This past Friday, the United State Supreme Court granted cert. in the case of Lawson v. FMR LLC. The case concerns whether the Sarbanes-Oxley Act (SOX), which protects employees of publicly traded companies from retaliation for reporting financial improprieties, also protects the employees of private contractors of those companies. In the case, two fund investment advisors blew the whistle on a publicly-traded mutual fund which contracted for their services. The First Circuit found that the fund advisors were not covered by SOX protections.
The Court had asked the U.S. Solicitor General’s views on the case, and the SG recommended that the Court bypass the case in order to allow the issue to percolate among more circuit courts. The case, however, was granted.
Among the issues to be decided: whether protecting the employees of contractors is mandated under the plain meaning of SOX and whether a finding of no coverage for such employees will discourage whistleblowers from bringing financial fraud allegations to the attention of the public. It should also be an interesting case because it is one of the first to examine the whistleblower protections of SOX and will likely provide guidance on how broadly or narrowly SOX should be interpreted to protect whistleblowers in the financial services industry.
This article was originally printed on Workplace Prof Blog on May 22, 2013. Reprinted with permission.
About the Author: Paul Secunda is an associate professor of law at Marquette University Law School. Professor Secunda is the author of nearly three dozen books, treatises, articles, and shorter writings. He co-authored the treatise Understanding Employment Law and the case book Global Issues in Employee Benefits Law. Professor Secunda is a frequent commentator on labor and employment law issues in the national media. He co-edits with Rick Bales and Jeffrey Hirsch the Workplace Prof Blog, recently named one of the top law professor blogs in the country.