WASHINGTON — The Supreme Court ruled that whistleblower protections in a federal law passed in response to the Enron financial scandal apply broadly to employees of publicly traded companies and contractors hired by the companies.
The justices voted 6-3 in favor of two former employees of companies that administer the Fidelity family of mutual funds. The workers claimed they faced retaliation after they reported allegations of fraud affecting Fidelity funds.
The case involved the reach of a provision of the Sarbanes-Oxley Act, passed in 2002 in response to the Enron scandal, which protects whistleblower activity. The measure was intended to protect people who expose the kind of corporate misdeeds that arose at Enron.
Justice Ruth Bader Ginsburg said in her opinion that the law “shelters employees of private contractors that serve public companies, just as it shelters the public companies’ own employees.”
Justices Sonia Sotomayor, Samuel Alito and Anthony Kennedy dissented.
Jackie Hosang Lawson and Jonathan M. Zang complained of retaliation for whistle-blower activities from the privately-held parent company and subsidiary companies that run the Fidelity family of mutual funds.
Lawson resigned after complaining of harassment, and Zang was dismissed, and they both sued. A lower court refused to throw out their complaints, but that decision was overturned. The federal appeals court in Boston said only people who work for public companies are protected by the Sarbanes Oxley Act.
The case is Lawson v FMR, 12-3.