MGM Resorts ordered to pay damages of $325,000, reinstate whistle-blower

MGM Resorts International was ordered Thursday to pay damages of $325,000 by the U.S. Department of Labor’s Occupational Safety and Health Administration and to immediately reinstate a whistle-blower who worked at the company’s Signature at MGM Grand condominiums.

In a brief statement, the casino operator said it viewed “this preliminary finding as fundamentally wrong on the facts and the law of this matter. We intend to pursue avenues for further review.”

According to a statement from OSHA, the casino operator violated the whistle-blower provisions of the Sarbanes-Oxley Act. OSHA said the former employee of The Signature — who was not named — was fired in retaliation for disclosing that co-workers were allegedly violating Securities and Exchange Commission rules and regulations by engaging in “forecasting,” which involves the providing of information to a potential buyer as to the expected revenue and occupancy rates of condominiums. The employee was also fired for saying there was pressure from others to engage in forecasting.

An OSHA spokeswoman said the allegations took place in 2007 and 2008. The U.S. Department of Labor does not release names of employees involved in whistle-blower complaints.

Under SEC rules, if a condominium unit is offered for sale with an emphasis on forecasting the economic benefits to the buyer from the rental of the unit by the seller, it is deemed a “security,” and can only be offered by someone who is a security broker licensed to offer such a security.

The complainant’s co-workers were not licensed security brokers. OSHA conducted its investigation under the whistle-blower protection 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,” Ken Atha, OSHA’s regional administrator in San Francisco said in a statement. “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.”

OSHA ordered MGM Resorts to post a notice informing all employees of Sarbanes-Oxley Act whistle-blower protections, asked that the employer expunge the employee’s personnel records of any references to the unlawful termination. The company is also required to provide the employee a neutral job reference.

The company or the employee can file an appeal with the department’s Office of Administrative Law Judges, but such an appeal does not stay the preliminary reinstatement order.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.