Sarbanes-Oxley Act Of 2002 Enacted Essay

1640 Words 7 Pages
Overview
The Sarbanes-Oxley Act significantly expands existing federal whistleblower protection laws, and public companies would be well advised to pay special attention to these new protections for corporate whistleblowers. Section 806 of the Act prohibits an employer from engaging in retaliation or discrimination against employees who report suspected accounting or financial fraud, and establishes a new system by which aggrieved employees can bring an action for damages against their employer before the Department of Labor or in federal District Court.
The whistleblower provisions are an integral part of the new law. Many of the questionable accounting practices that gave rise to the Sarbanes-Oxley Act came to light, at
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Virtually any personnel action taken against an employee, including a demotion or suspension, can potentially be actionable under this provision.
Moreover, if the experience under other whistleblower statutes is applied in the Sarbanes-
Oxley context, the SEC and DOL will broadly construe what actions of an employee are protected.
The Act does seek to avoid frivolous complaints by at least requiring that the employee have a "reasonable" belief that the practice constitutes a violation.
Civil Action by Employees. An employee who believes he has been unlawfully discharged or discriminated against may seek relief by filing a
Business & Finance
Alert
December 2002
Whistleblower Protection Requirements of the Sarbanes-Oxley Act
2
complaint with DOL. The complaint must be filed within 90 days after the date on which the

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