WASHINGTON — The Supreme Court looked back Tuesday at the collapse of energy giant Enron to determine who is protected from retaliation after blowing the whistle on a company’s misdeeds.
The justices heard arguments in an appeal brought by two former employees of companies that run the Fidelity family of mutual funds. The workers claimed they faced retaliation after they reported allegations of fraud affecting Fidelity funds.
They argue that a provision of the Sarbanes-Oxley Act, passed in 2002 in response to the Enron scandal, protects their whistle-blower activity.
The court spent most of an hour Tuesday discussing Enron’s bankruptcy in 2001 amid revelations that its executives manipulated the company’s earnings and stock price by lying to employees and investors about Enron’s financial health.
The provision at issue at the Supreme Court protects people who expose the kind of corporate misdeeds that arose at Enron. But there is a dispute over whether the protection covers only employees of publicly traded companies or also applies to contractors hired by the companies.