How Wide the Floodgates for Whistleblowers?

In his National Law Journal article “How Wide the Floodgates for Whistleblowers?,” Zuckerman Spaeder LLP partner Jason M. Knott examines the implications of the U.S. Supreme Court’s recent ruling in Lawson v. FMR LLC. The decision widened the scope of the whistleblower provision in the Sarbanes-Oxley Act and held that the law protects not only employees of public companies, but also employees of law firms, auditing firms, investment advisers, and other contractors working for public companies. Mr. Knott—a member of the firm’s Executive Termination and Benefits Practice and contributing editor of Suits by Suits—argues that the decision failed to clarify whether Sarbanes-Oxley extends to personal employees of public company employees, such as nannies or gardeners, and whether the law’s whistleblower provision applies to cases in which the alleged fraud was unrelated to shareholders. After describing several legal decisions that provide competing guidance on these issues, Mr. Knott contends that, while Lawson clarified whistleblower protection for contractors of public companies, it remains to be seen whether the decision opens the door for even more whistleblowers to claim protection under Sarbanes-Oxley.