Dollars to doughnuts: Unsupported conclusions won’t knock courts’ SOX off

Riddle me this: Why are conclusions like doughnuts? I use this question in class with my students. The answer: Because they look pretty (especially with sprinkles), taste yummy, and contain zero nutritional value. This truth played out in a recent case from the U.S. 5th Circuit Court of Appeals, the federal appeals court covering Texas.

SOX claim?

Darrell Seybold worked at Charter Communications but was fired for alleged unprofessional conduct. He disagreed, asserting the discharge resulted from engaging in protected conduct under the Sarbanes-Oxley Act (SOX).

As a publicly traded company, Charter is subject to SOX, which protects employees from retaliation for blowing the whistle on their employer’s shady financial practices. Seybold claimed that’s exactly what he did.

Enter: The ‘doughnut’

The trial court looked at the written claim in the filed lawsuit and tossed it, and the appeals court agreed. Why? Because Seybold asserted only conclusions (“I engaged in protected activity.”), not facts (“Here are the details of what I did and why I believe I was protected from termination.”).