Workers in California and around the country who report misconduct will no longer have to prove that their employers acted with retaliatory intent if they pursue legal remedies after filing whistleblower complaints with the U.S. Department of Labor. On Feb. 8, the Supreme Court of the United States cleared up any ambiguity over the burden of proof in whistleblower cases with a unanimous ruling. As a result of the ruling, employees who report misconduct will only have to establish that their protected actions were a contributory factor if they sue their employers for wrongful termination.
Research reports
The justices made their ruling after hearing arguments in a case involving a financial expert who wrote independent research reports for an investment bank. The man claims that he was pressured by his superiors to revise his reports to benefit the bank’s commercial mortgage-backed securities investments. He was fired after he filed a whistleblower complaint with the U.S. Department of Labor in 2012. The bank claimed that the man was let go during a planned layoff. A jury awarded the man $1 million in damages, but the U.S. Court of Appeals for the Second Circuit reversed the jury decision because the man failed to prove that his termination was directly connected to activities protected by the Sarbanes-Oxley Act.
Catchall provision
The arguments in the case centered on the use of the word “discriminate” in the 2002 federal law’s catchall provision. The Second Circuit ruled that the word imposes a burden on whistleblowers to prove animus or retaliatory intent in wrongful termination lawsuits. The U.S. Supreme Court justices unanimously disagreed. A wrongful termination plaintiff will still have to establish that their whistleblowing activities contributed to their employer’s decision to fire them, but they will no longer have to prove that it was the only or primary reason for their termination.
Clarification and guidance
The U.S. Supreme Court often hears arguments in cases when legislation is ambiguous and clarification and guidance is needed. In this case, the justices ruled that the word “discriminate” in the Sarbanes-Oxley Act did not place an additional burden on wrongful termination plaintiffs in whistleblower cases to prove retaliatory intent.