TheCorporateCounsel.net

Many members have been asking if we have heard what their peers are doing in reaction to the SEC’s new whistleblower rules. These survey results should help answer those questions:

1. In the wake of the SEC’s new whistleblower rules, our company:
– Has changed existing policies to address the new rules – 9.1%
– Hasn’t yet, but intends to change existing policies to address the new rules – 27.3%
– Not sure yet if will change existing policies – 42.4%
– Has decided not to change existing policies because considerations under the new rules are adequately addressed by existing policies – 21.2%

2. The board committee charged with consideration of the SEC’s new whistleblower rules is:
– Audit Committee – 68.8%
– Corporate Governance Committee – 18.8%
– Risk Committee – 0%
– Compliance Committee – 9.4%
– Compensation Committee – 0%
– Board as a whole – 3.1%

3. In the wake of the SEC’s new whistleblower rules, our company:
– Has provided incentives for whistleblowers to report internally first – 0%
– Hasn’t yet, but intends to provide incentives for whistleblowers to report internally first – 3.0%
– Not sure yet if will provide incentives for whistleblowers to report internally first – 60.6%
– Has decided to not provide incentives for whistleblowers to report internally first – 36.4%

4. In the wake of the SEC’s new whistleblower rules, our company:
– Has created a system to alert employees of the benefits of reporting internally (eg. sign updated employee handbook, fill out compliance questionnaires) – 12.1%
– Hasn’t yet, but intends to create a system to alert employees of the benefits of reporting internally – 24.2%
– Not sure yet if will create a system to alert employees of the benefits of reporting internally – 60.6%
– Has decided not to create a system to alert employees of the benefits of reporting internally – 3.0%

5. Since Dodd-Frank was enacted in mid-2010, our company has had:
– More whistleblower claims reported internally – 3.1%
– Same number of whistleblower claims reported internally – 90.6%
– Fewer whistleblower claims reported internally – 6.3%

Please take a moment to participate in this “Quick Survey on Stock Repurchase Practices.“

DOL Adopts New “Adverse Employment Action” Standard for SOX Whistleblower Cases

As noted in this memo, the DOL’s recent Menendez v. Halliburton decision substantially lowers the bar for SOX whistleblowers in terms of establishing that they suffered a legally actionable adverse employment action. In that case, the DOL’s Administrative Review Board adopted a new standard governing “adverse employment actions” under Section 806 of Sarbanes-Oxley. Now, according to the ARB, an employee need not experience a “tangible” consequence as a result of protected activity.

In addition, the US District Court for the Western District of Washington continued the trend of granting employers summary judgment on a Section 806 claim on causation grounds in Kim v. The Boeing Co. Importantly, the Kim court also noted that the “definitely and specifically” standard federal courts have applied in determining whether a complainant engaged in protected activity is alive and well (at least within the Ninth Circuit), despite the finding in Sylvester v. Parexel International LLC.

Transcript: “Preparing for the SEC’s New Whistleblower Rules: What Companies Are Doing Now”

We have posted the transcript for our popular webcast: “Preparing for the SEC’s New Whistleblower Rules: What Companies Are Doing Now.” The program was newsworthy, borne out by this Davis Polk blog regarding “Whistleblowers and Internal Certifications.”

– Broc Romanek