Various state and federal statutes exist to protect and compensate employees whose employers retaliate against them after they disclose certain fraudulent practices to the employers or government agencies. These are known as Whistleblower statutes. Employment claims under Whistleblower statutes are a complex and growing area of the law. The number of federal statutes authorizing Whistleblower claims has increased in recent years, and Congress, federal courts and the Department of Labor have all recently enhanced the ability of employees to collect damages under these statutes.

In 2002, Congress included a provision in the Sarbanes-Oxley Act (“SOX”), section 806 of the Act. This whistleblower provision responded to various corporate accounting scandals by enacting protections for employees of publicly-traded companies who were retaliated against after disclosing or complaining about certain frauds by their employers. In the case of Lawson v FMR (2014), the United States Supreme Court substantially broadened the number of claims that can be brought under SOX by finding that contractors, subcontractors and agents of public companies can be held liable. Consequently, accountants, auditors and attorneys (among other service providers) are now targets of SOX whistleblower actions. In addition, several recent court decisions have held that protected activity under SOX includes complaints of fraud by an employer’s clients or contractors. See, for example, Sharkey v J.P. Morgan Chase & Co. (S.D.N.Y. 2010)(action against JP Morgan relating to internal complaint of bank fraud, mail fraud and money laundering by JP Morgan client).

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