Supreme Court extends whistleblower protections to employees at private firms

WASHINGTON (Reuters) – A divided U.S. Supreme Court ruled on Tuesday that employees at private firms that contract with publicly traded companies are subject to whistleblower protections.

In a 6-3 vote along non-ideological lines, the court ruled that two whistleblowers were legally protected against retaliation after they raised concerns to their employer, Fidelity Investments parent FMR LLC, about how some mutual funds were being managed. Whistleblowers at public companies already are protected from employer retaliation.

The court was interpreting part of the Sarbanes-Oxley Act, a 2002 law passed by Congress that set standards for all U.S. publicly traded company boards, management and public accounting firms.

Although Fidelity’s mutual funds are public companies and are required to file reports with the U.S. Securities and Exchange Commission, management services are provided by private companies under contract with the funds, including Fidelity Brokerage Services LLC.

In the majority opinion, Justice Ruth Bader Ginsburg wrote that the “mischief to which Congress was responding” when it enacted the Sarbanes-Oxley law made it clear that the protections should extend to subcontractors, including investment advisers, law firms and accounting firms. Congress passed the law after accounting problems brought down energy company Enron Corp and communications provider WorldCom Inc.

Ginsburg questioned whether Congress, “prompted by the Enron debacle, would exclude from whistleblower protection countless professionals equipped to bring fraud on investors to a halt.”

More here: http://www.rawstory.com/rs/2014/03/04/supreme-court-extends-whistleblower-protections-to-employees-at-private-firms/