WASHINGTON (CN) — The Supreme Court endorsed a million-dollar fine stemming from a whistleblower complaint on Thursday, ruling in favor of added protections for employees who report misconduct.
The Sarbanes-Oxley Act made filing whistleblower complaints a protected activity. How employees use those protections, however, was up for debate before the justices.
In a unanimous opinion, the high court determined that a whistleblower who invokes such protections must prove his protected activity was a contributing factor in the employer’s action against him, but need not prove that his employer acted with “retaliatory intent.”
Trevor Murray was working as a financial expert at UBS Securities when he was fired for reporting misconduct. Murray says he was pressured to change his independent research reports to benefit UBS’s commercial mortgage-backed securities trading desk. Murray’s reports were used by UBS customers.
Before he reported his colleagues for pushing him to change reports, Murray says, his supervisor gave him positive feedback. Then Murray filed a whistleblower complaint with the Department of Labor in 2012 and he was fired.
The report claimed UBS violated federal law by firing him. UBS said Murray was terminated in a layoff.
A jury awarded Murray almost $1 million in damages, finding UBS didn't prove Murray would have been fired regardless of his complaint. The Second Circuit reversed the decision, ruling that Murray did not provide enough evidence that his termination was linked to his complaint.
Easha Anand, an attorney with Stanford’s Supreme Court litigation clinic representing Murray, said the Sarbanes-Oxley Act clearly states that employers have the higher burden of proof.
UBS’s attorney Eugene Scalia, the son of the late Justice Antonin Scalia, said Murray overread the statute. The Gibson Dunn lawyer said lawmakers have long interpreted the statue to require the employee to prove discriminatory intent.
"The Second Circuit was wrong when it held that the word 'discriminate' in the statute’s catchall provision imposes an additional requirement that the whistleblower plaintiff prove the employer’s 'retaliatory intent' or animus," Justice Sonia Sotomayor wrote for the unanimous opinion.
Despite USB's concerns that employers will face liability for legitimate decisions, the justices determined they would not be held liable if they had clear and convincing evidence that the same unfavorable action would have occurred if the employee hadn't blown the whistle.
Justices Samuel Alito and Amy Coney Barrett delivered a concurring opinion in which they reiterated that an employee still must show their whistleblowing activity was part of the reason they were fired.
"The plaintiff need not prove that the protected conduct was the only reason or even that it was a principal reason for the adverse decision. Showing that it 'help[ed] to cause or bring about' that decision is enough," Alito wrote.
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