Whistleblowers across various industries potentially face a heightened standard for proving retaliation now that the US Supreme Court is on course to clarify the burden-shifting framework in a case involving a former UBS employee.
The justices agreed earlier this week to hear a former UBS Securities LLC research strategist’s whistleblower case, the crux of which turns on whether the Sarbanes-Oxley Act requires him to show that the bank fired him with retaliatory intent, not just that the protected disclosure was a contributing factor to the decision.
The US Court of Appeals for the Second Circuit last year overturned a $1.7 million jury verdict against UBS Securities and parent UBS AG, finding that the jury should’ve been told that former employee Trevor Murray had to show that the company retaliated because of his lawful whistleblowing activity.
Requiring proof of retaliatory intent would make it virtually impossible for whistleblowers to pursue Sarbanes-Oxley retaliation claims, attorneys say. The Second Circuit is an outlier from other circuits that have addressed the issue, and the Supreme Court would undercut the legal safeguards for corporate whistleblowers if the justices affirm the decision below, they said.
The Tenth, Ninth, Fifth, and Fourth circuits instead have applied the contributing factor test, according to Murray.
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