In Lawson v. FMR LLC, the U.S. Supreme Court overturned a Court of Appeals ruling that the whistleblower protections of the Sarbanes-Oxley Act of 2002 (“SOX”) only applied to employees of public companies, not those of contractors. SOX established anti-retaliation provisions for whistleblowers by prohibiting public companies or contractors from retaliating against an employee due to protected activity.
The whistleblowers in Lawson worked for mutual fund advisers, rather than the public company mutual funds. The Administrative Review Board of the Department of Labor came to the opposite conclusion regarding whistleblowers in Spinner v. David Landau & Assoc. LLC, and held that a contractor’s employee was protected by Sarbanes-Oxley.
The Supreme Court reversed the Court of Appeals, ruling that the anti-retaliation protections of SOX also apply to the employees of a public company’s contractor.

  • The defendant-employers urged the Court to adopt a narrow interpretation of the whistleblower protections, arguing that Congress only sought to prevent public companies from hiring an outside contractor to carry out improper retaliation.
  • Writing for the majority, Justice Ginsburg reiterates that the goal of SOX is to ‘safeguard investors in public companies.’ Given the text and purpose of SOX, the Court found that it should protect employees of contractors of public companies, not just employees of public companies.
  • The Court also explained that this is consistent with interpretations of the air-carrier whistleblower statute that SOX is based on, which covers employees of air carriers’ contractors and subcontractors.
  • The Court disagreed with the defendants’ emphasis on the statute’s caption, “Whistleblower Protection for Employees of Publicly Traded Companies.” The majority explained that if a caption conflicts with ‘numerous indicators’ in the legislative text, the caption does not prevail. The dissent argued that since the SOX anti-retaliation provisions are ambiguous, greater weight should be placed on the statute’s caption and title.

If you have questions about whistleblower protections, contact a New York attorney who is highly experienced in labor and employment law.