Carol L. Gillam

Protecting those who blow the whistle on financial fraud is a major concern of Gillam, who founded The Gillam Law Firm to defend employee rights. A former assistant U.S. attorney who has worked at Irell & Manella LLP, Gillam opened her firm in 1994. She has obtained several seven-figure settlements and verdicts and many for lesser sums in employment cases.

Gillam’s major case now involves a bank’s internal auditor, her client, who reported alleged misconduct to federal agencies and to The New York Times, then sued the bank for retaliation over his disclosures. “We now have a classic district court decision that has been widely cited for its discussion of whistleblower protections,” Gillam said.

She filed the case in the Southern District for client Charles M. Erhart who worked for Bank of Internet USA in San Diego, which provides banking services online. Erhart contacted the Securities and Exchange Commission and the Department of the Treasury to report alleged misconduct at the bank, including an alleged failure to disclose information in response to an SEC subpoena. The suit alleges two claims for whistleblower retaliation under federal law. When news broke about Erhart’s allegations, the bank’s stock dropped 30 percent. Erhart v. BofI Holding Inc., 15-cv-02287 (S.D. Cal., filed Oct. 13, 2015). BofI countersued on claims that Erhart violated California law, the Computer Fraud and Abuse Act and his confidentiality agreement with the bank.

“Whistleblower cases are extremely difficult under Sarbanes-Oxley and Dodd-Frank,” Gillam said, naming two federal financial regulation laws designed to protect whistleblowers. “That’s because they tend to be very hotly contested and because defendants often find a receptive ear at district courts on the argument that the plaintiff’s claims fail to rise to the level required to plead the protection requested.”

But Gillam said that U.S. District Judge Cynthia A. Bashant of San Diego dug deeply into the case. “It took her nearly a year. She pondered long and hard and set the contours of protections. She knew she was writing for a wide audience.” The judge’s September order held most of Erhart’s claims could go forward and that he engaged in protected activity when he reported his allegations to the government, though they were not protected when he went to the media.

“Our defense there is that Mr. Erhart did not go to the paper until the suit was filed,” Gillam said. “Employers try to use confidentiality agreement to muzzle workers, and that’s the battle we are fighting.”

Trial is set for June 11, 2019. “I’m very glad Mr. Erhart came to me,” Gillam said. “This is the work I love, the work I was meant to do.”

— John Roemer