It shouldn’t surprise you that an employment lawyer will advise you to have an employee handbook.
But it may surprise you is that I would rather you have no handbook than one you write yourself.
Why would I say that?
Well, a handbook is an important legal document in lawsuits and labor audits. If you have non-compliant policies, it can create presumed liability automatically. In other words, non-compliant policies are like an admission of guilt.
In some cases, no written policies (for example, with respect to certain breaks, required notices, and pay policies) can also create a presumption of guilt. But non-compliant policies are a greater danger.
By far, my recommendation is that you have a lawyer-drafted, compliant employee handbook. Here is a short video on four good reasons why:
So now you know why you should have an employee handbook. Is downloading one off of an internet resource good enough?
NO! Employment laws are complex and numerous. Boilerplate employee handbooks often have provisions that sound reasonable to you as the employer, but are in fact illegal in some jurisdictions or may mislead you into doing something illegal.
I write several handbooks a year. I have never found a good template off a website (and I have tried several). I ended up creating my own template and checklist for management decisions. (You can choose different policies depending on how you want to run your business, and I advise on the financial, business and legal implications of those decisions as part of the drafting process.)
An employee handbook is a 50 page legal document that you should not attempt to DIY. Call a pro. And keep it updated!
Does it matter if I have an employee handbook?
“Does it matter if I have an employee handbook?” Yes! Here are four good reasons why. 1. A handbook teaches your managers and your employees the proper and legal way to do things. It’s not always commonsense. 2. A handbook empowers you to politely tell an employee “No” to a special request because it is against policy. This keeps everything fair. 3. A handbook can be used to defend you, should an employee lie about a situation to a court or governmental agency. 4. Employers are required to provide certain notices in writing to their employees, and a handbook is a good way to do it. Failure to provide these notices can result in lawsuits, fines and even criminal penalties. So yes, a handbook is essential and it should be reviewed by an employment lawyer annually. Does your business need employment law help? Visit us at bellatrixlaw.com to apply for our Employer Protection services.
In 2002, Congress passed a law known as the Sarbanes-Oxley Act, or SOX. SOX applies to both publicly- and privately-held companies, and imposes a rigid list of corporate best practices in an effort to deter acts of fraud. Companies who violate these standards risk exposure to a long list of civil and criminal penalties, as well as investment and loan denials. In short, failure to adhere to the provisions supplied by SOX presents allegedly non-compliant corporations with a battery of devastating legal and financial problems.
Whether your business needs experienced legal representation to challenge claims of non-compliance, or you are simply unsure whether your current practices align with SOX best practices and would like a closer review of your policies, the knowledgeable employment attorneys of Bellatrix PC are here to help. Our business risk review will identify and improve upon vulnerable areas in your employment and record-keeping policies to better protect you against legal claims in the future. If your organization has already been targeted by a lawsuit, our aggressive commercial litigation lawyers will prepare tactical defense strategies to protect your company’s best interests.
To arrange for a private legal consultation, call Bellatrix PC right away at (800) 449-8992.
What is Sarbanes-Oxley in Employment Law?
In response to the controversial and heavily publicized Enron and WorldCom bankruptcies, Congress passed the Sarbanes-Oxley Act into law in July of 2002. This act, which was quickly nicknamed “SOX,” is also known as the Public Company Accounting Reform and Investor Protection Act, or the Corporate and Auditing Accountability and Responsibility Act. These names provide a good idea of SOX’s general purpose.
The act has two primary objectives:
To deter and punish corporate fraud, accounting fraud, and acts of corruption among corporate executives.
To protect whistleblowers in whistleblower lawsuits, making the destruction of evidence and impeding federal civil investigations a crime.
It is crucially important for business owners to know that, contrary to common misconceptions, this act applies to privately held companies — not just publicly-traded companies. This means private companies may not destroy evidence or interfere with federal civil investigations by agencies such as OSHA, the EEOC, or the IRS, which implicates employment law. SOX also imposes specific restrictions on private placement securities solicitations, which is particularly important if you or your organization is raising capital from investors. Private companies must demonstrate full compliance with SOX before going public.
Sarbanes-Oxley also establishes corporate “best practices,” which include:
Establishing business policies and codes of ethics.
Monitoring conflicts of interest.
Establishing independent directors on the Board of Directors where appropriate.
Civil and Criminal Penalties for Violating SOX Best Practices
It is critically important for employers and business owners to note that the best practices delineated by Sarbanes-Oxley are not merely recommendations. On the contrary, failure to comply can result in a variety of debilitating civil and even criminal penalties being imposed on non-compliant companies. For example, depending on the severity of the offense, a maximum prison sentence can range from 20 to 25 years: nearly three decades of incarceration.
It is also important to remember that, in addition to the formal civil and/or criminal penalties imposed by judges or regulatory agencies, organizations which fail to comply with SOX best practices are often highly unappealing to lenders, venture capitalists, and other investors. If your company’s practices are deemed to be unethical, unsound, or otherwise fall short of the act’s requirements, the likely result is the denial of a loan or investment, or ongoing investor disputes. In other words, the negative financial consequences of non-compliance extend far beyond fines and penalties imposed by the government: they extend to your business opportunities and daily operations as well.
Finally, because SOX provides whistleblower protection provisions, a whistleblower whose rights are violated may seek special damages, back pay, reinstatement, and attorneys’ fees.
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SOX convictions can devastate even the most stable and robust of corporations. If you are at all concerned that your current employment or accounting practices are not in alignment with SOX provisions, it is absolutely crucial that you take immediate action to address the issue now before it is already too late. Failure to resolve legitimate concerns at the outset only increases the likelihood that costly, disruptive, and time-consuming litigation will arise in the future, draining your financial resources and damaging your organization’s reputation as a trustworthy and ethical business.
Let our team help yours. To start discussing your organization’s legal situation in a completely private consultation, call the experienced Sarbanes-Oxley lawyers of Bellatrix PC at (800) 449-8992 today.
The term “whistleblower” is defined as a person who reports illegal activity, fraud against the government, or other wrongdoing within a company, state agency, or organization. A federal law, called the False Claims Act, allows employees and other whistleblowers to bring a qui tam suit in the name of all taxpayers against companies who have overbilled or defrauded the federal government.
A state-level law, called the California False Claims Act, also encourages state employees and other whistleblowers to combat fraud and illegal activity by bringing claims against companies engaged in wrongdoing. If the whistleblower’s accusations are found to have merit by the government, and the company is subsequently charged, the whistleblower will receive statutory rewards for their courage in combating fraud against the government.
At Bellatrix PC, our experienced business lawyers are committed to defending entities accused of engaging in fraud, overbilling, and other wrongful financial and legal acts. Our legal team balances aggressive client advocacy with strict compliance with all pertinent state and federal laws, and is dedicated to assisting businesses of all structures and sizes. We will walk you through the nuances of the allegations against your entity, devise comprehensive defense strategies, and help your business explore its legal options for resolving the situation as rapidly, efficiently, and cost-effectively as possible.
To start discussing your goals in a completely confidential legal consultation, call Bellatrix PC today at (800) 449-8992.
Whistleblower Confidentiality Under California Law
The plaintiffs in whistleblower lawsuits, or qui tam lawsuits, are often referred to as “relators.” The California Whistleblower Protection Act, which protects the identity of relators, also authorizes the California State Auditor to accept complaints from both California employees and members of the general public who wish to confidentially report unlawful and unethical conduct.
Like the identity of the original relator, the confidentiality of these supplemental complaints is closely guarded. With a few special exceptions for law enforcement agencies conducting criminal investigations, complainants’ identities may not be revealed unless the complainant him- or herself grants permission for disclosure.
What Does the False Claims Act Prohibit?
The False Claims Act prohibits numerous types of fraudulent conduct, with some of the more common examples of prohibited acts including but not limited to:
A small business supplying false “minority-owned” certification, with the intention of securing additional government contracts, when the purportedly “minority-owned” business is in fact neither owned nor operated by a minority.
A healthcare professional billing Medicaid and/or Medicare for medical procedures, such as surgeries or examinations, which were never actually conducted. Medicare fraud is a widespread problem throughout the United States, with the Office of Management and Budget estimating nearly $48 billion in improper Medicare payments in 2010.
A government contractor falsely claiming compliance with federal safety regulations, such as those imposed by the Occupational Safety and Health Administratin (OSHA), when the pertinent regulations were in fact disregarded by the contractor.
A pharmaceutical company which encourages doctors and other healthcare professionals to prescribe patients drugs for uses which have not been approved by the Food and Drug Administration. This tactic is commonly referred to as “off-label” marketing.
Furthermore, California Labor Code Section 1102.5 provides several additional protections for individual employees. Pursuant to Section 1102.5:
(a) Employers are prohibited from creating, adopting, or enforcing any rules, regulations, or policies which would prevent an employees from whistleblowing, provided the employee in question has “reasonable cause” to believe that the information he or she is providing relates to a violation of state or federal laws or regulations.
(b) Employers are prohibited from retaliating against whistleblower employees. Once again, this provision is contingent upon the employee’s “reasonable cause” in believing that a violation or act of noncompliance has occurred or is occurring.
(c) Similarly to the provision of subdivision (b), employers are also prohibited from retaliating against employees who refuse to participate in illegal, unlawful, and unethical acts which violate state or federal laws or regulations.
(d) Employers may not retaliate against an employee for having exercised his or her rights under subdivision (a), (b), or (c) in any former employment.
(e) A report made by an employee of a government agency to his or her employer is a disclosure of information to a government or law enforcement agency pursuant to subdivisions (a) and (b).
Section 1102.5 is designed to protect California whistleblowers’ legal rights. Employers who violate this statute may be subject to civil penalties, as well as additional damages stemming from lawsuits, couched as retaliation, in violation of public policy or wrongful termination in violation of public policy claims.
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If your company has been charged with committing fraud or other violations of the False Claims Act, the California Whistleblowers Protection Act, or Section 1102.5 of the California Labor Code, it is a serious matter which demands immediate attention from an experienced legal professional.
The employment law attorneys of Bellatrix PC represent entities of all structures and sizes, ranging from small start-ups to large and firmly established corporations, and are prepared to handle even highly complex multi-party litigation cases. Don’t wait until it’s already too late to address your legal issue: call the law offices of Bellatrix PC today at (800) 449-8992.
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Alicia I. Dearn is the founder of Bellatrix PC, a woman-owned law firm with offices in Missouri and California. Bellatrix PC handles lawsuits and business transactions. We advise in business, employment, real estate, intellectual property, civil litigation, and election law.
The articles published by Bellatrix PC are for informational purposes only and do not constitute legal advice. If you have a legal issue, please get competent advice from a licensed attorney in your jurisdiction. Use of Bellatrix PC's site is subject to our Attorney Advertising Disclaimers.