UPDATED at 2:30 p.m. with comments from Fort's attorney
In the end, George Fort’s second stint as chief financial officer of Tennessee Commerce Bancorp lasted about 24 hours.
The Sixth Circuit Court of Appeals in Cincinnati this morning granted a motion by the Franklin-based bank to stay the immediate reinstatement of its former CFO pending an appeal.
Fort had resumed his duties at Tennessee Commerce Monday, about two years after he was fired and a few days after District Court Judge William Haynes said the bank needed to give him his old job back even though it was appealing a Department of Labor ruling. The bank contends he was dismissed for cause; he claims the company retaliated against him after he raised governance issues.
In their ruling, the appeals court judges said Tennessee Commerce’s motion – which says it would be irreparably harmed by Fort's reinstatement – “raises a substantial question as to the authority of the district court.” Following their decision, Fort was removed from his post and Frank Perez has been renamed chief financial officer. As of last week, Perez’s title had been changed to principal financial officer and principal accounting officer.
“By contrast, if the reinstatement order was properly issued, Ford can be made whole with compensatory damages, back pay, and interest," the appeals court judges wrote. "A balancing of the harms supports the issuance of a stay.”
Bruce Shine, the attorney representing Fort, pointed out that this latest ruling doesn't overturn Haynes' decision and added that, despite the fact that the Sarbanes Oxley Act governing today's whistleblower cases became law eight years ago, the Fort case is in some ways exploring new legal ground.
"There is no way the Sixth Circuit could have made an exhaustive inquiry of the case in 24 hours," Shine said. "This basically came down to the fact that the issue is novel."