'How employers win' | U.S. Supreme Court justices skeptical of high bar for whistleblower lawsuits

U.S. Supreme Court justices skeptical of high bar for whistleblower lawsuits

Several U.S. Supreme Court justices appear to be leaning toward rejecting an effort by UBS Group to make it more difficult for financial whistleblowers to prove retaliation claims.

As per Reuters, the court heard oral arguments in an appeal by Trevor Murray, a former UBS bond strategist who claims that he was unlawfully fired for refusing to publish misleading research reports and complaining about being pressured to do so.

A jury awarded Murray $1.7 million, but the New York-based 2nd U.S. Circuit Court of Appeals last year overturned the verdict. The court said the jury should have been instructed that in order to hold UBS liable under the federal Sarbanes-Oxley Act (SOX), Murray had to prove that the company acted with retaliatory intent.

The ruling created a split with at least two other appeals courts that have said the lack of intent can be raised as a defense in a SOX case, but must be proven by the defendant.

The issue is technical, but the court's answer could have a major impact on whistleblower litigation. A ruling in favor of UBS could significantly curtail whistleblower lawsuits because it is often difficult for plaintiffs to prove a defendant's motives.

UBS is represented by Eugene Scalia of Gibson Dunn & Crutcher, the son of late Supreme Court Justice Antonin Scalia and a former U.S. labor secretary, who was making his first appearance before the court.

he court's three liberal justices and one conservative, Justice Neil Gorsuch, all said that SOX, which bars "discrimination" against employees who report financial misconduct by publicly traded companies, did not seem to impose the high bar adopted by the 2nd Circuit and pushed by UBS.

“I see ‘discrimination’ in the statute, I see ‘whistleblowing activity,’ but I don’t see ‘retaliation,’” Gorsuch said to Scalia. “You’re asking me to read things into the statute that aren’t there.”

Scalia said SOX was no different than other employment discrimination laws that require plaintiffs who bring retaliation claims to prove employers intended to discriminate. UBS has said Murray was fired as part of a cost-cutting campaign that eliminated thousands of jobs and not because of his complaints.

Easha Anand, Murray's lawyer and the co-director of Stanford Law School's Supreme Court Litigation Clinic, told the court that Congress in adopting SOX imposed a lower bar than the one that exists in other discrimination laws in order to encourage workers to report misconduct.

From our content partner

Murray was backed in the appeal by the Biden administration. A lawyer from the U.S. Department of Justice, Anthony Yang also appeared at Tuesday's arguments on his behalf.

Justices Samuel Alito, Amy Coney Barrett and Brett Kavanaugh all expressed reservations about other aspects of UBS' arguments. Kavanaugh, for example, noted that regardless of the jury instruction UBS was able to argue to the jury that Murray’s firing was not spurred by his complaint.

“That’s how employers win these cases,” Kavanaugh said.



You are currently previewing this article.

This is the last preview available to you for the next 30 days.

To access more news, features, columns and opinions every day, create a free myGrapevine account.