Conscripting Attorneys to Battle Corporate Fraud without Shields or Armor? Reconsidering Retaliatory Discharge in Light of Sarbanes-Oxley

Authors

Kim T. Vu, University of Michigan Law School

Abstract

This Note advocates that federal courts should allow attorneys to bring retaliatory discharge claims under SOX. Traditional rationales prohibiting the claims of retaliatory discharge by attorneys do not apply in the context of Sarbanes-Oxley. This Note contends that the Department of Labor and the federal courts should interpret the whistleblower provisions of § 806 as protecting attorneys who report under § 307. Assuring reporting attorneys that they have protection from retaliation will encourage them to whistleblow and thereby advance SOX's policy goal of ferreting out corporate fraud. Part I explores the legal landscape of retaliatory discharge suits by attorneys. This Part examines the rationales of the traditional view, the limited-claim view, and the wide-open view. Part II considers whether reporting attorneys are protected as "employees" under the whistleblower provisions of § 806. This Part argues that, based on plain meaning, statutory purpose, legislative history, and policy considerations, courts should interpret § 806 as covering attorneys reporting under § 307 to carry out the substantive goal of SOX. Part III counters the common law's traditional view that has denied retaliatory discharge claims by whistleblower-attorneys. This Part argues that the legislative goal of Sarbanes-Oxley to combat corporate fraud takes precedence over common law policies of preserving the traditional attorney-client relationship. This Part also rebuts the traditional rationale that attorneys already bound by ethical obligations do not need additional support to whistleblow, and instead, contends that strong economic and psychological incentives encourage attorneys to sidestep the reporting requirements.

Recommended Citation

Kim T. Vu, Conscripting Attorneys to Battle Corporate Fraud without Shields or Armor? Reconsidering Retaliatory Discharge in Light of Sarbanes-Oxley, 105 Mich. L. Rev. 209 (2006).
Available at: https://repository.law.umich.edu/mlr/vol105/iss1/5