SCOTUS Hears Oral Argument on Whether the Sarbanes-Oxley Act Protects Employees of Privately-Held Contractors or Subcontractors of Public Companies

Oral argument is scheduled in the Supreme Court today in the case of Lawson and Zang v. FMR, LLC (information here).  The decision below is Lawson v. FMR, LLC, 670 F.3d 1 (1st Cir. 2012).

The case concerns the scope of protection provided by the “whistleblower” section (Section 806) of the federal Sarbanes-Oxley Act, 18 U.S.C. § 1514A, which forbids a publicly traded company, a mutual fund, or “any … contractor [or] subcontractor … of such company [to] … discriminate against an employee in the terms and conditions of employment because of” certain protected activity.

In the court below, the plaintiffs lost.  Specifically, the First Circuit held that under section 1514A such contractors and subcontractors, if privately-held, may retaliate against their own employees, and are prohibited only from retaliating against employees of the public companies with which they work.

The question presented to the Supreme Court is:  “Is an employee of a privately-held contractor or subcontractor of a public company protected from retaliation by section 1514A?”