Sarbanes-Oxley

The Sarbanes-Oxley Act (“SOX”) is a federal law that was enacted in 2002 in response to a number of high-profile corporate and accounting scandals. SOX contains eleven sections which regulate and impose new standards on public company boards, management, and public accounting firms.

At Siegel & Dolan, we primarily rely upon SOX in the context of retaliatory discharge cases. SOX provides protection for employees who report fraudulent activity to, amongst others, their supervisors. Under Section 1514A of the Act, an employer may not discriminate against any employee in the terms and conditions of employment because of any lawful act done by the employee

to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes [fraudulent activity] . . . or any provision of Federal law relating to fraud against shareholders.

Employees will be protected if 

the information or assistance is provided to or the investigation is conducted by . . . a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct).

In addition, the employee will be protected if information is provided to a federal regulatory or law enforcement agency, or any member of congress or congressional committee.

The Northern District of Illinois has held that to succeed on a SOX claim under Section 1514A, the claimant must establish that

(1) he engaged in protected activity;
(2) the employer knew of the protected activity; 
(3) he suffered an unfavorable personnel action; and 
(4) circumstances exist to suggest that the protected activity was a contributing factor to the unfavorable action.

Bishop v. PCS Admin. (USA), Inc., No. 05-C-5683, 2006 WL 1460032 at *1 (N.D. Ill., May 23, 2006) (citations omitted).

Our Employment Law Services

If an employer has violated the whistleblower protection provision of SOX, the employer may be liable to the employee for injunctive relief or front pay, back pay with interest, and special damages including mandatory attorneys’ fees and costs. For a consultation regarding your rights and remedies under SOX, contact Siegel & Dolan to speak to a Chicago employment lawyer.

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