SOX Whistleblower Protection Limited

Bloomberg reports that a federal appeals court has ruled that the whistleblower protections afforded by the Sarbanes-Oxley Act do not apply when tipsters contact the media. The case involves two former Boeing employees who were fired after going to the media regarding the company’s alleged lack of security regarding financial reporting. The employees claim that they reported the problems internally, but were ignored. The court found that the SOX Act protects whistleblowers from retribution only when they alert Congress, federal authorities, or a supervisor, and that if Congress had intended to include the media, it would have stated so explicitly. Reaction to the ruling was mixed, with media representatives saying that press attention is often the best or only way to draw attention to a problem and protect investors, and with in-house attorneys saying that internal reporting is the best recourse. The case will be appealed.