Whistleblower retaliation claims challenging employers; Cases growing rapidly since Sarbanes-Oxley Act introduced.

Byline: JUDY GREENWALD

Employers can expect to face a growing number of retaliation claims by employees under the whistleblower provisions of the 2002 Sarbanes-Oxley Act, say observers.

"It's a continuing and increasing distraction for employers,'' said attorney Phillip M. Berkowitz, with Nixon Peabody in New York. "These aren't going away.''

While from one perspective, Sarbanes-Oxley is just one of the many laws employers already cope with, its whistleblower provisions also present unique challenges, say observers. Among them is that employers may find themselves forced to reinstate terminated employees even before their retaliation complaint is resolved.

Section 806 of the 2002 Sarbanes-Oxley Act provides legal protection against retaliation to employees of public companies who report suspected corporate fraud or other activities related to fraud against shareholders. Employers subject to its prohibitions include publicly traded …