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Witness Protection What will a new whistle-blower clause mean to you and the way you do business?

By Steven C. Bahls

Opinions expressed by Entrepreneur contributors are their own.

Don't slay the bearer of bad news. That's the messageCongress sent companies when it finally hammered out a law lastsummer to curtail corporate misconduct. While the Sarbanes-OxleyAct of 2002 got plenty of media attention, chances are youhaven't heard about this provision protecting whistle-blowers,which applies not only to publicly held companies, but also tothose who advise them. Corporate scandals and the TimePersons of the Year brought whistle-blowers into the limelight, butthe need for you to pay attention to their rights will continuelong after the attention has died down.

Suppose an employee suspects his or her company is playing fastand loose with its financial reports. Being an upright citizen, heor she reports those suspicions to the federal government. Thesupervisor catches wind of this and fires the employee. Under thenew provisions, that supervisor and company officers could facecriminal fines or even jail time for such an action. It doesn'tmatter whether the employee's suspicions were correct; the keyis reasonable belief that there are federal fraud violations.

The law is tied to existing definitions of fraud. It covers bankfraud; securities fraud; fraud by wire, radio or TV; andgarden-variety frauds and swindles. Retaliation includes not onlytermination of the employee, but also demotion, suspension,harassment and other forms of discrimination. "You cannot takeany deleterious actions that would affect the person'sjob," says Philadelphia attorney Anita B. Weinstein of lawfirm CozenO'Connor. "That includes failure to consider [theemployee] for promotion."

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