Posted by: Melville Johnson, P.C.
May 29, 2008
Topic: The International Employment Effects of SOX
The Attorneys at Melville Johnson, P.C. can provide this type of representation for you:
Two lawsuits by former Fidelity portfolio mangers may determine whether mutual fund employees are protected by the Sarbanes-Oxley Act, which gave whistleblowers at public companies protection against retaliation. Congress passed the Sarbanes-Oxley Act in 2002, after the collapse of Enron Corporation and WorldCom. Currently, the Sarbanes-Oxley Act does not protect against privately held companies, such as Fidelity.
In Zang v. Fidelity Management & Research Company, the Plaintiff alleges that he was terminated for loudly complaining about company business practices, such as Fidelity's disclosure of the way it pays funds managers. The district court suit, which was filed on May 6, 2008, by the Plaintiff's lawyer, alleges that Mr. Jonathan M. Zang was terminated in violation of the Sarbanes-Oxley Act. Mr. Zang alleges that he complained that the disclosures made to the SEC, contained inaccuracies. Mr. Zang then repeated this to other colleagues in an electronic mail message. Fidelity said that Mr. Zang violated its rules on electronic communications; however, Mr. Zang maintains that his job performance was criticized only after he sent the electronic mail message.
Zang's attorney had attempted to make this argument in a Complaint that he had filed with the Occupational Safety & Health Administration. The Administrative Law Judge for OSHA determined that the Sarbanes-Oxley Act did not apply, since the corporate structure did not create a public held company. Essentially, Fidelity funds is a separate entity that hires FMR Company as the funds' manager, thus there was no clear connection between the company and the funds for ownership purposes.
The second suit, Lawson v. FMR, LLC, alleges that the Plaintiff, Ms. Jackie Hosang Lawson, was forced out of her position, when she questioned the way fidelity set funds fees. Fidelity has contended, through its counsel, that it is not subject to the Sarbanes-Oxley Act, since it is a private company. The suits have prompted much debate on the topic, as these matters could affect many companies and could even have international employment law implications. The attorneys at Melville Johnson, P.C. have represented similar clients regarding employment termination as well as many other issues relating to employment law for private employees, such as retirement planning, pension rights, and severance agreements.
This article is largely based on a Boston Globe article written by Ross Kerber on May 8, 2008.
