Did PricewaterhouseCoopers Retaliate Against a Whistleblower?

Did PricewaterhouseCoopers retaliate against a whistleblower or not? A California judge will decide.

The Case: Botta v. PricewaterhouseCoopers

The Court: U.S. District Court Northern District of California San Francisco Division

The Case No.: 18-cv-02615-RS

The Plaintiff: Botta v. PricewaterhouseCoopers

Mauro Botta, the plaintiff in the case, was a former PricewaterhouseCoopers (PwC) auditor in Silicon Valley who filed a lawsuit against the firm. Botta alleged he was fired in retaliation for standing up to and exposing auditor misconduct at the company and for reporting that conduct to the SEC. Botta worked in the defendant’s San Jose office and claims he was fired in August 2017. He also claims he was kicked off auditing projects for two technology companies (Cavium and Harmonic) after raising flags about potential fraud. Cavium makes semiconductors used in electronics, and Harmonic Inc. offers video-streaming and broadband-related services and products. After being fired, the former auditor filed a whistleblower retaliation suit against PricewaterhouseCoopers. However, a federal judge, U.S. Magistrate Judge Alex Tse, indicated the plaintiff failed to cite a specific law or regulation that the defendant allegedly violated.

The Defendant: Botta v. PricewaterhouseCoopers

The judge is considering whether or not one of the world’s largest accounting firms broke the law when they fired one of their senior managers for blowing the whistle on PricewaterhouseCoopers allegedly “cozy” relationships with various Silicon Valley businesses for which they were handling independent audits. The defendant argued that Botta lacks the necessary proof to support his allegations. During the bench trial, PwC showed evidence Botta had a history of struggling to accept constructive feedback, and had a communication style and immature behavior that “rubbed clients the wrong way.” However, these are not the reasons cited by the defendant when firing Botta. When terminating Botta, the company cited an investigation conducted by an outside attorney in 2014 for the Cavium account. The investigation claimed Botta lied about putting a “nonexistent control” in place or any type of method to prevent accounting improprieties. Botta claims PwC is rewording his “suggestion” for implementing a control to use as a pretext for the firing.

The Question in the Case: Botta v. PricewaterhouseCoopers

The bench trial ended early (after nine days) so the judge could determine whether the actions of the defendant constituted retaliation. Botta’s legal representation insisted during trial that Botta was fired for blowing the whistle on the company’s lack of independence in auditing clients’ accounting practices. The tech companies were providing PwC large amounts of money to fulfill the independent auditing services. The plaintiff argued that it’s common sense that if an auditing employee raises an issue, and is then removed from the job per the client’s request, the company performing the independent audit is not fulfilling its obligations according to SEC standards.

Botta claims PwC violated whistleblower protections under California State Labor Code, and the 2002 Sarbanes-Oxley Act, and that the company also violated his employment contract when they failed to provide him with three months notice before terminating his position. Botta seeks three months wages in damages, reinstatement in his position with PwC, additional damages for emotional distress and punitive damages for what Botta refers to as PwC’s reckless indifference regarding the basic rights of their employees.

If you have questions about California labor law violations or whistleblower retaliation, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.