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Whistleblower

A little over a year ago, I wrote an article explaining the First Circuit’s opinion in Lawson v. FMR LLC and why I thought the court’s analysis was incorrect. The Supreme Court recently announced that it will be reviewing the First Circuit’s decision.

The Supreme Court has a limited docket and generally only grants a writ of certiorari when there is what is known as a circuit split (where a federal appeals court in one part of the country interprets a law one way and a federal appeals court in another part of the country rules the opposite way when faced with the same law). The Lawson decision does not represent a circuit split. But the Court may have decided to review it is because the reasoning of the Lawson decision is in direct contrast to the Supreme Court’s recent, landmark decision in Thompson v. North American Stainless, LP (2011).  In Thompson, the Court’s opinion relied on an analysis of the text and purpose of the antiretaliation provision of title VII of the Civil Rights Act of 1964 to extend antiretaliation protection to a co-worker Fiancée found to be within the “zone of interests.” In Lawson, the First Circuit ignored the plain meaning of the text (straining to interpret the text to add “of such public company” as a modifier to “employee”) and also ignored the purpose of the antiretaliation provision (to encourage whistleblowing by those most likely to have relevant information), while inadvertently eviscerating antiretaliation protection for employees in the mutual fund industry (where none of the employees who work on the fund are employed by the public fund but, rather, are employed by the private companies that the fund contracts with to perform management services).

The Supreme Court’s opinion in this case will determine whether the mutual fund industry is effectively carved out from the protection of the antiretaliation provision of the Sarbanes-Oxley Act of 2002.

For more background information on the Lawson decision, see my prior article here.