Wednesday, February 23, 2005

Whistleblower's Speech Protected: Worker Gets Job Back, Plus Lost Wages and Attorney Fees

While workers may not be free to blog to their hearts’ content (as discussed in our earlier blogs), they do have rights to question their employers’ accounting practices without losing their jobs.
Last week a judge for the Department of Labor ordered a Virginia bank to reinstate an employee who was fired for questioning its accounting practices. The judge also awarded the worker nearly $65,000 for lost wages and other damages, recognizing that he was a whistleblower under a fairly new federal law, the 2002 Sarbanes-Oxley Act. The worker was the first person to win whistleblower protection under this law last year, when the judge found that the company had wrongfully fired him.
To Be or Not to Be - Reinstated? The company argued that since there was "emnity and distrust" between the worker and the company, the judge should not give him his job back. The court said that distrust often arises as a result of litigation, and in the absence of special circumstances, the worker was entitled to have his job back, so he could be placed in the position he would have been in had the company not retaliated against him.
New Employee Displaced. Interestingly, the judge ordered his reinstatement even though it would displace a new employee who had filled his position. The court found that the new employee was not an innocent incumbent, since there had been nationwide attention given to this dispute.
Delay in Remedy. Due to legal maneuvering on the part of the company, it took more than a year for the worker to obtain this ruling reinstating him and for his lost wages. In addition to the lost wages and special damages awarded to the worker, the judge awarded nearly $110,000 in his attorneys fees, finding the amount of time the attorney spent was reasonable, particularly given the novel issues presented by the case. Welch v. Cardinal Bankshares, Inc., decided 2/15/05. You can read the decision at
Workers: if you are fired for blowing the whistle on accounting practices, find a good lawyer.
Employers: if your workers complain to you about accounting practices, you have a duty under this law to investigate and not to retaliate against the worker. If you do not already have policies in place with a clear reporting/complaint mechanism for your workers, along with an anti-retaliation provision, it’s time to have your policies and/or employee handbook updated to comply with the law.