US Supreme Court approves extension of employee whistleblower coverage

The US Supreme Court agreed to extend on Tuesday the employee whistlerblower protection to employees of subcontractors investment advisory firms, law and accounting firms from potential retaliation by their employees, according to Reuters.

The 6-3 decision was the result of the latest interpretation of the US Sarbanes-Oxley Act, a 2002 law that seeks to reform Wall Street by setting standards for all publicly-traded company boards, management and public accounting firms in the US.

The news agency said that the three judges who dissented the decision, Justice Sonia Sotomayor, Justice Anthony Kennedy and Justice Samuel Alito believed that the extension was unnecessary as they were worried about the expanding scope of the law, of which legal representation of public companies also expressed as well. The latter determined that the new ruling would give US authorities a headache as the provision scope will increase from 5,000 to several million and include small businesses that do not necessarily should be considered, such as babysitting services/

The court majority, on the other hand, claimed that the ruling is in accordance on how the U.S. Department of Labor had interpreted Sarbanes-Oxley in the past ten years, Reuters said. Justice Ruth Bader Ginsburg, who voted yest to the coverage extension, said that the US Congress has passed the Act after accounting problems caused Enron Corp and communications provider WorldCom Inc to shut their businesses down.

"I wonder whether Congress) prompted by the Enron debacle, would exclude from whistleblower protection countless professionals equipped to bring fraud on investors to a halt," Ginsburg added.

New York-based lawyer Jordan Thomas at Labaton Sucharow, whose company represents whistleblower, said that the ruling was appreciative. He said, "(The ruling) sends the clear message to potential whistleblowers that they will be protected from retaliation for wrongdoing regardless of their legal relationship to a public company."

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US Sarbanes-Oxley Act, US Supreme Court

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