“Does the Sarbanes-Oxley Act, or other laws, protect lower-level employees of not-for-profits?”

Question: I have a question: Does the Sarbanes-Oxley Act in reality protect little people, meaning low-rung employees? Or are we out of luck?

In my case, this means a bedside nurse at a large private not-for-profit hospital. I am wondering about cases such as mine that do not represent much money, but a real injustice exists, nonetheless.

I blew the whistle (at the Department of Health) on my employer’s intention to put patients willfully at risk through a very unusual plan in order to save money. The plan was scuttled. I now have the worst Performance Improvement Plan of my nursing career – in fact, the only negative performance review in my 35 years.

To whom could I turn for help? It appears no attorney wants to take my case, or even be paid to assist me to know what my next steps ought to be.

J.G., R.N.
(City Not Specified)

Answer: Dear J.G.: Let me offer you a little background on the federal Sarbanes Oxley law, and then I can answer your questions about (a) whistleblowing, (b) retaliation and (c) fraudulent Performance Improvement Plans.

1. The federal Sarbanes-Oxley Act is a sweeping law enacted in 2002 that targeted primarily publicly-owned, for-profit companies. Sarbanes-Oxley was passed in response to the public uproar over the great corporate scandals based in fraudulent accounting at several large public companies including WorldCom, Tyco and Enron. The law mandated several new reforms intended to prevent any more large corporate collapses due to malfeasance. The reforms focused primarily on oversight of financial transactions, record-keeping, and auditing procedures, and made senior-most executives liable for failures to do so.  

Every level of employee – from the highest-paid executives to clerical workers paid minimum wage – is protected by Sarbanes-Oxley.

2. However, two provisions of the Sarbanes-Oxley Act do apply to not-for-profit companies: (a) anti-shredding, and (b) anti-retaliation. (a) Section 802 of the law prohibits knowingly altering, mutilating or destroying accounting records which are under review by the U.S. Government. (b) Section 1107 prohibits retaliating against a whistleblower, and provides for criminal penalties for anyone who engages in such retaliatory conduct.

From your brief note, I cannot tell if the activity you blew the whistle about is covered by the Sarbanes-Oxley Act; from your description of the activity your reported, it does not sound like false accounting or illegal shredding.

3. Depending on your state, other state laws may apply to (a) both protection of “whistle-blowers,” especially when it involves public health or safety, and (b) what seems to be outright retaliation in the workplace.  Even though Sarbanes-Oxley may not apply to your whistleblowing activity regarding your employer’s improper activity, the state in which you work may well have other “whistleblower” laws to protect those who report wrongdoing from retaliation.

Additionally, in more and more states, if it is the case that your employer has an anti-retaliation policy that forbids retaliation against those who in good faith report apparent wrongdoing, Courts are holding employers accountable on “breach of contract” theories. 

You did not indicate in your note in what state you work. You might try to contact the Labor Department of your state to make inquiry if any such law, or court precedents, exist under the laws of your home state.

If you believe you’ve been retaliated against, you might use our “Model Memo Objecting to Retaliation on the Job” to stop it and have it reversed. “What to Say, and How to Say It,™ just [ click here. ] Delivered by Email – Instantly!

4. Your difficulty in obtaining legal advice and representation is probably due to the legal community’s relative ignorance about Performance Improvement Plans. In my opinion, 99% of lawyers mistakenly view Performance Improvement Plans (“PIP”), as “not anything legal.”  It’s quite often the case that employers retaliate against employees by using fraudulent Performance Improvement Plans to rid themselves of employees who, for whatever reason, they want to fire. Sadly, almost all lawyers think PIP’s are “not a legal thing,” that is, “nothing they taught us about in law school,” and so turn away people facing the problem you are facing. 

5. It is for this reason that our blogsite offers videos, articles and model letters to help you help yourself in this dilemma.  We believe that people should try to help themselves, to the extent they can, whenever facing problems at work.

First, if you would like to review the many articles I’ve written on Performance Improvement Plans (“PIP’s”), just [click here].  

Second, if you’d like to view our video entitled “Performance Improvement Plans – How to Respond,” simply [click here].

Third, we offer a Model Letter for Pushing Back at a False Performance Improvement Plan. If you would like to obtain a copy, you may do so if you [click here].

6. Lastly, we offer consultations that offer advice and counsel on how to “navigate and negotiate” (a) whistleblowing at work, (b) retaliation for whistleblowing, and  (c) fraudulent Performance Improvement Plans. If you are interested in obtaining help in identifying what path to follow, and what steps to take, just [click here].

J.G., what you did was courageous, and is to be commended. In turn, what your employer has apparently done is disgusting, and should be condemned.  I hope you will not permit yourself to be a victim, and will stand up for yourself the same way you have stood up for others.                                                       

Al Sklover

 © 2011 Alan L. Sklover, All Rights Reserved.