The US Supreme Court is currently reviewing a case involving UBS Group AG and a fired research strategist, Trevor Murray. This case may impact how whistleblowers can claim retaliation under the Sarbanes-Oxley Act, an federal investor-protection law. According to Bloomberg Law, UBS argued that for whistleblowers to win, they need to prove intentional retaliation. However, this point has been met with skepticism from multiple justices, one of them being Neil Gorsuch.
Justice Gorsuch questioned the wording of the Sarbanes-Oxley Act as UBS attorney, Eugene Scalia, made their argument. “I don’t see ‘retaliation’ in the statute,” Gorsuch said. “You’re asking me to read things into a statute that aren’t there.”
In the last six years, over 750 Sarbanes-Oxley claims have been filed by employees with the Labor Department. The law’s creation was a response to the corporate fraud that led to the downfall of Enron Corp. and WorldCom Inc.
The conflict arose when Murray argued he was dismissed for refusing to falsify his reports to benefit the company’s business strategies. A federal appeals court originally discarded a verdict in Murray’s favor as he was expected to show that UBS purposefully retaliated against him. However, Murray’s lawyer, Easha Anand, counter-argued that under Sarbanes-Oxley, it is sufficient for employees to show that their protected activity was a “contributing factor” to their firing or demotion.
With the Supreme Court’s decision expected by June, this case could potentially change the burden of proof in whistleblowing cases. Furthermore, justices have hinted at the possibility of a narrow ruling that would send the case back to the New York-based 2nd US Circuit Court of Appeals, instead of reinstating the jury’s original $900,000 verdict to Murray.
In addition to this legal battle, UBS Group AG has also stated that Murray’s termination was part of a wider staffing reduction due to the bank’s financial difficulties, including a $2 billion loss due to a rogue trader at its London office five months prior to Murray’s dismissal.
As legal professionals, this case serves as a reminder of the complex dynamics surrounding whistleblowing suits, the legal interpretations of existing laws, and potential implications for future related cases.