Magazine article HRMagazine

Whistle-Blower Protections Extend to Some Private Companies

Magazine article HRMagazine

Whistle-Blower Protections Extend to Some Private Companies

Article excerpt

In March, the U.S. Supreme Court said the whistle-blower pro- tections in the Sarbanes-Oxley Act (SOX) apply to employees of contractors and subcontractors of publicly traded compa- nies as well as to employees of the public firm itself.

"With this decision, the Supreme Court has expanded the universe of companies regulated by the SOX whistle-blower provision from roughly 5,000 public companies to potentially 6 million private ones, including even the smallest mom and pop businesses," according to Lloyd Chinn, Proskauer's whis- tle-blowing and retaliation group co-head.

According to Edward Ellis, co-chair of Littler Mendel- son's whistle-blowing and retaliation practice, companies can expect to see more claims and pressure on nonpublic companies to set up compliance systems and train their HR people on dealing with fraud claims.

He recommended that pri- vate employers consider establishing systems that mirror those of pub- licly traded companies. "This will fall on the HR community," he said. …

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