In 2002, President Bush signed into law the Sarbanes-Oxley Act, designed to deter corporate corruption and protect employees who blow the whistle on corporate transgressions. Now the federal Occupational Safety and Health Administration (OSHA), the agency designated to handle whistleblower complaints under the act, has released final rules regarding the complaint filing and investigation process. Here’s a rundown on the law and the new regulations, which take effect immediately.
Summary of Whistleblower Protections
The Sarbanes-Oxley Act protects employees of public companies who disclose information or assist in an investigation into activities the employee reasonably believes violate federal securities laws or are a fraud against shareholders. The law covers employees who complain to a federal agency or to anyone at the company—including a supervisor—who has authority to investigate or stop the misconduct.
Employers cannot retaliate against an employee for making this kind of complaint by terminating, demoting, suspending, harassing, or discriminating. Company officers, employees, contractors, subcontractors, or agents can all be held personally liable for retaliating.
Violating the whistleblower provisions can carry criminal fines of up to $250,000 plus 10 years in jail. An employee can either bring a retaliation lawsuit or file a complaint with OSHA, and may recover back pay, compensatory damages, and attorney’s fees and be reinstated to their job.
Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.
Complaint Filing Procedures
The new rules state that a retaliation complaint must be filed within 90 days after the alleged violation occurs (that is, when the employee is told about the discriminatory decision). Complaints must be in writing but don’t have to be in any particular form. OSHA will notify the person named in the complaint about the nature and substance of the allegations.
OSHA won’t investigate if the retaliation complaint doesn’t show on its face that the protected conduct was a contributing factor in the adverse personnel decision. Note, too, that the named person can avoid an investigation by submitting information—within 20 days of receiving the OSHA notice—that shows they would have taken the adverse action in the absence of the employee’s protected conduct.
The OSHA Investigation and Findings
If OSHA’s investigation finds reasonable cause to believe the act was violated, the agency will notify the person named in the complaint of the investigation results. That person then has 10 business days to provide a written response to the allegations and meet with investigators.
After considering all relevant information collected during the investigation, OSHA must issue its findings. OSHA will notify the parties if it concludes no violation occurred. If OSHA finds reasonable cause to proceed, it will issue written findings and a preliminary order specifying remedies for the employee, which could include reinstatement, back pay, compensation for any special damages, litigation costs, expert witness fees, and attorney’s fees.
OSHA has just 60 days from the date the complaint was initially filed to issue these written findings and preliminary order.
Filing an Objection
OSHA’s findings and preliminary order become effective 30 days after the named party receives them unless that person files an objection and requests a hearing. A written objection must be filed within 30 days of receiving the findings and preliminary order. If an objection is lodged, the preliminary order—except for an order of preliminary reinstatement of the employee—will be stayed while an administrative law judge considers the objection.
Note that someone objecting that the complaint was frivolous or brought in bad faith can request that the judge award them attorney’s fees of up to $1,000.
The administrative law judge will issue a written decision, which may then be appealed to an administrative review board and ultimately to a federal court. The rules authorize settlements at any point during the investigation and review process.