Adverse Action

Under Section 806 (also referred to as section 1514A) of the Sarbanes-Oxley Act (SOX), an adverse action occurs when a company elects to “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment.” It has also been defined as an unfavorable employment action that is “more than trivial.”

People get fired or disciplined in their jobs every day. A SOX retaliation claim lies when the adverse action is taken, at least in part, because the employee engaged in protected activity. The fact that the employee engaged in protected activity need not be the only reason for the adverse action, but it must be one of the reasons. For SOX protections to fall into place, therefore, an adverse action must have occurred after the employee engaged in protected activity.

It is important to know that a person need not actually be fired from his or her job in order to bring a SOX claim. Other forms of retaliation such as harassment, threats, demotion and suspension can serve as the basis for a whistleblower retaliation action. For example, in one reported case, the adverse action was that the employer purposefully breached the employee’s confidentiality.

If you live or work in New York and have suffered an adverse employment action as a result of engaging in SOX protected activity, you can contact Attorney Eric Dinnocenzo at (212) 933-1675 for a free consultation.