In general, there are legal protections in place for whistleblowers in California workplaces. Common understanding of what a whistleblower does usually revolves around reporting wrongdoing or illegal activity by their employer. While this covers a wide variety of potential activities, there are specific statutes in place for those California employees that work in the financial sector.
Maison Law works tirelessly to serve and protect the rights of any employee that has blown the whistle on their employer. Their ultimate objective is to provide understanding of different whistleblower laws and how they protect California employees.
What is the Sarbanes-Oxley Act and How is it Applied in California?
The Sarbanes-Oxley Act (SOX) is a federal statute, originally passed in 2002. The Act made sweeping changes to how financial companies audit their books and implemented several important regulations that they have to follow in terms of compliance and reporting to the Securities and Exchange Commission (SEC). Specifically, the Act focuses on the following areas:
- Increasing criminal punishment for auditing discrepancies
- Regulation of accounting practices
- Providing new protections for whistleblowers
- Increasing overall corporate responsibility
As it applies to California employees, SOX provides protections for those employees that “blow the whistle” on their employer’s failure to adhere to the provisions of the Act through committing fraudulent activity.
Who Must Comply with the Sarbanes-Oxley Act?
Generally speaking, all publicly traded companies must comply with SOX. Specifically, SOX applies to the following class of business:
- Every United States publicly-traded company
- Foreign companies that are registered and do business in the United States
- Accounting firms that perform SOX audits
There are a few exceptions in terms of compliance with SOX. Private companies and nonprofits usually are exempt from SOX’s guidelines. Still, many of these companies adhere to SOX requirements as “best practices” despite no legal obligation to do so.
Corporate leadership of these businesses are required to ensure compliance with SOX. Failure to do so or retaliating against employees that report the company’s failure to comply with SOX opens the company up to potential legal action.
Procedure for Sarbanes-Oxley Act Claims in California
Procedurally, most violations of the Sarbanes-Oxley Act are brought as whistleblower retaliation cases. However, there are some key differences between a SOX whistleblower retaliation claim and a regular whistleblower retaliation claim, as a SOX whistleblower claim will originate with a complaint to the US Division of Labor (DOL) rather than a civil lawsuit.
Employees have 180 days from the adverse employment action to file their Complaint. Every retaliation claim looks different, but some of the more common forms of retaliation include the following:
- Firing or laying off the employee
- Blacklisting the employee
- Demotion of the employee
- Denying the employee overtime or a promotion
- Unwarranted discipline of the employee
- Denying the employee benefits
- Failing to hire or rehire the employee
- Intimidation or threatening the employee
- Reassigning the employee
- Reducing the employee’s pay or hours
If the Secretary of Labor does not respond to the initial complaint, the employee can then file a lawsuit. Damages that could be recovered in a SOX whistleblower suit against an employer include:
- Being rehired
- Recovery of lost wages
- Awarding of back pay with interest
- Attorney’s fees and other costs of bringing the whistleblower lawsuit
- Damages relating to emotional distress or damage to the employee’s reputation as a result of the whistleblower retaliation
Any claim against an employer is a daunting proposition, especially in the financial sector, where a great deal of capital and resources can come to bear. That’s why Maison Law is proud to work with individuals that stand up to the monolith of a publicly traded company that fails in its duty to keep accurate records for its shareholders.
Work With Skilled California Sarbanes-Oxley Act Lawyers
Working for a publicly traded company means a responsibility to not only shareholders, but also the public itself. When an employee observes and reports fraudulent activity, they should be hailed as a hero, not ostracized and punished. Unfortunately, some companies care more about profit than people. If you have observed activity in violation of the Sarbanes-Oxley Act, please contact Maison Law to arrange a free consultation. We can help you understand your rights under the Act and how to best approach your situation.
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