April 4, 2024 Whistleblowers who expose fraud have strong protections from employer retaliation based on a unanimous U.S. Supreme Court opinion in Murray v UBS Securities.
In a unanimous opinion, the justices held that a whistleblower does not have to prove that their employer had “retaliatory intent” in order to avail themselves of the Sarbanes-Oxley Act’s (SOX) protections against retaliation. Instead, they just need to prove that their protected activity was a contributing factor in their employer’s unfavorable action.
While the case before the court concerned one specific US whistleblower who came forward with information about securities law under SOX, other federal laws — including the False Claims Act — have similar protections against retaliation for whistleblowers, and this ruling is a win for them across the board.
Writes Bloomberg Law:
The Supreme Court decision adds to momentum in the US and globally—including a European Union directive and Organisation for Economic Co-operation and Development policy—toward encouraging and protecting more whistleblowing to expose corporate and governmental abuses and fraud.
The opinion clarifies that the burden of proof in SOX whistleblower retaliation claims “is meant to be plaintiff-friendly.” Going forward, a whistleblower is only required to show that a protected activity contributed to their demotion, firing or other form of retaliation. The burden of proof then falls on the employer to show that the action was not related to the protected activity.
Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) Whistleblower Protections
The government relies on whistleblowers to help guard against violations of securities and commodities law, including insider trading, market manipulation, Ponzi schemes, financial reporting violations, and violations of the Foreign Corrupt Practices Act. In addition to permitting anonymous filings, which itself offers significant protection for the whistleblower, the Dodd-Frank Act protects whistleblowers from retaliation. Whistleblowers are entitled to up to 30 percent of the recoveries from civil and criminal proceedings.
What is the False Claims Act?
The False Claims Act is the government’s primary tool for combating fraud, waste and abuse against the government. The qui tam provision of the FCA recognizes that private individuals (known as “relators”) often have valuable information to expose governmental fraud that would otherwise go undetected. The law allows relators to file qui tam whistleblower claims on behalf of the government and receive up to 30 percent of the award.
FCA actions resulted in the recovery of a record $2.68 billion in 2023, of which $1.8 billion was recovered from healthcare programs, including drug and medical device manufacturers, durable medical equipment, home health and managed care providers, hospitals, pharmacies, hospice organizations, and physicians.
How Do We Fight Fraud Against the Government?
Seek justice on behalf of taxpayers with the help of our experienced attorneys. Our Dallas, Texas, whistleblower team has battled corporate giants for 20 years, aggressively fighting to hold corporations, individuals, and other entities accountable for fraud committed against the government. If you believe you have a whistleblower case, we can help.
