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Understanding employee rights under SOX

New York employees of publicly-traded companies may have heard about the Sarbanes-Oxley Act's whistleblower-protection provision. It states that companies cannot take actions that could discourage them from acting as whistleblowers in the future. Prohibited actions include demoting, suspending or terminating those who engage in this protected workplace activity. Companies also may not harass or otherwise discriminate against those who make legitimate complaints against them.

Employees should know that they are protected against having their identities revealed as someone who has acted as a whistleblower. Such an action may result in harassment or alienation from colleagues. This was the conclusion of judges on the U.S. Court of Appeals for the 5th Circuit in a case involving a former accounting director at Halliburton. After noticing potential accounting irregularities, he tried to address his concerns with the company. When those concerns were not taken into consideration, he filed a confidential disclosure with the SEC.

Counsel for the company later outed him as the source of the disclosure, which caused fellow workers to treat him differently. It is also important for workers to know that SOX generally protects them from retaliation post-employment. Furthermore, evidence of retaliation that may occur outside of applicable statutes of limitations may still be used as evidence that retaliation took place.

Those who were suspended or demoted after exposing issues within a company may have been victims of illegal retaliation. It may be possible for an individual to take legal action against his or her employer to hold it responsible for its potentially illegal activity. An attorney can review the facts of a case to determine what the next steps in the legal process may be. In some cases, it may be possible to settle the matter outside of court.

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