By Mark Ishu
The Sarbanes-Oxley Act (“Act” or ”SOX”) shields whistleblowers from retaliation for reporting any wrongdoing by publicly traded companies. Recently, in Murray v. UBS Securities, LLC, the U.S. Supreme Court evaluated the threshold whistleblowers must meet to be afforded protection under the Act after the Second Circuit departed from the findings of the Fifth and Ninth Circuits and held that a SOX whistleblower must separately prove “retaliatory intent” to prevail in his claim. 
An employer acts with “retaliatory intent” where the employer acts out of prejudice, animus, or comparable hostile or culpable intent. On February 8, 2024, the U.S. Supreme Court unanimously (9-0) reversed the Second Circuit decision. The Supreme Court held that a whistleblower must prove that his protected activity was a contributing factor in the employer’s unfavorable personnel action, but need not prove that his employer acted with “retaliatory intent.”
To prevail in a SOX retaliation claim, the whistleblower must prove the following four elements:
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- That their employer is “covered” by SOX, which generally extends its protections to employees of publicly traded companies and their contractors;
- “Protected activity,” i.e., that they engaged in some activity that was protected by SOX, including opposing or raising concerns about fraud or violations of the securities laws;
- An “adverse action,” i.e., that their employer subjected them to some action (e.g., termination or demotion) that would dissuade a reasonable person from blowing the whistle; and
- Causation, i.e., a causal connection between the protected activity and the subsequent adverse action.
In Murray v. UBS Securities, LLC, Trevor Murray, a former research strategist at UBS Securities, reported suspected fraud to his supervisors and was subsequently terminated. Continue reading
