Corporate Whistleblower Retaliation
What laws protect corporate whistleblowers?
Corporate whistleblowers are one of the most important and effective checks on fraud against the government and/or shareholders. Yet a whistleblower is often met with hostility and retaliation from within the company.
In response, Congress has enacted a number of laws designed to protect employees who blow the whistle on corporate fraud.
One of the key statutes is the Sarbanes Oxley Act of 2002 (SOX). Under SOX, employees who work for publicly traded companies or companies that are required to file certain reports with the Securities and Exchange Commission (SEC) are protected from retaliation for reporting various violations such as bank or securities fraud or violations of federal law regarding shareholder fraud.
Other laws protecting corporate whistleblowers include the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Under Dodd-Frank, a whistleblower has a private right of action that allows them to file a retaliation complaint in federal court.
What companies are covered by SOX?
Section 806 of SOX covers companies that have a class of securities registered under Section 12 of the Securities Exchange Act or are required to file reports under Section 15(d) of that Act. The company’s subsidiaries, contractors, subcontractors, or agents may also be covered.
It is important to consult with an experienced whistleblower retaliation lawyer to understand your legal options.
How do I prove corporate whistleblower retaliation?
To establish a retaliation claim, a whistleblower must show:
- they engaged in protected activity
- the employer knew they engaged in the protected activity
- they suffered an adverse employment action
- the protected activity was a “contributing factor” in the adverse employment action
If the whistleblower makes this showing by a preponderance of the evidence, then the employer must prove by “clear and convincing evidence” that it would have taken the same adverse employment action even if the employee had not engaged in protected activity.
What remedies are available for corporate whistleblower retaliation?
Under SOX, a whistleblower can receive the following remedies if they experience retaliation:
- reinstatement with the same seniority status that the employee would have had, but for the retaliation;
- back pay, with interest; and
- compensation for any special damages sustained as a result of the retaliation, including emotional distress, litigation costs, expert witness fees, and reasonable attorney fees.
Notably, the emotional distress damages available under SOX are uncapped (unlike some other anti-retaliation laws).
The remedies available under Dodd-Frank include double back pay (with interest), reinstatement, reasonable attorneys’ fees, and reimbursement for certain costs in connection with the litigation.
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