On February 8, 2024, the Supreme Court issued a ruling in Murray v. UBS Securities, LLC, No. 22-660, clarifying the standard of proof required for whistleblowers under the Sarbanes Oxley Act, stating that a whistleblower must demonstrate that their protected activity contributed to the adverse employment action but does not need to prove retaliatory intent by their employer. The decision reinforces the Sarbanes Oxley Act’s role in protecting and promoting whistleblowing activity, setting crucial precedent for future cases.
The issue under consideration stemmed from a Second Circuit ruling in August 2022, which required whistleblowers invoking Section 1514A of the Sarbanes Oxley Act to prove retaliatory intent by their employer. This ruling contradicted decisions by the Fifth and Ninth Circuits, which did not require such proof. Section 1514A prohibits publicly traded companies from taking adverse actions against employees who “provide information, cause information to be provided, or otherwise assist in an investigation” or “file, cause to be filed, testify participate in, otherwise assist in a proceeding,” regarding any conduct which the employee “reasonably believes” constitutes a violation of any SEC rule or regulation, as well as Sections 1341, 1343, 1344 and 1348 of Title 18 of the United States Code. The Act prohibits employers from discriminating against employees who engage in protected whistleblowing activities. The central issue in Murray was whether Section 1514A requires proof of retaliatory intent for an adverse employment action to establish the necessary causal connection between the protected activity and the action.
Justice Sotomayor delivered the opinion of the Court, which was unanimously supported. The Court ruled that Section 1514A does not include a retaliatory intent requirement. The mandatory burden-shifting framework of the provision does not align with such a requirement. The Court clarified that the word “discriminate” in the provision’s text refers to adverse actions beyond those explicitly listed and does not require proof of retaliatory intent as an additional factor. Requiring such intent would conflict with established employment discrimination law.
This post is an advertisement. Any comments provided do not create an attorney-client relationship.
