The Sarbanes-Oxley Act of 2002: Whistleblower protection under OSHA
Issue: You have a meeting this afternoon with one of the managers in your organization. You know she wants to talk about terminating an employee of hers and you've read enough of the employee's file to know the issue involved may fall within the category of protected whistleblower activities. Recently you read an article about whistleblowers being protected under OSHA and you would like to know more about that connection before the meeting.
Answer:     The Occupational Safety and Health Act was enacted to achieve safer and more healthful workplaces throughout the nation. The Act provides for a wide range of substantive and procedural rights for employees and representatives of employees. To help ensure that employees are, in fact, free to participation in safety and health activities, §11(c) of the Act prohibits any person from discharging or in any manner discriminating against any employee because the employee has exercised rights under the Act—whistleblower protections. These rights include complaining to OSHA and seeking an OSHA inspection, participating in an OSHA inspection, and participating or testifying in any proceeding related to an OSHA inspection.

OSHA also administers the whistleblowing provisions of 13 other statutes, protecting employees who report violations of various trucking, airline, nuclear power, pipeline, environmental and securities laws.

Laws with whistleblower protections administered by OSHA:
  1. The Occupational Safety & Health Act of 1970
  2. The Surface Transportation Assistance Act
  3. The Asbestos Hazard Emergency Response Act
  4. The International Safety Container Act
  5. The Energy Reorganization Act
  6. The Clean Air Act
  7. The Safe Drinking Water Act
  8. The Federal Water Pollution Control Act
  9. The Toxic Substances Control Act
  10. The Solid Waste Disposal Act
  11. The Comprehensive Environmental Response, Compensation and Liability Act
  12. The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
  13. The Corporate and Criminal Fraud Accountability Act of 2002—Sarbanes-Oxley
  14. The Pipeline Safety Improvement Act of 2002
Whistleblower provisions under Sarbanes-Oxley. OSHA published a final rule establishing procedures for the handling of whistleblower complaints under the Corporate and Criminal Fraud Accountability Act of 2002—the Sarbanes-Oxley Act—one of 14 laws with whistleblower protections administered by OSHA (listed above).

Under Sarbanes-Oxley, an employee may file a complaint with OSHA if the employee was retaliated against by his or her employer 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.

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.

Sarbanes-Oxley in action. In late 2004, OSHA ordered the American Standard Companies and Trane Corporation, an American Standard subsidiary based in Piscataway, N.J., to pay more than $105,000 in back wages and reinstate a former controller who was fired for protected "whistleblowing" under the Sarbanes-Oxley Act of 2002.

David Windhauser, a controller for Trane Corporation, complained to OSHA's New York regional office that he was terminated after he raised questions about company accounting practices to his supervisors. According to Patricia K. Clark, OSHA's regional administrator in New York, an investigation by her office determined that Windhauser had been discharged in violation of Sarbanes-Oxley.

"This is precisely the type of whistleblowing activity that is protected under the law," said Clark. "We are determined to enforce the law so that employees who expose corporate wrongdoing know they will be protected."

Clark transmitted to American Standard a notice of "Secretary's Findings and Preliminary Order" ordering the company to:
  • Remove any disciplinary letters from Windhauser's personnel file;
  • Reinstate Windhauser to his former position as controller for Trane Corporation in good standing; and
  • Reimburse Windhauser back pay and compensatory remedies in the amount of $105,489.55.
[Both the company and Windhauser then had 30 days to file objections and request a hearing on the matter with the Labor Department's Office of Administrative Law Judges.]
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