SCOTUS Says Retaliatory Intent Not Required for SOX Whistleblowing Claim
|
APPLIES TO All Publicly Traded Companies |
EFFECTIVE February 8, 2024 |
QUESTIONS? Contact HR On-Call |
Quick Look
|
Discussion
In Murray v. UBS Securities, LLC, the Supreme Court stated that a whistleblower does not need to prove that an employer acted with retaliatory intent when invoking the protections of the Sarbanes-Oxley Act of 2002 (SOX). Instead, a plaintiff only needs to show that their protected whistleblower activity was a “contributing factor” in their termination. Upon this showing, the burden transfers to the defendant to prove it would have terminated the plaintiff even absent the protected activity.
In this case, the plaintiff worked as a research strategist in a role that required him to certify that his reports to the employer’s customers were independently produced and reflected his own views. The employee informed his supervisor “that two [company leaders] were engaging in what he believed to be unethical and illegal efforts to skew his independent reporting,” and the employer terminated his employment shortly thereafter. The employee filed suit, alleging his termination was in retaliation for expressing his concerns.
In deciding the case, the Supreme Court reasoned that if an employer takes any adverse action because of an employee’s whistleblowing activity, that action constitutes “actionable discrimination,” and the employer’s lack of retaliatory intent is irrelevant. In other words, the term “discrimination” does not necessarily require retaliatory intent. This decision also aligns with the Court’s interpretation of Title VII’s discrimination framework. Once the plaintiff has made a showing that their whistleblower activity was a contributing factor in their termination, the plaintiff must still demonstrate causation between the whistleblower activity and the adverse action taken by the employer.
Action Items
- Review anti-discrimination, retaliation and harassment policies for compliance.
- Update company reporting procedures to confirm employee complaints and/or concerns are properly collected, investigated, and rectified.
- Have appropriate personnel trained on how to handle and respond to employee complaints and concerns.
- Engage a third-party investigator when necessary to ensure whistleblower complaints and investigations are handled properly.
- Consult with legal counsel before taking adverse action against employees who have submitted a work-related complaint, whether formal or informal.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2024 ManagEase