The U.S. Supreme Court ruled Feb. 8 that “retaliatory intent” doesn’t have to be proven in whistleblowers’ Sarbanes-Oxley Act (SOX) retaliation claims, only that the protected activity was a “contributing factor” in an unfavorable employment action. In this case, the distinction involves a whistleblower seeking reinstatement of a damages award of nearly $1 million along with $1.77 million in attorney fees and costs.

The ruling is a reminder to employers to practice good documentation on all employment decisions.

“SOX protects employees of a broad array of entities—namely, public companies, essentially, those listed on stock exchanges and other types of companies that make SEC [U.S. Securities and Exchange Commission] filings, like mutual funds, as well as their officers, employees, contractors, subcontractors and agents,” said Brian Neil Hoffman, an attorney with Holland & Hart in Denver and Washington, D.C. “SOX specifically applies to reports about various types of perceived fraud.”

“This decision makes it easier for SOX whistleblowers to establish retaliation,” said Katie Reynolds, an attorney with Fisher Phillips in Boston. She said the decision underscores the importance of diligent documentation of workplace issues and employment decisions to defend against any inference of retaliation.

“Employers should continue to ensure they are operating lawfully and ethically,” said Tracey Salmon-Smith, an attorney with Faegre Drinker in Florham Park, N.J., and New York...

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