The dispute involves the basic question of what employees are covered by SOX. The Court highlighted the disputed language:
Whistleblower protection for employees of publicly traded companies. — No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. § 781), or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78o(d)), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee —The parties presented two differing arguments for the meaning: (1) FMR argued only employees of publicly held companies are covered, and the highlighted language means that they are protected against actions from any of the highlighted individuals; (2) the individuals who worked for private companies that contract to act as advisers and managers to publicly held companies, argue that coverage extends not only to employees of publicly held companies, but to the "employees those public companies' officers, employees, contractors, subcontractors, or agent." The First Circuit in a 2-1 decision chose the first, more narrow option.
The scope of the two is dramatically different. Hopefully someone with access to a lot of data will tell us how different, but I would bet that it would if the Supreme Court adopts the broader reading at least 10 times more employees will be covered, and that guess could be off by magnitudes of tens or even hundreds.
The Administrative Review Board, the top administrative agency to rule, has taken the broader view of coverage. Spinner v. David Landau and Associates, LLC (5.31.12).
A narrow reading would normally be subject to congressional change, but given the current state of affairs in Congress, it is highly unlikely that any such change would happen any time soon. (Although I will admit strange things do happen to move legislation at times.)
But as of today, the Supreme Court's docket for next term got a lot more important for employment lawyers.