From the enactment of the Sarbanes-Oxley Act in 2002, an issue has haunted private companies that serve publicly-traded companies, especially when their services relate to the type of corporate fraud SOX was intended to combat - does SOX's whistleblower protections extend to employees of contractors and subcontractors of public companies? We have reported in the past on this issue, and even today, there has been no final, authoritative decision on the question. However, the U.S. Department of Labor's Administrative Review Board recently issued another decision holding that the SOX whistleblower protections extend to employees of an accounting firm engaged by a public company to provide auditing services.
In Spinner, an accountant claimed he was unlawfully fired by his employer, which performed audit services for S.L. Green Realty Corp., in retaliation for reporting "internal control and reconciliation problems" at the client company.