Jury found that ADP unlawfully retaliated against the finance director who blew the whistle.
NEWARK, N.J. – [October, 30, 2026] – A jury in Essex County Superior Court has awarded $1.4 million in compensatory damages to a former Automatic Data Processing Inc. ("ADP") senior director who claimed he was fired in retaliation for disclosing his belief that the company's public margin-improvement claims were misleading, his counsel at Mark & Kleinfeldt, LLC announced.
After a month-long trial before the Honorable Judge Richard T. Sules, the jury found that ADP violated the Conscientious Employee Protection Act in terminating Stephen Lee. The jury awarded Lee $1.4 million in compensatory damages, and an application will be made to compel ADP to pay attorneys' fees and costs.
Lee, a Senior Director of Capital Markets and Corporate Finance, sued in September 2020, alleging he was terminated (in September 2019) after repeatedly disclosing and objecting to what he reasonably believed were overstated and misleading margin figures that ADP presented to investors. Lee made the discovery in the middle of a heated proxy contest launched by Bill Ackman and Pershing Square Capital Management.
In the proxy contest, Pershing Square sought to modify ADP's board and remove its then CEO, Carlos Rodriguez. It criticized ADP's operational margin expansions and alleged that ADP manipulated billions of dollars of annual zero-margin PEO pass-through revenue to make its performance appear stronger. Lee came to his discovery and belief after the U.S. Securities and Exchange Commission sent a comment letter on the issue, seeking clarification behind ADP's margin expansion claims in the proxy contest. Asked to evaluate both sides’ calculations, Lee identified a flaw in the methodology behind ADP’s margin-expansion claims, which he believed resulted in overstated margin expansion claims by ADP.
The jury found that Lee reasonably believed that ADP made unlawful misleading statements to investors, and that Mr. Lee engaged in whistle-blowing activity, when he disclosed his findings to superiors, which included ADP's then Treasurer, Michael Eberhard, and its then CFO, Jan Siegmund.
The jury was also presented evidence that Mr. Lee opposed ADP's continued use of the flawed metric as he reasonably believed this would cause ADP to make more misleading statements to the investing public. Lee contended that after he flagged another misleading public statement, he was told to "drop it" and that subsequently, the Treasurer told Lee that he had “questionable loyalty” to ADP. Lee was terminated in a reorganization but argued to the jury that ADP used the reorganization to conceal the whistle-blower retaliation.
Jury selection in the trial began on Sept. 28, 2026, and testimony was obtained from multiple witnesses, including Siegmund and Eberhard (who was an individual defendant in the matter). The trial lasted for four weeks, with the jury awarding Mr. Lee compensatory damages of $1.4 million.4
"This was an extremely complex and hard-fought case. The complexity made presenting the evidence to the jury challenging, but after the testimony and evidence, they understood the issues. I cannot be prouder to have been Steve's voice. He disclosed his reasonable belief that unlawful activities occurred, believed he was doing the right thing, and the jury found that he was unlawfully fired for refusing to drop it."
-- Adam J. Kleinfeldt
Mark & Kleinfeldt