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The National Whistleblower Center, National Employment Lawyers Association, and The Employment Law Group® law firm filed an amicus brief in Villanueva v. Core Laboratories NV, a case before the Department of Labor Administrative Review Board (ARB). Our amicus brief argues that whistleblowers at overseas subsidiaries remain protected under the Sarbanes-Oxley Act (SOX) when the protected activity includes emails to the U.S., and the decision to fire the whistleblower is made in the U.S.
Whistleblower William Villanueva was CEO of Saybolt Columbia, a subsidiary of Core Laboratories NV – a publicly traded company based in Houston, Texas. In 2008, Villanueva warned executives in Houston that other executives were engaging in illegal tax schemes. After Villanueva refused to sign a false tax return, Core fired him. The Sarbanes-Oxley Act prohibits publicly traded companies and their subsidiaries from retaliating against an employee that reports wrongdoing related to:
- Mail, wire, bank, or securities fraud;
- Fraud against shareholders; or
- Violations of any Securities and Exchange Commission rule or regulation.
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Following the lead of the Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC) adopted finalized rules for its new Whistleblower Reward Program that heavily favor whistleblowers. Importantly, the rules do not require whistleblowers to first report wrongdoing to their employer; instead whistleblowers may report wrongdoing directly to the CFTC.
The CFTC is an independent agency that regulates commodity futures and option markets in the United States and protects market participants against fraud, manipulation, and abusive trading practices.
Congress and the President established the new SEC and CFTC Whistleblower Programs when they enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203) on July 21, 2010. Under the Dodd-Frank Act, the SEC and CFTC are both required to reward whistleblowers who provide original information to the government with between 10% and 30% of the amount recovered by the government. To learn more about the CFTC Whistleblower Reward Program, click here.
The Dodd-Frank Act also prohibits employers from retaliating against whistleblowers. Those whistleblowers who are retaliated against may sue their employer to:
- Be reinstated to their former position;
- Recover the wages in the form of back pay with interest;
- Recover compensatory damages; and
- Recover attorney fees and litigation costs.
The Boeing Company has agreed to pay $2 million to resolve claims that the company overbilled the government from 2002 to 2005 for work done at a San Antonio Plant. According to the suit, brought under the qui tam provisions of the False Claims Act, Boeing inflated its estimates for the number of hours required to do non-routine repairs and maintenance on the Air Force KC-135 tankers. The suit also alleged that the company manipulated its billing records to inflate the number of workers that maintained the Air Force tankers. The whistleblower who exposed the fraudulent billing practices is entitled to a share of 15 percent to 30 percent of the $2 million settlement. For information aboutThe Employment Law Group® law firm’s False Claims Act practice, clickhere.
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The SEC Whistleblower Reward Program signed into law last year under theDodd-Frank Wall Street Reform and Consumer Protection Act is effective as from today, August 12, 2011.
As the U.S. economy continues to struggle, compounded by a lowered Standard & Poor’s rating that sent the New York Stock Exchange and European markets spiraling, corporate whistleblower cases are likely to increase as corporations try to tighten budgets and cut costs.
The SEC will now begin rewarding those whistleblowers who come forward with information regarding securities laws violations at public companies.
Law360 quoted Nicholas Woodfield, a principal attorney at The Employment Law Group® law firm, regarding the U.S. Occupational Safety and Health Administration’s request for an additional $6.1 million to fund 45 more investigators for its whistleblower programs. Mr. Woodfield stated:
More efficient investigations are among OSHA’s goals, but unless the workload for investigators gets lighter, there are still going to be substantial delays.
You can have the greatest systems in place, but if the demand for them is so great that you have to stand in line for a couple of years, you’re effectively denying the benefits to the populace.
OSHA’s commitment to bolstering investigator training is a positive sign, however, and could translate to a more consistent application of the law to cases.
OSHA is responsible for administering 21 whistleblower laws that prohibit employers from retaliating against employees who report violations of workplace safety, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health care reform, nuclear, public transportation, railroad, and securities laws.