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Whistleblower Protection Extended to Contractors

A contractor may not retaliate against its own employees for engaging in protected whistleblower activity. The Supreme Court recently passed down the ruling in Lawson v. FMR LLC. According to the Sarbanes-Oxley Act Sec. 806, whistleblower protection is extended to employees of privately held contractors and subcontractors who perform work for public companies. David Wachtel was quoted in Employment Law Daily’s analysis of the decision. Said Mr. Wachtel, “The majority restores important protection for cases like Lawson – the public company had no employees. The only protection for the public, against fraud, could come from whistleblowing by contractors’ employees.” He also noted, “there is an interesting footnote in which the Court suggests that it would defer to the interpretation of SOX by OSHA, not the SEC. As the Court notes, OSHA is responsible for 20 whistleblower retaliation statutes. In many cases DOL is not the only source of subject matter expertise on the underlying issue: aviation and the FAA, nuclear power and the NRC, securities and the SEC, and so on. Deferring to OSHA may be a favorable development for whistleblowers because DOL may be more focused on whistleblowing principles and less on the concerns of the regulated industries.”