Under SOX, the assistance must involve: (A) a Federal regulatory or law enforcement agency; (B) a Member of Congress or committee of Congress; or (C) a person with supervisory authority over the employee (or other person working for the employer who has the authority to investigate, discover, or terminate misconduct).
Enforcement of the civil provision falls to the Secretary of Labor. However, if within 180 days of the filing of a complaint, the Secretary has not issued a final decision, and the delay was due to the bad faith of the claimant, the employee may bring a de novo action in federal district court. The US Courts of Appeals have the authority to review the Secretary of Labor's final decisions.
Employees who believe that they have been subject to adverse action in retaliation for a protected activity may file a complaint with the Secretary of Labor within 90 days of the retaliatory act. The Secretary of Labor has assigned responsibility for administering the Act to the Assistant Secretary for Occupational Safety and Health Administration.
A broad range of whistleblower activities are protected, including providing information to Congress, federal agencies, or internally within a company, and also filing, causing to be filed, testifying, participating in, or assisting in proceedings.
Protected activity includes providing information that the employee "reasonably believes" constitutes a violation of federal mail, wire, bank or securities fraud, or a violation of any SEC rule or federal law relating to fraud against shareholders.
SOX's criminal provision, makes it a felony for anyone to retaliate against or take any action "harmful" to any person, including interfering with his employment, for providing truthful information to a law enforcement officer relating to the possible commission of a federal offense, and is enforced by the US Department of Justice. Criminal penalties can include fines and or imprisonment of up to 10 years.
In addition to the whistleblower provisions, SOX contains two other mechanisms to encourage the disclosure of corporate fraud. First, it requires companies to establish procedures for the receipt, handling, and retention of anonymous complaints from employees relating to accounting or auditing matters.
And second, to ensure the reliability of corporate disclosures, the SEC issued a rule requiring attorneys "appearing and practicing before the Commission" to report "evidence of a material violation" to their client's chief legal officer or chief executive officer and, absent an "appropriate response," to the company's audit committee or board of directors.
SOX whistleblower provisions also apply to "any officer, employee, contractor, subcontractor or agent" of a covered company and therefore, private companies, as well as other entities or individuals, that serve as "agents" or "contractors" of the publicly traded employer, are subject to the whistleblower provisions.
For instance, the 2003 OSHA, Whistleblower Investigations Manual, specifies that a small accounting firm acting as a contractor could be liable for retaliation against an employee who provides information regarding a violation of SEC rules to the SEC.
And there have been cases, where the Act's retaliation provisions have been applied to private subsidiaries of publicly traded companies. For example, in Platone v Atlantic Coast Airlines Holdings Inc., 2003-SOX-27 (April 30, 2004), an Administrative Law Judge held that an employee of a subsidiary was a covered "employee" where the subsidiary's parent company was publicly traded and the company was the alter ego of the subsidiary and had the ability to affect the employee's employment.
The ALJ in Gonzalez v Colonial Bank, 2004-SOX-39 (ALJ August 20, 2004), concluded that Congress intended to provide whistleblower protection to employees of subsidiaries and held that an employee of a subsidiary set forth a cause of action sufficient to withstand a motion for summary decision where the evidence reflected that the action affected the plaintiff's employment and the company shared management and function with the subsidiary.
In the first reported federal district court decision, Collins v Beazer Homes USA, Inc, 334 F Supp 2d 1365 (ND Ga 2004), held that where the officers of a publicly traded parent company had the authority to affect the employment of the employees of the subsidiary, an employee was a "covered employee" within the meaning of the SOX.
The remedies available to whistleblowers generally provide that an employee subject to retaliation is "entitled to all relief necessary to make the employee whole," and employees who proceed before the Department of Labor are entitled to "interim reinstatement."
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