud or securities violations [in] 18 U.S.C. § 1514A(a)(1).'"
UBS contends that Barker cannot show that she engaged in protected activity for several reasons. First, UBS argues that Barker was simply performing her job and is not entitled to whistleblower protection. See Mem. Supp. Mot. at 20-21. Next, UBS contends that Barker could not, and did not, reasonably believe that she was blowing the whistle on securities fraud because it was unreasonable for her to believe that UBS was either engaged in fraud or that the exchange seat discrepancies were material to shareholders. See id. at 22-26.
UBS asserts that Barker cannot establish that she engaged in protected activity because senior managers requested and supported the reconciliation project, commended Barker and her team on her work, and helped bring about a conclusion to the project. See Mem. Supp. Mot. at 20. At least one court, relying on cases discussing other whistleblower laws, has found that a plaintiff must "`step outside [her] role' and take additional action" in order to demonstrate protected activity. See Riddle v. First Tennessee Bank, 2011 WL 4348298, at *8 (M.D.Tenn. Sept. 16, 2011). The ARB, however, has made clear that an employee may engage in protected activity even where the employee is discharging her duties. See Robinson v. Morgan-Stanley, ARB Case No. 07-070 (Jan. 10, 2010) at *24-25 ("[Section 1514A] does not indicate that an employee's report or complaint about a protected violation must involve actions outside the complainant's assigned duties.").
Barker contests UBS's assertion that senior management commenced the reconciliation project and, instead, asserts that senior management was not aware of the project until Hees briefed them in September 2007. See L.R. 56(a)(2) Stmt. ¶¶ 58, 66. Further, Barker contends that she went beyond her original assignment in pursuing the reconciliation project by contacting the exchanges. See Barker Aff. ¶¶ 15-20. In addition, Barker asserts that Hees reprimanded her for discussing the reconciliation project with Operational Risk, held a meeting where he discussed how to "spin" Barker's findings regarding errors and omissions in UBS's exchange holdings, and instructed Barker not to discuss her findings with Ingrilli or anyone else in senior management. See Barker Aff. ¶¶ 39, 47-48, 51. Given these disputes, material issues of fact exist as to whether Barker engaged in protected activity.
UBS then argues that Barker cannot demonstrate that she held either a subjective or objective reasonable belief that "she was blowing the whistle on securities fraud." See Mem. Supp. Mot. at 21-26. An employee does not need to specifically
Next, UBS argues that it was not objectively reasonable for Barker to believe that UBS had violated the law because, given her education and training, she should have known that the discrepancies discovered through the reconciliation project were not material to UBS's shareholders. See Mem. Supp. Mot. at 23-25. Section 1514A does not contain "an independent materiality requirement." See Welch, 536 F.3d at 276. Consequently, Barker may satisfy this requirement so long as she demonstrates that she held an objectively reasonable belief that the conduct she complained of was in violation of federal law.
UBS does not appear to challenge Barker's ability to demonstrate that it was aware of Barker's protected activity. See Mem. Supp. Mot. at 26. There is ample evidence in the record of Barker's discussions with Sinni, Hees, and Ingrilli regarding the reconciliation project and her concerns regarding the exchange assets. See L.R. 56(a)(2) Stmt. ¶¶ 105-07. Such discussions were sufficient to alert UBS to Barker's concerns. See Fraser v. Fiduciary Trust Co. Int'l, 2009 WL 2601389, at *5 (S.D.N.Y. Aug. 25, 2009) ("A whistleblower must state particular concerns which, at the very least, reasonably identify a respondent's conduct that the complainant believes to be illegal.") (quoting Lerbs v. Buca Di Beppo, Inc., 2004 WL 5030304 (U.S.D.O.L. June 15, 2004)). A reasonable jury could find that UBS knew of Barker's activity.
Barker suffered an unfavorable personnel action when she was terminated on May 6, 2008. See Collins v. Beazer Homes USA, Inc., 334 F.Supp.2d 1365, 1378 (N.D.Ga.2004).
Finally, Barker must demonstrate that "circumstances exist to suggest that the protected activity was a contributing factor to the unfavorable action."
UBS first argues that Barker cannot demonstrate that any protected activity was a contributing factor in her termination because Ingrilli did not have knowledge of Barker's protected activity and made the decision to terminate Barker's employment without any involvement from Hees. See Mem. Supp. Mot. at 26-27. Barker asserts that she met with Ingrilli on October 19, 2007, and informed him of the meeting where Hees discussed how to "spin" Barker's findings, as well as Hees's instruction to her not to raise her concerns regarding the reconciliation project with Ingrilli directly. See Barker Aff. ¶ 61. In addition, Barker asserts that she told Ingrilli that she had expected Hees to report her findings from the reconciliation project to senior management and, if he had not done so, she felt obligated to do so. See id. Further, Barker points to evidence from which a jury could conclude that Ingrilli consulted with Hees prior to deciding to terminate Barker's employment. See Shore Aff., Ex. C at 100.
Next, UBS argues that the passage of time between Barker's protected activity and the termination of her employment negates any inference of causation. Mem. Supp. Mot. at 28-29. While causation may be inferred from timing alone where an adverse employment action closely follows the exercise of protective activity, the Second Circuit has declined to "define the outer limits beyond which a temporal relationship is too attenuated to establish a causal relationship." See Gorman-Bakos v. Cornell Coop, of Schenectady Cnty., 252 F.3d 545, 554 (2d Cir.2001). Generally, where a plaintiff relies solely on temporal proximity to establish causation, the amount of time between the employer's knowledge of protected activity and an adverse employment action must be "very close." See Clark Cnty. Sch. Dist. v. Breeden, 532 U.S. 268, 273, 121 S.Ct. 1508, 149 L.Ed.2d 509 (2001) (internal quotation omitted); Garrett v. Garden City Hotel, Inc., 2007 WL 1174891, at *21 (E.D.N.Y. Apr. 19, 2007) (noting that "in the absence of other evidence of defendant's retaliatory motive [a time lapse of two and a half months] precludes a finding of a causal connection between the protected activity and the adverse employment action"). Where other factual circumstances support
Barker testified that two months after she met with Ingrilli regarding the reconciliation project, Hees removed her from consideration for promotion.
Though Barker sets forth sufficient evidence for a reasonable jury to conclude that she has met her burden of establishing a prima facie case, UBS may still obtain summary judgment if it shows by clear and convincing evidence that it would have terminated Barker even absent any protected activity. See 18 U.S.C. § 1514A(b)(2)(A); Van Asdale, 577 F.3d at 1004. UBS presents convincing evidence that the firm was experiencing extreme financial hardship at the time Barker's employment was terminated, and a reduction in force was necessary. See L.R. 56(a)(1) Stmt. ¶¶ 1-9. However, such hardship does not explain why Barker in particular was selected for termination.
UBS first points to Barker's performance evaluations and deposition testimony from various supervisors as evidence of her "performance and interpersonal issues." See L.R. 56(a)(1) Stmt. ¶ 32-47. While these performance evaluations do indicate some performance issues, many also describe Barker in complimentary terms. See, e.g., Levin Decl., Ex. O at 11-14 (indicating that Barker "had a successful year," "builds strong relationships" with outside groups, "showed a great deal of [patience] and endurance," "seems to enjoy what she does," and is "highly motivated").
Taking the evidence in the light most favorable to the plaintiff, such evidence does not provide clear and convincing evidence that Barker would have been terminated regardless of any protected activity. Consequently, summary judgment is inappropriate.
For the reasons set forth above, Defendants' Motion for Summary Judgment (Doc. No. 53) is
