On Tuesday Supreme Court Justice Ruth Bader Ginsburg, ruled in favor of further protecting whistleblowers that work for private companies. Under the Sarbanes-Oxley Act of 2002, which protects employees of a public company’s private contractors and subcontractors.
What does all that mean? A whistleblower is someone who discloses information that he or she believes to be: in violation of a law or rule, mismanagement or waste of funds, situations where authority is being abused, or a scenario that puts public health or safety in danger.
This Supreme Court ruling means that private-company employees who allege they were punished for reporting certain kinds of suspected wrongdoing can possibly bring valid claims against their employers.
Lloyd Chinn, works for a whistleblower retaliation group said, “Company’s exposure to a Sarbanes-Oxley whistleblower claim is no longer governed by whether you’re a public company or not; any private employer who happens to be a contractor of a public company is subject to a suit.”
Plaintiffs in the case, Jackie Lawson and Jonathan Zang, previously worked for Fidelity Investments, between 1993 and 2007, reported problems to supervisors, including alleged improper accounting practices, only to be passed over for a promotion and threatened with punishment for insubordination.
Justice Ginsburg, along with Justice Sonia Sotomayor, joined by Justice Anthony Kennedy and Justice Samuel Alito, ruled in a 6-3 decision that the two whistleblowers were entitled to protection from retaliation, despite being contracted by a private firm.
Fidelity’s mutual funds are public companies but, private companies who are under contract with the funds, including Fidelity Brokerage Services LLC, provide the management services.
Ginsburg’s decision was based off of whether Congress, prompted by the Enron debacle, would exclude from whistleblower protection from countless professionals equipped to bring fraud on investors to a halt.”
Now private firms that are contracted by public companies will be forced to maintain stricter internals rules within their company to protect themselves from whistleblowers.
Whistleblowers Gain Protection From Supreme Court Ruling.