The Sarbanes-Oxley Act provides legal protections to individuals who blow the whistle on certain unlawful behavior. In doing so, the statute prescribes six categories of U.S. laws encompassed by the whistleblower provision. Generally, SOX bars a publicly traded company from retaliating against an employee who reports what she believes to be mail fraud, wire fraud, bank fraud, securities fraud, a violation of SEC regulations or a violation of a federal law related to shareholder fraud. See 18 U.S.C. 1514A(a).
The Fifth Circuit last year clarified that to engage in protected activity under the Sarbanes-Oxley Act, the whistleblower had to report conduct she reasonably believes violates one of those six categories – not conduct she believes is otherwise unlawful. In the case before the Fifth Circuit, the employee attempting to invoke SOX protection alleged that he had been fired after reporting a tax scheme he believed violated Columbian tax law. The Court concluded that the employee’s conduct was not, under the terms of the statute, protected activity under SOX. He was not reporting violations of US laws, much less the specific ones enumerated in SOX.
Regardless of the alleged violation at issue, though, employers should respond carefully and sincerely to an employee’s whistleblowing.
Villanueva v. United States Dept. of Labor, 743 F.3d 103 (2014)