In a case reviewing a First
Circuit panel’s ruling that only employees of public companies are covered by
the whistleblower provisions of the Sarbanes-Oxley Act, the National Whistleblower Center filed an
amicus brief urging the Supreme Court to give Chevron deference to the Department of Labor’s
holding that contractors and subcontractors are also covered under the term
employee under the provisions. The case is set for oral argument on November
12, 2013. Lawson v. FMR, LLC,. No. 12-3.
Congress vested exclusive
jurisdiction in the DOL to administer the whistleblower provisions in Section
806 of Sarbanes-Oxley, said the brief. Within the context of this authority,
the DOL has consistently interpreted the term employee broadly to encompass
contractors and subcontractors. Further, noted the brief, this interpretation
has been in place for decades and has not been challenged by Congress or
overturned judicially.
If the Court did not give
deference to the DOL interpretation of employee and decided that the
whistleblower protections do not extend to contractors and subcontractors, the
brief warns that this would create a massive loophole that was not intended by
Congress when it passed Sarbanes-Oxley. Even more, not giving deference to the
DOL in this matter would create dubious incentives for companies engaged in
misconduct to hire contractors and subcontractors to handle some of their more
legally questionable work.