MGM Resorts International has been ordered to reinstate a wrongfully terminated whistle-blower and pay $325,000 in damages for violating whistle-blower laws.
The U.S. Department of Labor’s Occupational Safety and Health Administration today announced details of the case, which stems from allegations that employees of the Signature at MGM Grand violated Securities and Exchange Commission rules.
The former Signature employee was fired in retaliation for disclosing that co-workers engaged in “forecasting” and reporting pressure from those employees to do the same.
Forecasting — the practice of giving information to potential condominium buyers focusing on expected revenues and occupancy rates of condos — is against SEC rules, according to OSHA. SEC regulations say that if a condo unit is put on the market and the seller partakes in forecasting, the property is automatically considered a “security.”
Only licensed security brokers can sell securities. None of the whistle-blower's co-workers were licensed security brokers, prompting an OSHA investigation. Whistle-blowers are protected under specific provisions of the Sarbanes-Oxley Act.
“This employee tried to ensure the employer was following the law and paid a hefty price for speaking up,” said Ken Atha, OSHA’s regional administrator in San Francisco. “This order reaffirms both the right of employees to report what they reasonably believe are violations of SEC rules and the department’s pledge to protect that right.”
"We view this preliminary finding as fundamentally wrong on the facts and the law of this matter. We intend to pursue avenues for further review," MGM officials said in a statement.
Going forward, the gaming giant has to maintain a public notice informing all its employees of the Sarbanes-Oxley Act’s whistle-blower protection.
OSHA has also asked MGM to expunge the whistle-blower’s personal records of any references to the unlawful termination and provide that employee a neutral job reference.
Either party involved in this case can appeal with OSHA’s Office of Administrative Law Judges. But an appeal doesn’t override the reinstatement order.