On November 12, 2013, the United States Supreme Court heard oral arguments regarding the breadth of whistleblower protections under the Sarbanes-Oxley Act. The arguments came in the matter of Lawson v. FMR, LLC. The United States Supreme Court is expected to issue its ruling next spring. The case arose out of two separate lawsuits filed against FMR and several related companies (the “FMR defendants”) by two of their former employees. The employer-companies were private companies, but contracted and subcontracted work with publicly-traded companies.
The first case involved Jonathan Zang, who filed a complaint with the Occupational Safety and Health Administration (“OSHA”) in 2005. It alleged that Mr. Zang had been terminated in response to concerns he voiced about registration statements for certain funds of Fidelity Management & Research Co. Specifically, Mr. Zang indicated he believed that the registration statements in question violated various securities laws. OSHA dismissed the complaint, finding that he had not engaged in protected activities. Mr. Zang requested review of the decision in front of an Administrative Law Judge (the “ALJ”). The ALJ found that Mr. Zang was not covered under the whistleblower protections of the Sarbanes-Oxley Act, as he was an employee of a private, not public, company. Mr. Zang then filed a lawsuit in the District Court for the United States District Court for the District of Massachusetts.
The other lawsuit was brought by Jackie Hosang Lawson against the FMR defendants, alleging that she had been forced to resign in 2007 for raising concern about the company’s cost accounting practices. Ms. Lawson filed a complaint with OSHA alleging violations of the whistleblower protection provisions of the Sarbanes-Oxley Act. Approximately a year later, Ms. Lawson notified OSHA that she intended to file a lawsuit in the District Court for the United States District Court for the District of Massachusetts, which she did.
The FMR defendants sought dismissal of both lawsuits, arguing that the whistleblower protections of the Sarbanes-Oxley Act did not extend to either Mr. Zang or Ms. Lawson. The FMR defendants argued that the protections did not extend to employees of private companies, even if those private companies are contractors or subcontractors to public companies. The United States District Court for the District Court of Massachusetts, Honorable Douglas P. Woodlock, addressed the arguments in a combined opinion. He found that the whistleblower provisions of the Sarbanes-Oxley Act did, in fact, extend to Mr. Zang and Ms. Lawson. Judge Woodlock limited the extension of the Sarbanes-Oxley Act in such circumstances to reporting violations related to fraud against shareholders.
The FMR defendants appealed the decision to the United States Court of Appeals for the First Circuit. On February 3, 2012, the First Circuit reversed the decision of Judge Woodlock. It found that under the circumstances in the cases at hand, the whistleblower protections of the Sarbanes-Oxley Act did not extend to Mr. Zang or Ms. Lawson. The First Circuit was careful to note that the cases at hand involved public companies affiliated with the private companies wherein those public companies were not involved in directing the retaliatory actions against the private company employees.
On July 30, 2012, Mr. Zang and Ms. Lawson filed a Petition for Writ of Certiorari with the United States Supreme Court, requesting that it review the decision of the United States Court of Appeals for the First Circuit. On May 20, 2013, the United States Supreme Court granted the Petition for Writ of Certiorari, indicated that it would hear and rule upon the request for review of the decision of the United States Court of Appeals for the First Circuit.
If you are in a retaliatory situation due to having raised concerns about practices by your employer, and you live in Mississippi, Barrett Law, PLLC can help you understand your rights and the protections to which you may be entitled. Our firm has extensive helping individuals obtain the protections to which they are entitled. Contact us today at (601) 790-1505 to schedule an initial consultation.
