Categories: Financial Services

By Stuart Gerson

Yesterday, the Supreme Court decided Department of Homeland Security v. MacLean. MacLean was a Transportation Security Administration (TSA) employee who, without authorization, disclosed to a reporter the otherwise unpublicized termination of  missions related to hijack prevention. He claimed he was disclosing a matter related to public safety. He was fired pursuant to regulations promulgated under the Homeland Security Act, 116 Stat. 2135. That Act provides that the  TSA “shall prescribe regulations prohibiting the disclosure of information . . . if the Under Secretary decides that disclosur[e] would . . . be detrimental to the security of transportation.” 49 U. S. C. §114(r)(1)(C). Around the same time, the TSA promulgated regulations prohibiting the unauthorized disclosure of “sensitive security information.” MacLean was fired pursuant to that regulation.  However, the Supreme Court held that the regulation at issue did not have the force of law.

Given the fact that this case involves facts peculiar to governmental entities, one might think it unimportant to non-governmental employers in general, or financial services employers in particular.  However, we believe there are two takeaways:

The first takeaway is a reiteration that, contrary to oft-repeated arguments that the Court is pro-business, this case further shows that, with one idiosyncratic exception (Garcetti  v. Ceballos, 547 U.S. 410 (2006)), the whistleblower has thus far consistently prevailed at the Supreme Court.  Employers should take note of this fact in connection with litigation of False Claims Act, Sarbanes-Oxley,  Dodd-Frank, and other whistleblower cases where retaliation might rear its head.

The second takeaway is the theory that not all regulations have the status of actionable laws. This could be an issue for a financial services firm that terminates a whistleblower for violating regulations applicable to the financial services industry.

A final point of interest:  This was a 7-2 decision, with Justices Kennedy and Sotomayor dissenting. The majority was, thus, bipartisan, as was the dissent, at least in terms of judicial philosophy.

Back to Workforce Bulletin Blog

Search This Blog

Blog Editors

Related Services

Topics

Archives

Jump to Page

Subscribe

Sign up to receive an email notification when new Workforce Bulletin posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.