The U.S. Supreme Court weighs in on Dodd-Frank Whistleblower Protections

 For several years now, Congress and the courts have attempted to protect whistleblowers from retaliation in the workplace. Through acts such as the Dodd-Frank Act, any person who provides information about a corporation’s violation of law or SEC regulation would be protected from firing or retaliation by their employer for reporting such an act. 1) Keith Paul Bishop, Supreme Court Holds Whistleblower Must First Blow The Whistle To The SEC, National Law Review (Feb. 21, 2018), https://www.natlawreview.com/article/supreme-court-holds-whistleblower-must-first-blow-whistle-to-sec. However, the Supreme Court just recently tackled another issue in this field: “Does the anti-retaliation provision of Dodd-Frank extend to an individual who has not reported a violation of the securities laws to the SEC and therefore falls outside the Act’s definition of ‘whistleblower’?”2)Id.

In the Supreme Court case Digital Reality Trust, Inc. v. Somers, Somers “was fired after he reported alleged securities violations to his senior management, but not the SEC.”3) Lydia Wheeler, Supreme Court limits Dodd-Frank protections for whistleblowers, The Hill Feb. 21, 2018, http://thehill.com/regulation/court-battles/374834-supreme-court-limits-dodd-frank-protections-for-whistleblowers. At the lower courts, “Somers filed suit and won at both the federal district and appeals courts, which ruled that Congress’ intention was to protect such actions.”4)Richard Wolf, Supreme Court deals blow to Wall Street whistle-blowers with unanimous ruling, USA Today (Feb. 21, 2018).  

However, the Supreme Court decided unanimously to reverse the lower courts’ rulings, finding that Dodd-Frank did not protect an employee who had failed to report such a violation to the SEC.5)Id. Justice Ginsburg, writing for the majority, opined that the core of Dodd-Frank’s whistleblower program is to aid the SEC’s enforcement work by “motivating people who know of securities law violations to tell the SEC.”’6)Wheeler, supra note 3. Ginsburg went on to explain that “while Dodd-Frank provides whistleblowers with monetary rewards when they provide actionable information about financial fraud, Ginsburg said Congress recognized that might not be enough of an incentive to encourage employees who are fearful of employer retaliation to come forward to report that information to the government.”7)Id. She explains that “Congress therefore complemented the Dodd-Frank monetary incentives for SEC reporting by heightening protection against retaliation.”8)Id. This ruling, thus, “limits the whistle-blower protections in the 2010 federal law cracking down on Wall Street fraud and abuse because of the specific way the so-called Dodd-Frank law was written by Congress.”9) Wolf, supra note 4. As USA Today explains, “It was a major victory for conservatives who argue that judges should interpret laws literally and agencies should not be granted discretion to implement them differently. It was a loss for consumer groups that lobbied for both the 2010 law that followed the Wall Street financial crisis and a 2002 law enacted after the Enron securities-reporting scandal.”10)Id.

            Ultimately, this ruling seems to force whistleblowers to closely pay attention to acts such as Dodd-Frank to ensure they receive the full protections under the statute. While time will only tell what effect, if any, this ruling will have on whistleblower cases, it is safe to say that the decision serves as a reminder of the power of statutory language and the possibility of retaliation many employees must contend with on a daily basis. If you think you have been retaliated against in your workplace for being a whistleblower or have another workplace-related grievance, you should consult legal counsel immediately to discuss your possible remedies.

References   [ + ]

1. Keith Paul Bishop, Supreme Court Holds Whistleblower Must First Blow The Whistle To The SEC, National Law Review (Feb. 21, 2018), https://www.natlawreview.com/article/supreme-court-holds-whistleblower-must-first-blow-whistle-to-sec.
2, 5, 7, 8, 10. Id.
3. Lydia Wheeler, Supreme Court limits Dodd-Frank protections for whistleblowers, The Hill Feb. 21, 2018, http://thehill.com/regulation/court-battles/374834-supreme-court-limits-dodd-frank-protections-for-whistleblowers.
4. Richard Wolf, Supreme Court deals blow to Wall Street whistle-blowers with unanimous ruling, USA Today (Feb. 21, 2018).
6. Wheeler, supra note 3.
9. Wolf, supra note 4.
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