Supreme Court decides Murray v. UBS Securities, LLC | Figre Drinker Biddle & Reith LLP
On February 8, 2024, the US Supreme Court decided Murray v. UBS Securities, LLCNo. 22-660, which states that whistleblowers do not need to prove retaliatory intent on the part of employers in order to establish a claim under federal whistleblower protections.
This case concerns the Sarbanes-Oxley Act of 2002, 18 USC § 1514A, which prohibits publicly traded companies from retaliating against employees who report what they reasonably believe to be cases of criminal fraud or violations of the securities law. Specifically, the provision states that no employer may “dismiss, demote, suspend, threaten, harass, or otherwise discriminate against an employee in terms and conditions of employment because of” the employee’s protected whistleblowing activity.
Here, Trevor Murray filed a whistleblower suit in District Court, alleging that his former employer, UBS, violated 18 USC § 1514A by terminating his employment after he informed his supervisors that two UBS trading desk leaders were engaging in what he believed to be illegal legal. and unethical behavior. During the trial, the district court instructed the jury that, to prove a claim under the Sarbanes-Oxley Act whistleblower protection, Murray was required to show by a preponderance of the evidence that his protected activity was a contributing factor to his termination, which meant that the burden would shift to Bank UBS must prove by clear and convincing evidence that it would have fired Murray regardless of whether he had reported the alleged misconduct. The jury sided with Murray. But on appeal, the Second Circuit reversed the arbitration award and remanded for trial, holding that “retaliatory intent is an element of a Section 1514A claim,” and the trial court erred by not instructing the jury on Murray’s burden of proving UBS’s retaliatory intent.
The Supreme Court unanimously reversed its decision, concluding that the text of Section 1514A did not indicate or include a “retaliatory intent” requirement. Justice Sotomayor wrote for the court that, in addition to the textual reasons driving the decision, requiring a whistleblower to prove retaliatory hostility to the employer would ignore the mandatory burden-shifting framework provided by the law. Congress decided in Sarbanes-Oxley that a plaintiff’s burden of intent is only to show that the protected activity was a “contributing factor to the action unfavorable to the employees.” If the plaintiff makes this offer, the burden shifts to the employer “to prove, by clear and convincing evidence, that the employer would have taken the same unfavorable employee action in the absence of that conduct.” This framework is necessarily plaintiff-friendly; But, according to the court, the Second Circuit turned the matter on its head by making proof of “retaliatory intent” a requirement to satisfy the “contributing factor” element. And so on Murray“(Showing) that an employer acted with retaliatory hostility is one way to prove that protected activity was a contributing factor to an adverse employment action, but it is not the only way.”
Justice Sotomayor delivered the court’s opinion. Justice Alito delivered a concurring opinion, joined by Justice Barrett.
Download the court’s opinion