Workforce Bulletin

By: Christina Fletcher

Confronting an issue of first impression, the U.S. Court of Appeals for the First Circuit recently held that the “whistleblower” protections of the Sarbanes-Oxley Act of 2002 (“SOX”) cover only employees of public companies, and do not extend to the employees of a public company’s contractors or subcontractors which are themselves private companies. Lawson v. Fidelity Management & Research LLC, et al., No. 10-2240 (1st Cir. Feb. 3, 2012) (pdf). This holding provides private-company employers with a potentially strong defense to claims of retaliation against employees. However, it should be anticipated that Congress may revisit the scope of the protections and ultimately expand them in response to Lawson.

Section 806 of SOX prohibits discrimination against employees who engage in protected whistleblowing activities and work for publicly traded companies subject to the requirements of the Securities Exchange Act of 1934. 18 U.S.C. § 1514A(a).  In Lawson, Fidelity Investments, a public company covered by Section 806 of SOX, contracted with a private investment advisory firm to provide investment advisory services. Plaintiff Zang alleged that he had been terminated in retaliation for raising concerns about inaccuracies in a draft revised registration statement for certain Fidelity funds. Plaintiff Lawson alleged retaliation for raising concerns relating to cost accounting methodologies. She resigned her employment in September 2007, claiming constructive discharge. Defendants’ motions to dismiss the complaints argued that the plaintiffs were not covered employees under Section 806 of SOX. The district court agreed with the plaintiffs, holding that subcontractors to a public company subject to SOX were protected by SOX’s whistleblower provision.

The First Circuit reversed, basing its decision on the language of SOX, principles of statutory interpretation, and SOX’s legislative history. The Court noted that plaintiffs’ suggested reading of the Act created anomalies and provided very broad coverage not intended by Congress. The Court explained that the clause “officer, employee, contractor, subcontractor, or agent of such company” in the whistleblower protection provision goes to who is prohibited from retaliating or discriminating, not to who is a covered employee. Thus, covered employees are limited to employees of public companies

by Jeffrey M. Landes, Susan Gross Sholinsky, Steven M. Swirsky, and Jennifer A. Goldman

On January 25, 2012, the Federal Trade Commission ("FTC") sent warning letters to three companies that market, in total, six mobile phone applications ("Apps") that provide users with background check reports. In the warning letters, the FTC states that the Apps may violate the Fair Credit Reporting Act ("FCRA"). According to a press release issued by the FTC on February 7, 2012, the FTC cautioned the Apps' marketers that, if they have reason to believe that the background reports provided will be ...

by Jeffrey M. Landes, Susan Gross Sholinsky, Steven M. Swirsky, and Jennifer A. Goldman

On January 25, 2012, the Federal Trade Commission ("FTC") sent warning letters to three companies that market, in total, six mobile phone applications ("Apps") that provide users with background check reports. In the warning letters, the FTC states that the Apps may violate the Fair Credit Reporting Act ("FCRA"). According to a press release issued by the FTC on February 7, 2012, the FTC cautioned the Apps' marketers that, if they have reason to believe that the background reports provided will be ...

By Michael Kun

As wage-and-hour litigation is more prevalent than ever, we believe that employers everywhere need easy access to federal and state wage-and-hour laws. With that in mind, we are pleased to announce that EBG’s free Wage-and-Hour app is now available in the Apple iTunes Store for downloading. The app puts federal wage-and-hour laws at your fingertips, along with those laws of many states. You can find the app by using the search term “Wage Hour” or by simply clicking here.    We hope you will enjoy it.

by David D. Green, Frank C. Morris, Jr., Allen B. Roberts

Two recent decisions on arbitration, one from the National Labor Relations Board ("NLRB" or "Board") and one from the Supreme Court of the United States, present an interesting question: Can employers limit employees from launching potentially costly class actions? Some employers have applicants or new employees sign a separate agreement, or include a clause in application forms or in the employee handbook (which employees acknowledge), requiring employees to bring future disputes to arbitration and to agree that the ...

We are pleased to announce that Epstein Becker Green’s first app - Wage & Hour Guide for Employers - is now available for download in the App Store on iTunes, for both iPhones and iPads.  You can find this complimentary app by searching for “Wage Hour” or accessing the following http://itunes.apple.com/us/app/wage-hour-guide/id500292238?mt=8&ls=1.

The Wage & Hour Guide app enables employers to access up-to-date federal wage and hour guidelines as well as various state guidelines, which can differ by jurisdiction. In addition, users can obtain insights and commentary ...

We are pleased to announce that Epstein Becker Green’s first app - Wage & Hour Guide for Employers - is now available for download in the App Store on iTunes, for both iPhones and iPads.  You can find this complimentary app by searching for “Wage Hour” or clicking here.

The Wage & Hour Guide app enables employers to access up-to-date federal wage and hour guidelines as well as various state guidelines, which can differ by jurisdiction. In addition, users can obtain insights and commentary about the latest wage and hour developments and issues by accessing this blog directly ...

By Michael Kun

Last week, the U.S. Department of Labor’s Wage and Hour Division and the California Secretary of Labor announced that they were teaming up to crack down on employers who classify workers as independent contractors. 

The announcement that the two groups would work together on such an initiative should not come as much of a surprise to employers.  Shortly after Hilda Solis took office as the U.S. Secretary of Labor, the Wage and Hour Division announced that it would be focusing on this issue.  And California has enacted a new statute that provides additional penalties in ...

by David D. Green, Frank C. Morris, Jr., Allen B. Roberts

Two recent decisions on arbitration, one from the National Labor Relations Board ("NLRB" or "Board") and one from the Supreme Court of the United States, present an interesting question: Can employers limit employees from launching potentially costly class actions? Some employers have applicants or new employees sign a separate agreement, or include a clause in application forms or in the employee handbook (which employees acknowledge), requiring employees to bring future disputes to arbitration and to agree that the ...

By:  Forrest G. Read, IV

Arbitration agreements can be an effective way for employers in the hospitality industry to streamline and isolate an employee’s potential claims on an individual basis and protect themselves from a proliferation of lawsuits with many plaintiffs or claimants. But the National Labor Relations Board’s (“Board”) January 6, 2012 decision in D.R. Horton, Inc. and Michael Cuda, notably finalized by two Board Members on departing Member Craig Becker’s final day, has caused significant confusion as to how employers can enforce such arbitration ...