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Unanimous Supreme Court shifts burden to employers in whistleblower case

Whistleblowers can blow their whistles a little louder tonight. The Supreme Court’s recent ruling, Murray v. UBS Securities, LLC, decided that an employee may prove a whistleblower retaliation claim without showing that their employer acted with retaliatory intent. As a result, it is now easier for employees to succeed on whistleblower retaliation claims under the Sarbanes-Oxley Act and probably beyond.

The Case

In Murray, an employee, Trevor Murray, had worked for UBS as a research strategist. His role required him to certify his reports to UBS customers were independently produced. UBS terminated Murray shortly after he informed his supervisor that two leaders of the UBS trading desk were changing his reports thus undoing the “independent” nature of the reports. Murray filed a whistleblower case against UBS. After extensive legal maneuvering, the case boiled down to a singular issue: do whistleblowers need to prove that their employer had retaliatory intent?

The Outcome

The Supreme Court decided that adding an intent requirement to whistleblower claims was imprudent: whistleblower’s need only prove that their protected activity was a contributing factor in the retaliation. Moreover, the Court said, “[the law’s] text does not reference or include a ‘retaliatory intent’ requirement, and the [law’s] framework cannot be squared with such a requirement.” This is another example of the Court following a strict interpretation of a statute, which is often a common theme for this Supreme Court.

The Takeaway

The Murray decision clarifies that employees seeking whistleblower protection under the Sarbanes-Oxley Act are not required to prove any specific intent behind their employer’s decision to retaliate against them for protected activity. Instead, a whistleblower only needs to demonstrate their protected activity contributed to their termination, after which the burden shifts to the employer to prove they would have terminated the employee even without considering the protected activity.

The heightened burden on employers is likely to raise the cost of defending these claims and makes winning that much harder. Also, while the case addresses the Sarbanes-Oxley Act, it will likely spill over to many other whistleblower cases. As such, taking appropriate/legal action against whistleblowers will be that much harder. Using skilled counsel can help companies best avoid liability.

Brody and Associates regularly advises management on complying with the latest state and federal employment laws. The subject matter of this post can be very technical. It is also very fact specific. Our goal is to alert you to some of the new laws and trends which may impact your business.  It is not intended to serve as legal advice. We encourage you to seek competent legal counsel before implementing any of the new policies or practices discussed above.  If we can be of assistance, please contact us at info@brodyandassociates.com or 203.454.0560.

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