High Court Extends Whistleblower Protections

Mar 4, 2014
Originally published on March 5, 2014 8:33 am

The U.S. Supreme Court has ruled that a federal whistleblower law, enacted after the collapse of Enron Corporation, protects not just the employees of a public company, but also company contractors like lawyers, accountants, and investment funds.

Writing for the six-justice majority, Justice Ruth Bader Ginsburg said that in enacting the Sarbanes-Oxley law in 2002, Congress provided protection from retaliation for employees and contractors alike to ensure that they would not be intimidated into silence when they knew of corporate wrongdoing.

The decision was not along liberal/conservative lines, with three of the court's conservatives joining Ginsburg's opinion, and the usually liberal Justice Sonia Sotomayor writing the dissent for herself and two of the court's conservatives. Sotomayor said that the majority's interpretation of the law was so sweeping that it could lead to whistleblower suits by "nannies, housekeepers, and caretakers," who allege wrongdoing by their corporate employers.

The majority dismissed such concerns as nothing more than hypothetical and noted that there is not even a single case in which a private contractor has made a claim based on allegations unrelated to shareholder fraud.

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