Supreme Court continues trend of ruling for employees in retaliation cases

The Supreme Court just decided a landmark case, Lawson v. FMR, concerning whether the law protecting employees of public companies also protects employees of private corporations. The law at issue is the Sarbanes-Oxley Act, which Congress enacted in 2002 as a response to the rampant fraud and other corporate misconduct by companies such as Enron. Sarbanes-Oxley clearly prohibits public corporations from firing, demoting, or otherwise retaliating against their employees for reporting apparently unlawful conduct. In other words, that law protects employees who become whistleblowers regarding public companies – but, until Lawson, it was unclear whether employees of private corporations also enjoy such protection.

The Supreme Court’s ruling has significant implications because the outsourcing of public functions to private contractors has expanded at a dizzying pace. In this respect, the Supreme Court’s decision represents an expansion of employment law rights that is as bold as it is necessary. Nonetheless, the outcry from the business community about Lawson supposedly being a radical departure from established precedent is unwarranted. Lawson is merely the latest in a long line of pro-employee decisions regarding retaliation claims, as we have discussed in previous publications. In other words, contrary to discrimination and harassment claims in the employment law arena, retaliation claims continue to receive favorable treatment by the courts in general. The Supreme Court’s decision here clearly reinforces that reality.