Murray v. UBS Securities, LLC et al

Filing 147

REDACTED OPINION AND ORDER: For the foregoing reasons, Defendants' motion for summary judgment is DENIED. The parties shall appear via telephone for a conference with the Court on April 14, 2017, at 4:30 p.m. to discuss a schedule for trial in this matter. The parties shall contact Chambers at [phone] with all parties present on the line. (Signed by Judge Katherine Polk Failla on 3/31/2017) (cla)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
TREVOR MURRAY,
:
:
Plaintiff,
:
:
v.
:
:
UBS SECURITIES, LLC and UBS AG,
:
:
Defendants. :
:
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: ______________
April 25, 2017

14 Civ. 927 (KPF)
REDACTED OPINION
AND ORDER

KATHERINE POLK FAILLA, District Judge:
Plaintiff Trevor Murray alleges that his employer, Defendant UBS
Securities, LLC, a subsidiary of Defendant UBS AG (collectively, “Defendants”
or “UBS”), terminated his employment in retaliation for his whistleblowing
activities. UBS responds that his termination was an unfortunate, but nonretaliatory, reaction to an economic downturn. The Court previously granted
Defendants’ motion to dismiss Plaintiff’s claim under 12 U.S.C. § 5567(a), the
anti-retaliation provision of Title X of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010),
commonly known as the Consumer Financial Protection Act. See Murray v.
UBS Sec., LLC, No. 14 Civ. 927 (KPF), 2015 WL 769586 (S.D.N.Y. Feb. 24,
2015) (“Murray I”). Plaintiff’s remaining claim is brought under the antiretaliation provision of the Sarbanes-Oxley Act, Pub. L. No. 107-204, § 806(a),
116 Stat. 745 (2002) (codified at 18 U.S.C. § 1514A) (“§ 806”). Defendants have
moved for summary judgment under Federal Rule of Civil Procedure 56 on

Plaintiff’s § 806 claim and, alternatively, on his back-pay damages remedy. For
the reasons that follow, Defendants’ motion is denied in its entirety.
BACKGROUND 1
A.

Factual Background
The Court assumes familiarity with the factual and procedural history of

this action, see Murray I, 2015 WL 769586, at *1, as well as of a predecessor
related action, see Murray v. UBS Sec., LLC, No. 12 Civ. 5914 (KPF), 2014 WL
1316472, at *1 (S.D.N.Y. Apr. 1, 2014); Murray v. UBS Sec., LLC, No. 12 Civ.
5914 (KPF), 2014 WL 285093, at *1 (S.D.N.Y. Jan. 27, 2014); Murray v. UBS
Sec., LLC, No. 12 Civ. 5914 (JMF), 2013 WL 2190084, at *1 (S.D.N.Y. May 21,
2013).

1

The facts in this Opinion are drawn from the parties’ submissions in connection with
Defendants’ motion for summary judgment, including Defendants’ Local Rule 56.1
Statement (“Def. 56.1” (Dkt. #103)); the corrected version of Plaintiff’s combined
opposition to this statement and counter-statement (“Pl. 56.1 Opp.” (Dkt. #129)); and
Defendants’ opposition to Plaintiffs’ counter-statement (“Def. 56.1 Opp.” (Dkt. #135)).
In addition, the Court has drawn on various declarations from attorneys and witnesses,
along with the exhibits thereto (cited using the convention “[Name] Decl.” (Dkt. #104,
127)). In many cases, the parties have marked the same documents as exhibits; in
such instances, the Court will provide only one citation to the document.
Citations to a party’s Local Rule 56.1 Statement incorporate by reference the
documents cited therein. Where facts stated in a party’s Local Rule 56.1 Statement are
supported by testimonial or documentary evidence, and denied with only a conclusory
statement by the other party, the Court finds such facts to be true. See Local Civil Rule
56.1(c), (d).
For convenience, the Court will refer to Defendants’ brief in support of their motion for
summary judgment as “Def. Br.” (Dkt. #102); Plaintiff’s brief in opposition to
Defendants’ motion as “Pl. Opp.” (Dkt. #126); and Defendants’ reply brief as “Def. Reply”
(Dkt. #134). The Court also adopts the parties’ convention of referring collectively to
both Defendant entities as “UBS” or “Defendants.” (See Def. 56.1; Pl. Opp. 1).
On March 31, 2017, the Court filed an unredacted copy of this Opinion under seal. On
that same day, the Court provided the parties with a copy of the unredacted Opinion
and allowed the parties to propose redactions. (See Dkt. #139). Taking the parties’
suggestions into consideration, the Court now publicly files this redacted Opinion.

2

1.

Plaintiff’s Employment and Termination

Plaintiff had two periods of employment with UBS. The first lasted from
in or about May 2007 to September 2009. (Def. 56.1 ¶¶ 1, 8-9). During this
period, Plaintiff was employed as a Strategist within UBS’s Mortgage Strategy
Group, where he focused on commercial mortgage-backed securities (“CMBS”).
(Id. at ¶¶ 2-3). According to Defendants, Plaintiff was let go when his group
and position were eliminated as part of a reduction in force prompted by the
2008 financial crisis. (Id. at ¶¶ 4-6, 8-9).
By early 2011 business had improved, and UBS looked to rebuild its
Mortgage Strategy Group, which was located within the Global Interest Rates
Strategy Group headed by Michael Schumacher. (Def. 56.1 ¶¶ 13-15; Pl. 56.1
Opp. ¶ 259). The Global Interest Rates Strategy Group, in turn, was a part of
Macro Strategy, a division within UBS’s Investment Bank (sometimes referred
to as the “Bank”). (Def. 56.1 ¶¶ 13-21). Schumacher reported to Lawrence
Hatheway, UBS’s Chief Economist, Chief Strategist, and Head of Macro
Strategy. (Id. at ¶¶ 16-17; Pl. 56.1 Opp. ¶ 260).
As part of its rebuilding effort, UBS engaged in a series of new hires,
including Kenneth Cohen in May 2011 to run the U.S. Real Estate Finance
Group, which included the non-research, business side of CMBS dedicated to,
inter alia, origination, trading, and sales (collectively, the “CMBS Business”).
(Def. 56.1 ¶ 32; Pl. 56.1 Opp. ¶¶ 257, 280-82, 345; Stulberg Decl., Ex. 21).
The U.S. Real Estate Finance Group, and thus the CMBS Business, was
housed within the Fixed Income, Currency, and Commodities (“FICC”) division,

3

also within UBS’s Investment Bank; Hatheway oversaw headcount (i.e., the
number of UBS personnel) at FICC. (Def. 56.1 ¶¶ 22, 31-35; Pl. 56.1 Opp.
¶ 280).
UBS also hired several strategists and analysts, including Plaintiff. (Def.
56.1 ¶¶ 25, 49, 52). Thus, Plaintiff began his second stint with UBS on
May 31, 2011, working as a CMBS Strategist within the Mortgage Strategy
Group, where he reported directly to Schumacher, and where his
responsibilities included writing research articles about the CMBS market and
interfacing with clients. (Id. at ¶¶ 57, 59, 61; Pl. 56.1 Opp. ¶ 254). Plaintiff
was the only such Strategist reporting to Schumacher during this period (Pl.
56.1 Opp. ¶ 263), and his role in this regard included supporting the CMBS
Business, his “internal client” at the Bank. (Id. at ¶¶ 257-58). Plaintiff did not
have responsibilities over any non-CMBS securitized products, such as
residential-mortgage-backed securities (“RMBS”) or Asset-Backed Securities
(“ABS”). (Id. at ¶¶ 264-66).
Plaintiff believed that his research “was required to be independently
conducted pursuant to SEC Guidelines and UBS compliance training.” (Pl.
56.1 Opp. ¶ 256). After all, Plaintiff was required to certify in his research
reports that “with respect to each security or issuer that the analyst covered in
this report [i] all of the views expressed accurate[ly] reflect his or her personal
views about those securities or issuers and were prepared in an independent
manner, including with respect to UBS, and [ii] no part of his or her
compensation was, is, or will be directly or indirectly related to the specific

4

recommendations or views expressed by that research analyst in this research
report.” (Id. at ¶ 256(a); Mondl Decl., Ex. 1 (Murray Dep.), at 135:7-24;
136:10-14). See also 17 C.F.R. § 242.501 (Regulation AC, a regulation issued
by the Securities and Exchange Commission (“SEC”) requiring analyst
certifications concerning the accuracy and independence of their research
reports). Plaintiff published research reports approximately every three to five
weeks. (Pl. 56.1 Opp. ¶ 255).
About nine months into Plaintiff’s second stint at UBS, on February 6,
2012, UBS terminated his employment. (Def. 56.1 ¶ 208; Pl. 56.1 Opp. ¶ 504).
Defendants maintain that Plaintiff was let go as part of another reduction in
force. (Def. Br. 11-12). Plaintiff argues that he was fired for whistleblowing to
his supervisors about illegal efforts by CMBS Business personnel to sway his
independent research analysis. (Pl. Opp. 11-14).
2.

UBS’s Renewed Financial Challenges

As the preceding suggests, Plaintiff’s termination is presented as the
denouement of two competing narratives. Defendants outline the turmoil in
the global financial markets that reintroduced challenges to their business
starting in mid-2011. (Def. 56.1 ¶¶ 90-91). 2 In July 2011, in response, UBS
announced a cost-reduction program, and the next month it issued a press
release describing restructuring changes and a plan to reduce headcount by
approximately 3,500 employees. (Id. at ¶¶ 92-95). Defendants’ difficulties were

2

Defendants note that Plaintiff, too, recognized these financial challenges. (Def. 56.1
¶¶ 100, 121-22).

5

then exacerbated when they discovered, in or about September 2011, that a
London-based trader had engaged in unauthorized speculative trading, causing
losses of over $2 billion. (Id. at ¶¶ 103-05). Defendants engaged in a reduction
in force in November 2011, which affected [redacted] among others. (Id. at ¶¶
113-15). Defendants’ 2011 year-end Form 20-F filing with the SEC reported a
$4.5 billion reduction in total operating income compared to 2010, due to the
aforementioned unauthorized-trading incident and generally lower trading
revenues in certain businesses; this reduction was felt acutely in the
Investment Banking business. (Id. at ¶¶ 117-19).
The 2011 cost-cutting measures only “partly offset” UBS’s lower
operating income, and so Defendants’ efforts to lower costs continued into
2012. (Def. 56.1 ¶ 118). For example, UBS reduced the overall 2011 bonus
pool by about 40% compared to 2010, and the bonus pool for the Investment
Bank in particular by about 60%. (Id. at ¶¶ 144-45). As part of another
reduction in force, [redacted]. (Id. at ¶¶ 152, 154-55). Defendants contend
that Plaintiff’s termination was a result of “[redacted]” and [redacted]. (Id. at
¶¶ 158, 164). 3

3

Defendants’ note that [redacted], another strategist in the Mortgage Strategy Group,
though one focused on non-agency RMBS, was also separated at about this time. (Def.
56.1 ¶¶ 165, 194, 211). They also emphasize that Plaintiff was never replaced. (Id. at
¶ 216). Plaintiff counters that the evidence shows that Defendants considered hiring
another CMBS Strategist shortly after Plaintiff’s termination. (See, e.g., Pl. 56. Opp.
¶¶ 216, 599).

6

3.

Efforts to Undermine Plaintiff’s Independent Analysis and
Plaintiff’s Reporting of Those Efforts

In sharp contrast to Defendants’ focus on external, market-roiling events,
Plaintiff maintains that his termination was due to his whistleblowing
activities. (Pl. Opp. 11-14). Specifically, Plaintiff testified at his deposition to a
series of incidents in which senior CMBS Business personnel, including Cohen
and others, endeavored to skew or chill Plaintiff’s independent research
analysis when it did not favor the CMBS Business strategy. Those episodes,
which are generally disputed by Defendants (see generally Def. 56.1 Opp.), are
set forth below.
A few weeks after Plaintiff was rehired, he met with Cohen, who told him
“that CMBS would be a significant revenue generator for the [B]ank, as
evidenced by [Plaintiff’s] joining the firm and the firm’s increased staffing in the
CMBS [B]usiness.” (Pl. 56.1 Opp. ¶¶ 322-23). Cohen encouraged Plaintiff to
write a research article with a specific viewpoint about “special servicers,” a
topic about which there had been anxiety in the CMBS market. (Id. at ¶¶ 325,
327). Cohen emphasized that “it was important that the topic not deter
investors from becoming reacquainted and accustomed with the CMBS
products.” (Id. at ¶ 328). Thus, Cohen recommended that Plaintiff write a
piece that presented “a benign and positive view” of special servicers so as to
“assuage or sooth[e] investors’ concerns about special servicers” (id. at ¶ 330);
this view, however, was inconsistent with Plaintiff’s own independent view of
special servicers (id. at ¶ 331). Plaintiff considered Cohen’s directive to express
a biased viewpoint in an ostensibly independent research article to be an
7

improper attempt to influence Plaintiff’s research. (Id. at ¶¶ 332, 334).
Because Cohen’s views were at odds with Plaintiff’s, Plaintiff opted not to write
any article about special servicers, rather than write a disingenuous piece. (Id.
at ¶ 333). 4
Subsequently, in September 2011, Cohen and David McNamara, head of
the CMBS Trading Desk within the U.S. Real Estate Finance Group, instructed
Plaintiff to “pre-clear” his ostensibly independent articles with them before the
articles were published. (Def. 56.1 ¶¶ 43-44; Pl. 56.1 Opp. ¶¶ 339-41). Cohen
recalled to Plaintiff an interaction that Cohen had had with an investor who
questioned Plaintiff’s conclusions in a prior article. (Pl. 56.1 Opp. ¶ 342). This
caused Cohen concern “that views about [the] CMBS market were being
published that [Cohen] wasn’t in control of or aware of.” (Id. at ¶ 344). Cohen
explained that it was important “not to confuse the market with conflicting
ideas of what Sales, Trading, and Research are saying,” and “to maintain
consistency of message within the CMBS Originations team, the CMBS Trading
Desk, and [R]esearch in order to accomplish what we are trying to do here.”
(Id. at ¶ 345). Accordingly, Cohen told Plaintiff that he “was to cross all of [his]
research articles and topics with the CMBS Trading Desk.” (Id. at ¶ 346).
McNamara concurred, and told Plaintiff that he should “cross everything [he]
publishes with McNamara before he publishe[d] it.” (Id. at ¶ 347). Thereafter,

4

In his deposition, Cohen denied having any recollection of the June 3 meeting or any inperson meeting with Plaintiff in or around that time (besides meeting Plaintiff during
the latter’s orientation). (Pl. 56.1 Opp. ¶ 335; Mondl Decl., Ex. 17 (Cohen Dep.), at
90:23-91:18).

8

Plaintiff generally sought pre-clearance for his research — “including as to the
topic, the general subject of the article, and his point of view or opinion.” (Id.
at ¶ 348). Plaintiff would first orally clear his research ideas, subject, and
point of view with the CMBS Trading Desk. (Id. at ¶ 349). Then, if the
proposed article was cleared, Plaintiff would draft the article and provide the
CMBS Trading Desk a copy of the final draft before the article was published.
(Id. at ¶ 350). Between September 2011 and early December 2011, Plaintiff
sought pre-clearance from the CMBS Trading Desk for about three articles.
(Id. at ¶ 351).
In one instance, Plaintiff wanted to write a “cautious and bearish” article
about his view that certain classes of bonds were overvalued or too expensive
compared to other classes of bonds, and he wanted to use examples of specific
bonds and deals to illustrate his point. (Pl. 56.1 Opp. ¶¶ 356-57). Plaintiff
sought pre-clearance for the article from the CMBS Trading Desk, telling
McNamara and CMBS trader Jamar Delauney about his vision for the article.
(Id. at ¶ 357). Delauney responded that he had just purchased some of the
bonds that Plaintiff considered “overvalued,” and told Plaintiff not to write
anything negative about them. (Id. at ¶ 359). McNamara agreed, instructing
Plaintiff that he did not want anything negative in the market about those
bonds, given that the Bank had just invested in them. (Id. at ¶¶ 358, 360).
Because Plaintiff felt hamstrung from expressing his independent view about
the topic, he once again opted not to write the article at all. (Id. at ¶ 361).

9

In early December 2011, Plaintiff published an article entitled, “2012
CMBS Outlook,” which was intended to provide a forward-looking one-year
projection for the CMBS market. (Pl. 56.1 Opp. ¶¶ 368-69; Stulberg Decl.,
Ex. 78 (2012 CMBS Outlook Article)). This time, Plaintiff drafted the article
without preclearing the topic or the position it expressed with either Cohen or
McNamara, a first for Plaintiff since the September 2011 meeting. (Pl. 56.1
Opp. ¶¶ 371, 376). In point of fact, Plaintiff knowingly defied Cohen’s and
McNamara’s preclearance rule in this instance because “he was concerned that
the 2012 Outlook article was too important to be subject to the influence of the
CMBS [B]usiness.” (Id. at ¶ 372). The article expressed a bearish and cautious
view of the CMBS market. (Id. at ¶ 373; Stulberg Decl., Ex. 78 (2012 CMBS
Outlook Article), at 1 (“[Redacted]”)). About a week after the article was
published, Cohen expressed his displeasure to Plaintiff in a tone that made
Plaintiff think he had done something wrong; Cohen told Plaintiff the outlook
was “too bearish,” “off message,” and “not really consistent with what we are
trying to do around here.” (Pl. 56.1 Opp. ¶ 374). McNamara, too, expressed
his displeasure about the article to Plaintiff, telling him that it made it tough
for McNamara to send the article to clients. (Id. at ¶ 375).
In mid-December 2011, Plaintiff complained to his direct supervisor
Schumacher that the relationship with his internal client, i.e., the CMBS
Business, had become untenable because the business side only interacted
with him in order to steer and skew his research. (Pl. 56.1 Opp. ¶¶ 381-82).
Plaintiff told Schumacher that he had been instructed to clear his research

10

topics, article content, and viewpoints with the CMBS Business before
publishing his articles. (Id. at ¶ 383). He also told Schumacher that he felt the
situation “was not only unethical but illegal,” and that he “didn’t see how it was
going to end well.” (Id. at ¶ 384). Schumacher sympathized with Plaintiff,
saying that he understood that it was difficult to have a view contrary to what
the business line wanted, but he told Plaintiff “to make sure” that he did not
“alienate his internal client.” (Id. at ¶¶ 386-87). 5
Efforts to shape Plaintiff’s independent views went beyond the articlewriting process. Plaintiff recalled an instance in late 2011 where he, Cohen,
and McNamara were on their way to meet with an institutional investor, and
Cohen warned Plaintiff “not to say anything negative” about a certain product
in which the investor was interested. (Pl. 56.1 Opp. ¶¶ 364-67).
In early January 2012, Plaintiff and other UBS employees attended an
industry-wide conference in Miami, Florida. (Pl. 56.1 Opp. ¶ 388). Before the
conference, Plaintiff learned that CMBS Business personnel had scheduled a
series of client meetings at the conference, to which Plaintiff had not been
invited. (Id. at ¶¶ 399, 403, 408). Plaintiff nonetheless attended one of these
meeting uninvited, where he found Cohen and McNamara engaged in a
discussion with a client investor. (Id. at ¶ 417). At the meeting, the client
asked questions relating to defaulted loans, delinquency rates, and special-

5

Schumacher testified at his deposition that he was not certain whether he ever had a
communication with Plaintiff in which Plaintiff communicated that the CMBS Trading
Desk was only interacting with him in order to steer his articles. (Pl. 56.1 Opp. ¶ 385;
Mondl Decl., Ex. 13 (Schumacher Dep.), at 130:9-19).

11

servicing prospects, topics on which Plaintiff’s 2012 CMBS Outlook article had
expressed a bearish viewpoint. (Id. at ¶¶ 418-19). Cohen responded “by
purporting to communicate the analysis of the [B]ank’s researchers,” such as
Plaintiff, on those topics. (Id. at ¶ 421). He said that the Bank’s research and
analysis had shown a benign outlook for the topics being discussed, despite
the fact that Plaintiff’s article had taken a cautious and bearish view of those
topics. (Id. at ¶¶ 423-25). The client then turned to Plaintiff and remarked
that Cohen’s comments were “inconsistent with the viewpoint” expressed in
Plaintiff’s 2012 CMBS Outlook article. (Id. at ¶¶ 426-27). In response, Plaintiff
“openly affirmed the client’s observation, stated that he was a bit more
cautious about the topics and directed the investor and other attendees to read
[the] 2012 Outlook article.” (Id. at ¶ 428). 6
After the conference, Cohen asked Plaintiff what he was working on;
Plaintiff responded that he was crafting a new article reacting to the conference
where, in Plaintiff’s view, everyone seemed “cautiously optimistic.” (Pl. 56.1
Opp. ¶¶ 455-56). Plaintiff noted that part of his article “would express caution
towards property sectors that faced the consumer and that obvious examples
would be retail and hotel properties.” (Id. at ¶ 457). When Plaintiff mentioned
these two sectors, Cohen told him “to be sure not to write anything negative
about the hotel sector because we’re coming to market with [a securities
offering involving the Fontainebleau Hotel in Miami] in a couple of months.”

6

Meanwhile, Cohen testified that he did not recall communicating with Plaintiff at the
conference and, indeed, that he did not even remember whether Plaintiff attended the
conference. (Pl. 56.1 Opp. ¶¶ 430-31; Mondl Decl., Ex. 17 (Cohen Dep.), at 117:8-17).

12

(Id. at ¶ 458). Plaintiff defied Cohen’s directive, and [redacted]. (Id. at ¶ 459;
Stulberg Decl., Ex. 17).
Also in January 2012, Plaintiff tried to get access to a certain financialdata service, and proposed to Cohen that [redacted]. (Pl. 56.1 Opp. ¶¶ 500-02).
Cohen responded that he would be willing to do so as long as members of the
CMBS Business could access the data “so that we can all stay on ‘message.’”
(Id. at ¶¶ 502-03).
When Plaintiff met with Schumacher to go over Plaintiff’s performance
evaluation review in January 2012, Plaintiff informed Schumacher that his
relationship with his internal client, the CMBS Business, had only worsened,
and Plaintiff reiterated his displeasure with the pre-clearance regime to which
his independent research and analysis were being subjected. (Pl. 56.1 Opp.
¶¶ 437, 440-41, 446-49). 7 Plaintiff told Schumacher that the pattern of
behavior he had experienced over the course of the last several months had
developed into an “overall clearer picture of illegal activity” and that Plaintiff
“was deeply concerned about it.” (Id. at ¶ 450). Plaintiff told Schumacher that,
for example, the feedback he had received from CMBS Business personnel on
the 2012 CMBS Outlook article was negative and made Plaintiff believe not just
that the group disagreed with him, but that he was somehow in trouble for the

7

In mid-January 2012, Plaintiff also reported these activities to [redacted], a strategist
focused on agency RMBS, and someone who had helped rehire Plaintiff. (Def. 56.1
¶¶ 36, 41). Plaintiff told [redacted] that he was being forced to pre-clear his article
topics and content with the CMBS Business and that the only interest the CMBS
Business took in his research “was to be a shill for the market.” (Pl. 56.1 Opp. ¶¶ 43233).

13

views he expressed in the article. (Id. at ¶ 451). Schumacher was sympathetic
to Plaintiff, but told him to “just write what the business line wanted.” (Id. at
¶ 452). 8
4.

Plaintiff’s Employment After His Termination from UBS

Defendants terminated Plaintiff’s employment on February 6, 2012. (Def.
56.1 ¶ 208; Pl. 56.1 Opp. ¶ 504). In or about September 2013, Plaintiff
accepted a position as a financial advisor with [redacted] in Charlotte, North
Carolina. (Murray Decl. ¶¶ 24-26; Def. 56.1 ¶ 222). The position paid an
annual salary of [redacted], without opportunity for a bonus. (Murray Decl.
¶ 27). By contrast, Plaintiff’s annual salary at UBS was about [redacted] more,
with opportunities for a [redacted] bonus. (Id.; Def. 56.1 ¶ 226; Pl. 56.1 Opp. ¶
312). Moreover, after two years, the base salary for the [redacted] position
would be [redacted]. (Murray Decl. ¶ 27; Stulberg Decl., Ex. 117).
Plaintiff left this position after about four months and accepted a new job
as Chief Financial Officer for a hotel company called [redacted]. (Murray Decl.
¶ 29; Def. 56.1 ¶¶ 223, 229-332). The new role paid an annual salary of
[redacted], double the [redacted] annual salary, but likewise offered no bonus
opportunity. (Murray Decl. ¶ 30; Def. 56.1 ¶ 231; Stulberg Decl., Ex. 107).
Plaintiff lost this position when [redacted]’s former controller returned and
replaced Plaintiff. (Def. 56.1 ¶ 233; Mondl Decl., Ex. 1 (Murray Dep.), at 348:5-

8

Schumacher testified that he did not recall whether any topic other than Plaintiff’s
performance review was discussed during this meeting. (Pl. 56.1 Opp. ¶ 454; Mondl
Decl., Ex. 13 (Schumacher Dep.), at 152:18-21).

14

23). Plaintiff continued to look for work thereafter. (Mondl Decl., Ex. 1
(Murray Dep.), at 353:23-25, 358:5-7).
B.

Procedural Background
Defendants filed their motion for summary judgment and supporting

materials on March 2, 2016 (Dkt. #98, 102-04); Plaintiff filed his opposition
brief and supporting materials on April 22, 2016 (Dkt. #126-29); and
Defendants filed their reply brief and supporting materials on May 9, 2016
(Dkt. #134-35). 9
DISCUSSION
A.

Motions for Summary Judgment Under Rule 56
Rule 56(a) instructs a court to “grant summary judgment if the movant

shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 10 “When
ruling on a summary judgment motion, the district court must construe the

9

Unsealed copies of these filings were submitted to the Court and served on opposing
counsel on these dates; the referenced docket entries reflect later dates on which sealed
versions of these submissions were posted on the Court’s electronic docket.

10

The 2010 Amendments to the Federal Rules of Civil Procedure revised the summary
judgment standard from a genuine “issue” of material fact to a genuine “dispute” of
material fact. See Fed. R. Civ. P. 56, advisory comm. notes (2010 Amendments) (noting
that the amendment to “[s]ubdivision (a) … chang[es] only one word — genuine ‘issue’
becomes genuine ‘dispute.’ ‘Dispute’ better reflects the focus of a summary-judgment
determination.”). As of this past year, the Second Circuit continues to use both
formulations. Compare, e.g., Smith v. Barnesandnoble.com, LLC, 839 F.3d 163, 166 (2d
Cir. 2016) (“The moving party bears the burden to demonstrate the absence of any
genuine issues of material fact.”), with, e.g., Harris v. Miller, 818 F.3d 49, 54 (2d Cir.
2016) (“[W]e conclude that there are genuine disputes of material fact[.]”). Indeed, the
Circuit sometimes uses the terms interchangeably within the same decision. Compare,
e.g., Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 162 (2d Cir. 2016)
(“[T]here is a genuine dispute of material fact[.]”), with, e.g., id. at 168 (“We therefore
think that [the nonmovant] has raised a genuine issue of material fact[.]”). This Court
uses the post-amendment standard, but continues to be guided by pre-amendment
Supreme Court and Second Circuit precedent.

15

facts in the light most favorable to the non-moving party and must resolve all
ambiguities and draw all reasonable inferences against the movant.” Pace v.
Air & Liquid Sys. Corp., 171 F. Supp. 3d 254, 262 (S.D.N.Y. 2016) (internal
quotation marks omitted) (quoting Dallas Aerospace, Inc. v. CIS Air Corp., 352
F.3d 775, 780 (2d Cir. 2003)).
“A motion for summary judgment may properly be granted … only where
there is no genuine issue of material fact to be tried, and the facts as to which
there is no such issue warrant the entry of judgment for the moving party as a
matter of law.” Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015)
(quoting Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010)). In
determining whether summary judgment is merited, “[t]he role of a court … is
not to resolve disputed issues of fact but to assess whether there are any
factual issues to be tried, while resolving ambiguities and drawing reasonable
inferences against the moving party.” NEM Re Receivables, LLC v. Fortress Re,
Inc., 173 F. Supp. 3d 1, 5 (S.D.N.Y.) (internal quotation mark and citation
omitted), reconsideration denied, 187 F. Supp. 3d 390 (S.D.N.Y. 2016).
A party moving for summary judgment “bears the initial burden of
demonstrating ‘the absence of a genuine issue of material fact.’” ICC Chem.
Corp. v. Nordic Tankers Trading A/S, 186 F. Supp. 3d 296, 301 (S.D.N.Y. 2016)
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “[A] fact is material
if it ‘might affect the outcome of the suit under the governing law.’” Royal
Crown Day Care LLC v. Dep’t of Health & Mental Hygiene of City of N.Y., 746
F.3d 538, 544 (2d Cir. 2014) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.

16

242, 248 (1986)). And “[a] dispute is genuine ‘if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.’” Fireman’s
Fund Ins. Co. v. Great Am. Ins. Co. of N.Y., 822 F.3d 620, 631 n.12 (2d Cir.
2016) (quoting Anderson, 477 U.S. at 248). If the movant satisfies its initial
burden, then “the adverse party must set forth specific facts showing that there
is a genuine issue for trial.” Anderson, 477 U.S. at 250 (internal quotation
marks and citation omitted). To make this showing, a summary-judgment
“opponent must do more than simply show that there is some metaphysical
doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). Rather, that opponent must adduce “evidence
on which the jury could reasonably find for” him. Anderson, 477 U.S. at 252.
B.

Defendants Are Denied Summary Judgment on Plaintiff’s SarbanesOxley Retaliation Claim
1.

Applicable Law

Congress enacted the Sarbanes-Oxley Act of 2002 in order “to safeguard
investors in public companies and restore trust in the financial markets
following the collapse of Enron Corporation.” Lawson v. FMR LLC, — U.S. —,
134 S. Ct. 1158, 1161 (2014). Section 806 of the Act, codified at § 1514A of
Title 18, creates a whistleblower provision designed “to combat what Congress
identified as a corporate ‘culture, supported by law, that discourage[s]
employees from reporting fraudulent behavior not only to the proper
authorities … but even internally.’” Bechtel v. Admin. Review Bd., U.S. Dep’t of
Labor, 710 F.3d 443, 446-47 (2d Cir. 2013) (quoting S. Rep. No. 107-146, at 5
(2002)). Accordingly, the provision “protects employees when they take lawful
17

acts to disclose information or otherwise assist in detecting and stopping
actions which they reasonably believe to be fraudulent.” Id. at 446 (internal
quotation marks, citations, and alterations omitted).
Section 806 provides in relevant part:
No [publicly traded company] may discharge, demote,
suspend, threaten, harass, or in any other manner
discriminate against an employee in the terms and
conditions of employment because of any lawful act
done by the employee … to provide information [or]
cause information to be provided … regarding any
conduct which the employee reasonably believes
constitutes a violation of [the fraud provisions of Title
18], any rule or regulation of the Securities and
Exchange Commission, or any provision of Federal law
relating to fraud against shareholders, when the
information or assistance is provided to … a person with
supervisory authority over the employee (or such other
person working for the employer who has the authority
to investigate, discover, or terminate misconduct)[.]
18 U.S.C. § 1514A. “It is now well accepted that courts should construe [§] 806
broadly.” Leshinsky v. Telvent GIT, S.A., 942 F. Supp. 2d 432, 440 (S.D.N.Y.
2013) (citing Mahony v. KeySpan Corp., No. 04 Civ. 554 (SJ), 2007 WL 805813,
at *5 (E.D.N.Y. Mar. 12, 2007) (“The law was intentionally written to sweep
broadly, protecting any employee of a publicly traded company who took such
reasonable action to try to protect investors and the market.”)).
Under the burden-shifting framework of § 806, the plaintiff bears the
initial burden of making a prima facie case. To do so, the plaintiff “must prove
by a preponderance of the evidence that [i] [he] engaged in protected activity;
[ii] the employer knew that [he] engaged in the protected activity; [iii] [he]
suffered an unfavorable personnel action; and [iv] the protected activity was a

18

contributing factor in the unfavorable action.” Bechtel, 710 F.3d at 451 (citing
49 U.S.C. § 42121(b)(2)(B)(iii); 29 C.F.R. §§ 1980.109(a), 1980.104(e)(2)). If the
plaintiff carries this burden, the employer may rebut the prima facie case “with
clear and convincing evidence that it would have taken the same unfavorable
personnel action in the absence of the protected behavior.” Id. at 451 (citing 49
U.S.C. § 42121(b)(2)(B)(iv); 29 C.F.R. § 1980.109(b)).
“At the summary judgment stage, a plaintiff need only demonstrate that
a rational factfinder could determine that [the] [p]laintiff has made his prima
facie case,” and if the plaintiff successfully does so, then “summary judgment
is appropriate only when, construing all of the facts in the employee’s favor,
there is no genuine dispute that the record clearly and convincingly
demonstrates that the adverse action would have been taken in the absence of
the protected behavior.” Leshinsky, 942 F. Supp. 2d at 441 (emphasis in
original). In light of this scheme, courts have correctly recognized that “the
defendant’s burden under [§] 806 is notably more than under other federal
employee protection statutes, thereby making summary judgment against [a]
plaintiff[] in Sarbanes–Oxley retaliation cases a more difficult proposition.” Id.
2.

Analysis
a.

Plaintiff Has Carried His Prima Facie Burden

Defendants’ motion attacks the first and fourth elements of Plaintiff’s
prima facie case. They argue that Plaintiff’s claim fails as a matter of law
because Plaintiff did not engage in a protected activity and, even if he did, it did
not contribute to Defendants’ decision to terminate Plaintiff’s employment.

19

(Def. Br. 14-22). The Court disagrees. At this stage, Plaintiff has adduced
sufficient evidence to permit a reasonable jury to conclude that he engaged in a
protected activity and that the protected activity was a contributing factor to
his termination.
i.

A Reasonable Jury Could Find That Plaintiff
Engaged in a Protected Activity

Under § 806, a plaintiff’s activity is protected if he (i) “provide[s]
information,” (ii) “regarding any conduct which the employee reasonably
believes constitutes a violation of [the mail, wire, bank, and securities and
commodities fraud provisions of Title 18], any rule or regulation of the
Securities and Exchange Commission, or any provision of Federal law relating
to fraud against shareholders,” to, inter alia, (iii) “a person with supervisory
authority over the employee.” 18 U.S.C. § 1514A(a)(1). Defendants contend
that Plaintiff fails to satisfy the second of these elements; specifically, that
Plaintiff did not have a reasonable belief that the conduct he reported was a
violation of applicable laws or regulations.
“[W]hether the employee reported conduct that he or she reasonably
believes constituted a violation of federal law” is the statute’s “critical focus.”
Nielsen v. AECOM Tech. Corp., 762 F.3d 214, 221 (2d Cir. 2014) (internal
quotation marks omitted) (quoting Villanueva v. U.S. Dep’t of Labor, 743 F.3d
103, 109 (5th Cir. 2014)). In its 2014 Nielsen decision, the Second Circuit
rejected the prevailing, restrictive standard that “an employee’s protected
communications must relate ‘definitively and specifically’ to the subject
matter … of the listed categories of fraud or securities violations.” Id. at 220.
20

Rather, the Circuit held that “relief pursuant to § [806] turns on the
reasonableness of the employee’s belief that the conduct violated one of the
enumerated provisions — which is contrary to the ‘definitively and specifically’
standard.” Id. at 221 (emphasis in original). “A reasonable belief contains both
subjective and objective components,” meaning a plaintiff “must show not only
that he believed that the conduct constituted a violation, but also that a
reasonable person in his position would have believed that the conduct
constituted a violation.” Id. (internal quotation marks omitted) (quoting
Livingston v. Wyeth, Inc., 520 F.3d 344, 352 (4th Cir. 2008)).
Defendants offer various arguments why Plaintiff could not have
reasonably believed that unlawful conduct had occurred. They contend, first,
that the reasonableness of Plaintiff’s belief should be informed by the specific
securities rule that he believes was violated — here, SEC Rule 10b-5. (Def.
Br. 15). Such a belief would be unreasonable, Defendants maintain, because
the rule outlaws material misstatements in connection with the sale or
purchase of a security and no such statements were actually made; indeed,
Plaintiff admits that he successfully resisted the pressure to publish skewed
research reports and confirms that he published only accurate and
independent reports. (Def. 56.1 ¶¶ 71-72, 76-77).
For similar reasons, Defendants maintain that Plaintiff’s belief that there
was a violation of Regulation AC, 17 C.F.R. § 242.501, is also unreasonable; no
false analyst certification occurred because no inaccurate or biased reports
were issued. (Def. Reply 2-4). Defendants further argue that Plaintiff’s belief

21

that shareholder fraud occurred is unreasonable because shareholders never
became aware of any of the alleged pressure directed toward Plaintiff to skew or
chill his independent analysis. (Def. Br. 16). Finally, Defendants claim that
Plaintiff’s amorphous belief that efforts to influence his independence violated a
variety of policies and procedures related to the independence of financialmarket analyses is insufficient; his failure to identify the specific federal laws
violated dooms his claim. (Id.).
Defendants’ arguments are unpersuasive. For starters, Defendants offer
no authority for the proposition that a plaintiff’s failure to match the conduct
he believes to be illegal with the precisely applicable securities law or
regulatory provision forecloses a whistleblower claim. 11 Indeed, Defendants’
proposed narrowing would be in tension with the Second Circuit’s decision in
Nielsen, which expressly held that an employee’s reported conduct “need not
‘definitively and specifically’ relate to one of the listed categories of fraud or
securities violations in § 1514A in order for that employee to claim protection
under the statute.” Nielsen, 762 F.3d at 224. Nielsen also recognized that
“[m]any employees are unlikely to be trained to recognize legally actionable
conduct by their employers” and, therefore, the whistleblower’s “belief” that his
“employer has engaged in wrongdoing” plays a “central[]” role in the analysis.

11

The authorities that Defendants cite on this point are all distinguishable. (Def. Br. 1617). For example, in Villanueva v. U.S. Dep’t of Labor, 743 F.3d 103 (5th Cir. 2014), the
court affirmed the grant of summary judgment because the plaintiff believed he was
retaliated against for complaining that the defendant had violated a foreign country’s tax
laws, which are not covered by § 806. Id. at 108-09. Affirmance was not on the
grounds that the plaintiff had failed adequately to specify the exact law or regulation,
among those covered by § 806, that had been violated.

22

Id. at 221; see also Ashmore v. CGI Grp. Inc., 138 F. Supp. 3d 329, 343
(S.D.N.Y. 2015) (holding that the “critical focus” is whether the employee
reported conduct that he reasonably believes constituted a violation of federal
law and, so, “fulfills his duty ... when he ‘identifies conduct that falls within the
ample bounds of the anti-fraud laws.’” (quoting Leshinsky, 942 F. Supp. 2d at
443)); cf. Sharkey v. JPMorgan Chase & Co., 660 F. App’x 65, 68 (2d Cir. 2016)
(summary order) (vacating grant of summary judgment in § 806 case where
defendants presented evidence that plaintiff’s proffered concerns “subsequently
proved unfounded” and that plaintiff “may have failed to take reasonable steps
to investigate her concerns”; finding that parties’ factual dispute did not permit
the “conclusion that, as a matter of law, the [plaintiff] could not have held a
reasonable belief of illegal … activity”).
Defendants’ arguments tend also to assume, incorrectly, that the
absence of a completed legal violation vitiates the reasonableness of Plaintiff’s
belief under § 806. “[A] whistleblower need not show that the corporate
defendant committed fraud to prevail in [his] retaliation claim under § 1514A.
The statute only requires the employee to prove that [he] ‘reasonably believed’
that the defendant’s conduct violated federal law. The provision’s focus [is] on
the plaintiff’s state of mind rather than on the defendant’s conduct[.]” Guyden
v. Aetna, Inc., 544 F.3d 376, 384 (2d Cir. 2008) (alterations omitted) (quoting
18 U.S.C. § 1514A(a)(1)), superseded on other grounds by statute as described
in Wong v. CKX, Inc., 890 F. Supp. 2d 411, 421 (S.D.N.Y. 2012).

23

Furthermore, one logical conclusion that flows from Defendants’
argument would be that employees in Plaintiff’s position are unprotected by the
statute unless they actually capitulate to inappropriate influence, publish
seemingly independent research that is in fact inaccurate or biased, and then
blow the whistle. 12 That position is both untenable and wholly at odds with
the purpose of § 806. As one court in this District has summarized:
[I]mminent crimes, or at least crimes in their infancy,
are within the scope of [§] 806. … “[I]t would frustrate
the purpose of Sarbanes-Oxley to require an employee,
who knows that a violation is imminent, to wait for the
actual violation to occur when an earlier report possibly
could have prevented it.” It furthers the purpose of
[§] 806 to nip corporate wrongdoing in the bud, rather
than permitting a scheme to blossom into a full-fledged
crime before whistleblower protections take effect.
Whistleblowers should not be asked to wait until
executives have dotted the i’s and crossed the t’s before
sounding an alarm.
Leshinsky, 942 F. Supp. 2d at 446 (alterations omitted) (quoting Wiest v.
Lynch, 710 F.3d 121, 133 (3d Cir. 2013)); id. (citing Walters v. Deutsche Bank
AG, No. 2008 SOX 70, 2009 WL 6496755, at *9 (ALJ Mar. 23, 2009) (“Senator
Leahy justified the protection [§] 806 affords to whistleblowers based on the
importance of the unique, inside, financial perspective they can provide ...
[§ 806 was] designed to encourage insiders to come forward without fear of
retribution.”)).

12

Requiring the putative whistleblower to capitulate to demands that he or she engage in
improper conduct would also, presumably, reduce incidents of retaliation for precisely
the wrong reasons, thereby contravening the purpose of § 806.

24

Here, Plaintiff believed it was illegal to skew or falsely certify his
independent research reports in order to benefit UBS’s CMBS Business. So he
did not do it. He also believed that the CMBS Business campaign to skew or
chill his independent analysis was itself illegal. So he reported it and,
construing the evidence in his favor and as discussed infra, got fired for doing
so. Moreover, Plaintiff’s securities licenses and experience, while notable, do
not make him a securities lawyer or compliance official attuned to the elements
of specific statutory or regulatory violations of the securities laws, and certainly
do not foreclose a whistleblower claim as a matter of law. It suffices to say at
this stage that Plaintiff’s belief did not “exist wholly untethered” from the
enumerated provisions in § 806, Nielsen, 762 F.3d at 221 n.6 — Plaintiff
believed that efforts to pressure him into publishing biased and inaccurate, but
ostensibly independent, reports touching on the CMBS securities market were
a violation of federal securities laws and regulations. (Pl. 56.1 Opp. ¶¶ 256,
378-79; Mondl Decl., Ex. 1 (Murray Dep.), at 249:18-250:25).
The evidence, viewed in the light most favorable to Plaintiff, permits a
rational jury to conclude that he was both objectively and subjectively
reasonable in believing that Defendants’ CMBS Business members “engaged in
wrongdoing” of the sort cognizable under § 806. See Nielsen, 762 F.3d at 221;
see also Leshinsky, 942 F. Supp. 2d at 447.
ii.

A Reasonable Jury Could Find That Plaintiff’s
Protected Activity Was a Contributing Factor in
Defendants’ Unfavorable Action

25

Under § 806, Plaintiff must also demonstrate that his protected activity
was “a contributing factor in the unfavorable action.” Bechtel, 710 F.3d at 451.
The phrase “a contributing factor” means “any factor which, alone or in
connection with other factors, tends to affect in any way the outcome of the
decision.” Leshinsky, 942 F. Supp. 2d at 449 (internal quotation marks
omitted) (quoting Pardy v. Gray, No. 07 Civ. 6324 (LAP) 2008 WL 2756331, at
*5 (S.D.N.Y. July 15, 2008)). “A plaintiff need not prove that [his] protected
activity was the primary motivating factor in [his] termination, or that the
employer’s articulated reason was pretext in order to prevail.” Perez v.
Progenics Pharm., Inc., 965 F. Supp. 2d 353, 366 (S.D.N.Y. 2013) (internal
quotation marks omitted) (quoting Barker v. UBS AG, 888 F. Supp. 2d 291, 300
(D. Conn. 2012) (Droney, J.)). Factors that may be considered include “the
amount of time between the protected activity and the adverse employment
action, the existence of a strained relationship between the party and the
employer, any isolation of the employee from the company, and changed
performance evaluations.” Id. (internal quotation marks omitted) (quoting
Barker v. UBS AG, No. 09 Civ. 2084 (CFD), 2011 WL 283993, at *4 (D. Conn.
Jan. 26, 2011)); accord Mahony, 2007 WL 805813, at *6 (same).
Plaintiff and Defendants offer different narratives for why Plaintiff was
terminated. Construing the evidence in the light most favorable to Plaintiff, the
record demonstrates that Plaintiff’s reporting of efforts by CMBS Business
personnel, including Cohen, to skew or chill his independent analysis was a
contributing factor to his termination. (Pl. Opp. 14-15). For example, Plaintiff

26

asserts that Cohen was involved in the decision to terminate Plaintiff (see, e.g.,
Mondl Decl., Ex. 16 (Hatheway Dep.), at 137:5-25 (acknowledging that
Hatheway and Cohen spoke regarding Plaintiff’s termination before the
termination decision was finalized)); that Cohen and McNamara were aware of
Plaintiff’s complaints and resistance to their pressure (see, e.g., Pl. 56.1 Opp.
¶ 200; Mondl Decl., Ex. 1 (Murray Dep.), at 398:4-400:3); and that Cohen
rejected efforts to save Plaintiff’s job (see, e.g., Mondl Decl., Ex. 1 (Murray
Dep.), at 286:21-287:4 (testifying that Schumacher told Plaintiff that he had
personally appealed to Cohen and McNamara to try to save Plaintiff’s job but
that Cohen and McNamara said no); Pl. 56.1 Opp. ¶¶ 565-67 (describing
testimony that, in January 2012, Schumacher discussed with McNamara
[redacted], a move that would require Cohen’s approval); Stulberg Decl., Ex. 45
(notes from a human-resources manager’s meeting with Schumacher regarding
Plaintiff’s termination stating that “Ken Cohen not taking [Plaintiff] on”)).
Defendants respond that Plaintiff had already been identified as a
candidate for termination by the time Hatheway and Cohen spoke, even if the
final decision had not yet been made. (Def. 56.1 ¶¶ 164-65, 169; Def. 56.1
Opp. ¶¶ 523-24). Indeed, Defendants argue, Cohen favored retaining Plaintiff.
(Def. Reply 7; Def. 56.1 ¶¶ 181-82, 188). They also point out that Hatheway,
who was the ultimate decision-maker when it came to terminating Plaintiff,
was unaware of Plaintiff’s whistleblowing and that Plaintiff was terminated
solely for business reasons. (Def. 56.1 ¶¶ 163-65, 191). These business
reasons tie into Defendants’ broader narrative that financial considerations

27

were the sole reason for Plaintiff’s termination: Defendants were experiencing
financial difficulties in the period leading up to Plaintiff’s termination and had
undergone cost-cutting measures, such as slashed bonuses and multiple
reductions in force. (Def. Br. 18-19). Plaintiff was simply the victim of one
such reduction. (Id.).
The Court finds that genuine disputes of material fact preclude summary
judgment. Defendants criticize Plaintiff’s heavy reliance on his own deposition
testimony. (See, e.g., Def. Br. 1 (“[D]espite extensive discovery, plaintiff has
failed to develop any support for his ‘whistleblower’ claim, apart from his own
self-serving testimony and conjecture.”); id. at 5 n.4 (“[Plaintiff’s] deposition
testimony is the only evidence supporting his claim that any of these incidents
of improper pressure occurred. There is no corroborating testimony, and no
contemporaneous documentation of any kind.”)). But such criticism is
unwarranted: Plaintiff may appropriately rely upon his own testimony to defeat
summary judgment where, as here, that “testimony [i]s not contradictory or rife
with inconsistencies such that it [i]s facially implausible.” Fincher v. Depository
Trust & Clearing Corp., 604 F.3d 712, 726 (2d Cir. 2010); see Danzer v. Norden
Sys., Inc., 151 F.3d 50, 57 (2d Cir. 1998) (declining to hold allegations
insufficient to survive summary judgment merely because they were “selfserving”); see also Jeffreys v. City of N.Y., 426 F.3d 549, 554 (2d Cir. 2005) (“[I]t
is undoubtedly the duty of district courts not to weigh the credibility of the
parties.”).

28

Indeed, just a few months ago in Yang v. Navigators Group, Inc., the
Second Circuit reversed a district court’s grant of summary judgment in a
similar § 806 whistleblower-retaliation action because the lower court had
improperly deemed the plaintiff’s own deposition testimony to be insufficient to
support her claim. See No. 16-77-cv, 2016 WL 7436485, at *1 (2d Cir. Dec. 22,
2016) (summary order). The Circuit held that
[the plaintiff’s] own testimony … constituted admissible
evidence and, thus, should not have been excluded from
consideration in reviewing [the] defendant’s summary
judgment motion. To the contrary, the testimony
should have been viewed in the light most favorable to
[the plaintiff], in which circumstances it sufficed to give
rise to a genuine dispute of material fact as to protected
activity that precluded summary judgment.
Id. (internal citations omitted).
At best, then, Defendants’ counter-narrative implicates genuine disputes
of material fact, including assessments of witness credibility, concerning how
and why Plaintiff was actually terminated. See, e.g., Perez, 965 F. Supp. 2d at
368 (denying summary judgment and holding that the weighing of competing
reasons why the plaintiff was terminated would require the court “to evaluate
the credibility of the [p]laintiff and [the defendant’s general counsel], a task
outside the Court’s domain at the summary judgment stage”); cf. Fincher, 604
F.3d at 726 (denying summary judgment where plaintiff's own account
established genuine dispute of material fact).
At worst, Defendants’ cost-cutting narrative is reconcilable with their
own liability; that is, Plaintiff could have been selected as a candidate for
termination because of financial reasons and because he had been a thorn in
29

the side of his whistleblowing targets. After all, Plaintiff “need not prove that
[his] protected activity was the primary motivating factor in [his] termination,”
only that it was “a contributing factor,” meaning that “alone or in connection
with other factors” it “affect[ed] in any way the outcome of the decision.”
Leshinsky, 942 F. Supp. 2d at 449 (emphases added) (internal quotation marks
and citations omitted). Moreover, Hatheway’s status as the ultimate decisionmaker, coupled with his ignorance of Plaintiff’s protected activity, do not
preclude causation. Drawing all inferences in Plaintiff’s favor, the evidence
demonstrates that before making a final decision Hatheway consulted
Cohen — who was one of Plaintiff’s primary antagonists, was aware of
Plaintiff’s complaints and resistance, and could have prompted Plaintiff’s final
selection for termination. A jury could thus conclude that Plaintiff’s protected
activity was a contributing factor to his termination. Cf. Staub v. Proctor Hosp.,
562 U.S. 411, 419 (2011) (holding that an employer may be held liable when a
supervisor is a proximate cause of the termination, even if the ultimate
decision-maker lacks the requisite animus); accord Leshinsky, 942 F. Supp. 2d
at 450-51.
In sum, the Court finds that there are genuine disputes of material fact
concerning the reason for Plaintiff’s termination and, drawing inferences in
Plaintiff’s favor, further finds that a reasonable jury could conclude that
Plaintiff’s protected activity was a contributing factor to his termination.

30

b.

Defendants Fail to Rebut Plaintiff’s Prima Facie Case

“If a plaintiff carries the burden, the defendant employer can still secure
a favorable judgment by showing no genuine dispute that the record clearly
and convincingly demonstrates that the employer’s adverse action would have
been taken even in the absence of protected activity.” Yang, 2016 WL
7436485, at *1 (citing Bechtel and Leshinsky). For the reasons set forth in
section B.2.a.ii of this Opinion, supra, wherein the Court described genuine
disputes of material fact concerning whether whistleblower-retaliation
contributed to Defendant’s termination of Plaintiff, Defendants cannot show
the absence of a genuine dispute that the record “clearly and convincingly”
demonstrates that Plaintiff would have been terminated even in the absence of
his whistleblowing activity. See Leshinsky, 942 F. Supp. 2d at 451 (rejecting
defendant’s non-retaliatory rationale for the same reasons that genuine
disputes of material fact precluded summary judgment on the contributingfactor element).
C.

Defendants Are Denied Summary Judgment on Plaintiff’s Back-Pay
Remedy
Defendants argue that even if their motion fails as to Plaintiff’s retaliation

claim, the Court should hold that Plaintiff cannot recover back-pay damages
after February 12, 2014, the date on which Plaintiff accepted employment with
hotel company [redacted] and ceased looking for work. (Def. Br. 24-25). 13

13

Both Plaintiff and Defendants rely on damage-mitigation principles from the traditional
employment-discrimination context in support of their arguments. (See, e.g., Def.
Br. 24-25; Pl. Opp. 17). See also Perez, 204 F. Supp. 3d at 563 (applying Title VII
damage-mitigation principles in § 806 whistleblower-retaliation action).

31

“A discharged employee must use reasonable diligence in finding other
suitable employment, which need not be comparable to their previous
positions.” Greenway v. Buffalo Hilton Hotel, 143 F.3d 47, 53 (2d Cir. 1998)
(internal quotation marks and citation omitted). “This obligation is not onerous
and does not require [him] to be successful.” Hawkins v. 1115 Legal Serv.
Care, 163 F.3d 684, 695 (2d Cir. 1998) (citing Dailey v. Societe Generale, 108
F.3d 451, 456 (2d Cir. 1997)). “In order to reduce the meritorious claimant’s
entitlement to backpay, the defendant employer has the burden of
demonstrating that [the former employee] has failed to attempt to mitigate.
This burden may be met by establishing [i] that suitable work existed, and
[ii] that the employee did not make reasonable efforts to obtain it.” Id.; cf.
Broadnax v. City of New Haven, 415 F.3d 265, 268 (2d Cir. 2005). “An
employer … is released from the duty to establish the availability of comparable
employment if it can prove that the employee made no reasonable efforts to
seek such employment.” Greenway, 143 F.3d at 53. For example, “a claimant
who voluntarily resign[s] from comparable employment for personal reasons
would not have adequately mitigated damages, but ‘a voluntary quit does not
toll the back pay period when it is motivated by unreasonable working
conditions or an earnest search for better employment.’” Hawkins, 163 F.3d at
696 (emphasis added) (quoting EEOC v. Delight Wholesale Co., 973 F.2d 664,
670 (8th Cir. 1992)).
Here, there are sufficient facts to permit a jury to conclude that Plaintiff
has made reasonable efforts to find comparable employment. (Pl. Opp. 17). A

32

jury may find that the [redacted] position was not comparable to Plaintiff’s
position with Defendants, even accounting for cost-of-living adjustments; after
all, not only did the position pay [redacted] less and no bonus, it was also
structured to [redacted]. (Murray Decl. ¶¶ 24-27; Stulberg Decl., Ex. 117). See
Elmessaoudi v. Mark 2 Rest. LLC, No. 14 Civ. 4560 (PGG), 2016 WL 4992582,
at *15 (S.D.N.Y. Sept. 15, 2016) (“Given that Plaintiff has had employment
since his termination, and given the evidence of his efforts to find work,
Defendant is not entitled to judgment as a matter of law that Plaintiff has failed
to mitigate his damages. Under the circumstances here, it is a jury question
whether Plaintiff made reasonable efforts to mitigate his damages.”).
Furthermore, Plaintiff’s resignation from [redacted] and acceptance of an offer
with [redacted], viewed favorably, can be considered “an earnest search for
better employment” that does not cut off his damages. Hawkins, 163 F.3d at
696. (See Murray Decl. ¶ 31). In sum, genuine disputes of material fact
preclude summary judgment in favor of Defendants on Plaintiff’s mitigation of
back-pay damages.

33

CONCLUSION
For the foregoing reasons, Defendants’ motion for summary judgment is
DENIED. The parties shall appear via telephone for a conference with the
Court on April 14, 2017, at 4:30 p.m. to discuss a schedule for trial in this
matter. The parties shall contact Chambers at [phone] with all parties
present on the line.
SO ORDERED.
Dated:

March 31, 2017
New York, New York

__________________________________
KATHERINE POLK FAILLA
United States District Judge

34