|  | | 2005 News and Press Releases | | |
HEADLINE NEWS:
Pay Attention To SOX Whistle-Blower Provision News
Staff Writer – Texas Lawyer
Securities Mosaic. December 5, 2005
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EXCERPT: In the three years since its passage, the Sarbanes-Oxley Act of 2002 (SOX) has profoundly impacted publicly traded companies. Although the act's whistle-blower provision has been less heralded than provisions focusing on institutional controls and accountability, employers would be remiss to ignore the whistle-blower component.
Section 806 prohibits publicly traded companies from retaliating against employees who report corporate fraud. Importantly, for employers facing the prospect of defending these whistle-blower claims, the statute and accompanying regulations erect rigid, detailed administrative procedures with which in-house lawyers must become familiar. First, employees must file §806 complaints with the Occupational Safety and Health Administration within 90 days of the alleged retaliation. As noted by the U.S. District Court for the Northern District of Texas in Murray v. TXU Corp. (2003), failure to do so precludes the Department of Labor (DOL) from awarding any relief and deprives federal district courts of "jurisdiction over a suit brought under Section 806 of the Sarbanes-Oxley Act." Moreover, the DOL strictly enforces the 90-day deadline, as two rulings by DOL administrative law judges (ALJs) show. In 2003's Walker v. Aramark Corp., ALJ C. Richard Avery of Metairie, La., affirmed OSHA's dismissal of a complaint "[b]ecause Complainant's first contact with OSHA was 105 days after his termination." In 2004's Flood v. Cedant Corp., Cherry Hill, N.J., ALJ Paul H. Teitler affirmed OSHA's dismissal of a complaint that was filed 84 days after termination, because it was at least 95 days after Cedant told Flood he would be fired on a date certain. As Teitler explained, "the limitations period commences once the employee is aware or reasonably should be aware of the employer's decision." |
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