While whistleblowers are protected under federal laws such as the Sarbanes-Oxley Act and the Dodd-Frank Act, some states -- Connecticut, for instance -- have laws that go further than federal law in protecting employees who report corporate wrongdoing. Now the Connecticut Supreme Court is in a position either to restrict or maintain the whistleblower protections that apply on the state level.
The case in question involves a former head of valuations at UBS Realty Investments LLC. In 2008 the man was fired by UBS, and in his lawsuit, which was filed in Connecticut, he claims his superiors retaliated against him after he reported that properties were being overvalued.
The Occupational Safety and Health Administration began investigating the situation after the man alleged that his superiors had violated the Sarbanes-Oxley Act. He then sued UBS in federal court for back pay and other damages, and the U.S. District Court in New Haven has asked the Connecticut Supreme Court to hear arguments in the case.
Referring to a U.S. Supreme Court ruling in 2006, UBS claims that when the former head of valuations raised concerns about overvalued properties, his doing so was "encompassed within his official duties." The distinction is important because the U.S. Supreme Court ruled that employees may not be protected from disciplinary action in the workplace when they make statements that are "pursuant to their official duties."
The high court's ruling effectively restricted whistleblower protections under federal law, and the Connecticut Supreme Court has been asked to decide whether such a restriction is applicable in lawsuits filed under state law.
Connecticut residents with employment law concerns may want to follow this case as it progresses.
Source: The Wall Street Journal, "Connecticut Supreme Court to Revisit Protection for Whistleblowers," Daniel Huang, July 22, 2014