On February 10, 2025, the U.S. Court of Appeals for the Second Circuit issued a decision in Murray v. UBS Securities, LLC finding that, for Sarbanes-Oxley whistleblower retaliation claims, a whistleblower’s activity must “actually cause or help cause the termination decision.” The decision clarifies the standard applicable to Sarbanes-Oxley whistleblower retaliation claims after the Supreme Court decided last year that a whistleblower need not prove that an employer acted with “retaliatory intent,” as we discussed in our prior blog post.
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The Sarbanes-Oxley Act prohibits employers from, among other things, “discriminat[ing] against an employee in the terms and conditions of employment because of” protected whistleblowing activity. The statute sets out a burden shifting framework in which a plaintiff must first show that their whistleblowing activity was a “contributing factor” in an adverse employment action taken against them. If the plaintiff makes that showing, the burden then shifts to the defendant to show by “clear and convincing evidence” that it would have taken the adverse action anyway.
In February 2024, the Supreme Court held in Murray that nothing in the text of the Sarbanes-Oxley statute required showing that the employer acted with “retaliatory intent,” reversing an earlier decision by the Second Circuit. Instead, the Supreme Court explained that a “plaintiff’s burden on intent is simply to show” that the whistleblowing activity was a “contributing factor in the unfavorable personnel action.”
The Supreme Court’s decision, however, left unaddressed UBS’s objection to the trial court’s jury instruction that defined a “contributing factor” as something that “tended to affect in any way” the termination decision. UBS argued that the instruction was overbroad because it allowed the jury to consider effects that did not contribute to Mr. Murray’s termination. The Second Circuit agreed, writing, “The district court’s instruction conflicted with the statutory text. Whistleblowing may ‘tend to affect’ termination generally, without actually being partly responsible for a particular plaintiff’s termination.” Instead, the Second Circuit wrote that a “contributing factor” “must actually cause or help cause the termination decision—it is not enough merely to influence the termination, or generally to be the type of thing that tends to cause termination.” The court vacated the trial court’s judgment in favor of Mr. Murray, and remanded the case for further proceedings.
The Second Circuit’s decision clarifies the causation element of a Sarbanes-Oxley whistleblower retaliation claim. Although a showing of animus, or “retaliatory intent,” is not required, the Second Circuit has now confirmed that “[a] termination is not because of whistleblowing just because whistleblowing has a propensity to lead to termination,” and instead “must have actually been at least ‘partly responsible for’ the adverse employment action.”
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