Fourth Circuit Affirms No Whistleblower Protection for Former Wyeth Employee

Last month, the U.S. Court of Appeals for the Fourth Circuit held that the whistleblower protection provisions of the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, did not protect a former employee of Wyeth who alleged that he was fired for complaining to Wyeth management about insufficient training. The Court affirmed a summary judgment decision by the U.S. District Court for the Middle District of North Carolina, which held that Mr. Livingston’s complaints were not protected “because Livingston could not reasonably have believed that Wyeth was violating the securities laws.”

The case, Livingston v. Wyeth, presents an interesting fact pattern based on the following allegations. Mark Livingtson, Wyeth’s former Associate Director of Training and Continuous Improvement, claimed to be fired in December 2002 after an altercation with Wyeth’s Human Resources Director, David McCuaig. Mr. Livingston threw a holiday party at Wyeth did not invite Mr. McCuaig. When Mr. McCuaig appeared at the party (allegedly to wish everyone a happy holiday), Mr. Livingston became very angry (allegedly in part because Mr. McCuaig had not brought a gift for the gift exchange), and threatened to call the police. This was not the first time Mr. Livingston had been cited for hostile behavior, and shortly after the incident, Mr. Livingston was fired.

Mr. Livingston claimed he was fired because he complained that Wyeth was making insufficient progress in teaching employees good manufacturing practices. Under the FDC Act, pharmaceutical products produced in a facility that does not adhere to good manufacturing practices, including training, are considered adulterated. In 2000, FDA cited Wyeth for failure to observe good manufacturing practices. Wyeth, as part of a Consent Decree advised FDA that the company would implement a new training program. Although FDA has not publically suggested that Wyeth failed to implement the program and an internal audit found that the program was on track, Mr. Livingston complained that the training program was not on track. Two months later, in September 2002, Wyeth met the compliance target date set by the Consent Decree.

The district court found sufficient evidence to support Wyeth’s contention that it had fired Mr. Livingston for his hostile behavior. The court further concluded that there was no “objectively reasonable basis . . . for Livingston to equate the perceived training deficiencies with imminent wrongdoing” and that even if the wrongdoing Mr. Livingston had hypothesized had been true, it would not have resulted in a material loss to Wyeth. The Fourth Circuit affirmed this decision, concluding “not one link in Livingston’s imaginary chain of horribles was real or was in the process of becoming real.”

The United States Chamber of Commerce filed an amicus brief for this case.

By Susan J. Matthees