In Lawson v. Fidelity Management & Research, LLC, the 1st Circuit ruled on Feb. 3 that the whistleblower protection provision of section 806 of the Sarbanes- Oxley Act of 2002 (SOX) does not apply to employees of nonpublic companies, even those who work for private contractors or subcontractors to public companies.
The plaintiffs, Jackie Lawson and Jonathan Zang, filed two separate but similar suits, each alleging retaliation by their employers—private, contracted advisers to the Fidelity mutual funds—for raising concerns over potential securities fraud and cost inaccuracies, which resulted in the loss of their jobs.
