The 5-4 decision sides with Alabama high school coach Roderick Jackson, who said his girls' basketball team received worse treatment than the boys' team. It is a victory for women's advocates who say the legal protection will prompt reports of bias that would otherwise go unsaid or unheeded.
Congress intended to allow whistleblower suits when it passed the Title IX law, justices said.
"The text of Title IX prohibits a funding recipient from retaliation against a person who speaks out against sex discrimination, because such retaliation is intentional discrimination on the basis of sex," Justice Sandra Day O'Connor wrote for the majority.
She was joined in her opinion by Justices John Paul Stevens, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.
The 1972 law, best known for promoting women's athletics, bars sex discrimination in any educational program receiving federal funds. It already was settled law that students or others could sue if they thought they were shortchanged based on their sex.
But the statute has been silent as to the rights of whistleblowers — regardless of gender — who aren't direct victims of discrimination but who claim retaliation. Since 1975, the federal government has interpreted Title IX to cover retaliation claims.
Justice Clarence Thomas was among the four dissenters.
Whistleblowers shouldn't be given protection unless Congress explicitly says so, said Thomas and three other justices who voted no. They noted that other civil rights laws have specific provisions addressing retaliation.
"We require Congress to speak unambiguously in imposing conditions on funding recipients through its spending power," Thomas wrote.
Under the ruling, schools now may be forced to pay compensatory and punitive damages for retaliation claims, something that was never contemplated when they chose to accept federal funding, the dissenting justices said.