An employee of a non-publicly traded subsidiary failed to show sufficient common management and purpose on the part of the subsidiary's publicly traded parent and, therefore, the parent company's corporate veil could not be pierced in order to hold it liable for the employee's termination, allegedly in violation of the whistleblower protection provisions of the Sarbanes-Oxley Act of 2002 (SOX), according to CCH, Inc.

In the absence of any evidence that the parent company was sufficiently involved in the management and employment relations of the subsidiary, the employee's complaint was properly dismissed.

Lawrence Bothwell was hired to sell insurance by American Income Life (AIL), a subsidiary of Torchmark Corporation. After working for approximately five months, he was terminated. He filed a complaint under SOX with the Occupational Safety and Hazard Administration (OSHA) claiming that he was fired in retaliation for raising concerns regarding the implementation of standards and ethics in AIL's marketing structure.

The complaint named AIL and referenced AIL as a subsidiary of Torchmark, but did not name Torchmark. In a letter sent after his complaint, Bothwell requested that OSHA open an investigation against Torchmark. Because AIL was not a publicly traded company, with securities registered under the Securities and Exchange Act of 1934, AIL was not a company as defined by SOX. Therefore, OSHA dismissed Bothwell's complaint without investigating allegations against Torchmark.

On appeal, an administrative law judge (ALJ) found that although Bothwell was designated an independent contractor, the evidence was sufficient to raise an issue with regard to whether he was an employee of AIL. However, because AIL was not publicly traded and Bothwell was not an employee of Torchmark, the ALJ concluded that summary dismissal of Bothwell's complaint was proper.

Bothwell had argued that his attempts to add Torchmark as a party, sent to OSHA more than 90 days after his termination, should relate back to the date of his original complaint against AIL. But, because Torchmark did not have notice of Bothwell's complaint prior to expiration of the 90-day statute of limitations, the relation back doctrine did not apply, held the ALJ. Moreover, the ALJ concluded that Bothwell failed to show sufficient commonality of management and purpose to justify piercing Torchmark's corporate veil.