Bloomberg Law: UBS Whistleblower’s Retaliation Case Taken Up by Supreme Court

The US Supreme Court agreed to examine whether a former UBS Securities LLC research strategist suing the company for allegedly firing him for whistleblowing must prove that he was intentionally retaliated against.

The justices on Monday granted Trevor Murray’s bid to review a US Court of Appeals for the Second Circuit decision overturning a $1.7 million jury verdict against UBS Securities and parent UBS AG in his whistleblower suit.

The Second Circuit found that the whistleblower protection provisions of the Sarbanes-Oxley Act require Murray to prove that the bank acted with retaliatory intent.

This decision not only raised a whistleblower’s burden of proof under the statute, but cuts directly against the holdings of the Tenth, Ninth, Fifth, and Fourth circuits, Murray’s Supreme Court petition said. Those courts have held that whistleblowers need only show that their protected disclosure was a contributing factor to their employer’s adverse action.

The Supreme Court must resolve this circuit split because any uncertainty in the law’s anti-retaliation provision undermines its purpose of providing uniform protection to corporate whistleblowers, Murray told the justices. Whistleblower suits “cannot serve their intended deterrent purpose” if their claims are too hard to prove, he said.

Resolving the circuit split also would benefit at least 10 other whistleblower statutes that cover workers in industries like nuclear energy, railways, and aviation, the petition added. Those laws have a nearly identical framework for employee whistleblowers to meet their burden of showing that their protected activity contributed to the adverse employment action against them, it said.

‘Outsized Influence’

Sens. Charles Grassley (R-Iowa) and Ron Wyden (D-Oregon), who supported Murray’s high court bid, echoed these sentiments in a joint amicus brief with the Government Accountability Project.

The Second Circuit’s order will “have an outsized influence nationwide” because it’s considered to be the “Mother Court” on securities law, according to the lawmakers, who lead the Senate Whistleblower Protection Caucus. It may also influence future decisions by appeals courts that haven’t yet ruled on the burden of proof question in Sarbanes-Oxley Act whistleblower cases, they added.

Consumer advocacy group Public Citizen made similar arguments in a separate amicus brief.

Murray claimed the bank retaliated against him for complaining that officials pressured him to skew his reports in favor of their business strategies.

But the bank maintained that Murray was never a whistleblower, and he was fired as part of a broader staff reduction caused by “significant financial difficulties” the company faced after he was hired in 2011, its response brief said.

The Second Circuit correctly overturned the verdict because the district court’s jury instructions were inadequate and the statutory text requires proof of retaliatory intent, UBS said.

The jury shouldn’t have been told that Murray only needs to show that his protected whistleblower activity “tended to affect in a way” the employer’s decision, the filing added. This “broad and vague” instruction means the bank “could be liable even if the whistleblowing activity actually benefited him, such as by delaying his eventual termination.”

The case is Murray v. UBS Sec., LLC, U.S., No. 22-660, cert. granted 5/1/23.