SARBANES-OXLEY ACT OF 2002

New "whistle blower" protections are available to employees under the Sarbanes-Oxley Act of 2002 which was effective July 1, 2002. The Act provides protection to employees of public companies when they disclose information about fraudulent activities within their company. That is, the Act protects employees when they lawfully provide information to criminal investigators, Congress, federal regulators, supervisors, or parties in a judicial proceeding in detecting and stopping fraud. If an employee reasonably believes that there is a violation of the federal securities law, the rules of the SEC, or any provision of federal law relating to fraud to shareholders, then the employee is protected under the Act.

An employee who believes he has been retaliated against must file a complaint with the Department of Labor within ninety (90) days. The employee has the initial burden of proving that the disclosure of fraudulent activities was a contributing factor in the adverse employment decision. The employer must prove "by clear and convincing evidence, that it would have taken the same employment action regardless of whether the employee made the complaint regarding fraudulent activity within the company."

If the Department of Labor decides to hold a hearing, it must issue a final order within one hundred twenty (120) days of the hearing. However, if the Department of Labor does not resolve the matter within one hundred eighty (180) days, then the employee can file an action in Federal District Court.

Remedies available to the employee under the Act are considerable, including reinstatement of the employee, back pay with interest, and compensatory damages including reasonable attorney fees and costs.