## Facts

- Jackie Hosang Lawson and Jonathan M. Zang worked for privately held Fidelity management entities that provided advisory and management services to Fidelity mutual funds.
- The mutual funds were publicly registered investment companies but had no employees; they relied on the private Fidelity entities for core operations.
- Petitioners alleged they reported suspected fraud affecting the mutual funds and their investors and, as a result, their private employers took adverse employment actions against them.
- Petitioners sued under Sarbanes–Oxley Act whistleblower provision, 18 U.S.C. § 1514A, which bars a public company and its “officer, employee, contractor, subcontractor, or agent” from retaliating against “an employee” for specified protected activity.
- The district court denied the employers’ motions to dismiss, accepting that § 1514A could cover contractor employees.
- The First Circuit reversed, holding § 1514A protects only employees of public companies.
- The Supreme Court granted review to decide whether § 1514A covers employees of private contractors and subcontractors serving public companies.

## Issues

1. Whether 18 U.S.C. § 1514A protects only employees of public companies, or also employees of privately held contractors and subcontractors of public companies who suffer retaliation for protected whistleblowing.

## Decision

- The Supreme Court reversed the First Circuit.
- The Court held that § 1514A’s anti-retaliation protection extends to employees of private contractors and subcontractors of public companies, not only to employees directly employed by the public company.
- The case was remanded for further proceedings consistent with that interpretation.

## Legal Principles

- Under 18 U.S.C. § 1514A, a covered “contractor” or “subcontractor” of a public company may not retaliate against its own employees for SOX-protected whistleblowing related to fraud or securities-law violations.
- Statutory text prohibiting specified actors from discriminating against “an employee” is ordinarily read to protect the employees of the actor who commits the retaliation, absent limiting language.
- SOX’s whistleblower provision is construed in light of the investor-protection purpose that motivated its enactment, including risks posed by outsourcing key functions to outside firms.
- Reading “employee” to mean only public-company employees would substantially weaken § 1514A in industries where public companies operate through contractors and may have no employees.

## Conclusion

The Court interpreted SOX § 1514A to protect whistleblowers employed by private firms that contract with public companies, allowing contractor and subcontractor employees to seek relief when their employers retaliate for protected reporting of fraud affecting public-company investors.


Lawson v. FMR LLC, 134 S. Ct. 1158 (2014)