In a unanimous decision, the U.S. Supreme Court rejected an argument that would have made it harder for whistleblowers to prevail on retaliation claims under the Sarbanes-Oxley Act (“SOX”). The decision, Murray v. UBS Securities, LLC, No. 22-660, may be welcome news to whistleblowers, but as a practical matter, employers will likely not see a significant change in SOX whistleblower retaliation claims or awards.

Under SOX’s anti-retaliation provision, a publicly traded company may not “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against” a whistleblower who reports certain conduct to certain governmental authorities or supervisors. There are four elements in a plaintiff’s prima facie case: (1) the employee engaged in protected activity; (2) the employer knew of the employee’s protected activity; (3) the employee suffered an unfavorable personnel action; and (4) the employee’s protected activity was a contributing factor in the adverse action. Seybold v. Charter Communications, Inc., 2023 WL 7381438, at *2 (5th Cir. 2023). If the employee makes a prima facie case, SOX’s anti-retaliation provision provides that the employer then must show the personnel action would have been taken notwithstanding the employee’s protected activity.  

In 2022, the Second Circuit expanded the four prima facie elements by incorporating a sub-element to the “contributing factor” requirement. Murray v. UBS Sec., LLC, 43 F.4th 254, 258 (2nd Cir. 2022), holding that a whistleblower must also prove that the employer acted with “retaliatory intent” when taking the adverse action. The court’s ruling deviated from the Fifth and Ninth Circuits, which held that retaliatory intent is not an element of an employee’s prima facie case. Halliburton, Inc. v. Admin. Rev. Bd., 771 F.3d 254, 263 (5th Cir. 2014); Coppinger-Martin v. Solis, 627 F.3d 745, 750 (9th Cir. 2010). The Supreme Court sided with the Fifth and Ninth Circuits, holding that plaintiffs do not need to show retaliatory intent. 

The Murray decision likely will not significantly impact the SOX whistleblower retaliation landscape. The decision generally maintains the status quo—the Supreme Court endorsed the familiar four elements of a SOX retaliation prima facie case which have been embraced by a majority of courts for decades. Further, before employees can bring a SOX retaliation claim in federal court, they must first file a complaint with the Occupational Safety and Health Administration (“OSHA”), which may resolve the allegations administratively. According to the OSHA Investigator’s Desk Aid, the agency analyzes SOX retaliation claims using the standard four-element prima facie case that does not require retaliatory intent. The Supreme Court endorsed the framework, so the decision is unlikely to alter OSHA’s approach to handling SOX retaliation complaints. 

Regardless of whether Murray shifts SOX whistleblower behavior, the opinion is a good reminder for employers to review their whistleblower policies and practices. Employers can best position themselves against whistleblower retaliation claims by maintaining a strong anti-retaliation policy, ensuring that employment decisions are well documented and supported by legitimate, non-retaliatory business reasons, and applying policies and practices consistently.

Photo of Lindsay Burke Lindsay Burke

Lindsay Burke co-chairs the firm’s employment practice group and regularly advises U.S., international, and multinational employers on employee management issues and international HR compliance. Her practice includes advice pertaining to harassment, discrimination, leave, whistleblower, wage and hour, trade secret, and reduction-in-force issues arising…

Lindsay Burke co-chairs the firm’s employment practice group and regularly advises U.S., international, and multinational employers on employee management issues and international HR compliance. Her practice includes advice pertaining to harassment, discrimination, leave, whistleblower, wage and hour, trade secret, and reduction-in-force issues arising under federal and state laws, and she frequently partners with white collar colleagues to conduct internal investigations of executive misconduct and workplace culture assessments in the wake of the #MeToo movement. Recently, Lindsay has provided critical advice and guidance to employers grappling with COVID-19-related employment issues.

Lindsay guides employers through the process of hiring and terminating employees and managing their performance, including the drafting and review of employment agreements, restrictive covenant agreements, separation agreements, performance plans, and key employee policies and handbooks. She provides practical advice against the backdrop of the web of state and federal employment laws, such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Equal Pay Act, the Family and Medical Leave Act, the Fair Labor Standards Act, and the False Claims Act, with the objective of minimizing the risk of employee litigation. When litigation looms, Lindsay relies on her experience as an employment litigator to offer employers strategic advice and assistance in responding to demand letters and agency charges.

Lindsay works frequently with the firm’s privacy, employee benefits and executive compensation, corporate, government contracts, and cybersecurity practice groups to ensure that all potential employment issues are addressed in matters handled by these groups. She also regularly provides U.S. employment law training, support, and assistance to start-ups, non-profits, and foreign parent companies opening affiliates in the U.S.

Photo of Carolyn Rashby Carolyn Rashby

Carolyn Rashby provides business-focused advice and counsel to companies navigating the constantly evolving and overlapping maze of federal, state, and local employment requirements. She conducts workplace investigations and cultural assessments, leads audits regarding employee classification, wage and hour, and I-9 compliance, advises on…

Carolyn Rashby provides business-focused advice and counsel to companies navigating the constantly evolving and overlapping maze of federal, state, and local employment requirements. She conducts workplace investigations and cultural assessments, leads audits regarding employee classification, wage and hour, and I-9 compliance, advises on employment issues arising in corporate transactions, and provides strategic counsel to clients on a wide range of workplace matters, including harassment and #MeToo issues, wage and hour, worker classification, employee accommodations, termination decisions, employment agreements, trade secrets, restrictive covenants, employee handbooks, and personnel policies. Her approach is preventive, while recognizing the need to set clients up for the best possible defense should disputes arise.