Trevor Murray, a commercial mortgage-backed securities strategist at UBS, reported to his supervisors that traders were pressuring him to skew his research to support business strategies rather than reflect independent analysis. Murray alleged that UBS terminated him in February 2012 in retaliation for this whistleblowing. He sued under the Sarbanes-Oxley Act's antiretaliation provision, 18 U.S.C. § 1514A. At trial, the district court instructed the jury on the elements of the claim but omitted any requirement that the jury find UBS acted with retaliatory intent. The jury found UBS liable and awarded Murray damages. UBS appealed, arguing that the jury instructions were legally incorrect because the statute requires proof of intent. The district court had denied UBS's post-trial motions, reasoning that the evidence supported the verdict without the intent element.
The Second Circuit analyzed the plain meaning of 18 U.S.C. § 1514A, which prohibits employers from discriminating against an employee 'because of' any lawful whistleblowing act. The court reasoned that the word 'discriminate' implies a conscious decision to act on the basis of prejudice, and 'because of' denotes a causal relationship. Therefore, the statute necessarily requires that the adverse employment action be motivated by the employee's whistleblowing. The court held that a plaintiff must prove by a preponderance of the evidence that the employer took the adverse action with retaliatory intent. This interpretation aligns with the Second Circuit's prior decision in Tompkins v. Metro-North Commuter R.R. Co., which interpreted nearly identical language in the Federal Railroad Safety Act to require evidence of retaliatory intent. The court noted that while the plaintiff need not prove that retaliation was the sole factor, there must be more than a mere temporal connection between the protected activity and the adverse action. The district court's failure to instruct the jury on this element was a legal error that could not be considered harmless, as the jury was not required to credit UBS's non-retaliatory reasons for termination, such as financial difficulties.
The decision clarifies that whistleblowers suing under the Sarbanes-Oxley Act in the Second Circuit must prove that their employer acted with a specific intent to retaliate. This raises the evidentiary bar for plaintiffs compared to a standard where mere causation or contributing factor is sufficient without proving animus. The case is sent back to the district court for a new trial where the jury will be instructed that they must find UBS acted with retaliatory intent to hold the company liable. The court did not reach the cross-appeal regarding damages.
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