The U.S. Supreme Court confirmed in March that the Sarbanes-Oxley Act’s whistleblower provision — and its attendant cause of action for retaliation — protects not only public-company employees, but also employees of law firms, auditing firms, investment advisers and other contractors of public companies. Lawson v. FMR LLC, No. 12-3 (March 4). However, the Lawson court did not decide two important issues: whether a household employee of a public-company officer or employee — for example, a nanny or gardener — can bring a Sarbanes-Oxley claim against that officer or employee; and whether a whistleblower can bring a Sarbanes-Oxley claim against a public company, a private contractor of a public company or a public-company employee, even if the whistleblower has not reported shareholder fraud. Until these questions are resolved, private and public employers alike could face a broad variety of Sarbanes-Oxley whistleblower claims.
In Lawson, the plaintiffs were former employees of privately held Fidelity Investments advisers, which performed services for public Fidelity mutual funds. The plaintiffs alleged that they blew the whistle on fraud related to the funds and that the Fidelity advisers terminated them as a result. They brought a retaliation claim under Sarbanes-Oxley’s whistleblower protection provision (18 U.S.C. 1514A), which provides that no public company, or “any officer, employee, contractor, subcontractor or agent of such company … may discharge, demote, suspend, threaten, harass or in any other manner discriminate against an employee in the terms and conditions of employment because of any [protected activity].”
