Whistleblower Protection Against Retaliation by Employers

Whistleblower Protection Provided Under SEC Law

Federal law mandates that, if a company is publicly traded, they must report earnings and other financial information to the Securities Exchange Commission (SEC).  In 2002, the Sarbanes-Oxley Act was enacted in response to an increase in the mishandling of required SEC filings and corporate fraud. The legislation afforded employee whistleblower protection and helped the SEC further regulate corporations. The Act also made retaliation against a whistleblower a crime, for which the employer can be prosecuted. The SEC protections, however, were limited to those employees whistleblowing on insider trading violations. Because of the narrow scope of the Act, many employees were left with no recourse in the event of retaliation from the employer.

Whistleblower Protections of the Dodd-Frank Wall Street Reform Act

In 2010, the SEC whistleblower protection was significantly broadened by the Dodd-Frank Wall Street Reform Act (also known as the “finance reform bill”). The Act amended the anti-retaliation provisions of the Sarbanes-Oxley Act and, specifically, created a SEC whistleblower reward program.  Furthermore, the new Act covers a wider variety of securities fraud violations including late trading, insider trading, money laundering and violations of Foreign Corrupt Practices Act.

According to the key provisions of the Act, SEC will pay a whistleblower reward to anyone who provides original information that leads to an action resulting in monetary sanctions exceeding $1 million. The award may range anywhere from 10% to 30% of the amount recovered. Factors the SEC will consider when determining an appropriate payment amount are:

• • The significance of the information provided by the whistleblower
• • The degree of assistance provided by the whistleblower
• • SEC’s interest in deterring violations of the securities law at issue
• • The extent to which the whistleblower cooperated with their employers internal compliance department

The Act also provides for job protection. The new law allows whistleblowers to report anonymously and, in some instances, the whistleblower’s identity is not revealed to even the SEC until it is time to pay the reward. Despite these strong protections, retaliation can still occur. In fact, the employer revealing the name of the whistleblower to others, inside or outside of the company, is in itself grounds for a retaliatory action. The employee can bring a claim under the Dodd-Frank Act if they were retaliated against for:

• • Providing information to SEC
• • Initiating, testifying or assisting in any investigation or action of the SEC
• • Making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002, the Securities Exchange Act of 1934

Finally, according to Dodd-Frank, a person who has faced retaliation may be entitled to:

• • Reinstatement with the same seniority status the person would have had if there was no retaliation
• • Two times the amount of back-pay plus interest
• • Compensation for litigation costs, expert witness fees and attorney’s fees

How Do I Pursue a Whistleblower Claim or a Retaliatory Action?

Due to the complex nature of whistleblower complaints and the new whistleblower protection provided by various new laws, any person considering taking action should first consult with an experienced attorney. Likewise, if you feel that you have been retaliated against for reporting workplace violations to any government agency, it is extremely important to contact an attorney. Audet & Partners, LLP, is a nationally recognized class action firm with significant experience in labor law, including reviewing and investigating whistleblower claims. We represent individuals, consumers and small business owners who are aware of wrongdoing, and wish to do the right thing. We will provide you with a free, confidential evaluation and advise you on the best way to proceed with your claim.

You can request a free, confidential evaluation of your case either by calling us at (800) 965-1461, or by completing and submitting our confidential inquiry form on the right side of this page.