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Potential whistleblowers might think twice before reporting suspected corporate malfeasance in the face of a recent study that indicates promised protection isn’t what it’s cracked up to be. After reviewing 491 whistleblower complaints filed with the Department of Labor between 2002 and 2005, Richard E. Moberly, an assistant professor of law at the University of Nebraska College of Law, found that only 3.6% of the 361 cases that were decided by the Department of Labor proved they were unfairly published after revealing potentially damaging information about their employers, and only 6.5% of the 93 who appealed to DOL judges emerged victorious. “It’s not working the way people expected it would,” says Moberly, who contends the Occupational Safety and Health Administration (charged by the DOL with resolving the disputes) advocates a “narrow reading” of the law.

Attorney Jason Zuckerman, a lawyer with The Employment Law Group that represents SOX whistleblowers, would agree. Zuckerman argues that while Section 806 of SOX states that an employee need only have a “reasonable belief” of misconduct, department officials are demanding a “smoking gun,” meaning unequivocal evidence. For example, in one of the more nuanced provisions of the law, says Moberly, an employee reporting insufficient internal controls might have to prove that the deficiency they are reporting will ultimately hurt share value. Public interest groups such as the Government Accountability Project (GAP), say this undercuts the intention of SOX and raises the burden of proof. Also, GAP argues, a 90-day statute of limitations unfairly keeps complaints at a minimum.

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