Supreme Court Extends Whistle-Blower Protections to Contractors

The Supreme Court ruled Tuesday that private contractors are entitled to federal whistle-blower protection when they expose fraud at public companies.

The 6-3 decision, written by Justice Ruth Bader Ginsburg, was a victory for private employees who advised or managed Fidelity mutual funds, but it's sure to have a broader impact in the future.

Mutual funds often have no employees, so the court reasoned that whistle-blower protections enacted by Congress after the Enron scandal — in what became known as the Sarbanes-Oxley law — were intended to extend to contractors such as law firms and accountants.

"Based on the statutory text, and the mischief to which Congress was responding, we hold that (the law) shelters employees of private contractors that serve public companies," Ginsburg said in announcing her opinion from the bench.

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