Judge tosses Danon's wrongful-firing complaint vs Vanguard

Federal Judge C. Darnell Jones II has thrown out the wrongful-firing lawsuit that former Vanguard tax lawyer David Danon filed against the company last year.

Ruling in Philadelphia on Monday, Judge Jones endorsed Vanguard's arguments that Danon hadn't proved he was illegally let go from his $250,000-a-year job in retaliation for making legally-protected whistleblower complaints accusing the Malvern mutual fund company of tax fraud.

Rather, he cited a decision by New York State Judge Joan Madden last fall, in a separate lawsuit, holding that Danon had failed to show that he was fired in retaliation. Danon has told New York he plans to appeal that earlier ruling. 

"We are pleased that a second court dismissed the plaintiff's attempt to pursue similar claims in another court, as we have stated repeatedly that this case was without merit," said Vanguard spokeswoman Emily M. Farrell in a statement. Danon's lawyers had no immediate comment.

"Neither the complaint, nor the additional submissions, contain any allegations [that Vanguard] knew in January 2013, that [Danon] was involved in protected conduct" as a whistleblower, the judge wrote.

"Notably, [Danon] does not indicate the dates when he expressed his concerns to [Vanguard]'s employees and, in particular, whether he did so before he was informed of his termination in January 2013."

Jones also notes that Vanguard let Danon keep his job until June of that year -- and he used that time to collect Vanguard documents and information to strengthen his whistleblower case. Vanguard has said he "stole" these papers.

Vanguard, a private corporation, says it pays "fair and appropriate" federal, state and local income taxes. Danon has been paid as an informant by Texas tax authorities for giving that state information it used to collect unpaid Vanguard income taxes.

The Securities and Exchange Commission had filed a friend-of-the-court brief in the Philadelphia case. SEC opposed Vanguard's contention that Danon's wrongful-firing complaint was invalid because, while still an employee, he had complained only to his Vanguard bosses, not to federal authorities, so far as his bosses knew.

Vanguard was represented by attorneys at Jones Day, the same firm that blew out Danon's New York case.