The US Supreme Court Rules in Murray v. UBS That SOX Whistleblowers Do Not Need To Prove Retaliatory Intent

On Feb. 8, 2024, the U.S. Supreme Court unanimously ruled in Murray v. UBS Securities, LLC that plaintiffs bringing whistleblower retaliation claims under Section 1514A of the Sarbanes-Oxley Act of 2002 do not need to prove that their employers acted with retaliatory intent. In so holding, the Court reversed a decision by the Second Circuit Court of Appeals and reinstated a jury verdict in favor of the plaintiff. The decision makes clear, once and for all, that plaintiffs need prove only that their protected whistleblowing activity played a role, no matter the magnitude, in their employers’ decision to take a subsequent adverse action. This burden, the Court held, “is meant to be more lenient than most.”

Section 1514A(a) states 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. Section 1514A contains by reference a mandatory burden-shifting framework enumerated in a separate federal law. Under this framework, a plaintiff whistleblower bears the burden to prove that their protected whistleblowing activity “was a contributing factor in the unfavorable personnel action alleged in the complaint.” 49 U.S.C. § 42121(b)(2)(B)(i). If the plaintiff makes that showing, the burden shifts to the employer to show “by clear and convincing evidence” that it “would have taken the same unfavorable personnel action in the absence of the [protected activity].” 49 U.S.C. § 42121(b)(2)(B)(ii).

At the district court level, the jury found that the plaintiff proved that his protected activity was a contributing factor in the termination of his employment and that UBS did not show it would have terminated him but for such activity. UBS moved for judgment as a matter of law, arguing that Section 1514A(a) required the plaintiff to prove that his manager, who made the decision to terminate him, possessed retaliatory animus toward him for whistleblowing and dismissal was warranted because the jury was not properly instructed on this point. The district court denied UBS’ motion. On appeal, the Second Circuit reversed, holding that the words “discriminate ... because of” in Section 1514A(a) require a showing of “retaliatory intent,” which it defined as a kind of animus.

The Supreme Court opinion, written by Justice Sonia Sotomayor, set forth two main reasons for its holding that the contributing factor test does not require plaintiffs to prove that their employers acted with retaliatory intent. First, the Court observed that a retaliatory intent requirement does not appear in the plain language of the statute, nor do the words “discriminate ... because of” in Section 1514A(a) inherently require it. Rather, “discriminate” means “differential treatment” because of some protected characteristic for which animosity is irrelevant. Second, the Court held that the statute’s mandatory burden-shifting framework, which Congress prescribed, is the sole vehicle through which a fact-finder determines whether whistleblower discrimination occurred and is therefore incompatible with yet an additional burden on plaintiffs to prove retaliatory intent. The Court acknowledged that while the contributory factor test would not hold employers liable for legitimate, non-retaliatory decisions, the test is decidedly “not as protective of employers” as other frameworks, such as a motivating-factor framework. But the Court held “[t]hat is by design” because Congress made a policy decision that whistleblowing should never weigh in the minds of employers.

Justice Samuel Alito issued a concurring opinion in which Justice Amy Coney Barrett joined. The purpose of the concurrence, Alito wrote, was “to explain in simple terms how [Section1514A(a)] works and to reiterate that our rejection of an ‘animus’ requirement does not read intent out of the statute. Rather, as the Court confirms, a plaintiff must still show intent to discriminate.” (Emphasis added.) The concurring opinion highlights the important difference between “retaliatory intent” and plain “intent” in that a plaintiff must still “show that differential treatment was at least in part ‘because of’ his or her protected conduct,” and “[t]his requires proof of intent; that is, plaintiff must show that a reason for the adverse decision was the employee’s protected conduct.” Thus, just because a plaintiff does not need to prove retaliatory intent (or animus), that does not mean that intent is irrelevant.

There are two main takeaways from the Murray decision. The first is of course that whistleblowing plaintiffs need not prove retaliatory intent. But that was already the case in most jurisdictions before the Court’s decision. Perhaps the more critical takeaway, in the long term, is that the U.S. Supreme Court reached a unanimous position that the burden on plaintiffs to prove whistleblower discrimination is relatively low and unprotective of employers by design. Based on this ruling, we expect that whistleblower litigation will focus less on plaintiffs’ initial burden in proving that their whistleblower activity was a contributing factor to the adverse action they experienced and much more on the element of causation, where the burden shifts to the employer to prove that it would have taken the same unfavorable personnel action in the absence of the protected activity.