Key Takeaways

• On February 8, 2024, the Supreme Court of the United States (SCOTUS) unanimously ruled in Murray v. UBS Securities, LLC that employers can violate whistleblower protection statutes without evidence establishing retaliatory intent or animus.
• The standards discussed in Murray for proving whistleblower retaliation cover a wide variety of industries, including trucking, motor vehicles, food safety, railroads, airlines, energy, healthcare, consumer product safety, consumer financial protection, and pipelines.
• The Murray decision contains a silver lining for employers: SCOTUS provided clarification as to what an employer must show to avoid liability.

On February 8, 2024, the Supreme Court of the United States (SCOTUS) unanimously ruled in Murray v. UBS Securities, LLC that employers can violate whistleblower protection statutes without evidence establishing retaliatory intent. In a 9-0 decision authored by Justice Sotomayor, the Court reversed a decision by the U.S. Court of Appeals for the Second Circuit that had found that an employee must present evidence of intentional discrimination to establish a violation of the whistleblower protection provisions of the Sarbanes-Oxley Act of 2002 (SOX). Though the case was decided under SOX, the Court’s reasoning and its application to a wide variety of analogous whistleblower protection statutes is great cause for concern for employers of all sizes.

Like many statutes regulating a number of industries, SOX prohibits employers from disciplining, discharging or “otherwise discriminating against” employees in retaliation for engaging in activity protected under the statute. Murray alleged that UBS terminated his employment in retaliation for reporting to his supervisor that two people on the UBS trading desk were engaging in unethical and illegal efforts to impact his independent reporting. After a jury found in favor of Murray and UBS appealed, the Second Circuit concluded that a valid retaliation claim must include evidence of an intent to retaliate, and the trial court’s failure to give such an instruction was in error.

SCOTUS reversed the appellate court’s decision, concluding that the plain language of the statute contained no retaliatory intent requirement, and that as long as the protected activity contributed in some way to the adverse employment action, a plaintiff satisfies the relaxed burden to establish a prima facie case. The Court carefully limited the term “retaliatory intent” in this context to be akin to “animus” or ill will. The Court noted that to “discriminate” only means to treat differently and, if an employee can prove he was treated differently because of protected conduct, the “why” the employer discriminated does not matter. Intent is still required, but the only intent needed is to take the action “because of” the protected activity. In other words, SCOTUS held that an employee can succeed on a whistleblower retaliation claim even if he has no evidence to prove the reason for the adverse action was to punish or retaliate against him for engaging in the protected activity.

Because whistleblower activity under SOX and many whistleblower statutes has exploded in recent years, Murray is an important development. Similar to some other whistleblower protection statutes, SOX incorporates the burden-shifting and legal burdens of proof established under the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21). In addition, other whistleblower protection statutes contain nearly identical standards to SOX and AIR 21. These standards for proving whistleblower retaliation cover a wide variety of industries, including trucking, motor vehicles, food safety, railroads, airlines, energy, healthcare, consumer product safety, consumer financial protection and pipelines – to name a few. Accordingly, the Murray decision has far-reaching impact and has made it easier for many employees to satisfy their burden to prove a prima facie case of whistleblower retaliation.

Murray, however, contains a silver lining for employers in an otherwise pro-employee decision. SCOTUS clarified what an employer must show to avoid liability. Specifically, even after a whistleblower employee proves a prima facie case that his protected activity was a contributing factor in an adverse employment action, an employer can still avoid liability if it can prove it would have taken the same action in the absence of the employee’s protected activity. In discussing the “same action” defense available under SOX (and the other whistleblower retaliation employee protection statutes incorporating the AIR-21 standard), the Court explained:

The statute’s burden-shifting framework provides that an employer will not be held liable where it “demonstrates, by clear and convincing evidence, that [it] would have taken the same unfavorable the absence of” the protected behavior.

SCOTUS instructed that the correct way to think about that kind of “same action causation analysis” is to “change one thing at a time and see if the outcome changes. … The question is whether the employer would have ‘retain[ed] an otherwise identical employee’ who had not engaged in the protected activity.” In other words, if an employer can show that removal of the protected activity would not have changed the outcome, it can still win.

As a result, employers must continue to strive for consistent and comparable treatment of similarly situated employees. Though the required “clear and convincing” standard in whistleblower cases is more difficult than the obligation under other employment discrimination statutes, if employers accused of whistleblower retaliation can prove that similar employees in similar situations are treated the same, the employer still can successfully avoid liability.

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