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Leg500 Week 3 Assignment 1: Whistleblowing and Sarbanes-Oxley

In: Business and Management

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Describe the key characteristics of a whistleblower
Person or any employee who reports the illegal activities occurring in an organization or who has insider knowledge of immoral, or illegitimate practices taking place in a business either through witnessing the behavior or being told about it. Such practices can include illegality, frauds, mismanagement or abuse of power. Whistleblowers can use different channels to report wrongdoings, including internal channels (i.e., within their organization, such as directly reporting misbehavior and incidents to their immediate supervisor, union representative, or human resources department) or external means (i.e., going outside their organization to, for example, a third party ombudsman, an external hotline, or an applicable government regulatory agency related to the type of wrongdoing behavior.
Internal whistleblowing mechanisms for public companies must comply with the provisions of the Sarbanes-Oxley Act of 2002 (SOX). Two of the many corporate governance provisions of SOX place whistleblower-friendly requirements on issuers. SOX section 301 requires the audit committee of every issuer to establish procedures for the receipt, retention, and treatment of complaints regarding accounting, internal control, or auditing matters, and to maintain the anonymity of employee complaints regarding accounting and auditing matters (i.e., the establishment of a whistleblower hotline). SOX section 806 provides protection for employees who blow the whistle against their employer, an anti-retaliation provision subsequently reinforced by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Programs to encourage external whistleblowing typically provide an incentive to the would be whistleblower, either in the form of monetary awards, protection from retaliation, or both.
Researchers have identified various issues that are most often associated with whistleblowing
Whistleblowing dilemmas can occur when there is a conflict between the expectations of an individual and/or a profession regarding safety and the interests of the organization. Whistleblowing regarding public harm can include concerns about pollution or other forms of environmental harm.
Briefly summarize one (1) researched instance of whistleblowing in one (1) publicly traded company within the last 12 months
March 23, 2015, St. Petersburg, FL–Former JCPenney employee Robert Blatchford has filed a claim against the retailer under the State of Florida’s Private Whistleblower Act.
According to a report, Blatchford, a part-time employee from August 2012 to July 2013, accused the retailer of charging customers full price on sale items and collecting sales tax on un-taxable items.
Blatchford then sent emails to former CEO Ron Johnson and human resources chief Dan Walker and was told that the accusations were being addressed but he didn’t believe it so he went on NBC’s show in July 2013 to speak out about it. He was fired two days later and sued by the retailer, but JCPenney dropped the case last September.

Include the details of the issue that the whistleblower reported and the effect of the whistleblower’s actions on both the whistleblower himself and the company
In a report by The Inquisitr, JC Penney’s sales plummeted over 33 locations and department retailers were forced to borrow $850 million a year. For that they tried this and several other sales tricks to their customers. They claim their prices were low yet they were trying to get rid of the sales completely JC Penney’s pricing team go through the store and raise the price, mostly doubling. Then they would go on sale, and they wouldn’t always go on sale for 50 percent off. Not only was it a fake sale, but they were actually paying more than they would have been previously.
Unfortunately for Bob, lost his job when he reveal JC Penney’s dirty little secret. JC Penney even contested his unemployment benefit claims and filed an arbitration claim, which, according to Blatchford, was done in order to prevent him from speaking out further against the company. But company officials claim their former employee is seeking the “love of media attention.”

Decide whether or not the whistleblower was justified in reporting the company’s actions. Provide a rationale for your response

I believe if the JC Penney sale prices are indeed fake then it’s possible they’re leaving themselves open to class action lawsuits. In my opinion, Bob was justified because JC Penney was actually tricking customers and making them pay more than actually price. I found it as a false bargain, when prices on a product are artificially inflated before a sale in order to market the supposed discount.
The loss of shopper trust is apparently worth a whole lot more than any money they have saved from such practices.

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