A jury recently found Bio-Rad Laboratories liable under the Sarbanes-Oxley Act and the Dodd-Frank Act for nearly $8 million in damages after the company’s alleged retaliatory firing of its former general counsel, Sanford Wadler. The jury awarded Wadler $2.96 million for past economic loss as a result of the termination and $5 million in punitive damages, after just three hours of deliberation.

Wadler alleged that Bio-Rad fired him in response to his reports to the CEO that the company’s business activities in China may violate the Foreign Corrupt Practices Act (“FCPA”). Wadler suspected that the company’s contracts did not include provisions prohibiting corruption and that the company failed to maintain necessary records of its China business actions. The company later conducted investigations that did not find any violations of the FCPA. Wadler also alleged that Bio-Rad fabricated a negative performance review after he had already been fired.

Crucially for Wadler, earlier in the case the trial court held that the whistleblower protections of the Sarbanes-Oxley Act preempt the attorney-client privilege. The court reasoned that “there is some room for the use of privileged information” for in-house counsel in whistleblower actions, and that whistleblowers can use privileged and confidential information reasonably “necessary to prove a claim or defense.” This ruling allowed Wadler to use communications and documents that ordinarily would be privileged to litigate his whistleblower claims against Bio-Rad.

The court also held that whistleblowers do not need to report suspected wrongdoing to the SEC to rely on the whistleblower protections of the Dodd-Frank Act. The court reasoned that Dodd-Frank is ambiguous in regards to whether it protects whistleblowers who only report internally, and so the court deferred to an SEC rule interpreting Dodd-Frank to protect internal whistleblowers.

The size of the award in this case will only encourage in-house counsel who suspect wrongdoing to come forward with whistleblower claims. Companies should take notice and ensure that that their policies clearly prohibit retaliation against whistleblowers. Companies also need to ensure that they have strong internal reporting procedures and training for employees in how to handle reports of suspected wrongdoing, even if the reports originate from in-house counsel.