SCOTUS Kicked Off Spooky Season with a New Term – Should Employers be Scared?

New Supreme Court terms begin each year on the first Monday in October. The nine justices will hear and decide on a number of cases throughout the year, touching on a variety of different issues. This October, one of the matters before the Court poses the possibility of an update to the laws on whistleblower protections under the federal Sarbanes-Oxley Act (“SOX”). While the complexities of SOX might cause many to jump out of their shoes, a ruling in favor of the employer in this matter could be a treat, and not a trick for management-side employment lawyers and the companies they represent.

In Murray v. USB Securities, an employee sued his employer claiming he was fired because he made complaints of fraud after being pressured to submit false reports. Murray brought the action under the SOX anti-retaliation provision and won at the district court level, but lost on appeal when the Second Circuit sided with the employer, which argued the employee had to prove the company had a retaliatory intent when it acted to terminate his employment. The Supreme Court will now determine who has the burden of proof, the employee or the employer? A ruling on this issue in favor of the employer would have a significant impact on whistleblower litigation in this context, as it would make it more difficult for plaintiffs to pursue and succeed on these claims.

In December, the Court will hear another employment law-related case – Muldrow v. City of St. Louis, Missouri. In Muldrow, a former employee filed a discrimination lawsuit after she was transferred to a different role and denied her requested transfer, claiming the decisions were based on her sex. On appeal, the Eighth Circuit found there was no Title VII violation, as it was not enough that the decision impacted the “conditions” of her employment, and that she had to do more by establishing a “material employment disadvantage.” After hearing oral arguments in the case in December, the Supreme Court will determine whether Title VII prohibits discrimination in the context of job transfers without a separate determination showing the decision caused a significant disadvantage to the employee. A finding in favor of the plaintiff could broaden the pool of potentially actionable adverse employment actions.

Overall, so long as you stay up to date on new developments, employers need not be scared of the dark when it comes to potential changes from this year’s round of SCOTUS decisions. The Crowe & Dunlevy Labor and Employment Practice Group will keep tabs on SCOTUS developments, so keep an eye out for the update on these cases when the final decisions are made. For additional information, contact Katie Campbell or another member of the Labor & Employment Practice Group at Crowe & Dunlevy.

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Associated People:

Katie Campbell

Practice Area:

Labor & Employment