In a key Sarbanes-Oxley (SOX) ruling, a federal court has ordered two whistleblowers reinstated to their jobs. Clients who are subject to SOX need to be aware of this ruling. Such administrative complaints are investigated by OSHA and adjudicated by the Labor Department. Arent Fox’s OSHA and Workplace Regulation Groups are equipped to handle these claims. Here are the details of the case:

In the first federal court decision enforcing a preliminary reinstatement order under the Sarbanes-Oxley Act of 2002, the U.S. District Court for Connecticut has ordered Competitive Technologies Inc. (CTI) of Fairfield, Conn., to reinstate, pending the outcome of litigation, two men who claimed they were fired for whistleblower activities protected by the Act.

In September 2003, Scott Bechtel and Wil Jacques complained to OSHA that CTI fired them in June 2003 because they raised concerns about financial disclosures in the preceding six months. OSHA investigated the complaints and issued its findings on Feb. 2, 2005. The agency ordered CTI to reinstate the men to their jobs and pay them back wages and benefits. CTI filed an objection that was denied, as was a subsequent CTI request for reconsideration.

On April 18, the Labor Department, along with Bechtel and Jacques, petitioned the U.S. District Court in New Haven, Conn., asking the court to enforce the reinstatement order. On May 13, Judge Alfred V. Covello ordered CTI to temporarily reinstate Bechtel and Jacques retroactive to Feb. 2, 2005, and to compensate them for lost income and benefits from that date forward. The litigation about the underlying case is pending before a Labor Department administrative law judge.

Sarbanes-Oxley, the Corporate and Criminal Fraud Accountability Act, provides employees the opportunity to file a complaint with OSHA if their employer has retaliated them against for reporting suspected corporate fraud or other activities related to fraud against shareholders. If OSHA determines after an investigation that an employee's complaint has merit, it can order remedies such as reinstatement and back pay. Either party has 30 days to file objections or request a hearing on the matter with the Labor Department's Office of Administrative Law Judges.

Companies are covered under Sarbanes-Oxley if they have a class of securities registered under section 12 of the Securities Exchange Act of 1934 or if they are required to file reports under section 15(d) of the Securities Exchange Act.