Sarbanes-Oxley "Whistleblower" Employee Protections Extended to Private Employers who Contract with Public Companies
On March 4, 2014, the U.S. Supreme Court held in Lawson v. FMR LLC that the whistleblower provision of Sarbanes-Oxley applies to employees of privately held companies. Sarbanes-Oxley provides that no public company may discharge or discriminate against an employee for reporting, or whistleblowing, violations of federal securities laws, including mail, wire and bank fraud. Until the Lawson decision, courts had routinely held that employees of private companies were not covered by this provision. However, the Supreme Court determined that Sarbanes-Oxley was enacted to safeguard investors in public companies, and found it suspicious that construction of the provision protected whistleblowers only when they were employed by a public company, but not by the public company’s contractor. Therefore, the Court concluded that the provision covers employees of private contractors and subcontractors.
Private employers who contract with a public company are now subject to new legal exposure, and should ask counsel to help familiarize themselves with the relevant regulations, including the whistleblower protection provision of Sarbanes-Oxley, to be certain that their complaint procedures and anti-retaliation policies cover these situations.
If you have questions regarding the Sarbanes-Oxley whistleblower statute, please feel free to contact AttorneyTara Craft Adams (email@example.com; 952.921.4618), or any Peters, Revnew, Kappenman & Anderson, P.A. attorney at (952) 896-1700.