Sarbanes-Oxley Act

Many employees learn information about legal violations at publicly traded companies that they would not know but for their employment. However, in many instances, they are concerned about whether they will be able to keep their jobs if they report the wrongdoing. Under the law, they receive special protections against retaliation as whistleblowers. If you believe that you have a whistleblower protection claim under the Sarbanes-Oxley Act, you should contact the New York City whistleblower attorneys at Phillips & Associates.

The Sarbanes-Oxley Act of 2002 protects people who work for publicly traded companies and who let authorities know about violations of SEC regulations or any federal law violations that amount to fraud against corporate shareholders. Publicly traded companies are those companies that have a class of securities registered under section 12 of the Securities Exchange Act of 1934. Additionally, contractors, subcontractors, and agencies that work for publicly traded companies are covered.

Activity protected under Sarbanes-Oxley includes reports to federal regulatory agencies and law enforcement agencies. Moreover, it includes reports to your supervisor, company investigators, or Congress. You are also protected if you are an employee who testifies or who is engaged in regulatory proceedings or other shareholder fraud proceedings. After a 2018 Supreme Court ruling, Sarbanes-Oxley may protect more activity than does Dodd-Frank under certain circumstances.

People who report violations are known as whistleblowers. Under Sarbanes-Oxley, employees who engage in certain protected activities are whistleblowers. Employees can be current workers, or they may be former workers. To be protected as whistleblowers, they must report or assist in reporting corporate wrongdoing, such as securities fraud, mail fraud, wire fraud, bank fraud, SEC rule or regulation violations, or fraud against shareholders that is covered by Sarbanes-Oxley that they reasonably believe has happened. They may have filed, participated in, testified, or assisted with a proceeding that was previously or is about to be filed in connection with the wrongdoing.

It can be stressful to consider blowing the whistle on your employer about a legal violation. If you are a whistleblower, Sarbanes-Oxley prohibits your employer from retaliating against you. Retaliation includes all adverse decisions made with regard to your employment. It encompasses smaller events, but it can also include serious events like blackballing within the securities industry, demotion, harassment, or termination.

Under Sarbanes-Oxley, prior to suing in federal court, you will need to file an administrative complaint with the Secretary of Labor through the Occupational Safety and Health Administration (OSHA). Once you have filed the complaint with OSHA, you must wait 180 days, and then you can proceed to federal court under 18 U.S.C. § 1514A. An employer is not able to enforce waivers of whistleblowers' rights or remedies, and it cannot require arbitration of claims of retaliation under Sarbanes-Oxley under an agreement signed prior to the dispute.

Whistleblowers who prevail under Sarbanes-Oxley can recover any and all relief that is needed to make the employee whole. This may include back pay, reinstatement, attorney fees and costs, and special damages. Reinstatement is preferred over front pay, but there are situations in which front pay is awarded instead of reinstatement. Special damages may include personal humiliation, mental anguish and suffering, reputational damage, and other noneconomic harms. For example, if you were blackballed from an industry, your reputation has been damaged, and it may impair your future earning capacity. Courts have stated that employees in this situation cannot be made whole without compensation for the lost future earnings that they would have gotten if not for the employer's illegal activity.

It is hard for an employee to confront his or her employer. If you are concerned about blowing the whistle on your employer under the Sarbanes-Oxley Act, you should consult an experienced employment litigator in New York City. It can be helpful to consult a lawyer even before you report the violation, and it is important to have representation when you file an initial administrative complaint. Contact Phillips & Associates at (212) 248-7431 or through our online form for a free appointment. We handle employment litigation in the boroughs of the Bronx, Queens, Brooklyn, and Manhattan; the counties of Westchester, Nassau, and Suffolk; a well as New Jersey, Connecticut and Pennsylvania.

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