We recently posted a blog on Sarbanes Oxley Act (“SOX”) whistleblower protection that explained what kinds of employers are covered and what kinds of employees are protected. The blog also explained the procedure for filing a SOX complaint. Only days later, the U.S. Supreme Court handed down a rare unanimous decision in Murray v. UBS Securities, LLC that will make it easier for whistleblowers to assert SOX claims for retaliation.
What the Case Was About
Trevor Murray, the plaintiff in the case, worked as a research strategist who focused on commercial mortgage-backed securities (“CMBS”) for the UBS firm. Securities and Exchange Commission (“SEC”) regulations required him to certify that his reports were produced independently, and that they accurately reflected his own views. He claimed two leaders of the UBS CMBS trading desk improperly pressured him to skew his reports to be more supportive of their business strategies. He reported this conduct to his direct supervisor in December 2011 and January 2012, but the supervisor pretty much told him not to rock the boat. Ultimately, he told Murray to just “write what the business line wanted.”
Shortly after this admonition to violate the rules, UBS terminated Murray, even though his most recent performance report had been very positive. Per the procedure described in our earlier blog, he filed a SOX complaint with the Department of Labor, and when the agency did not issue a final decision within 180 days, he filed an action in federal court. A jury found in his favor after the judge instructed that to win he had to prove (1) that he engaged in whistleblowing activity that protected SOX, (2) that UBS knew that he engaged in the protected activity, (3) that he suffered an adverse employment action (i.e., was fired), and (4) that his “protected activity was a contributing factor in the termination of his employment.” When the jury asked for clarification about what “contributing factor” meant, the judge instructed that it should consider whether knowledge of Murray’s protected activity “affect[ed] in any way the decision to terminate [him].”
UBS appealed to the Second Circuit Court of Appeals, arguing that Murray had to prove UBS possessed “retaliatory intent,” a much steeper burden for a plaintiff to bear. Contrary to holdings from other Circuits, the Appellate Court agreed, and ordered the case re-tried with different jury instructions. Murray appealed to the Supreme Court, which reinstated his trial court verdict.
What the Supreme Court Held and What it Means
The Supreme Court held that nothing in the SOX statutory language created a “retaliatory intent” requirement. All that’s necessary is a showing that the whistleblowing activity was a contributing factor to the decision to take adverse action (here termination) against a whistleblower. Discrimination – treating someone differently – can occur without animus or intent. The Court rejected the argument that without a retaliatory intent requirement, innocent employers could face liability for legitimate, non-retaliatory personnel decisions. The proper question, the Court said, is whether an employer would have retained an otherwise identical employee who had not engaged in the protected activity.
For whistleblowers asserting SOX claims, the Murray decision is good news. It removes uncertainty about what they must prove to prevail at trial and strengthens the protections provided by the statute. If you think you’ve been retaliated against for whistleblowing activity covered by SOX, you should promptly contact counsel, as a plaintiff has only 180 days to file a SOX complaint.
