On March 4, 2014, the United States Supreme Court expanded the scope of the whistleblower protections of the Sarbanes-Oxley Act ("SOX") in Lawson v. FMR LLC. The Court held that SOX's whistleblower protections extend to employees of a public company's private contractors and subcontractors. Thus, by way of example, employees of investment advisers, law firms and accounting enterprises are shielded by SOX's whistleblower protections when they perform work for a public company.
In reaching this result, the Court found support in the plain language of the statute and the legislative history, as well as a comparison to other whistleblower statutes. This decision is of note not only because it is the first ever Supreme Court SOX whistleblower ruling, but also because of the potential impact it will have in expanding the scope of coverage under SOX. Although six of the justices endorsed the conclusion that SOX whistleblower protection covers contractors, Justice Sotomayor wrote the dissent stating that the majority's view was a "stunning reach" and would lead to "absurd results."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
