Mondaq reports that Scott Bechtel and Willie Jacques, vice presidents at CTI, had voiced concerns on three occasions about the company’s financial reporting practices. Bechtel and Jacques allegedly questioned whether certain oral agreements they and CTI’s CEO John Nano entered into with consultants should be disclosed to shareholders and included in Securities and Exchange Commission (SEC) reports.
Nano said their concerns would be addressed, but allegedly became hostile towards the vice presidents, according to the Mondaq account of the case. They claim he openly criticized and attempted to embarrass them, and eventually terminated them. Bechtel and Jacques filed a complaint with the Occupational Safety and Health Administration (OSHA) alleging retaliatory termination in violation of SOX.
OSHA found that CTI had unlawfully fired Bechtel and Jacques and ordered that they be reinstated to their former positions. CTI filed objections with the Secretary of Labor, requested a hearing, and filed a motion to stay the reinstatement order. That motion was denied, however, CTI refused to reinstate Bechtel and Jacques while an appeal was pending. Bechtel and Jacques then filed suit against CTI in federal court.
The court began by rejecting CTI’s contention that it lacked subject matter jurisdiction to enforce a preliminary reinstatement order under SOX, saying the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (“AIR21”) allows federal courts to enforce preliminary orders reinstating employees despite the filing of objections by employers, and hence so does SOX.
Relying on a previous Supreme Court decision, the court also determined that Congress could grant the Secretary of Labor authority to order reinstatement on the basis of an investigation provided that the investigation met minimum due process requirements. CTI did not contend that OSHA failed to meet minimum due process standards in making its determination, so the court concluded that Bechtel and Jacques were entitled to a preliminary injunction enforcing the Secretary’s determination.
The Court ordered CTI to reinstate Bechtel and Jacques and pay them all salary and benefits they would have earned had CTI complied with the Secretary’s original reinstatement order.
The case is Bechtel v. Competitive Techs., Inc.
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