Sarbanes Oxley Whistleblower ProtectionLaw Archives

Are disclosures about bank fraud protected under the Sarbanes-Oxley whistleblower law?

SOX Whistleblower Law Protects Disclosures About Bank Fraud Yes, a disclosure about bank fraud is protected conduct (protected whistleblowing) under the whistleblower protection provision … Continued

Does Section 806 of SOX preempt other claims or remedies?

Section 806 of SOX specifically provides that “[n]othing in this section shall be deemed to diminish the rights, privileges, or remedies of any employee under any Federal or State law, or under any collective bargaining agreement.” 18 U.S.C. § 1514A(d). A whistleblower who is fired for refusing to commit an illegal act could bring both a SOX claim and a common-law wrongful discharge claim. Bringing the latter claim could potentially result in an award of punitive damages. But note that in some states, where there is an adequate statutory remedy to vindicate the public policy objectives, the employee can pursue a retaliation action only through the statute.

Who administers the whistleblower-protection provision of SOX?

The U.S. Department of Labor Occupational Safety and Health Administration (“OSHA”) administers the anti-retaliation provision of SOX. A SOX whistleblower claim must be filed initially with OSHA. OSHA will then investigate the complaint and may order preliminary reinstatement of the whistleblowers if it finds “reasonable cause” to believe that retaliation occurred.

Does subjecting an employee to heightened scrutiny evidence retaliation?

Where an employer jumps on an employee’s first instance of misconduct or poor performance and subjects the employee to heightened scrutiny, the employer’s reliance on that alleged change in performance can be deemed a pretext for retaliation.

What damages can a whistleblower recover under the Sarbanes-Oxley Act?

A prevailing SOX whistleblower can recover “all relief necessary to make the employee whole,” which includes:

back pay (lost wages and benefits);
reinstatement with the same seniority that the employee would have had, were it not for the retaliation;
special damages (damages for impairment of reputation, personal humiliation, mental anguish and suffering, and other noneconomic harm that results from retaliation); and
attorney’s fees, and costs

If reinstatement is not feasible, can a judge award front pay in lieu of reinstatement?

Although reinstatement is the preferred and presumptive remedy to make an employee whole, some SOX whistleblowers have recovered front pay in lieu of reinstatement. In Hagman v. Washington Mutual Bank, Inc., an ALJ awarded $640,000 in front pay to a banker whose supervisor became verbally and physically threatening when the banker disclosed concerns about the short funding of construction loans.

Does SOX authorize an award of punitive damages?

Does SOX authorize an award of punitive damages? The SOX whistleblower protection law does not authorize punitive damages, but it does authorize uncapped special damages, … Continued

Is retaliation that occurred outside of the statute-of-limitations period relevant evidence of retaliation?

Retaliatory acts outside the statute-of-limitations are relevant evidence of retaliation Discrete conduct occurring outside the statute of limitations may be circumstantial evidence of retaliation. An … Continued

Does SOX prohibit employers from “outing” confidential whistleblowers?

Disclosing a whistleblower’s identity may constitute an adverse employment action. The U.S. Court of Appeals for the Fifth Circuit reached this conclusion in a SOX case brought by Anthony Menendez, a former director in Halliburton Inc.’s finance and accounting department.

Is constructive discharge a prohibited act of retaliation under SOX?

Is constructive discharge a prohibited act of retaliation under SOX? Retaliatory termination goes beyond “You’re fired!” Under the SOX whistleblower protection law, constructive discharge … Continued

Image of Must a whistleblower prove that the individual who made the final decision to take the adverse action has personal knowledge of the whistleblower’s protected activity?

Must a whistleblower prove that the individual who made the final decision to take the adverse action has personal knowledge of the whistleblower’s protected activity?

Establishing Knowledge of SOX Protected Conduct The second element of a SOX claim is knowledge of protected conduct. A whistleblower may establish employer knowledge by … Continued

Are disclosures made in the course of performing one’s job duties protected?

Disclosures made in the course of performing one’s job duties are protected under the SOX whistleblower law A consensus is emerging that the duty … Continued

Page 2