Outlined in part one of our series—SCOTUS Clarifies Whistleblower Claims Standard under Sarbanes Oxley—the U.S. Supreme Court reversed a federal court of appeals decision, resolving a recent federal appeals court split regarding the standard for liability in Sarbanes-Oxley whistleblower claims. The decision in Murray v. UBS Securities, LLC has implications that affect all employers, but there are steps you can take now to address workplace retaliation claims and prevention.
Key Takeaways for Employers
Employers who are not publicly traded, and therefore not subject to Sarbanes Oxley, might wonder whether the Supreme Court’s decision will have any effect on their business. Great question! The answer is “yes.” Sarbanes-Oxley is just one of many laws with anti-retaliation provisions, and it is anticipated that Murray will likely impact other similar whistleblower laws in future decisions. As U.S. Senator Ron Wyden (D-OR) and U.S. Representative Jackie Speier (D-CA) pointed out in an amicus curiae brief filed in the Second Circuit, there are approximately 20 other whistleblower-protection statutes Congress has enacted in the last 30 years that use burden-shifting mechanisms similar to Sarbanes Oxley. Similarly, they don’t require the claimant to prove retaliatory intent, but rather only show that a complaint was a factor in an adverse employment action that is taken against an employee who has made a complaint or engaged in other activity protected by the applicable statute (testifying before an agency, for example). It is then the employer’s burden to show it would have taken the same action irrespective of the protected activity. The Supreme Court’s standard in Murray is expected to be cited by other courts to standardize those laws as well.
Decisions like Murray should matter to all employers because they illustrate just how challenging and costly retaliation claims can be to defend. They are also becoming increasingly more prevalent. In fact, retaliation is the most common type of claim filed with the U.S. Equal Employment Opportunity Commission (EEOC). According to the EEOC, “[r]etaliation is the most frequently alleged basis of discrimination in the federal sector and the most common discrimination finding in federal sector cases.”
In the wake of Murray, here are best practices employers should consider implementing to avoid workplace retaliation claims:
- Develop effective policies and anti-retaliation training for all employees.
Demonstrating the employer’s understanding of its legal obligations and commitment to complying can be critical to ensuring a safe and productive workplace as well as avoiding claims. Be clear to all employees in your policies and practices that retaliation for protected activity is illegal and will not be tolerated.
While the list is quite long, some common examples of protected activity can include:
- filing a lawsuit or an agency complaint with the EEOC, DOL, OFCCP, OSHA, and other state and federal agencies that may have oversight over the employer’s activities;
- serving as a witness or participating in an agency investigation;
- opposing or reporting unlawful discrimination, harassment, or retaliation;
- requesting an accommodation for a disability, pregnancy, or religious practice;
- raising safety concerns;
- taking job-protected leave, such as those provided by state and federal laws for personal or family illness and military service, as well as absences protected by applicable sick leave laws;
- engaging in union activities or joining with other employees to advocate for pay, benefits, or to challenge other management decisions;
- sharing or discussing the employee’s compensation with colleagues.
It is also important to understand that other adverse acts besides termination may constitute retaliation, including:
- work-related threats or warnings;
- immigration-related threats;
- reduction of hours or rate of pay;
- lower ratings or scores on performance evaluations;
- transfers or re-assignments to less desirable positions or worksites;
- closer scrutiny of the employee's work product than other employees' without a valid reason;
- subtle actions, such as isolating, ostracizing, mocking, or falsely accusing the employee of poor performance; and
- of course, termination.
Perhaps equally notably, it is important to understand that these protections apply whether or not a particular complaint or concern was substantiated, so long as it was made in good faith.
- Establish (and follow!) an internal complaint process.
Effective policies should include an internal reporting mechanism so that concerns about potential retaliation can be reported and addressed appropriately. Ideally, this includes identifying more than one option for reporting concerns. Employers should also train those who are responsible for receiving such complaints on how to properly handle them.
- Have a “safety net” for decision-making.
Having an additional review by perhaps a senior manager and/or HR, and ideally your legal counsel, is a good step to take before proceeding to further mitigate the risks associated with retaliation claims. This is especially relevant where a potential adverse action against an employee is contemplated for disciplinary, performance, or other legitimate business reasons, if it occurs with any proximity in time to a protected activity, and especially with final actions like termination.
- Be vigilant and keep employment-related handbooks, policies, and trainings current.
As we have tried to highlight here, new laws, regulatory guidance, and court decisions are expanding the list of what may be considered a protected activity in the workplace with increasing frequency. Failing to stay current, and to ensure that all decision-makers understand what qualifies as protected activity and triggers these protections, is more important than ever to avoid what can be monumental missteps.
