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OSHA News Release - Table of Contents

DOL Logo OSHA News Release – Region 2

U.S. Department of Labor

Region 2 News Release: 14-949-NEW/BOS 2014-093
June 10, 2014
Contact: Ted Fitzgerald      Andre J. Bowser
Phone: 617-565-2075      617-565-2074
Email: fitzgerald.edmund@dol.gov      bowser.andre.j@dol.gov

US Department of Labor OSHA investigation finds that New York company
violated Sarbanes-Oxley Act by firing worker who reported investor fraud
SpongeTech Delivery Systems Inc. ordered to pay back wages of $31,835

NEW YORK – SpongeTech Delivery Systems Inc. of New York has been ordered by the U.S. Department of Labor's Occupational Safety and Health Administration to pay $31,835.33 in back wages to a former employee who was fired after she reported apparent investment fraud to her superiors.

"The point here is sharp and important: No employee should be fired or otherwise penalized for reporting investor fraud," said Robert Kulick, OSHA's regional administrator in New York. "This employee did the right thing and must be compensated for the unjust job and wage loss that resulted."

In November 2009, the complainant was sent to the Netherlands to represent the company in a trade show. She discovered that the company had no sales in Europe and communicated her concerns about this to company officials. At the time, SpongeTech was under investigation by the Securities and Exchange Commission for publicizing fictitious sales and product orders for the purpose of selling stock. The complainant was terminated on Jan. 11, 2010. She filed a whistleblower complaint with OSHA on April 7, 2010.

OSHA's investigation found that the employee engaged in protected activity under the whistleblower provisions of the Sarbanes-Oxley Act* when she raised concerns to her employers about the veracity of the sales information, and that her protected activity was a contributing factor in her firing. As a result, OSHA is ordering the payment of the back wages. Both the company and the complainant have 30 days from receipt of OSHA's finding to file an appeal with the department's Office of Administrative Law Judges.

Michael Metter, the company's chief executive officer, and Steven Moskowitz, its chief operating officer, pled guilty in January 2013 and August 2011, respectively, to criminal charges related to the investor fraud that led to the employee's termination.

OSHA enforces the whistleblower provisions of Sarbanes-Oxley and 21 other statutes protecting employees who report violations of various airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health-care reform, nuclear, pipeline, worker safety, public transportation agency, maritime and securities laws. Employees who believe that they have been retaliated against for engaging in protected conduct may file a complaint with the secretary of labor to request an investigation by OSHA's Whistleblower Protection Program. Detailed information on employee whistleblower rights, including fact sheets, is available at www.whistleblowers.gov.

Under the Occupational Safety and Health Act of 1970, employers are responsible for providing safe and healthful workplaces for their employees. OSHA's role is to ensure these conditions for America's working men and women by setting and enforcing standards, and providing training, education and assistance. For more information, visit www.osha.gov.

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Editor's note: The U.S. Department of Labor does not release the names of employees involved in whistleblower cases.

U.S. Department of Labor news materials are accessible at http://www.dol.gov. The department's Reasonable Accommodation Resource Center converts departmental information and documents into alternative formats, which include Braille and large print. For alternative format requests, please contact the department at (202) 693-7828 (voice) or (800) 877-8339 (federal relay).

* Accessibility Assistance Contact OSHA's Office of Communications at 202-693-1999 for assistance accessing PDF materials.

OSHA News Release - Table of Contents

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