SOX Whistleblowers Don’t Have to Prove Employers Had Retaliatory Intent, Supreme Court Rules

The U.S. Supreme Court ruled Feb. 8 that fraud whistleblowers alleging retaliation do not have to prove their employer acted with retaliatory intent under the Sarbanes-Oxley Act (SOX).

While a whistleblower bringing a SOX retaliation claim must prove that the protected activity was a contributing factor in the unfavorable employment action, the employee need not prove the employer acted with retaliatory intent, the court decided. A retaliatory intent requirement is absent from the statutory text, the court explained.

In Murray v. UBS Securities, Trevor Murray sued UBS Securities, alleging that UBS terminated his employment because he reported alleged fraud and a violation of the retaliation prohibitions in SOX. UBS argued that without a retaliatory intent requirement, innocent employers will face liability for legitimate, nonretaliatory employment decisions, the court noted. However, the court ruled that the statute’s burden-shifting framework provides that an employer will not be held liable if it demonstrates by clear and convincing evidence it would have taken the same unfavorable action in the absence of the protected behavior.

This news will be updated later today.