SOX Protections for Employees of Public Companies’ Contractors and Subcontractors

March 06, 2014

On March 4, the U.S. Supreme Court issued its decision in Lawson v. FMR LLC, holding that the whistleblower protections afforded by 18 U.S.C. § 1514A of the Sarbanes-Oxley Act of 2002 (SOX) extend to employees of contractors and subcontractors of public companies. The Court addressed concerns about the potential reach of its decision, however, by referencing “various limiting principles” that were advanced by the plaintiffs and Solicitor General, including that an entity may not be considered a “contractor” unless its “performance of [the] contract will take place over a significant period of time” and that SOX would “protect[] contractor employees only to the extent that their whistleblowing relates to the contractor fulfilling its role as a contractor for the public company, not the contractor in some other capacity.” Because the plaintiffs at issue sought only “mainstream application” of SOX protections, however, the Court determined that it did not need to “determine the bounds of §1514A today.”

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