The U.S. Supreme Court soon will take up an appeal that will decide a crucial issue for whistleblowers.

The issue to be decided: How carefully will courts guard whistleblowers against retaliation?

The justices take up the question during the upcoming term, which starts in October.

The case involves Trevor Murray, who started work for UBS Securities in April 2011, the only research strategist for the company’s commercial mortgage-backed securities (CMBS) arm. Federal regulations dictate that such researchers come up with independent opinions, but Murray repeatedly was pressured to publish notes slanted in favor of his company’s strategies.

In December 2011, Murray reported the situation to his boss — twice — calling it unethical and illegal. Still, he received a positive annual performance review. Then, in early February 2012, he was fired. 

Murray filed a whistleblower complaint under the Sarbanes-Oxley Act (SOX) in August 2012, suing in 2014. In court, UBS contended that it had fired Murray for financial reasons. The SOX prohibits publicly traded companies like UBS from retaliating against their employees for engaging in protected activity, such as reporting violations of federal securities laws.

The district court ruled in favor of Murray, but the appeals court reversed, saying Murray should have had to show that UBS’s actions were intended as retaliation — not just that his report and his firing were connected.

This is technical, but it’s huge.

“The … requirement that plaintiffs prove the defendant’s intent in order to receive these protections would discourage would-be whistleblowers from taking the significant risk of coming forward to report financial frauds,” The Anti-Fraud (TAF) Coalition wrote in an amicus brief. “Unless reversed, the decision will insulate financial misconduct from detection and prosecution. Investors, financial markets, and potentially our entire economic system will suffer the negative consequences.”

Indeed, the fallout of weaker whistleblower protections could be widespread. 

Many will be watching this case; the intent interpretation differed from the rulings of four other federal appeals courts.

The lawyers at Keller Grover have three decades of experience representing whistleblowers and can advise potential whistleblowers about the best path forward from the very beginning, helping minimize the impact of reporting, protect their rights and achieve the best possible outcome. Keller Grover attorney Kate Scanlan is a member of TAF, which works to empower whistleblowers, and she chairs its Public Education Committee. If you have information about government fraud, contact us for a confidential, free consultation.