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Protections for whistleblowers

The goal of most corporations in California is to make money. Some will do whatever it takes even if involves scandals that end up hurting many people involved with the company and beyond. When major scandals do occur, generally there is backlash and laws are created in order to try and prevent the same activities from occurring in the future. One of the laws is the Sarbanes Oxley Act, which was enacted in the aftermath of the Enron and WorldCom scandals and requires more transparency, among other things, from publicly traded companies.

However, having a law is one thing, being able to effectively enforce the law is another. It is not always easy for the SEC or other enforcement agencies enforce all the laws against all corporations in the country. They sometimes need the help from people within the corporation to disclose violations. Therefore, there are protections built into the act againstwhistleblower retaliation for those who report a company's violations of the law.

It is illegal for any company to fire, suspend, demote, threaten or harass employees who either provide information or cooperate with an investigation regarding violations of the act. If it is found that the company did retaliate against an employee for participating in an investigation, the employee could be reinstated to the same seniority level they were at before the retaliation. The company would also have to pay the employee back pay with interest and may need to pay the employee's legal costs including attorneys' fees.

There are many companies in California who are regulated by the Sarbanes Oxley Act and must comply with the law. There are some who do not always follow the law though. There are employees within the companies who know this as well and are encouraged to disclose the information. If they do, the company cannot retaliate against the employee for doing so. If they do, there are consequences and experienced attorneys may be able to help ensure that the employee is protected.

Source: United States Department of Labor, "Sarbanes Oxley Act (SOX) 18 U.S.C. § 1514A" accessed on Dec. 28, 2017

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