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  • Writer's pictureRobert Lusk

US Supreme Court Addresses Burden of Proof in Whistleblowers Cases

On February 8, 2024, the United States Supreme Court defined the burden of proof in Sarbanes-Oxley whistleblowers cases.  Murray v. UBS Securities, Case No. 22-660 (February 8, 2024).  Readers may recall Congress passed the Sarbanes-Oxley Act of 2022 in the wake of the infamous Enron scandal.  Among other things, Sarbanes-Oxley made it illegal for publicly traded companies to “discriminate, demote, suspend, threaten, or in any other manner discriminate against an employee in the terms and conditions of employment because of” whistleblowing activity.  Sarbanes-Oxley also set forth a burden-shifting test for proving a whistleblowers case.  The putative whistleblower is required to establish protected activity was a “contributing factor” to the discrimination, demotion, etc., alleged against the employer.  Once this requirement is met, the burden shifts to the employer to prove it would have treated the employee the same way regardless of the alleged protected activity.

In Murray, plaintiff was employed by UBS as a research strategist.  His job included reporting to UBS customers on the firm’s securities businesses and certifying his reports were independently produced and reflected his own views.  Plaintiff apparently did his job well and received positive employment reviews.  However, his work was not appreciated by two of his colleagues, who attempted to persuade him to revise his reports to reflect more positively on the investments they wished to sell UBS customers.  Plaintiff declined and, shortly thereafter, was fired.  At trial, an advisory jury awarded plaintiff a $1 million verdict, which the trial court adopted.  The trial court awarded an additional $1.76 million in attorneys’ fees and costs.  UBS appealed and the Second Circuit reversed on the grounds the court had not required plaintiff to prove “retaliatory intent.”

The Court, in a unanimous decision, reversed the Second Circuit and ruled in the employee’s favor.  The Court, parsing Sarbanes-Oxley, concluded it did not require plaintiff to prove “retaliatory intent” in addition to proving protected whistleblowing was a “contributing factor” to his termination.  The Court noted its interpretation was consistent with the federal Whistleblowers Protection Act and, in addition, Sarbanes-Oxley’s burden shifting approach was intended to be “plaintiff-friendly.”  Here in Michigan, it remains to be seen what effect, if any, Murray will have on whistleblowers claims asserted under Michigan’s Whistleblowers Protection Act.


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