A “whistleblower” is someone, usually an employee, who reports an employer who has broken the law to an outside agency. Whistleblowers are protected by federal and state laws. Employers may not retaliate against them for reporting misconduct. Whistleblowers may not be fired or otherwise mistreated, and in some instances the government may reimburse them for costs incurred as a result of reporting.
Whistleblowers are protected by a variety of state and federal laws. The main federal law that protects whistleblowers is the False Claims Act. The False Claims Act allows employees to report instances involving fraudulent or false reports made to the government. It also protects informers from retaliation by their employer. The False Claims Act deals mainly with the federal government and federal contractors. Several states also have their own versions of False Claims Acts. Check with your local or state government to see if your state has a False Claims Act.
A newer law provides protection for whistleblowers who are employed in a publicly traded company such as a corporation. This law is called the "Sarbanes-Oxley Act of 2002," commonly referred to as “SOX”.
Companies covered by the Act are those that are registered under the Securities Exchange Act and those that are required to file reports with the Securities Exchange Commission. The Act also covers actions made by contractors or agents of the corporation.
SOX was implemented in response to widespread fraud being practiced by large corporations at the time. Most people associate SOX with issues such as improper corporate governance and accounting issues. However, SOX also contains a major provision which deals with whistleblowers in a corporate setting. Employers can file a claim under SOX against an employer who has violated the law. Like other federal statutes, SOX also protects such whistleblowers from employer retaliation.
The Sarbanes-Oxley Act expanded the protection provided previously by the False Claims Act into the area of corporate organizations. SOX provided three major additions to the area of corporate whistleblower law:
The Sarbanes-Oxley Act has been instrumental in updating whistleblower laws. Violations of the act can lead to strict penalties for the organization. A new section has been introduced in the federal criminal penal code dealing with retaliation against whistleblowers. Title 18, section 1513(e) of the U.S. Code (USC) also makes retaliation a criminal offense punishable by fines and up to 10 years in prison.
An employee’s actions are considered to be retaliation if their employee’s lawful reporting was a contributing factor in the decision to take “unfavorable” action. Unfavorable retaliatory action can include:
A person who was retaliated against for whistleblowing may be entitled to the following remedies:
Aggrieved employees must first file a complaint with the Occupational Safety and Health Administration (OSHA) before they are allowed to file suit in a civil court. Filing a complaint with OSHA requires:
There are several laws covering whistleblower protection. Depending upon the industry in which you work, you may file a whistleblower lawsuit under either the False Claims Act of SOX. Making a fraud claim against you employer is a trying and complex process, so it is essential that you consult with an employment attorney experienced in such matters.
Last Modified: 12-12-2014 04:22 PM PSTLaw Library Disclaimer
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