In 2002, when Congress passed the Sarbanes-Oxley act to tighten up corporate governance standards in the wake of Enron, it included a measure to protect and encourage corporate whistleblowers, people like Enron’s Sherron Watkins. Business grudgingly accepted the law, while reformers like Taxpayers Against Fraud called the statute “the single most effective measure possible to prevent recurrences of the Enron debacle and similar threats to the nation’s financial markets.”
Apparently, though, the reformers didn’t read the fine print: Big business groups managed to get enforcement of the new law vested with the Occupational Safety and Health Administration (OSHA), a notoriously toothless agency in the Labor Department. Not surprisingly, OSHA hasn’t given whistleblowers any more protection than it has to poor workers in meatpacking plants.
In a new law review article out this fall, University of Nebraska professor Richard Moberly calculates that in the first three years after Sarbanes-Oxley, only 13 out of 491 employees who filed complaints with OSHA found any sort of relief for their claims of retaliation and other repercussions resulting from blowing the whistle. Only six succeeded on appeal. Moberly concludes that, among other things, OSHA has no idea what it’s doing and that—surprise—even if it did, the agency was underfunded and couldn’t really handle the workload. The whistleblower provision is one of those great examples of big business touting its commitment to reform by supporting a tough new law while virtually ensuring that it will never actually have to reform anything.