Corporate Services, Inc.
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Not All Retaliation Requires Intent


On February 8, 2024, the Supreme Court agreed unanimously that protections for whistleblowers who speak up about corporate fraud or securities law violations at publicly traded companies must prove that their protected activity (i.e., whistleblowing) was a contributing factor in the employer's unfavorable personnel action, but need not prove that the employer acted with "retaliatory intent."

Termination of Employment
Termination of Employment

So, how exactly does an employer retaliate without "retaliatory intent?"

Trevor Murray was a research strategist for UBS Securities, whose job required him to certify that certain financial reports were produced independently and accurately reflected his own views. He claimed that others at the company pressured him to compromise his independence to skew his reports to be more supportive of their business strategies. Murray further alleged that after approaching his supervisor and blowing the whistle, he received pushback, and UBS eventually fired him.

Murray then filed a complaint with the Department of Labor (DOL) alleging that his termination violated §1514A of Sarbanes-Oxley (SOX) because he was fired in response to his internal reporting about fraud on shareholders. Then, Murray filed an action in federal court.

Murray's claims went all the way to the jury. At trial, the court instructed the jury that Murray was "not required to prove that his protected activity was the primary motivating factor in his termination, or that UBS's articulated reasons for his termination... was a pretext, in order to satisfy this element."

The jury found in favor of Murray. So, UBS appealed.

The Second Circuit had a different take than the trial court on appeal. It concluded that "a whistleblower-employee must prove that the employer took the adverse employment action against the whistleblower-employee with retaliatory intent."

The appeal to the Supreme Court followed were the Second Circuit's decision was reversed in Murray v. UBS Securities.

It noted that while SOX makes it unlawful to "discriminate" against an employee for whistleblowing, "that word, however, cannot bear the weight that both the Second Circuit and UBS place on it." Instead, the "normal definition" of "discrimination" is "differential treatment," and the employer's lack of "animosity" is "irrelevant."

In other words, if Murray had established his whistleblowing contributed to his termination, the burden shifted to UBS to show that it would have terminated Murray anyway.

But not all antiretaliation laws are alike. Employees who claim retaliation based on complaining about discrimination (Title VII of the Civil Rights Act of 1964), speaking up about pay (Fair Labor Standards Act), or taking leave (Family and Medical Leave Act) must prove animus motivated their employer's response.

Not so under SOX.

Posted In: Fair Labor Standards Act (FLSA); Family and Medical Leave Act (FMLA); Quit, Resigned, Termination of Employment, etc.; Title VII of the Civil Rights Act of 1964 (Title VII); U.S. Supreme Court

Want to know more? Read the full article by at The Employer Handbook

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