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News < Back Compliance : Sarbanes Oxley : Whistleblower : Sarbanes Oxley Whistleblower Hotlines Conflict with European Union Privacy Laws
“The problem is that SOX-mandated whistleblower hotlines conflict with European Union privacy laws,” said Donald C. Dowling, Jr., International Employment Counsel at White & Case LLP, who has surveyed European law on whistleblower hotlines and frequently advises companies on the issue. “There is no magic bullet to the problem, but there are options that multinationals can pursue.” The dilemma facing US companies seeking to launch whistleblower hotlines in Europe began in 2005, when France issued widely-publicized regulations that conflicted with SOX hotline rules. Since then, seven other countries that have issued written guidance on SOX hotlines: Belgium, UK, Germany, Ireland, Luxembourg, Netherlands and Spain. Each of these countries, with the arguable exception of the UK, severely restricts US-style “best practices” SOX hotlines. Virtually all US public companies doing business in Europe are now struggling with the issue. To overcome these challenges, Dowling recommends companies first assess their position on EU data protection laws. The next step is tailoring a strategy for whistleblower hotlines – for example, creating a single, global hotline that complies with EU rules, or launching two hotlines, one for Europe, the other for elsewhere in the world. “Another strategy would be to do away with a pan-European hotline entirely,” said Dowling. “There is a legal theory suggesting that SOX might not mandate hotlines abroad at all, but this strategy requires caution.” A final consideration is to consult with worker representatives about the hotline strategy selected by the company. Since its enactment in 2002, Sarbanes-Oxley has presented numerous compliance challenges to US publicly held companies. While the seemingly-simple SOX hotline requirement has sparked little controversy in the United States, it has proved enormously vexing to companies operating in Europe. Said Dowling: “There are so many issues of law involved here in so many countries, there are so many strategic and factual nuances, and each individual company’s compliance approach and risk tolerance plays so big a role, that there is simply no one-size-fits-all strategy. Donald C. Dowling, Jr., is the International Employment Counsel of the Labor, Employment and Immigration Practice of White & Case in New York. He is author of “Sarbanes-Oxley Whistleblower Hotlines across Europe: Directions through the Maze,” to be published in the 2008 volume of the American Bar Association's The International Lawyer. Dowling is one of only two lawyers in the US ranked in the top tier ("Leading") of international labor/employment lawyers by London-based PLC Which Lawyer? An adjunct law professor, he teaches European Union Law and International Employment Law. He is also the chair and a founder of XBHR, the multidisciplinary cross-border employment professionals' association, as well as past chair of the ABA International Employment Law Committee. White & Case LLP is a leading global law firm with more than 2,300 lawyers in 35 offices in 23 countries. Our clients value the breadth and depth of our US, English and local law capabilities and rely on us for their complex cross-border commercial and financial transactions and for international arbitration and litigation. Whether in established or emerging markets, the hallmark of White & Case is our complete dedication to the business priorities and legal needs of our clients. 
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