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Whistleblower Protection Changes

June 10th, 2007 Posted by Mark

Normally under the new laws surrounding Sarbanes Oxley and the laws that make it so that companies must be as upfront and open with regulators and the SEC as possible, employees who blow the whistle, so to speak, on illegal behavior, get protected from their employers later.

However, under the decision by a Michigan court, it seems those Sarbanes Oxley whistle blower protections only extend to employees of a publicly traded company, or one whose has stock and has their stock on the Nasdaq, the New York stock exchange, or some other stock market. The instance of the Michigan trial is even more interesting because the company where the whistle blower acted was actually the private subsidiary of a publicly traded company.

The employee had been a supervisor in the subsidiary’s engineering departments, but in 2004, he claimed that he was discriminated against because of his national origin. After that, he then claimed that his employer had retaliated against him because of the fact that he made the discrimination claim. He said that his employer did not promote him as they normally would have had he not claimed discrimination, and he said they actually demoted him because of it.

The Michigan court, however, clearly came down on the side of the employer, saying that the federal law as it stands now does not keep employees of private companies in its view. Does that mean that employers should throw all their Equal Employment Opportunity Commission posters, or EEOC posters, in the trash, and begin discriminating against employees of national origins, races, genders, hair colors, and skin complexions that they don’t like? No, of course not.

And the case is only in Michigan. So employers outside of this state have yet to hear what their state courts have to say about the issue. The basic rule then should be for all employers, private and public, not to discriminate nor retaliate against your employees.