Whistleblower Protection Under Sarbanes Oxley

Employees of publicly traded companies who become aware of questionable practices in the workplace can find themselves in a difficult position and may not know how to respond. Many feel compelled to report their findings up the ladder but are concerned about the repercussions they could face if management chooses to ignore them. Unfortunately, some companies are desperate to keep such dealings private and resort to job retaliation to silence concerned employees. Realizing that whistleblowers need protection in order to promote transparency in business, Congress enacted the Sarbanes-Oxley Act in 2002. At Joseph & Kirschenbaum LLP, our NYC whistleblower attorneys understand the protections afforded by this important legislation and have successfully fought for those who suffered retaliation for taking a stand against corruption and illegal practices.

The Sarbanes-Oxley Act, often called SOX, applies to all publicly traded companies that are required to register securities under the Securities and Exchange Act. It prohibits such companies from retaliating against individuals for the following activities related to fraud or SEC rules violations within the company:

• Providing information to the federal government or to higher supervisors within the company or assisting in law enforcement or internal investigations

• Initiating or participating in administrative or judicial proceedings relating to such conduct

Unlike many other retaliation laws, SOX applies not only to employees of covered companies but also to contractors, subcontractors and agents of the company. Moreover, retaliation under SOX does not require any adverse employment action to actually take place. Threats and harassment against whistleblowers are still a violation even if they are not accompanied by termination, demotion or other more tangible retaliation.

SOX protection only applies to certain types of illegal conduct. The Whistleblower must reasonably believe that the company has engaged in certain violations of the Sarbanes-Oxley Act, violations of SEC rules or regulations, or fraud on its shareholders. While whistleblowers who report other types of misconduct may find protection under other laws, the rights provided by SOX may not be available.

While SOX affords fairly extensive protection to whistleblowers at publicly traded companies, there is a specific process for asserting these rights:

• A person who suffered retaliation under SOX must file a complaint with the U.S. Department of Labor within 180 days of the alleged retaliation.

• If the Department of Labor fails to issue a final decision within 180 days, the whistleblower may bring an action in a U.S. district court.

• While some other similar banking regulations as well as the SEC whistleblower provisions of the Dodd-Frank Act do allow whistleblowers to go straight to court, an initial administrative complaint with DOL or an appropriate inspector general is a prerequisite for court action under SOX.

Victims of retaliation under Sarbanes-Oxley may recover all compensation required to make them whole, including reinstatement or restoration of seniority and benefits, back pay, litigation costs, compensation for emotional distress, damage to reputation and reasonable attorney fees.

Coming forward as a whistleblower always takes courage and often comes with risks. If you have been subjected to harassment, threats or adverse employment action after voicing concerns regarding the practices of a publicly traded company, you may have legal rights. Our NY whistleblower attorneys at Joseph & Kirschenbaum LLP understand the intricacies of SOX's whistleblower protection provisions and can stand with you through the entire whistleblower process. Call our office today at 212-688-5640 or contact us online to arrange a confidential assessment. Se habla espanol.