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February 08, 2024

Supreme Court Decides Murray v. UBS Securities, LLC

On February 8, 2024, the U.S. Supreme Court decided Murray v. UBS Securities, LLC, No. 22-660, holding that whistleblowers do not need to establish retaliatory intent on the part of their employers in order to prove a claim under federal whistleblower protections.

This case concerns the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, which prohibits publicly traded companies from retaliating against employees who report what they reasonably believe to be instances of criminal fraud or securities law violations. Specifically, the provision establishes that no employer may “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of” the employee’s protected whistleblowing activity.

Here, Trevor Murray filed a whistleblower action in district court, alleging that his former employer, UBS, violated 18 U.S.C. § 1514A by terminating his employment after he informed his supervisors that two leaders of the UBS trading desk were engaging in what he believed was illegal and unethical conduct. At trial, the district court instructed the jury that, to prove a claim under the whistleblower protections of the Sarbanes-Oxley Act, Murray was required to show by a preponderance of the evidence that his protected activity was a contributing factor in his termination, at which point the burden would shift to UBS to establish by clear and convincing evidence that it would have terminated Murray regardless of whether he had reported the alleged misconduct. The jury sided with Murray; but on appeal, the Second Circuit vacated the award and remanded for a new trial, holding that “[r]etaliatory intent is an element of a section 1514A claim,” and the trial court erred by not instructing the jury on Murray’s burden to prove UBS’s retaliatory intent.

The Supreme Court reversed in a unanimous decision, concluding that the text of Section 1514A does not reference or include a “retaliatory intent” requirement. Writing for the Court, Justice Sotomayor reasoned that, in addition to the textual reasons animating the decision, requiring a whistleblower to prove an employer’s retaliatory animus would ignore the statute’s mandatory burden-shifting framework. Congress decided in Sarbanes-Oxley that the plaintiff’s burden on intent is only to show that the protected activity was a “contributing factor in the unfavorable personnel action.” If the plaintiff makes that showing, the burden shifts to the employer to “demonstrat[e], by clear and convincing evidence, that the employer would have taken the same unfavorable personnel action in the absence of that behavior.” That framework is necessarily plaintiff-friendly; but, according to the Court, the Second Circuit turned it on its head by making proof of “retaliatory intent” a requirement for satisfaction of the “contributing factor” element. Thus, after Murray, “[s]howing that an employer acted with retaliatory animus is one way of proving that the protected activity was a contributing factor in the adverse employment action, but it is not the only way.” 

Justice Sotomayor delivered the Opinion of the Court. Justice Alito filed a concurring opinion, in which Justice Barrett joined. 

Download Opinion of the Court

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