When an employee comes forward with evidence of wrongdoing in a company, it’s important for the employer to take the allegations seriously.
That’s because many state and federal laws have “whistleblower” provisions that prohibit employers from firing, demoting or otherwise punishing workers who report legal or ethical violations.
These laws are complex, in part because there’s no “one size fits all” standard. They vary among industries, among types of companies, and between states. So if you’re a whistleblower or you have an employee who’s a whistleblower, it’s wise to consult an attorney who can give you the lay of the land.
Some legal protections for whistleblowers are not obvious. Take the case of Anthony Menendez, who worked for Halliburton, the oilfield-services giant. Menendez claimed he observed irregularities in the company’s accounting practices and reported them to his supervisor. When the supervisor dismissed his concerns, Menendez filed a confidential complaint with the Securities and Exchange Commission, and later sent an e-mail to the company’s audit committee.
Members of the audit committee forwarded the e-mail to other employees, in effect “outing” Menendez as a whistleblower, which he claimed led to difficulties in the workplace.
Menendez filed a complaint, arguing that forwarding the e-mail violated his right to confidentiality under the Sarbanes-Oxley Act, a federal law that regulates accounting in publicly traded companies. A Labor Department administrative review board agreed, finding that Halliburton violated his rights.