Attorney: Supreme Court Leaning Toward Maintaining Fed Whistleblower Rights

The Supreme Court during oral arguments Tuesday appeared sympathetic to upholding the rights of federal employees contained in both the 1989 and 2012 Whistleblower Protection acts, a prominent employment law attorney said.

R. Scott Oswald, managing principal at the Employment Law Group who filed an amicus brief in the case of Lawson v. FMR LLC, told Government Executive that Tuesday was “a good day for federal employees and executives and sends a strong message that the statutes designed to protect whistleblowers are going to be embraced.”

The case does not involve federal employees directly but stems from a dispute over whether financial industry private contractors under the 2012 Sarbanes Oxley Act enjoy protections against retaliation envisioned by Congress for full-time public company employees.

Jonathan Zang and Jackie Hosang Lawson complained to the Labor Department after their employer, Fidelity Investments (FMR LLC), dismissed them in 2005 and 2007, respectively, after they raised questions about the accuracy of corporate filings. They then brought a lawsuit that worked its way through the circuit court. FMR LLC argued that Congress only intended the law’s protections against retaliation to apply to public company employees.

The fact that the Supreme Court took the case, Oswald explained, puzzled many in the employment law field, causing concern that the justices might rethink longstanding standards of deference to administrative agencies adjudicating cases involving whistleblowers.

But as it turned out, “the Supreme Court showed little interest in the issue,” except for a passing reference from Associate Justice Elena Kagan, Oswald said. Instead, the oral arguments and questions focused on the reason for the enactment of Sarbanes-Oxley -- when such corporations as Enron and Worldcom used phony bookkeeping techniques in part because of help from subcontracting accountants who were in a position to play the role of whistleblower.

Oswald added that in the years between passage of the 1982 whistleblower law and the 2012 Whistleblower Protection Enhancement Act, circuit courts “emasculated the law with a host of exceptions, cutting huge swaths of whistleblowers out of coverage.”

The direction of Tuesday’s Supreme Court discussion, he said, bodes for an embrace of “fulsome and expansive protections to whistleblowers,” a signal to circuit courts now taking on a new wave of whistleblower cases that those courts “shouldn’t use the cases as opportunities to narrow what Congress intends as strong protections to whistleblowers.”

In future litigation, he predicted, the “discussion will be on the limitation on coverage, not whether coverage exists.”