Expanding Whistleblower Protection Under The Sarbanes-Oxley Act (Or, George Clooney, Litigious Babysitters, and Enron At The Supreme Court)
Shawn M. Larsen
Shawn M. Larsen is a founding partner of Larsen Woodard LLP, located in Irvine, California. He specializes in management-side employment law, with expertise in both litigation and pre-litigation counseling. Mr. Larsen may be reached at the following email addresses: slarsen@larsenwoodard. com; firstname.lastname@example.org.
With its decision in Lawson v. FMR, LLC et al.,1 the United States Supreme Court has added another level of protection for corporate whistleblowers. Clarifying a provision in the Sarbanes-Oxley Act of 2002,2 the Court held that the Act applies not only to employees of publicly-traded companies, but to employees of the contractors and subcontractors with whom those companies work. Workplace and whistleblower advocates are sending up cheers, viewing the ruling as facilitating the original intent of Sarbanes-Oxley: to encourage the reporting of potential wrongdoing on the part of public companies. The business community, on the other hand, casts the decision as an overreach, exposing businesses to more frivolous and unanticipated lawsuits.
A. The Sarbanes-Oxley Act of 2002: Remember Enron?