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Member, Beacon International Group, Ltd.
WASHINGTON (Reuters)—Corporate whistle-blowers suffered a setback Monday as a divided U.S. Supreme Court said they cannot bring lawsuits on the basis of information learned through Freedom of Information Act requests.
By a 5-3 vote, the court reversed a federal appeals court ruling in favor of a former Schindler Elevator Corp. employee who sued the company under the federal False Claims Act.
The employee, Daniel Kirk, said the company did not comply with reporting requirements concerning the employment of Vietnam veterans. The lawsuit was based on information his wife obtained through FOIA requests.
A federal judge threw out his lawsuit, saying a response to a FOIA request constitutes a “report” and thus falls within a bar on False Claims Act lawsuits based on public information disclosed in that manner.
The 2nd U.S. Circuit Court of Appeals in New York reversed that decision last year, but the U.S. Supreme Court found Monday that the lower court judge was correct.
Mr. Kirk's lawyer was not immediately available for comment.
WASHINGTON (Reuters)—U.S. securities regulators are resisting corporate America's demands to force whistleblowers to report possible wrongdoing internally before they can be considered for compensation from regulators.