The Untouchables

Employees are increasingly comfortable blowing the whistle.

Whistle-blowers who report suspected violations of securities laws now have broad protections under the Sarbanes-Oxley Act of 2002 — so broad, says employment attorney Michael Nosler of Denver-based Rothgerber Johnson & Lyons LLP, that companies should treat any employee who voices a concern with kid gloves.

“You’d have to monitor all employment decisions,” says Nosler. “And somebody has to alert HR that an employee has protected status.” Even changing someone’s cubicle location or reassigning him or her to a different client or project may be construed as retaliation.

Nosler likens the new antiretaliatory provisions to those in sexual-harassment and racial-discrimination laws. But there’s one big difference: while harassment or discrimination cases involve civil penalties for reprisals, retaliation against certain whistle-blowers can land a manager in jail.

That’s because Congress underscored the Sarbanes-Oxley Act by amending the U.S. criminal code to provide a 10-year sentence for anyone who “knowingly, with intent to retaliate, takes any action harmful to any person” who brings truthful information to the police or federal authorities. A criminal provision for retaliatory acts is unusual in employment law, says Nosler. What’s more, the amendment isn’t specific to corporate fraud. That means protected status applies to employees who report any type of federal crime — even one that has nothing to do with their jobs. For employers, the new statute “is disastrous in terms of its broad coverage,” he says.

Even without these protections, there is evidence that employees are increasingly comfortable blowing the whistle. During the past six months, only 48 percent of callers to ethics hotlines run by The Network Inc. have requested anonymity. That’s a steep drop from an average of 75 percent in the past 20 years, says CEO Tony Malone, whose firm provides hotline services to more than 1,000 companies, including 125 of the Fortune 500. Employees are speaking up, says Malone, “because they are profoundly aware that inappropriate behavior can bring about the ruin of their company and damage them personally.”

Discuss

Your email address will not be published. Required fields are marked *