The Sarbanes-Oxley Act prohibits publicly traded companies from retaliating against employees who report actions they reasonably believe amount to criminal fraud or violations of securities laws. Trevor Murray sued UBS, claiming he was fired for reporting what he believed to be unethical and illegal conduct. A jury agreed. The Second Circuit threw out the jury’s decision because Murray had not been required to prove that his employer took action against him “with retaliatory intent.”
A unanimous Supreme Court reversed, finding that a Sarbanes-Oxley whistleblower must prove only that his protected activity was a “contributing factor” in his employer’s unfavorable action, and there is no need, under the statute, for evidence the employer acted with “retaliatory intent.”
In response to the argument that this “contributing factor” test is simply too easy for a whistleblower to meet, the Court noted:
“To be sure, the contributing-factor framework that Congress chose here is not as protective of employers as a motivating-factor framework. That is by design. Congress has employed the contributing-factor framework in contexts where the health, safety, or well-being of the public may well depend on whistleblowers feeling empowered to come forward. This Court cannot override that policy choice by giving employers more protection than the statute itself provides.”
The key takeaway is that retaliation claims by whistleblowers against publicly traded employers just got easier under the Sarbanes-Oxley Act. Employees who complain of fraud or securities violations are protected, and employers who take adverse actions against them must be prepared to prove, by clear and convincing evidence, that they would have taken the adverse action even if the employee did not make a complaint.
#retaliation #sarbanesoxley #employmentlaw #employmentretaliation
Murray v. UBS Securities, LLC., U.S. Supreme Court, February 8, 2024