Lawson and Zang lawsuit became the test case. In a divided but majority 6-3 ruling, in Lawson v. FMR LLC,the Court held that Section 1514A whistleblower protection extends to employees of contractors and subcontractors of public companies, including investment advisers, law firms, and accounting firms. The Lawson decision means that such employees are protected by Section 1514A. The decision's scope is not limited to employees of mutual fund contractors but also extends to employees of other contractors to public companies, such as law firms and accounting firms.
Justice Ruth Bader Ginsburg's opinion said that the totality of circumstances
including the text of Section 1514A,other considerations such as legislative intent, and the Department of Labor's interpretation and similar prior whistleblower protection legislation that Congress drew on when drafting Section 1514A, weighed in favor of interpreting the SOX whistleblower protection to cover employees not just of the public company itself, but of any officer, employee, contractor, subcontractor, or agent of a public company. Further, the Court reasoned that Congress did not intend to stop contractors from retaliating against whistleblowers employed by the public companies they served, yet permit them to retaliate against their own employees.(Justices Antonin Scalia and Clarence Thomas joined in the opinion only to the extent it was based on the language of the statute itself.)
Justice Sonia Sotomayor's dissent argued that the majority's holding gave the law a "stunning reach." A babysitter, for example, could bring a Section 1514A claim against his employer, merely because that employer was an employee of a public company. Justice Ginsburg's opinion discounted the dissent's "fanciful visions of whistleblowing babysitters" and noted that "[f]ew housekeepers or gardeners... are likely to come upon and comprehend evidence of their employer's complicity in fraud."
This is a landmark ruling with far reaching implications.