A California whistleblower has been awarded what may be the largest award ever for exposing violations of the Sarbanes-Oxley Act. The $6 million was awarded by a California federal jury to the former comptroller of Playboy Enterprises. It could even go higher because Playboy Enterprises may be required to pay punitive damages as well. That has not yet been determined.
The whistleblower alleged that she was terminated from her job at Playboy in 2012 after she refused to authorize $1 million in bonus pay to executives. She asserted that although the chief financial officer told her to pay the bonuses, the board of directors had not approved them. She also said that she was terminated in part because of her age — 56.
According to the plaintiff, Playboy retaliated against her for refusing to pay the bonuses in a number of ways. She says they removed 15 of her accounting staffers, withheld necessary information from her and did not include her in meetings. These actions, she contends, prevented her from properly doing her job.
The U.S. District Court for the Central District of California found for the plaintiff because they determined that she was terminated for “reporting to company management actual and suspected frauds and improprieties involving financial and accounting matters and corporate governance.”
As reported in “Compliance Week,” California has recently expanded protections for whistleblowers. One employment attorney noted in the article that thanks to these new amendments to the state’s whistleblower laws, California has even greater protections than those provided under the federal law.
Whistleblower protection laws were enacted so that employees could report fraud and other wrongdoing in a company without fear of retribution. However, companies in California and throughout the nation still engage in retaliatory behavior toward these employees.
People who believe they lost their job or suffered retaliation on the job for reporting illegal or inappropriate activity should seek legal advice to determine what their rights and options are, and to help ensure that they receive any rewards to which they are entitled under whistleblower laws.
Source: Compliance Week, “Playboy Must Pay SOX Whistleblower Record $6 Million” Jaclyn Jaeger, Mar. 07, 2014