Employment Law Dodd-Frank Act Expands Whistleblower Protections
Total Page:16
File Type:pdf, Size:1020Kb
Employment Law December 2010 In this Issue Dodd-Frank Act Expands Whistleblower Protections 1 Dodd-Frank Act Expands Whistleblower Protections In an effortUp to encourage thosedate with inside knowledge to assist the government in prosecuting those who have violated 2 Accommodating Muslim Employees securities laws, and to provide whistleblowers with expanded 4 SOX Retaliation Claims: Recent protection from retaliation, President Obama signed the Dodd- Developments Frank Wall Street Reform and Consumer Protection Act (the “Act”) on July 21, 2010. Given the enhanced whistleblower 6 Adverse Employment Actions: protections provided by the Act, it is vital that companies have Be Consistent and Truthful When in place a strong compliance program and an effective system Providing Reasons for the reporting of financial misconduct and investigation 7 California Court Narrowly Interprets What of such reports. Note that the Securities and Exchange Constitutes an “Employment Loss” Under Commission on November 3, 2010 proposed regulations Federal WARN Act implementing certain provisions of the Act but which address only the bounty program discussed just below. 8 Recent Business Immigration Law New Whistleblower Incentive Program Developments To motivate whistleblowers to report fraudulent activity to the 9 Break Time for Nursing Mothers government, the Act amends the Securities and Exchange Act of 1934 by adding a “bounty” provision designed to provide 10 Executive Compensation and Corporate lucrative monetary incentives for individuals who provide Governance Update information to the Securities and Exchange Commission (“SEC”) 12 New York Court of Appeals Limits Who leading to a successful enforcement action. The Act requires the May Bring Claims Under the New York SEC, in any action in which it imposes sanctions in excess of State and City Human Rights Laws $1 million, to compensate whistleblowers who provide “original information” with between 10% and 30% of the monetary sanctions. “Original information” means information derived from the independent knowledge or analysis of the whistleblower which is not known by the SEC from other sources. Private Right of Action for Securities Whistleblowers Editors Section 922 of the Act amends the Securities Exchange Act to generally prohibit employers from discriminating against If you have any questions or would like more information concerning any of these topics, please contact: (e.g., discharging, harassing, threatening, etc.) an employee for providing information to the SEC; initiating, testifying Kevin B. Leblang 212.715.9306 in, or assisting in certain investigations or actions relating to [email protected] that information; or making disclosures that are required or Robert N. Holtzman 212.715.9513 protected under the Sarbanes-Oxley Act (“SOX”), the Securities [email protected] Exchange Act or another law, rule or regulation subject to the The contents of this Update are intended for general jurisdiction of the SEC. informational purposes only, and individualized advice should be obtained to address any specific situation. The Act provides a private right of action under the Securities Exchange Act for whistleblowers against retaliating employers. Whistleblowers may bring such claims up to the earlier of three Kramer Levin Naftalis & Frankel LLP continued on page 3 Attorney Advertising 2 Employment Law Update Accommodating Muslim Employees “Towel head,” “Osama,” and “Taliban,” are just a few of 1. Allow Prayer Breaks — Muslims pray five times a day the names that Muslim employees have been called in the and the timing of these prayers changes throughout workplace since September 11, 2001. These employees have the year based on the position of the sun. The prayers also reported that employers have refused to accommodate take approximately five to fifteen minutes and require their religious obligations. Antipathy toward Muslims a clean, quiet space. has only increased since September 11, culminating in 2. Permit the Wearing of a Hijab or Head Scarf — Many “Islamophobia” recently espoused during debates regarding Muslim women wear headscarves in accordance with the building of mosques or Islamic cultural centers, an their belief that they should cover their hair. attack on a Muslim New York City cab driver, and threats from a Florida pastor to burn the Koran. American media 3. Alter Timing of Meal Breaks — During Ramadan, from Time magazine to ABC’s This Week are exploring the Muslims fast from sunrise to sundown. Some devout hostility that Americans have expressed toward Muslims. Muslims also fast on Mondays and Thursdays throughout There is no doubt that conversations regarding these current the year. Muslim employees may request that their meal events are seeping into the workplace and commingling with break be adjusted to sundown so that they may eat as soon as permissible. Conversations regarding these current 4. Adjusting Work Schedule on Fridays — On Fridays, events are seeping into the workplace midday prayers are replaced with prayers at the local mosque or other place of worship. Muslim employees and commingling with anti-Muslim may require time beyond their meal breaks to attend comments. At the same time, reports such prayers. show that in 2009 Muslim employees 5. Allow Vacation Days for Religious Holidays — Eid al-Fitr and Eid al-Adha are two periods during which reported more discrimination complaints Muslim employees often seek time off. Eid al-Fitr is than ever before. celebrated at the end of Ramadan and Eid al-Adha takes place approximately seventy days after Ramadan. anti-Muslim comments. At the same time, reports show that The Muslim calendar does not correspond with the in 2009 Muslim employees reported more discrimination Gregorian calendar. complaints than ever before. We can only expect 2011 will 6. Permit Men To Have Facial Hair — Observant Muslim see even more complaints regarding alleged discrimination men are religiously required to maintain facial hair. If on the basis of an employee’s Islamic faith. such facial hair would conflict with health and hygiene Employers should be wary of conversations that could requirements, consider providing a beard cover. reveal discriminatory animus toward Muslims and be aware Employers must ensure that Muslim employees are of accommodations that may be requested by Muslim protected from discrimination and are provided with employees. Prohibiting bigoted speech in the workplace reasonable accommodations for their religious practices. is an obvious policy for employers, but the accommodations Not only is this the right thing to do, but employers who that may be requested by Muslim employees may not be fail to take such actions face liability under Title VII and so commonplace, given that Muslims make up only 2% of various state and local laws. Indeed, recent actions and the U.S. population. Below is a list of accommodations that investigations brought by the EEOC demonstrate that the employers may consider offering to Muslim employees, if agency is particularly focused on discrimination against such accommodations do not cause an undue hardship: Muslim employees. n Kramer Levin Naftalis & Frankel LLP Employment Law Update 3 Dodd-Frank Act Expands Whistleblower Protections continued from page 1 years after the date on which the facts material to the right of New Whistleblower Protection for Financial action are known or reasonably should have been known by Services Employees the employee or six years after the retaliation occurred. Section 1057 of the Act creates a new private right of action for employees in the financial services industry who are Under the new provision, whistleblowers can bring their subjected to retaliation for disclosing information about claims directly in federal court. Thus, whistleblowers unlawful conduct related to the offering or provision of a electing to sue under the new law can seek remedies for consumer financial product or service. retaliation while bypassing SOX’s requirement to exhaust administrative remedies with the Department of Labor Coverage applies to organizations that extend credit or before going to court. service or broker loans; provide real estate settlement services or perform property appraisals; provide financial The new provisions allow a prevailing claimant to obtain advisory services to consumers relating to proprietary reinstatement, double back pay, interest, and compensation financial products, including credit counseling; or collect, for litigation costs and attorneys’ fees. Notably, this analyze, maintain, or provide consumer report information provision differs from Section 806 of SOX, which provides or other account information in connection with any for an award of reinstatement and back pay, but not double decision regarding the offering or provision of a consumer back pay. financial product or service. The Dodd-Frank Act Also Amends SOX Section 1057 prohibits retaliation against an employee who Sections 922 and 929A contain important provisions that has engaged in any of the following protected acts: broaden the scope and clarify certain provisions of SOX, including the following: n providing or attempting to provide to an employer, the newly created Bureau of Consumer Financial Protection n Aggrieved employees will now have 180 days to file a complaint with the Department of Labor’s Occupational (the “Bureau”), or any other state, local, or federal Safety and Health Administration (“OSHA”), an increase government authority or law enforcement agency