Milwaukee Employment Law Attorneys Blog | Wisconsin Employee Rights Lawyer | Waukesha Family Medical Leave Act Law Firm

The long-term effects of a stroke aren't just physical

2012-05-18T21:47:42Z

Stroke is not just a geriatric issue. According to the Wisconsin Department of Health Services, about 28 percent of the people in this state who have a stroke are under 65. While strokes are often fatal, a good number of people survive a stroke -- a good number of working people, in fact, because stroke is one of the most common causes of long-term disability.

If you know anyone who has sprained an ankle, you have probably seen how dramatically this relatively temporary disability can affect the person's life. A sprained ankle limits a person's mobility, and for many that can be enormously frustrating -- especially if the sprain was the result of a dumb accident. The point is, though, that this person's caregiver has to deal with the physical and the emotional effects that come with the injury.

]]> A stroke patient likely faces physical limitations, cognitive challenges and about every emotion possible. This person has a brain injury, and brain injuries are unpredictable and notoriously slow to heal.

A little background

There are three different categories of stroke: ischemic, hemorrhagic and transient ischemic attack. In all cases, the stroke interrupts or cuts off the flow of blood and oxygen to the brain. Affected cells die, and the part of the body or mind controlled by that part of the brain suffers.

A hemorrhagic stroke is a "brain bleed" caused by a blood vessel rupturing. This is what happens, for example, when an aneurysm weakens an already vulnerable part of the blood vessel.

The ischemic stroke is the most common, accounting for 87 percent of all strokes, and it is the type of stroke most people are familiar with. Here, a blood clot blocks the flow of blood to the brain.

Transient ischemic attacks are essentially mini-strokes. Like ischemic strokes, they are caused by blood clots; these blood clots, however, are temporary. That isn't to say that the TIAs aren't serious -- TIAs may cause little damage alone, but combine them and the damage can be serious.

In our next post, we'll talk about the effects of the stroke.

Source: American Heart Association, About Stroke, accessed May 18, 2012

Wisconsin county pays hefty settlement in discrimination suit

2012-05-12T18:01:40Z

On the eve of Mother's Day, we thought we would discuss a settlement reached at the end of April between Waupaca County and a sheriff's deputy who just happens to be a woman. While the county maintains there was no violation of the deputy's civil rights, the settlement awards the deputy back pay with interest, attorney's fees and damages -- about $142,000 all told.

Another part of the agreement goes directly to the deputy's complaint: The sheriff's office must promote the deputy to detective sergeant by 2015. It was the county's repeated denial of promotion applications that the deputy claims violated the Civil Rights Act.

]]> According to court documents, the deputy has been with the sheriff's office for 17 years. For nine years, she applied for promotions and was rejected every time. By the time she filed the complaint, she was one of just two female employees -- her supervisor at one point referred to her as "a token." Apparently, male co-workers expressed their misgivings about reporting to "a skirt."

In 2006, she applied for detective sergeant and was passed over for a man. She met or exceeded all of the qualifications, but the county said that hiring her would have violated department policy. The county explained that deputies cannot supervise family members, and as a deputy she would have to supervise her patrol officer husband. The following year, the county invoked the policy again and directed her not to apply for promotions anymore.

The problem, of course, is that deputies do not supervise patrol officers. On top of that, the sheriff's office boasted eight employees that supervised family members -- eight male employees that supervised family members.

By settling the case, the parties will avoid the time and expense of a trial. The county also avoids a judge or jury's guilty verdict. While the verdict would not be a sure thing, the county's reputation could suffer.

Source: Green Bay Press Gazette, "Waupaca County to pay $142,000 in discrimination suit," Todd Richmond, April 27, 2012

Medical Examinations of Job Applicants

2012-05-09T18:53:54Z

A motor carrier company in Indiana, Celadon Trucking Services, Inc., was sued by the EEOC for allegedly requiring applicants to submit to physical examinations, in violation of the Americans With Disabilities Act ("ADA"). See EEOC v. Celadon Trucking Services, Inc., Cause No. 1:12-cv-0275-SEB-TAB. The problem, according to the EEOC, is not that Celadon required applicants to undergo a pre-employment physical examination, but that it did so before giving the applicants a conditional offer of employment.

Under the ADA, employers are allowed to conduct pre-employment medical examinations of job applicants. However, the medical examination may only be required after an offer of employment has been made and prior to the commencement of the employment duties. Further, under the ADA, an employer is allowed to condition an offer of employment on the results of the physical examination only if the following conditions are satisfied:

• All entering employees are subjected to such an examination regardless of disability;

• Information obtained regarding the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated as a confidential medical record, subject to limited exceptions; and

• The results of such examination are used only in accordance the ADA.

Attorney Elizabeth A. Schmidt is an associate attorney with Alan C. Olson & Associates, S.C. If you have any questions about disability discrimination, please contact her at LSchmidt@Employee-Advocates.com.

Wal-Mart, DOL resolve overtime pay complaint for $4.8M

2012-05-08T19:19:27Z

Wal-Mart Stores, Inc. is having a tough time right now. Exxon-Mobile just bumped the mega-retailer from first place on the Fortune 500 list of revenue-generating U.S. companies. The company is facing allegations of bribing foreign government officials and may soon be hit with a related shareholder suit. With all of this, corporate leaders must have been relieved last week to settle a wage and hour claim brought by the U.S. Department of Labor.

Not as relieved, perhaps, as the 4,500 or so employees that will benefit from the $4.8 million settlement. The award includes back wages and estimated damages. Wal-Mart also agreed to pay $463,815 in civil penalties.

]]> The employees were security guards or vision department managers in either Walmart or Sam's Club stores. From 2004 to 2007, the employees were misclassified as exempt (salaried, not hourly) under the Fair Labor Standards Act, and as a result they were not paid time-and-a-half for the overtime hours they worked.

Wal-Mart and the Department of Labor say that the overtime error was corrected in 2007. The last five years have been spent negotiating the settlement.

The government believes the damages and penalties paid by Wal-Mart will serve as a deterrent to other companies, especially retailers. Investigators are paying close attention, especially to employee classification, and companies cannot escape their obligations to the workers or the government.

As for this settlement, the parties agreed that an independent administrator would determine and distribute the payments to the employees. Initial estimates indicate that workers will receive payments from $30 at the low end to $10,800 at the high end.

Source: Wall Street Journal, "Wal-Mart to Pay $4.8 Million in Back Wages, Damages," Shelly Banjo, May 1, 2012

Postal worker shot down in discrimination case

2012-05-05T13:04:25Z

A postal worker was fired from his job for his prolonged period of absence. However, the former employee claims that it was a case of discrimination. The case addresses the definition of disability and return to work agreements.

The man was employed as a mail handler for the United States Postal Service in Milwaukee, where he suffered two injuries on the job. The first injury came in 1998 and took him away from work for two weeks. He hurt himself once again in May 2003 and only worked one week before he was finally let go in January 2006.

]]> During the three-year period that the man was out of work, the USPS claimed that they tried to contact his union about the matter but never received a response. The post office eventually informed the man that they were preparing to fire him for not maintaining a regular schedule. The union finally came to his aid and filed a grievance. He agreed to return to work if he was cleared by doctors for full duty.

Two doctors did clear the man to work, but with restrictions. His physical ailments did not allow him to transport heavy items on a regular basis or to stand for long periods of time. Since he was not able to tend to the job's full duties, as the USPS required, the post office decided not to have him back, instructing him instead to apply for disability retirement. He did not.

The ousted worker viewed this as disability discrimination and filed a grievance in arbitration, which was dismissed. The Equal Employment Opportunity Commission also launched an investigation, but it did not find evidence of discrimination. Furthermore a federal court also ruled in favor of the USPS, and that decision was reinforced by an appellate court.

The USPS stressed that they fired him for his poor attendance, not the fact he might have been disabled.

Source: Human Resources Journal, "USPS Mail Handler Claims That He Was Fired for His Disability," April 13, 2012

Women in the workplace: Rosie the Riveter is spinning in her grave p2

2012-05-03T15:05:13Z

Last month, Wisconsin Gov. Scott Walker signed a bill that repealed the 2009 Equal Pay Enforcement Act. The law had allowed employees that have experienced compensation discrimination based on their protected status to pursue damage claims in state courts. Women especially were dismayed; the wage gap between men and women is very real.

The governor and proponents of the repeal said the law had no effect beyond "lining the pockets of trial lawyers." Wage gap data tells a different story: In 2009, Wisconsin ranked 36th in terms of gender parity in the workplace. New data shows a marked improvement: The state ranked 25th.

]]> Our border states are within one or two points -- both higher and lower. It's hard to know if it's a Midwestern thing or a "rust belt" thing. Heavy industry like steelmaking and hard labor like mining tend to foster high-paying jobs, but most of those jobs are for men.

While this gender gap in earnings initially started to narrow after 1970, in recent years little or no progress has been made. The gap is even heightened in particular industries or working environments, such as the "boy's club" on Wall Street, where women only manage to extract between 55 to 62 cents for every dollar their male co-workers are earning.

The depth of the problem is underlined by the fact that even after researchers took into account such factors as age, race and ethnic origin, religion, marital status, work experience, education, occupation, and industry, amongst other factors, and there was still a big gap. One year after college graduation, men earned 5 percent more than women. Over time, the gap widens, until their earnings are 12 percent higher than their female coworkers 10 years after their college graduation, with no evident explanation except unlawful gender discrimination.

Even without the enforcement act, gender discrimination is still illegal in Wisconsin. The repeal of the act means that the employee that is discriminated against has a steeper uphill battle ahead when seeking redress.

Sources:

The Huffington Post, "Equal Pay Day: AAUW Releases State By State Gender Wage Gap Rankings," Emma Gray, April 17, 2012

The Daily Beast, "Wisconsin's repeal of equal pay rights adds to battles for women," Michelle Goldberg, April 7, 2012

Women in the workplace: Rosie the Riveter is spinning in her grave

2012-05-02T13:22:45Z

During World War II, Rosie the Riveter became the symbol of women at work, women doing men's work for the good of society. Things changed after the war, and women have been playing catch-up ever since -- especially when it comes to wages.

Under both federal and Wisconsin state law, men and women must be given equal pay for equal work. However, the daily reality for millions of working women is unfortunately a far cry from this ideal aspiration. Statistics verify that women in the U.S. continue to earn significantly less than their male co-workers, even when they are performing the same work side by side.

]]> A recently research study conducted by the American Association of University Women reveals that the scope of the income disparity between male and female coworkers varies greatly by location. A comparison of various U.S. jurisdictions indicated that in the best instances, female workers were earning a still unacceptable 91 percent of men's average wages ($56,127 for women versus $61,381 for men). Wisconsin was not among the best.

Neither, however, were we among the worst. In the worst case, women earned an incredibly low 64 percent of the average earnings of their male counterparts, having to survive and in many instances attempt to raise a family on a mere $32,426, a fraction of male worker's average $50,854 paycheck in that state.

No, we were right in the middle, ranked 25th, with women earning about 78 percent of what men earn. There are a number of possible explanations. We'll continue this in our next post.

Source: The Huffington Post, "Equal Pay Day: AAUW Releases State By State Gender Wage Gap Rankings," Emma Gray, April 17, 2012

Long-term disability application leads to privacy case, concl.

2012-04-30T18:53:08Z

We are still discussing a recent U.S. Supreme Court decision about the Privacy Act and its waiver of sovereign immunity. The plaintiff sued a handful of federal agencies when his HIV status was made public; the agencies had shared information about him, including his application for Social Security disability benefits. In the majority opinion, the court focused on the act allowing individuals to file civil actions if they suffered "actual damages" because of an agency's violation.

Sovereign immunity generally bars lawsuits against the government. Lawsuits are allowed when the government does something that a government shouldn't do -- a wrongful conviction, for example -- and when the statute or the federal code like the Privacy Act says that a government's violation of the law opens it up to private actions. Sovereign immunity acts a little like Star Trek's shields. The government lowers them in some cases and keeps them up in others.

]]> Again, the Privacy Act states that the shields must be lowered if a claimant suffers actual damages. The 9th U.S. Circuit Court of Appeals decided that actual damages include both monetary and non-monetary losses. The plaintiff had sued for emotional distress, not economic loss; the 9th Circuit held that he was eligible for a damage award.

The Supreme Court opinion went the other way. The majority wrote that the term is not ambiguous at all. Rather, it is a legal term of art and, in that context, refers only to economic damages. Because the plaintiff was only asking for noneconomic damages, his claim failed. The Privacy Act does not waive the government's sovereign immunity if a claimant only suffers emotional distress.

So when individuals say the government has violated the Privacy Act, the government lowers its shields for economic -- monetary -- loss. Shields are up if the claimant has only suffered emotional distress or mental anguish.

Unless, of course, Congress changes the law.

Sources:

Local10.com, "Supreme Court rejects damage claim in HIV privacy case," Bill Mears, CNN, March 28, 2012

F.A.A. v. Cooper, 132 S.Ct. 1441 (U.S., 2012), via Westlaw (subscription)

Long-term disability application leads to privacy case, p. 3

2012-04-28T18:23:36Z

The decision of the U.S. Supreme Court in a Privacy Act case has caused a stir among consumer advocates and in legal circles. The plaintiff accused the Federal Aviation Administration, the Social Security Administration and the United States Department of Transportation of violating the Privacy Act when the agencies shared information about his Social Security long-term disability benefits. As we said in our last post, the majority decision turned on the Privacy Act's use of the term "actual damages."

The Privacy Act addresses how the government deals with the massive amount of personal data different agencies hold about all of us. Think about Al Capone -- the FBI could not make criminal charges stick, until someone looked at Capone's tax records. He was eventually convicted of tax evasion. Granted, that was a criminal matter, but in those days, the government considered any information shared with one agency to be open to all agencies.

]]> That changed with the Privacy Act of 1974. Agencies must follow strict guidelines when dealing with or sharing personal data. If an agency violates the act, the law allows individuals to sue. The doctrine of sovereign immunity prohibits individuals from suing the government in most cases; that's why the act specifically allowed individuals to file civil actions.

Usually, when a court interprets a statute or code, it looks at the "plain meaning" of undefined terms. Suppose a law prohibited loud noises "in the morning hours." The court would have to figure out the plain meaning of "morning hours" -- after sunrise? Between midnight and 10:00? When a term is ambiguous, a court will look at what the legislature or Congress intended. It's not always an easy process.

And courts don't always agree.

Continued in our next post.

Sources:

Local10.com, "Supreme Court rejects damage claim in HIV privacy case," Bill Mears, CNN, March 28, 2012

F.A.A. v. Cooper, 132 S.Ct. 1441 (U.S., 2012), via Westlaw (subscription)

Social Security to stop issuing paper checks

2012-04-27T17:29:38Z

By March 2013, Social Security will cease issuing paper checks to recipients. Individuals who receive Social Security, veterans' benefits, railroad pensions and disability payments will be required to receive their monthly benefits either by direct deposit or on a debit card.

For most individuals, this change will go unnoticed since the majority of individuals already receive their benefits by direct deposit. Currently, all new beneficiaries are required to receive their funds electronically or by debit card. The people most likely to be affected by this change are the elderly, older retirees, and individuals who are unfamiliar with electronic payments.

One of the motivating reasons for this transition is to combat fraud. Over 500,000 paper checks were lost or stolen in 2010; an expensive penalty for mailing benefit checks. Now, the government claims it will save over $1 billion over the next decade with this change.

The concern by senior advocates is that individuals who are used to receiving paper checks will not understand that the card they receive in the mail is their benefit amount or that their funds appear automatically in their bank account. There are very limited exceptions to this rule change: (1) person 90 years and older will not be required to make the switch, and (2) if an individual can show that a debit card would impose a hardship, which the government claims would be an extreme circumstance.

This transition does not come without some strings attached, however. The debit cards are issued by Comerica Bank, the Treasury Department's financial agent and individuals may make purchases anywhere MasterCard debit cards are accepted. Debit card holders may also make one ATM withdrawal each time a payment is made to the card. Any additional withdrawals will cost $0.90. All withdrawals may be subject to fees charged by the owner of the ATM. For individuals not used to using ATMs or debit cards, these fees may be a surprise. In the case of a lost or stolen card, if the beneficiary reports the card missing promptly, they will be protected from any unauthorized purchases.

In order to help educate the public regarding this change, visit www.GoDirect.org or call toll-free, 1-800-333-1795.

Attorney Jennifer J. Allen is an associate attorney with Alan C. Olson & Associates, S.C. If you have any questions about Social Security Disability, please contact her at JAllen@Employee-Advocates.com.

Long-term disability application leads to privacy case, cont.

2012-04-24T22:13:41Z

We are picking up our discussion from earlier this month of a U.S. Supreme Court case that provoked some strong feelings for commentators. As we explained in our April 5 post, the case was brought by a man whose HIV status became public knowledge at the hands of the federal government.

He had applied for Social Security long-term disability benefits when he was ill. Fortunately, treatment options became available, and his health improved. Fast forward six years, when federal and local investigators launched Operation Safe Pilot, a criminal investigation targeted at identifying medically unfit pilots (even recreational, like the plaintiff) who were also receiving federal benefits.

]]> The agents discovered that the plaintiff had lied about his health history when he re-applied for his pilot's license. Shortly thereafter, his name appeared on a federal press release about the investigation, and his HIV status became public knowledge.

He sued the government. In his complaint, he said the Federal Aviation Administration, the Social Security Administration and the United States Department of Transportation had violated the Privacy Act when they shared information about him.

The Privacy Act of 1974 describes in great detail how federal agencies are to manage confidential records. If an agency violates the law "in such a way as to have an adverse effect on an individual," that person is allowed sue. If a court determines that the violation was intentional or willful, the court may order the federal government to pay what the law refers to as "actual damages."

The plaintiff did not claim to have suffered any economic harm -- he hadn't lost his job or been denied services, and he had not incurred medical expenses as a result of the government's actions. Instead, he claimed the government's actions caused him mental and emotional distress.

The court's decision turned on the definition of "actual damages" and whether emotional distress constituted actual damages under the Privacy Act. In the end, the majority found for the government.

We will explain the court's reasoning in our next post.

Alan Olson practices employment law throughout the United States from his offices in New Berlin, Wisconsin. Attorney Olson may be contacted at AOlson@Employee-Advocates.com with questions about the information posted here or for advice on long-term disability benefits claims.

Source: Local10.com, "Supreme Court rejects damage claim in HIV privacy case," Bill Mears, CNN, March 28, 2012

Long-term disability benefits at risk in Nortel bankruptcy

2012-04-19T03:59:21Z

In the business world, there is an underlying tension between employees and investors. While neither will survive, much less thrive, without the other, budget considerations often come down to what's good for the investor or what's good for the employee. Right now, telecommunications company Nortel Networks Corp. is between that rock and hard place, and its long-term disability benefits and retiree health care plans are both at risk.

Discussions between the company and its disabled and retired employees have been tough. (The retiree benefit program includes long-term disability benefits.) One reason is that the company never purchased a long-term disability plan. Instead, Nortel kept disabled workers on the payroll. While it lasted, the program was generous. Now that Nortel is liquidating, the program participants could quickly land on public assistance.

]]> The story is a little different for retired employees in the U.S. By law, the company is not allowed to cut off retiree benefits without consulting with the retirees first.

At the same time, Nortel's retired employees elsewhere in the world are trying to set themselves up for some of the liquidation funds, but they have a major barrier to overcome. The barrier? The company kept the disabled on the payroll.

The company's United States arm is asking a neutral mediator to help settle the problem, but Nortel will more than likely need to pay billions to its creditors, employees and ex-employees. The money left over will be provided to debt investors that have continued to remain unidentified.

Currently, Nortel is dealing with a round-the-world bankruptcy liquidation, and it has had to sell almost $10 billion of its businesses. This could satisfy the debt investors, but it may not take care of the company's creditors. And the question of the retired and disabled is still out there.

Source: Total Telecom, "Nortel turns to mediator to resolve disputes with ex-workers," Peg Brickley, April 13, 2012

Court knocks SOX off contractors' retaliation claim, p. 2

2012-04-17T14:57:52Z

We are continuing our discussion of a case involving contract workers and the Sarbanes-Oxley Act of 2002. In a work-for-hire situation, an employee may often feel that he is serving two masters. In some circumstances, that is true. In others, however, the fact that the employee works for the agency and not the company (our terms from our April 12 post) is enormously important.

The court in this case had to determine how SOX applied in two contract workers' whistle-blower retaliation claims. The tricky part was that the contractors reported the financial services company they'd been assigned to (a public company), not the agency that they worked for (a private company). They had both discovered financial reporting irregularities in the mutual funds they managed for the company.

]]> The district judge was not sure if his interpretation of the law was correct. He turned to the 1st U.S. Circuit Court of Appeals for help. In situations like this, the appeals court can provide a legal opinion that will guide the district court's decision. The appeals court is not deciding the case; it is only answering a question about the applicable law.

In this case, the question was, "Does the [SOX] whistleblower protection ... apply to an employee of a contractor or subcontractor of a public company?" The answer was no.

It was not, however, a unanimous no. Two of the three judges looked at the language of the law and decided that the statute specifically applied to "employees of publicly traded companies." They also pointed out that the parts of the law that applied to private companies very specifically stated they applied only to private companies.

So, because the agency was the employer of record for the two contractors, SOX would not protect them. Their retaliation claims -- they had both been fired -- were not supported by the law.

Commentators say there is one more angle to consider. If the contractors could prove that the publicly-held company told their agency to discharge them, the SOX claim could survive. It isn't clear that the two men will pursue any additional claims.

Source: HR and Employment Law News, "Whistleblowing: Which Employees Are Covered by SOX?" April 2, 2012

New Compassionate Allowances Conditions for Social Security Disability

2012-04-12T21:54:50Z

The Social Security Administration has added 52 new conditions to its list of Compassionate Allowances. The additions include neurological disorders, cancers, and rare diseases.

Compassionate Allowances are conditions that the Social Security Administration has earmarked to "fast track" the disability application, to ensure shorter delays between application and approval. Social Security continues to work with the medical community to continually review the Compassionate Allowances list and add more conditions as they are deemed appropriate. Tens of thousands of people have benefited from the Compassionate Allowances program.

The addition of these 52 new conditions, which are effective in August, brings the total number of Compassionate Allowances to 165.

New Compassionate Allowances Conditions

Aicardi-Goutieres Syndrome
Alobar Holoprosencephaly
Alpers Disease
Alpha Mannosidosis
Carcinoma of Unknown Primary Site
Cerebrotendinous Xanthomatosis
Child Neuroblastoma
Child Non-Hodgkin Lymphoma
Chondrosarcoma with multimodal therapy
Cornelia de Lange Syndrome-Classic Form
Ewings Sarcoma
Follicular Dendritic Cell Sarcoma with metastases
Fucosidosis - Type 1
Galactosialidosis - Early Infantile Type
Glioma Grade III and IV
Hallervorden-Spatz Disease
Hepatoblastoma
Histiocytosis
Hutchinson-Gilford Progeria Syndrome
Hydranencephaly
Hypocomplementemic Urticarial Vasculitis
Hypophosphatasia Perinatal lethal Form
I Cell disease
Infantile Free Sialic Acid Storage Disease
Juvenile Onset Huntington Disease
Kufs Disease Type A and B
Lissencephaly
Lymphomatoid Granulomatosis Grade III
Malignant Brain Stem Gliomas - Childhood
Malignant Melanoma with metastases
Mastocytosis Type IV
Medulloblastoma with metastasis
Merkel Cell Carcinoma with metastases
Myocolonic Epilepsy and Ragged Red Fibers Syndrome
Nephrogenic Systemic Fibrosis
Obliterative Bronchiolitis
Ohtahara Syndrome
Orthochromatic Leukodystrophy with Pigmented Glia
Pearson Syndrome
Pelizaeus-Merzbacher Disease-Classic Form
Pelizaeus-Merzbacher Disease-Connatal Form
Peripheral Nerve Cancer - metastatic or recurrent
Perry Syndrome
Rhabdomyosarcoma
Rhizomelic Chondrodysplasia Punctata
Schindler Disease Type 1
Smith Lemli Opitz Syndrome
Spinal Nerve Root Cancer- metastatic or recurrent
Stiff Person Syndrome
Tabes Dorsalis
Wolf-Hirschhorn Syndrome
Xeroderma Pigmentosum

Court knocks SOX off contractors' retaliation claim

2012-04-12T19:02:04Z

A recent case heard in federal court raised some interesting issues about contract workers and the Sarbanes-Oxley Act of 2002. As more and more companies are hiring contractors for short-term and long-term assignments, they are finding themselves facing questions about employment issues such as disability accommodations, leave policies and, as in this case, retaliation.

Congress passed SOX in response to the financial scandals of the early 2000s (Enron was perhaps the most notorious). The purpose of the act was to enhance corporate responsibility and financial disclosures and to combat corporate and accounting fraud. One of the key provisions is protection for whistle-blowers who report suspected financial irregularities or fraud.

]]> SOX, however, only applies to publicly-traded companies -- that is, companies that are subject to the Securities and Exchange Act of 1934. Private companies -- companies that do not offer stock to the general public -- are not governed by SOX. Business analysts argue that these companies may not be legally responsible to follow the law, but they are ethically bound to do so.

In this case, the contract employees worked for a private company that we will call "the agency." The company the workers were assigned to, however, was publicly-held; we'll call that "the company." The company was also a financial services provider.

The assignment was to advise and manage company mutual funds. In 2005, one employee filed a complaint against the company under SOX alleging federal filing inaccuracies. The following year, the other man filed a claim alleging violations of accounting regulations. The agency fired both of them.

They went to court, and the federal judge had some tough decisions to make.

Continued in our next post.

Source: HR and Employment Law News, "Whistleblowing: Which Employees Are Covered by SOX?" April 2, 2012