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Lawson v. FMR LLC
United States Supreme Court
134 S. Ct. 1158 (2014)
In 2002 Congress passed the Sarbanes-Oxley Act (the act) to prevent and punish corporate fraud. The act encouraged corporate employees to blow the whistle on wrongdoing by their employers and provided for whistleblower protections. Section 806 explicitly stated that the whistleblower protections forbade officers, employees, or contractors of public companies from discharging or otherwise discriminating against whistleblowers who were employees of publicly traded companies. Jackie Hosang Lawson and Jonathan M. Zang (plaintiffs) were employees of FMR LLC (defendant). FMR was a privately held company that contracted with publicly held companies to provide investment advice. Lawson and Zang were both fired after raising concerns about wrongdoing within FMR. Lawson and Zang filed lawsuits in federal court pursuant to § 806 of the act, seeking whistleblower protections. FMR filed motions to dismiss the cases, arguing that neither Lawson nor Zang had a claim for relief under § 806 because they were not employees of a publicly traded company. The district court denied FMR’s motions to dismiss. FMR appealed. The United States Court of Appeals for the First Circuit reversed the district court, holding that Lawson and Zang were not protected by § 806. The court of appeals reasoned that FMR was a contractor of a public company and was prohibited from discriminating against whistleblowers, but that Lawson and Zang were not among the protected class of employees. The United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Ginsburg, J.)
Dissent (Sotomayor, J.)
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