OSHA recently awarded a whistleblower $5.4 million in damages against his former employer, Wells Fargo. This award arises under the Sarbanes-Oxley Act (SOX), which contains a strong anti-retaliation provision. In this case, the whistleblower was a bank manager who was terminated after reporting separate incidents of bank, mail and wire fraud by his subordinate bankers. When the manager was unable to find another position in Wells Fargo, he was terminated in 2010. Since that time, he was unable to find replacement employment.
Pursuant to the procedural requirements for SOX retaliation claims, the manager submitted a complaint to OSHA to initiate the mandatory administrative process. Eventually, after several years of investigation, OSHA concluded that the former manager’s whistleblower activity (a) was protected under SOX and (b) was at least a contributing factor in his termination.
OSHA ordered that Wells Fargo reinstate the whistleblower, clear his personnel file, and fully compensate him for lost earnings during his time out of the banking industry. Back pay, compensatory damages, and attorneys’ fees were together calculated at about $5.4 million. Wells Fargo also must post a notice informing all employees of their whistleblower protections under SOX.
While Wells Fargo can appeal the order before the Office of Administrative Law Judges, such action does not stay the preliminary reinstatement order.
SOX is a powerful tool for whistleblowers who have been retaliated against for reporting or attempting to stop what they reasonably believe to be a current or likely future violation of Federal statutes regarding mail, wire, bank, or securities fraud, or any rule or regulation of the SEC, or any provision of Federal law relating to fraud against shareholders. In order make a claim for unlawful retaliation under SOX, wiythin 180 days of the retaliation at issue the whistleblower must first file a complaint with OSHA, which is responsible for investigating and making the preliminary determination of such claims. After such determination, the whistleblower or the respondent employer may seek review in the administrative courts. However, if the Secretary of the Department of Labor has not issued a final determination within 180 days, the whistleblower may take his or her claims directly to Federal court.