U.S. Supreme Court Rules On Whistleblower Case

The U.S. Supreme Court issued a decision today in Murray v. UBS Securities, LLC, a whistleblower retaliation lawsuit filed under the Sarbanes-Oxley Act. In this case, which we briefed you about in October, the Court ruled that a whistleblower is not required to prove that his employer acted with retaliatory intent. Instead, the Court adopted a lesser (and easier to meet) standard of proof.

Murray contended that he was discharged by UBS Securities shortly after he reported that he was being pressured to skew his independent reports on the firm’s securities business. He alleged that his discharge was retaliatory under the Sarbanes-Oxley Act which prohibits publicly traded companies from retaliating against employees who report what they reasonably believe to be instances of criminal fraud or securities law violations.  

The issue before the Supreme Court was whether an employee must prove intentional retaliation or may use a lesser standard of proof showing that his/her whistleblowing was a contributing factor in the employer’s unfavorable decision. The Court determined that the lesser standard of proof was appropriate under the Sarbanes-Oxley Act in part because this Act required the use of a burden-shifting framework. Thus, if an employee can show his complaint was a contributing factor in the employer’s decision, the burden shifts to the employer to prove that it would have taken the same action in the absence of the complaint.  

The Court explained that its decision to adopt a contributing factor standard of proof (instead of the motivating factor standard of proof used in Title VII cases) is required by the text and purpose of the Sarbanes-Oxley Act. Its ruling is expected to have a broad impact upon numerous industry-specific whistleblower laws that mimic the Sarbanes-Oxley Act.

If you have questions about this case, please contact a KZA attorney.

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