Last week in a unanimous opinion, the U.S. Supreme Court concluded that an employee who sued his former employer for retaliatory termination did not need to prove a retaliatory intent behind the decision. Murray v. UBS Securities Inc. involved an employee who alleged that he was terminated after refusing to change an opinion he provided regarding mortgage-backed securities. He sued under the Sarbanes-Oxley Act (SOX), a federal law that protects employees who report financial misconduct by their employers.

The Second Circuit Court of Appeals reversed a jury verdict in favor of the plaintiff, finding that SOX requires workers to demonstrate that their employer took adverse action out of retaliatory animus toward them. This opinion contradicted several other federal appellate circuits that had not read an intent element into SOX.

The Supreme Court agreed with the plaintiff, reversing the Second Circuit. The court relied on a reading of SOX that does not indicate any requirement that the employee prove a retaliatory intent. While proving intent is one way of prevailing, all the employee need demonstrate is an adverse employment action that would not have been taken absent his or her protected activity.

This decision avoids an outcome that would have significantly increased the difficulty for employees to prevail in federal whistleblower claims. In addition to SOX, a number of federal statutes contain anti-retaliation provisions that do not mention an explicit demonstration of retaliatory intent. Employers considering disciplinary action against employees who have made internal or external complaints should carefully consider their ability to show that the action had no relation to the complaint, even if there is never any intent to retaliate against the complaining employee.

For more information, please contact me or your regular Parker Poe contact. You can also subscribe to our latest alerts and insights here.