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Region 1 News Release: 05-785-BOS/BOS 2005-125
Monday, May 23, 2005
Contact: Ted Fitzgerald
Phone: (617) 565-2074

U.S. District Court Orders Competitive Technologies Inc. to Reinstate Sarbanes-Oxley Whistleblowers

NEW HAVEN, Conn. -- In the first federal court decision enforcing a preliminary reinstatement order under the Sarbanes-Oxley Act of 2002, the U.S. District Court for Connecticut has ordered Competitive Technologies, Inc. (CTI) of Fairfield, Conn. to reinstate, pending the outcome of litigation, two men who claimed they were fired for whistleblower activities protected by the Act.

In September 2003, Scott Bechtel and Wil Jacques complained to the U.S. Labor Department's Occupational Safety and Health Administration (OSHA) that CTI had fired them in June 2003 because they raised concerns about financial disclosures in the preceding six months. OSHA investigated the complaints and issued its findings on Feb. 2, 2005. The agency ordered CTI to reinstate the men to their jobs and pay them back wages and benefits.

CTI filed an objection to OSHA's findings with the Labor Department's Office of Administrative Law Judges and requested a stay of the reinstatement order. An administrative law judge denied both that request and a subsequent request for reconsideration.

On April 18, the Labor Department, along with Bechtel and Jacques, petitioned the U.S. District Court in New Haven, asking the court to enforce the reinstatement order. On May 13, Judge Alfred V. Covello ordered CTI to temporarily reinstate Bechtel and Jacques retroactive to Feb. 2, 2005, and to compensate them for lost income and benefits from that date forward. The litigation about the underlying case is pending before a Department of Labor administrative law judge.

"This is a significant decision in favor of workers who are penalized for doing the right thing," said Jonathan Snare, acting assistant secretary of labor for occupational safety and health. "It affirms that the law does not give the employer the option to refuse reinstatement during the Sarbanes-Oxley appeal process."

Sarbanes-Oxley, the Corporate and Criminal Fraud Accountability Act, provides employees the opportunity to file a complaint with OSHA if they have been retaliated against by their employer for reporting suspected corporate fraud or other activities related to fraud against shareholders. If OSHA determines after an investigation that an employee's complaint has merit, it can order remedies such as reinstatement and back pay. Either party has 30 days to file objections or request a hearing on the matter with the Labor Department's Office of Administrative Law Judges.

Companies are covered under Sarbanes-Oxley if they have a class of securities registered under section 12 of the Securities Exchange Act of 1934 or if they are required to file reports under section 15(d) of the Securities Exchange Act.


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Archive Notice - OSHA Archive

NOTICE: This is an OSHA Archive Document, and may no longer represent OSHA Policy. It is presented here as historical content, for research and review purposes only.

OSHA News Release - (Archived) Table of Contents

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