Two Phillips & Cohen whistleblower attorneys wrote an article for New York University’s Compliance & Enforcement blog that examines the issue of who is a whistleblower as defined by the Dodd-Frank Act and therefore is covered by the law’s whistleblower protections.
Erika Kelton and John Tremblay explored the topic by looking at a recent decision out of the Ninth Circuit Court of Appeals. In Somers v. Digital Realty Trust, the Ninth Circuit ruled that “Dodd-Frank protects whistleblowers from retaliation for reporting suspected violations of securities laws to their employers,” Kelton and Tremblay wrote.
“The Ninth Circuit rejected DRT’s argument, reasoning that if anti-retaliation protection applied only to people who reported to the SEC first, then Dodd-Frank’s explicit protections for employees who make protected disclosures under Sarbanes-Oxley would be rendered virtually meaningless,” wrote Kelton and Tremblay.
That decision joins a Second Circuit decision from 2015, Berman v. Neo@Ogilvy LLC, which also ruled that Dodd-Frank’s whistleblower protections apply to internal whistleblowers.
Not all courts have agreed on the issue. In Asadi v. G.E. Energy (USA), the Fifth Circuit ruled that Dodd-Frank’s anti-retaliation provisions are reserved only for whistleblowers who report directly to the SEC or CFTC.
“Dodd-Frank’s anti-retaliation protection often is what helps a potential whistleblower off the fence to report fraud to his or her employer, and maybe, eventually, the SEC or the Commodity Futures Trading Commission,” wrote Kelton and Tremblay.