When Financial Employees Face Wrongful Termination

Employees working in the financial industry may suffer serious consequences if they lose their jobs following their complaints about illegal practices like discrimination, retaliation, and more. Even with broad discretion in employment decisions, some terminations are subject to federal and state protection.

There are reporting requirements and rules financial firms have to follow under SOX and the Dodd-Frank Act. These regulations safeguard certain employees who come forward with complaints. A single termination dispute in this sector can involve claims under more than one federal law.

There were 88,201 new discrimination charges processed by the EEOC in fiscal year 2025. Of the 94 merits lawsuits this agency took to court, 64 included allegations of discharge or constructive discharge.

After a rights violation, employees may recover lost income, lost benefits, and legal fees. Statutory damages are available in some cases, and emotional distress compensation may also apply, according to the Park APC employment law website https://www.park-lawyers.com/.

The circumstances surrounding the decision, the employee’s protected activity, and applicable employment laws can determine whether a termination may violate the law. Let’s take a closer look.

At-Will Is the Default, and the Exceptions Are the Whole Case

Employment across most of the country runs at will, meaning either side can end it at almost any time for almost any reason. A wrongful termination claim is not an argument that a firing was unfair.

The argument is the theory that the termination fell into one of the carve-outs, such as discrimination based on a protected class, retaliation for taking part in protected activities, or breach of an actual contract.

Why this framing is important is that terminations in this industry are rarely ever labeled as such. Performance management, restructuring, and reallocation of a book of business three weeks following an employee’s escalation about valuation can all be found in one file.

The Exit Paperwork Does Its Own Work

In this industry, departing employees are often asked to sign separation papers before they have sought legal advice. These agreements are likely to have terms that include severance, waivers of claims, noncompetition, non-solicitation, and garden leave. These documents may also allow for the forfeiture of deferred cash or stock. The employer will often give the employee a deadline to accept a severance package, creating more pressure to sign.

Restrictive covenants in particular are often handled as business litigation matters. A Gallatin business litigation lawyer can evaluate whether a non-compete was valid, whether the contract was violated, and how much harm a violation caused, for either a company or a separated employee.

The area of law involved often depends on which documents the parties dispute first.

Financial Services Has Its Own Retaliation Statute

Employees of publicly traded companies and their contractors have a dedicated federal remedy under the whistleblower section of the Sarbanes-Oxley Act, which the Labor Department administers through OSHA before any court action.

The window is short. A complaint must reach OSHA within 180 days of the violation, or within 180 days of the employee becoming aware of it.

The next question is what employees must prove in their timely complaint. UBS argued that whistleblowers also must establish retaliatory intent, but the Supreme Court rejected that argument. In February of 2024, Murray v. UBS Securities LLC was decided unanimously, confirming that proof of intentional retaliation is not required. Employees must show that their protected activity was a contributing factor in the adverse employment action.

After the employee makes that showing, the employer can still defeat the claim. It must prove by clear and convincing evidence that it would have taken the same action even without the protected activity.

Remedies include reinstatement with the same seniority and back pay with interest. Special damages cover litigation costs, expert witness fees, and attorney fees.

Where You Report Changes What Protects You

Two federal whistleblower regimes run alongside each other, and they do not cover the same people.

Reporting to the SEC in writing, and doing so before any retaliation, is what brings a person under Dodd-Frank retaliation protection. Digital Realty Trust v. Somers, decided by the Supreme Court in 2018, settled that the SEC report is a requirement.

An employee who raised concerns only through internal compliance may hold a Sarbanes-Oxley claim and no Dodd-Frank claim at all.

Dodd-Frank allows double back pay with interest for a successful retaliation claim. Reinstatement and attorney’s fees may also be awarded.

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More Recommended Ebike/Scooters

Check out these other ebikes and scooters I've reviewed:

Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.

More Recommended Investing App Bonuses

For additional investing app bonuses, be sure to check out the ones below:

M1 Finance ($75) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $75 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
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More Recommended Bank Account Bonuses

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Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
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Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.

Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.

Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:

SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
US Bank Business. US Bank is currently offering new business customers a $400/$1200 signup bonus after opening a new account and meeting certain requirements.
M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $75 for opening an account.
Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.

Feel free to send Kevin a message here.