Supreme Court Tightens Dodd-Frank Whistleblower Protections
In a unanimous ruling, the Supreme Court narrowed the definition of a whistleblower under the Dodd-Frank Act. The U.S. Court of Appeals for the Second, Fifth and Ninth Circuits had different rulings over the interpretation of the whistleblower protections, but the Supreme Court ultimately decided on a narrow definition.
The decision stems from the case of Digital Realty Trust v. Somers, which involved the termination of former Digital Realty Trust vice president Paul Somers after he reported possible violations to management. Somers claimed that the Dodd-Frank whistleblower protections, which bar companies from retaliating against employees who report misconduct under certain situations, covered him. Somers relied on the Securities and Exchange Commission’s (“SEC”) interpretation of the law to support his argument.
Digital Realty Trust, however, alleged that since Somers told management and not the SEC, the whistleblower protections did not apply to him. The Supreme Court’s February 21 ruling, however, concluded that Dodd-Frank’s clear whistleblower definition prevents the SEC from interpreting the term.