Chapter 29
SARBANES-OXLEY ACT OF 2002
Ogletree, Deakins, Nash, Smoak & Stewart, P.C..
Summary
The newest employment law is part of a much larger legislative package designed to restore public confidence in publicly-traded companies. Following a torrent of news of wrongdoing by large, publicly-traded companies, Congress passed and President Bush signed the Sarbanes-Oxley Act of 2002. SOX, as it has become known, focused primarily on issues of corporate governance and financial reporting, but included among its provisions were significant employment-related provisions. It:
- Creates a new cause of action protecting whistleblowers at publicly-traded companies who make reports of violations of federal securities laws, the rules and regulations of the Securities and Exchange Commission, or other federal laws concerning fraud against shareholders.
- Requires publicly-traded companies to establish a mechanism so that reports of corporate financial misconduct can be made anonymously.
- Requires employers whose employees have individual account plans over which they have investment control to provide notice in advance of any period of time that they will be denied access to the accounts for more than three consecutive business days.
- Requires employers whose employees have individual account plans to provide a separate notice to officers and directors in those situations advising them of restrictions on buying and selling certain company stock during blackout periods.
- Makes it criminal to retaliate against an individual for truthfully reporting to a law enforcement authority any violation or potential violation of any Federal offense. Interfering with a person's employment opportunities is specifically included as prohibited conduct. Punishment for violation of this provision is by imprisonment and/or fine.