Supreme Court Analysis

Grace Marji

MGT 550

Winter 2015

Supreme Court Analysis

Lawson V. FMR LLC

Case Brief

Facts: Jackie Lawson and Jonathan Zang both worked for private companies that provided management services to Fidelity family of mutual funds. Lawson and Zang both sued Fidelity, alleging that the companies reacted against them for reporting what they believed to be securities law violations. Section 1514A of the Sarbanes-Oxley Act protects employees of public companies from retaliation after the employee “blows the whistle” on the company. Zang and Lawson argued that this act should also apply to employees of private contractors and subcontractors that have contracts with public companies since their employees are in a position where they can report problems of fraudulent behavior and mismanaged money. The parties ended up in the court system because Fidelity (FMR) argued that Congress only intended Section 1514A to apply to direct employees of public companies and that extending this coverage would result in an unmanageable amount of litigation.

Procedural Facts: Lawson and Zang each filed separate actions in District Court against their former employers. The District Court ruled in favor of Lawson and Zang. The defendants appealed to the U.S. Court of Appeals for the First Circuit. The Court of Appeals reversed the decision, now ruling in the defendants favor that the plaintiffs were not protected under the Act. The plaintiffs then appealed the case and the case went to the U.S. Supreme Court. Justice Ginsburg delivered the opinion, ruling in Lawson and Zang’s favor.

Issue: The issue of this case is whether or not employees of privately-held contractors or subcontractors of a public company are protected under Section 1514A of the Sarbanes-Oxley Act, thus extending protection from retaliation after the employee “blows the whistle” on the company. Another issue of the case is how the word “employee” is defined in Section 806 of the Sarbanes-Oxley Act....