Assignment

Corporate Whistleblowers Are Left Dangling

4th September 2008 |

Top of Form

Bottom of Form

By JENNIFER LEVITZ | The Department of Labor, charged with enforcing the federal law protecting corporate whistleblowers at publicly traded companies, has been dismissing complaints on the technicality that workers at corporate subsidiaries aren’t covered.

The government has ruled in favor of whistleblowers 17 times out of 1,273 complaints filed since 2002, according to department records. Another 841 cases have been dismissed. Many of the dismissals were made on the grounds that employees worked for a corporate subsidiary, says Richard Moberly, a University of Nebraska law professor. He studies issues involving workers who face retaliation from employers for reporting wrongdoing, and based his findings on department data. The rest of the cases are either pending, withdrawn or were settled.

Sen. Patrick Leahy, a Vermont Democrat who helped craft the whistleblower provision — part of the Sarbanes-Oxley corporate governance act — says the law was meant to cover workers in corporate subsidiaries. “Otherwise, a company that wants to do something shady, could just do it in their subsidiary,” he said.

Sharon Worthy, a Labor Department spokeswoman, said the agency “believes that there is no legal basis for the argument that subsidiaries of covered corporations are automatically covered” under the Sarbanes-Oxley whistleblower provision. “The plain language of the statute only applies to publicly traded corporations,” she said in a statement.

The agency declined to provide the exact number of cases dismissed because employees worked for a subsidiary. Ms Worthy said only 17 employees have won favorable findings because many cases are settled before adjudication. Records show 187 cases have been settled to date.

The dismissed cases include three whistleblower complaints against the German manufacturing conglomerate Siemens AG and two against London media giant WPP Group PLC....