The Supreme Court sought on Oct. 10 to clarify how courts and juries should evaluate allegations that an employer retaliated or discriminated against employees due to their decision to blow the whistle on improper conduct.
Trevor Murray, a former UBS securities strategist, won his lawsuit alleging that the financial services firm had terminated him in response to his complaints about fraud. The U.S. Court of Appeals for the Second Circuit later vacated that judgment, arguing that the lower court should have instructed the jury that Murray and other plaintiffs needed to show their employers acted with retaliatory intent.
This comes from a law cited in the Sarbanes Oxley Act of 2002, which was passed in the wake of scandals like Enron. That bill refers to 49 U.S.C. § 42121 or the code for the AIR21 Whistleblower Protection Program. They also emphasized statutory language insisting that plaintiffs should show that their actions were a “contributing factor in the unfavorable personnel action alleged in the complaint.”
Those laws create what the attorneys and justices referred to as a burden-shifting scheme or framework in which whistleblowers show their actions were a contributing factor and the employer follows by demonstrating that it would have taken the same unfavorable action in the absence of the whistleblower’s conduct.
During oral arguments on Oct. 10, both Ms. Anand and Assistant Solicitor General Anthony Yang asked the Supreme Court to oppose the second circuit’s ruling. Both focused on the role of “discriminatory” intent without an element of animus, although Ms. Anand said even that intent wasn’t necessary for whistleblowers to fulfill their end of the burden-shifting framework. She told Justice Ketanji Brown Jackson that the second step in the burden-shifting framework would satisfy or replace a need to prove intent.
Justice Neil Gorsuch probed both as to the type of opinion the Court should issue, including whether the Court should simply reject the second circuit’s ruling of a need to prove retaliatory intent. Parts of the oral arguments involved multiple justices asking for clarification on the differences between the legal positions advanced by Mr. Yang, Ms. Anand, and Eugene Scalia, the former U.S. Labor Secretary and son of the late Supreme Court justice with the same last name.
Mr. Scalia, who currently works as a partner at Gibson and Dunn, argued that even though AIR21 set up a new way of addressing burdens of proof, it didn’t eliminate the need for the whistleblower to show discriminatory intent from the employer.
At one point, Justice Elena Kagan asked Mr. Yang what would be left to consider if the Court issued an opinion overturning the Second Circuit’s decision.
When Kagan asked if the Court would have to “have this conversation all over again,” Justice Gorsuch prompted laughter when by adding: “I don’t think anybody wants to have this conversation all over again.”
