Nielsen v. Aecom Tech. Corp.

Decision Date08 August 2014
Docket NumberNo. 13–235–CV.,13–235–CV.
Citation762 F.3d 214
PartiesChristian NIELSEN, Plaintiff–Appellant, v. AECOM TECHNOLOGY CORPORATION, Defendant–Appellee, AECOM Middle East, Ltd., Defendant.
CourtU.S. Court of Appeals — Second Circuit


Daniel J. Kaiser, Henry L. Saurborn, Kaiser Saurborn & Mair, P.C., New York, NY, for PlaintiffAppellant.

William Roberts, III, John R. Shane, Todd A. Bromberg, Wiley Rein LLP, Washington, DC, for DefendantAppellee.

Before: SACK, HALL, and LIVINGSTON, Circuit Judges.


We consider the reach of the whistleblower retaliation provision created by the Sarbanes–Oxley Act of 2002 (“Sarbanes–Oxley” or “SOX”). SeePub.L. No. 107–204, § 806, 116 Stat. 745, 802–04 (codified as amended at 18 U.S.C. § 1514A). The district court (Forrest, J.) dismissed the complaint brought by plaintiff-appellant Christian Nielsen (Nielsen) against AECOM Technology Corporation (AECOM) and its subsidiary, AECOM Middle East Ltd. (AME). The only claim at issue on appeal is Nielsen's whistleblower retaliation claim against AECOM, which was dismissed for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).

Section 1514A of Sarbanes–Oxley protects the employees of publicly traded companies who provide information or otherwise assist in an investigation concerning conduct that they “reasonably believe[ ] constitutes a violation” of certain enumerated federal statutes, any rule or regulation of the Securities and Exchange Commission (“SEC”), or “any provision of Federal law relating to fraud against shareholders.” 18 U.S.C. § 1514A(a)(1). We consider the proper standard for analyzing the reasonableness of Nielsen's asserted belief that he complained of conduct protected by the statute. The Department of Labor (“DOL”), which is charged with adjudicating administrative actions brought pursuant to this statute, recently abrogated the standard it had previously employed in conducting this analysis. We agree with the more recent interpretation, and also conclude that it deserves, at the least, “respect according to its persuasiveness” pursuant to Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). See United States v. Mead Corp., 533 U.S. 218, 221, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Accordingly, we hold that the standard applied by the district court, citing a nonprecedential order from this Court, is invalid. Reaching the merits of Nielsen's complaint, we nevertheless affirm the judgment of the district court. Applying the correct standard, Nielsen has failed to allege that he reasonably believed, based on non-trivial allegations, that he was reporting a violation of any of the enumerated provisions.

A. Facts 1

Nielsen was employed by AECOM 2 in the position of Fire Engineering Manager, where he was tasked, inter alia, with ensuring that his subordinates' engineering plans were sufficient under “applicable fire safety standards.” J.A. 4. One of the employees who reported to Nielsen, Naung Hann, allowed fire safety designs to be marked as approved although Hann had not in fact reviewed them. In March and June of 2011, Nielsen brought his concern about Hann to several managers in the Dubai office and “a series of meetings [was] held ... to discuss Mr. Hann,” but no action was taken. J.A. 6. Consequently, Nielsen told other executives that “unless the issue was definitively resolved, he could no longer work at AECOM.” J.A. 6–7. On June 23, 2011, Nielsen was terminated; the complaint alleges that this action was part of a “continuing effort to coverup [sic] the false approval of fire safety designs.” J.A. 7. Differing explanations—which Nielsen asserts were pretextual—were given for the termination.

On June 26, 2011, three days after he was fired, Nielsen complained to David Barwell, Chief Executive for the Middle East, that the termination was improper, but Nielsen received no relief. A few weeks later, in July 2011, Nielsen contacted members of AECOM's global compliance team located in the United States, who told him that an independent investigation would be conducted. Nielsen was informed in August 2011 that the investigation concluded that there was no wrongdoing and that the termination was justified. His request for a copy of the investigative report was denied on grounds of confidentiality.

B. Procedural History

In December 2011, Nielsen filed a complaint regarding his discharge with DOL. The DOL Acting Regional Administrator rejected the complaint by letter on January 27, 2012. Upon Nielsen's objection, his complaint was reviewed by an Administrative Law Judge (“ALJ”), who dismissed his complaint in May 2012. 3 After commencing an appeal to the DOL Administrative Review Board (“ARB”), Nielsen filed this lawsuit in the Southern District of New York against both AECOM and AME in July 2012, as permitted by the statute.4 His sole claim against both defendantswas a whistleblower retaliation claim under Section 806 of the Sarbanes–Oxley Act of 2002, codified at 18 U.S.C. § 1514A. Nielsen claimed that he was fired, and that the termination was upheld after the internal investigation, “because of his complaints about, and opposition to, [AECOM's] fraudulent business practices.” J.A. 9.

The district court dismissed Nielsen's § 1514A claim against AME under Rule 12(b)(2), holding that there was no basis for personal jurisdiction under New York's long-arm statute.5 Further, it dismissed the claim against AECOM under Rule 12(b)(6) on the ground that Nielsen has not plausibly alleged that he engaged in “protected activity” under § 1514A. Judgment was entered on December 12, 2012, and Nielsen filed this timely appeal.


We review de novo the dismissal of a complaint under Rule 12(b)(6), accepting all allegations in the complaint as true and drawing all inferences in favor of the plaintiff. Walker v. Schult, 717 F.3d 119, 124 (2d Cir.2013). Our review of a district court's interpretation of a statute, a pure question of law, is also de novo. United States v. Delis, 558 F.3d 177, 180 (2d Cir.2009).

Under Ashcroft v. Iqbal, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face” to survive a motion to dismiss. 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks omitted). To state a plausible claim, the complaint's [f]actual allegations must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A motion to dismiss should be granted “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.


“To safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corporation, Congress enacted the Sarbanes–Oxley Act of 2002.” Lawson v. FMR LLC, –––U.S. ––––, 134 S.Ct. 1158, 1161, 188 L.Ed.2d 158 (2014). Among other changes to the U.S. financial regulatory regime, the statute creates the whistleblower provision pursuant to which Nielsen brings the claim at issue in this suit. Section 1514A of Title 18 is intended to “protect[ ] employees when they take lawful acts to disclose information or otherwise assist in detecting and stopping actions which they reasonably believe to be fraudulent.” Bechtel v. Admin. Review Bd., 710 F.3d 443, 446 (2d Cir.2013) (internal quotation marks and ellipsis omitted). Specifically, the statute provides that a publicly traded company or its subsidiary cannot “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment” because the employee:

provide[s] information, cause[s] information to be provided, or otherwise assist[s] in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders....

18 U.S.C. § 1514A(a)(1). To prevail on a claim of retaliation pursuant to § 1514A, the plaintiff must show that:

(1) he or she engaged in a protected activity; (2) the employer knew that he or she engaged in the protected activity; (3) he or she suffered an unfavorable personnel action; and (4) the protected activity was a contributing factor in the unfavorable action.

Bechtel, 710 F.3d at 451.

The district court concluded that Nielsen failed to allege that he had engaged in a protected activity, relying in large part on a 2010 summary order from this Court for the proposition that a whistleblowing employee's communications “must definitively and specifically relate to one of the listed categories of fraud or securities violations in 18 U.S.C. § 1514(a)(1).” Nielsen v. AECOM Tech. Corp., No.12 Civ. 5163, 2012 WL 6200613, at *5 (S.D.N.Y. Dec. 11, 2012) (quoting Vodopia v. Koninklijke Philips Elecs., N.V., 398 Fed.Appx. 659, 662–63 (2d Cir.2010)) (internal quotation marks omitted). As set forth below, however, we disagree with the standard on which the district court relied. That standard, set out in this Court's order in Vodopia v. Koninklijke Philips Electronics, stemmed from a holding of the ARB that the agency has since repudiated. We are persuaded by the ARB's more recent interpretation of § 1514A and therefore follow its reasoning. Nonetheless, on review using the proper standard, we affirm the district court's judgment and conclude that Nielsen has not plausibly alleged that he engaged in an activity protected by the statute.


In our administrative scheme, courts generally will defer to an agency's interpretation of a statute if (1) Congress has not directly addressed the precise...

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