The United States Supreme Court agreed to review whether the Sarbanes-Oxley Act whistleblower protections apply to employees of a public company's contractor or subcontractor. Plaintiffs Jackie Lawson and Jonathan Zang each filed SOX whistleblower claims against FMR LLC ("Fidelity") first with the United States Labor Department and then in a Massachusetts federal court. See Lawson v. FMR LLC and Zang v. FMR LLC. Lawson claimed she was harassed and forced to quit because of certain reporting and accounting information she provided to Fidelity management; Wang claimed Fidelity fired him for notifying management that Securities and Exchange Commission disclosures were inaccurate.
Fidelity asked the trial court to dismiss each action, arguing that SOX whistleblower protections did not apply to plaintiffs because Fidelity is a private company. Plaintiffs argued that, because Fidelity is the contractor to a covered public entity, SOX whistleblower protections applied to them. The trial court denied Fidelity's motions to dismiss; but, on appeal, the First Circuit Court of Appeals reversed finding no SOX protections for plaintiffs.
The United States Supreme Court's review is anticipated to resolve a split between the First Circuit and the Department of Labor Administrative Review Board's decision in Spinner v. David Landau and Associates that extended SOX whistleblower protections to employees of contractors and subcontractors of a public company.
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