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If They Whistle While They Work

If They Whistle While They Work. Jay Rutherford Jackson Walker L.L.P. (817) 334-7246 jrutherford@jw.com. The Fall of Enron. Effect of Sarbanes-Oxley on Employment law. Civil Whistleblower Protection Provision Criminal Provisions Sanctions for retaliation. Whistleblowing Provision.

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If They Whistle While They Work

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  1. If They Whistle While They Work Jay Rutherford Jackson Walker L.L.P. (817) 334-7246 jrutherford@jw.com

  2. The Fall of Enron

  3. Effect of Sarbanes-Oxley on Employment law • Civil Whistleblower Protection Provision • Criminal Provisions • Sanctions for retaliation

  4. Whistleblowing Provision • Section 806 - Fraud • Applies to: • Publicly traded companies • Any officer, employee, contractor, subcontractor or agent of a public company

  5. Who and What is Protected • Two Types of Activities • Provide Information regarding the violation of a federal criminal statute • Participation in a proceeding relating to a violation of a federal criminal statute • Prevents Retaliation

  6. Applicable Standards • Employee’s Prima Facie Case • Protected Activity • Knowledge • Unfavorable personnel action • Contributing factor

  7. How Whistleblower Complaints are Handled • Procedure (Adoption of the Aviation Investment and Reform Act for the 21st Century) • Employee files complaint • Opportunity for written response • Investigation • Issue findings and preliminary order that provides relief • Objections and hearing • Final order

  8. Judicial Review • Petition by one of the parties • Following final order • Violation of final order • De novo review

  9. Remedy • Compensatory damages including • Reinstatement • Back pay • Special damages

  10. Hey, but I’m not a Public Company

  11. Criminal Provisions of Sarbanes-Oxley • Section 1107 – Criminal penalties for retaliation

  12. Prohibited Conduct • Retaliation • Must be truthful • Extends beyond fraud

  13. Protected Activity • Disclosure to law enforcement officer

  14. Criminal Sanctions • Fine of up to $250,000 • Imprisonment of 10 years • Both

  15. Criminal Sanctions for Tampering with a Record or Otherwise Impeding an Official Proceeding • Section 1102

  16. Criminal Sanctions for Destruction, Alteration, or Falsification of Records in Federal Investigations and Bankruptcy Cases • Section 802

  17. Before Sarbanes-Oxley

  18. Protection for Private Employees • No explicit whistleblower protection • Sabine Pilot public policy exception

  19. Elements of Sabine Pilot • Discharge or other adverse affect • Sole reason • Refuse to perform illegal act

  20. Government Whistleblowers • Texas Government employees • Texas Whistleblower Act • Purpose • Good faith

  21. Elements of Whistleblower Action • Report Violation • Good Faith • Law enforcement authority • Adverse action

  22. Procedure for Bringing Government Action • Grievance procedure • Court

  23. Remedy Available to Government Employees • Injunctive relief • Actual damages • Court costs • Attorney’s fees • Reinstatement • Back pay • Benefits • Seniority • Loss of enjoyment of life

  24. Sarbanes-Oxley Act of 2002

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