Next term the Supreme Court hopefully will provide an answer to the hotly debated question whether the Dodd-Frank Act’s anti-retaliation provision (Section 21F) protects only those whistleblowers who report violations to the Securities and Exchange Commission (“SEC”), or if the protections extend to those who report concerns internally.
The U.S. Court of Appeals for the Second Circuit was the first court to take up this issue in Berman v. Neo@Ogilvy LLC, No. 14-4626. The court decided that employees who make internal complaints of suspected securities violations are whistleblowers entitled to protection from retaliation under the Dodd-Frank Act even if they do not report their concerns to the SEC. The U.S. Court of Appeals for the Fifth Circuit subsequently came to a different conclusion in Asadi v. G.E. Energy (USA), No. 12-20522, holding that the anti-retaliation provision of the Dodd-Frank Act protects only those employees who report suspected securities violations to the SEC. Then in March 2017, the U.S. Court of Appeals for the Ninth Circuit agreed with the Second Circuit in Somers v. Digital Realty, No. 15-17352, holding that employees who report complaints only internally are protected from retaliation by the Dodd-Frank Act.
On June 26, 2017, the Supreme Court granted certiorari to Digital Realty’s appeal of the Ninth Circuit’s decision in order to decide exactly who is protected by the Dodd-Frank Act’s anti-retaliation. Proponents of the Ninth and Second Circuit reading of the Act argue that protecting only those who report to the SEC will deter employees from reporting securities violations at all, which is in contrast to Congress’s purpose in passing Section 21F. On the other hand, those who support the Fifth Circuit’s holding argue that it is consistent with the plain language of the Act, and that expanding the protection to those who only report internally will open the door to numerous meritless claims. The United States Chamber of Commerce has written an amicus brief supporting the Fifth Circuit’s interpretation of the Act.
The Supreme Court will not rule on this case until next term, but continue checking this blog for updates on any developments.
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