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Whistleblower Rights Expand with Supreme Court Ruling
Sometimes, the U.S. Supreme Court surprises us with a decision that cuts across ideological lines and propels the Court out of the intellectual grotto in which it appeared to be dwelling. Such is Lawson v. FMR LLC, No. 12-3 (March 4, 2014), which could have significant consequences for law and accounting firms, as well as all businesses working with public companies.
In Lawson , the Court held by a six-to-three split that the anti-retaliation protections afforded whistleblowers under the Sarbanes-Oxley Act of 2002 (SOX) enacted in the aftermath of the Enron and WorldCom financial scandals apply to employees of contractors and subcontractors of publicly traded companies. Although SOX was enacted to provide greater regulatory oversight of public companies, the Lawson decision means that private companies could be subjected to whistleblower lawsuits. Law firms with public company clients could also face SOX lawsuits that could concern matters unrelated to the public companies.
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