OSHA orders companies to rehire employees over whistleblower violations

Michael P. Tremoglie Sep. 20, 2011, 3:16pm


The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) has cited two companies for violating the whistleblower protection provisions of the Sarbanes-Oxley Act.

OSHA announced Sept. 14 that it found Charlotte, N.C. - based Bank of America Corp. broke the law and ordered it to reinstate the employee. It also ordered the company to pay the employee approximately $930,000, which includes back wages, interest, compensatory damages and attorney fees.

"It's clear from our investigation that Bank of America used illegal retaliatory tactics against this employee," said OSHA Assistant Secretary Dr. David Michaels. "This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same."

The employee was a carryover from Countrywide Financial Corp. Bank of America merged with Countrywide in July 2008.

The worker led internal investigations that revealed widespread and pervasive wire, mail and bank fraud involving Countrywide employees. This person then alleged that those who attempted to report fraud to Countrywide's Employee Relations Department suffered persistent retaliation. The employee was fired shortly after the merger.

Both the complainant and Bank of America can appeal the monetary damages to the Labor Department's Office of Administrative Law Judges within 30 days of receiving the findings.

On Sept. 15, OSHA announced that Bond Laboratories Inc. and former CEO Scott Landow were found negligent of the same violations as Bank of America.

It ordered the company to re-hire an employee and pay approximately $500,000 in back wages, interest and compensatory damages.

According to the complaint, Landow and Bond Laboratories, formerly based in Solana Beach, Calif., allegedly terminated the complainant, an officer, for objecting to the manipulation of sales figures. These figures misrepresented the company's value to potential investors. OSHA determined that the complainant repeatedly objected to this practice between March and October 2008, and that the objections contributed to the decision to terminate the complainant.

The parties also have 30 days to appeal. Bond Laboratories, now based in Omaha, Neb., manufactures nutritional supplement beverages and related products for public consumption.

OSHA enforces the whistleblower provisions of the Sarbanes-Oxley Act. The two actions announced last week are covered under Section 806 of the Sarbanes-Oxley Act's Title VIII, known as the Corporate and Criminal Fraud Accountability Act of 2002.

It also enforces 20 other statutes protecting employees who report violations of various airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health care reform, nuclear, pipeline, public transportation agency, railroad and maritime laws.

Under the laws enacted by Congress, employers are prohibited from retaliating against employees who raise various protected concerns or provide protected information to the employer or to the government.

According to Lindsey Williams, the Director of Advocacy for the National Whistleblower Center, Sarbanes-Oxley is only one of numerous whistleblower protection laws in the United States. There is a patchwork of state and federal laws providing this function.

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