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In Romaneck v. Deutsche Asset Mgmt., 2006 U.S. Dist. LEXIS 59397 (N.D. Cal. Aug. 17, 2006), a plaintiff filing a state whistleblowing claim did not need to exhaust his federal administrative procedures under Sarbanes-Oxley Act (SOX) before filing his state law claim.

A sales director claimed he was terminated in retaliation for saying he was going to “spill the beans” about company activities when he was called to testify before the SEC.  The district court determined the sales director may pursue a state law claim for wrongful discharge based on the “public policy” reflected in SOX.

According to the district court, the plaintiff was not required to exhaust his federal administrative procedures under SOX before filing his state law claim, even though he would have been required to file a complaint with the Department of Labor before commencing a lawsuit under SOX itself.

The district court denied the employer’s motion for summary judgment on the plaintiff’s public policy claim. The court granted the employer summary judgment on a separate state whistleblower claim under the California Labor Code, finding that the statute did require exhaustion of state administrative procedures.