Supreme Court Provides Expansive Interpretation of Sarbanes-Oxley Whistleblower Protection Provision, in Bender’s Labor and Employment Bulletin

David W. Garland, Chair of the firm's Labor and Employment Steering Committee, in the New York office, and John F. Fullerton, III, a Member of the Firm in the Labor and Employment practice, in the New York office, co-wrote an article titled "Supreme Court Provides Expansive Interpretation of Sarbanes-Oxley Whistleblower Protection Provision."

Following is an excerpt:

In its very first decision interpreting Section 806, the whistleblower provisions of the Sarbanes-Oxley Act of 2002 (''SOX''), the Supreme Court has opened up an enormous pool of potential whistleblower claimants against employers who might not otherwise be covered by statute. On March 4, 2014, reversing the First Circuit Court of Appeals, the Supreme Court held, in Lawson v. FMR LLC,1 that the SOX whistleblower protection provisions set forth in 18 U.S.C. § 1514A protect the employees of private companies that contract with public companies that are directly covered by the Act. The 6-3 decision is noteworthy, among other reasons, for the mix of ''conservative'' and ''liberal'' justices in both the majority and the dissent. Justice Ginsburg, writing for the majority, held that § 1514A ''shelters employees of private contractors and subcontractors, just as it shelters employees of the public company served by the contractors and subcontractors.'' While the Court, as Justice Sotomayor noted in her dissenting opinion, has given § 1514A a ''stunning reach'' that could lead to ''absurd results'' — by covering, for example, the housekeeper or nannie of an individual covered by SOX — the decision should be of particular concern to the types of employers to which public companies routinely contract work, such as accounting and law firms, whose employees are routinely in a position to perceive — rightly or wrongly — evidence of fraud or other corporate wrongdoing.