Monday, November 15, 2004
One of the many changes made by the Sarbanes-Oxley Act was the enactment of specific protections for corporate whistleblowers. While the role of whistleblowers, such as Enron's Sherron Watkins, were much celebrated, this aspect of the Act has received relatively little attention, at least until now. According to an AP story, two leading senators, Charles Grassley (R-Iowa) and Patrick Leahy (D-Vermont), have written a letter to the SEC requesting information about how the Commission plans to enforce the whistleblower protections. The letter was triggered by a finding by the Department of Labor in early October that an officer of CheckFree Corp., a publicly-traded company, had been retaliated against for reporting corporate misconduct and ordering the company to pay him $103,000 in backpay. The National Whistleblower Center website has a description of the provisions of the Sarbanes-Oxley Act that protect employees of publicly traded corporations from retaliation for reporting illegal conduct by their employers. The Center's analysis states:
Unlike most whistleblower laws, the SOX’s whistleblower protection provisons are not limited to providing a legal remedy for wrongfully discharged employees. In addition to containing employment-based protections for employee whistleblowers, the law contains four other provisions directly relevant to whistleblower protection. First, the law requires that all publicly traded corporations create internal and independent “audit committees.” As part of the mandated audit committee function, publicly traded corporations must also establish procedures for employees to file internal whistleblower complaints, and procedures which would protect the confidentiality of employees who file allegations with the audit committee.