Carol L. Gillam

Before opening her own firm, Gillam served as an assistant U.S. Attorney in the Central District of California. While it may be an unusual background for a plaintiff’s employment attorney, she said the experience has been invaluable in pursuing whistleblower cases for her clients.

“I know how to spot some issues that maybe others don’t,” she said. “I’ve also prosecuted banks in the past, so with my bank whistleblowers, that’s been a valuable experience.”

In a closely watched federal whistleblower case in San Diego, Gillam has obtained decisions on several unique issues. Charles Matthew Erhart was an internal auditor for Bank of the Internet who disclosed what he believed to be misconduct to federal regulators. He later filed a whistleblower complaint against BofI, alleging the bank retaliated against him for reporting unlawful conduct to the government. In turn, BofI filed a complaint alleging that Erhart breached his employee confidentiality agreement by taking and disseminating BofI’s confidential information to the national press. Erhart v. BofI Holdings Inc., 3:15-cv-02287-BAS-NLS (S.D. Cal., filed Oct. 13, 2015).

U.S. District Magistrate Judge Nita L. Stormes ruled that the work product doctrine applies to communications between Gillam and federal law enforcement, given their common interest in uncovering wrongdoing. This is the first such ruling in the country, applying to whistleblowers under Sarbanes-Oxley Act, Dodd-Frank Wall Street Reform and Consumer Protection Act and other statutes.

In another critical decision, U.S. District Judge Cynthia Bashant ruled that whistleblowers can use confidential company documents to expose fraud, and that company confidentiality agreements cannot trump whistleblower laws. The ruling signals that retaliatory lawsuits against whistleblowers are unlikely to succeed.

In a third significant ruling, Stormes quashed a subpoena to compel Gillam’s deposition testimony about her communications with third parties. The whistleblower case first gained national attention when, the day after Gillam filed a detailed complaint in federal court, the company’s stock dropped 30 percent, a loss of about $1 billion.

“This is real scorched-earth litigation. It’s high stakes, and the defense has thrown a lot of motions at us. But they have resulted in cutting-edge rulings,” Gillam said. “I’m particularly proud of the fact that the court saw that you need to have a more nuanced view of an employee’s so-called self-help in taking company documents.”

— Jennifer Chung Klam