Does a fired whistleblower need to show their employer acted with retaliatory intent to prove retaliation under the Sarbanes-Oxley Act (SOX)? The Supreme Court has been asked to review the standard of proof in such cases – and the outcome could resolve a disagreement among federal appeals courts and set a consistent standard. The ruling will impact how publicly traded companies defend against SOX retaliation claims and may also affect whistleblower protections under other laws that are similarly structured. How will SCOTUS decide? During oral argument, the Justices seemed unlikely to accept the employer’s higher bar. This means we may see more whistleblower claims make it to jury trials, and employers should be prepared to prove they would have made the adverse employment decision anyway. Read on for an analysis of the issues and our specific predictions on how the Justices will decide the case.
A Rundown of the Issues
SOX Whistleblower Protections: Employees of publicly traded companies are protected under SOX when they report financial wrongdoing — and covered businesses may not “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment” when they assert their rights under the act.
Dispute About Reason for Termination: The employee in this case claims he was fired for refusing to create misleading reports about commercial mortgage-backed securities and complaining about being pressured...
; ; ; agreed to pay $17.07 million to settle federal allegations of illegal diversity, equity and inclusion (DEI) hiring practices on Friday, marking the Justice Department's first resolution unde...