Under the Sarbanes-Oxley Act of 2002, commonly known as SOX, employees who report alleged accounting irregularities internally and to OSHA are protected from retaliation if their employer punishes the activity.
Making simple statements that aren’t very specific can be enough to meet the employee’s reporting requirement under the law. It’s enough that the employee reasonably believes that he is reporting wrongdoing. He doesn’t have to know the details, just that it probably violates the law.
Recent case: Kevin was an executive who worked in pricing and commercial analysis for his employer, Tesoro Corp. He claimed to have discovered that Tesoro counted taxes as revenues on certain financial forms, including the company’s Forms 10-K and 10-Q filings, even though that money was collected just for transmittal to the Treasury.
He guessed that this meant the company would look more profitable than it actually was to potential investors who rely on those public reports.
He filled out Securities and Exchange Commission (SEC) forms as part of his job and checked yes to a question about whether the company had ever retaliated against anyone for reporting financial wrongdoing. He also reported his suspicions—without being very specific—to OSHA.
Kevin was fired shortly afterward. He then sued, alleging SOX violations and retaliation.
His former employer argued that his allegations to OSHA had been vague and nonspecific so that they didn’t constitute reporting financial wrongdoing.
The court disagreed. It said Kevin only had to show that he believed, in good faith, that the company was engaged in wrongdoing when he complained to OSHA and filled out the SEC forms. That was enough to bring the lawsuit. A jury will decide whether the company did retaliate for his reporting. (Wallace v. Tesoro, No. 13-51010, 5th Cir., 2015)