NELA and the Government Accountability Project argue in this amicus brief that the remedial nature of the Sarbanes-Oxley Act (SOX) calls for broad and inclusive application, which is necessary to prevent a crisis in the mutual fund industry, such as the one that occurred in the banking sector in 2008. An interpretation of “employee” that limits coverage to employees of public companies would undermine SOX’s basic purpose. Publicly traded companies increasingly use a variety of contractual relationships to separate functions into organizations focused on those functions. These employees are in a position to expose corporate fraud. In the context of the mutual fund industry, all the employees would be without whistleblower protection under Section 806.
We further argue that an interpretation of the term “employee” to cover employees of private contractors and subcontractors is consistent with the plain text of the statute, the legislative history, the remedial purpose, and Department of Labor procedural regulations and policy implementing Section 806. A contrary interpretation would leave a significant number of employees unprotected.
Authors: R. Scott Oswald and Kellee Boulais Kruse (The Employment Law Group, Washington, DC), Richard R. Renner (Kalijarvi, Chuzi, Newman & Fitch, P.C., Washington, DC), Michael T. Anderson (Murphy Anderson PLLC, Boston, MA), and NELA Program Director Rebecca Hamburg Cappy.