By: Mary E. Pivec & John Staige Davis, V
Williams Mullen (North Carolina and Virginia, USA)
In a case of first impression in the federal appellate courts, the United States Court of Appeals for the First Circuit recently ruled, in a 2-1 decision, that the whistleblower protections
of the Sarbanes Oxley Act (SOX) extend only to employees of “public companies” (as defined under the Act). See Lawson v. FMR LLC, No. 10-2240 (1st Cir. Feb. 3, 2012) (Lynch, C.J.). The court concluded that only employees of public companies are covered by 18 U.S.C. § 1514A's whistleblower protection provisions, and that employees of private contractors or subcontractors of public companies are not covered. The court read the statutory clause "officer, employee, contractor, subcontractor, or agent of such company" as referring to categories of persons or entities prohibited from retaliating against employees, but not as expanding the universe of covered "employees" beyond public-company workers. In interpreting § 1514A, the Lawson majority relied on the Supreme Court’s guidelines for statutory construction, particularly in securities cases; a textual comparison of coverage provisions found elsewhere in SOX and other federal whistleblower protection statutes; and the statute’s legislative history. Click here to read entire article.
