A Whistle Upon Deaf Ears: Changes to Dodd-Frank Whistleblower Protections
A Whistle Upon Deaf Ears: Changes to Dodd-Frank Whistleblower Protections On Wednesday, February 21st, the U.S. Supreme Court unanimously ruled that individuals who report allegations of corporate wrongdoing must do so to the Securities and Exchange Commission, not just to their own companies, in order to qualify for protections offered under the Dodd-Frank Act. The case in question, Digital Realty Trust v. Somers, involved Paul Somers, a former employee of Digital Realty Trust, a San Francisco-based real estate investment company. Somers detected foul-play in the company and reported mismanagement of funds and contracts to senior management. He was subsequently fired in 2014. Somers proceeded to sue, claiming that his termination was retaliation that violated the Dodd-Frank Act. Unfortunately for Somers, and other would-be whistleblowers, the Supreme Court disagreed. This decision is contrary to how the Dodd-Frank Act has been interpreted by many lower courts since its introduction in 2010. The Dodd-Frank Whistleblower Program includes payable awards to those who report information that leads to a successful action, as well as safeguards against employer retaliation. Whereas past interpretations offered these protections for those who reported issues internally, the Supreme Court decision suggests that the Act’s plain language limits its protections to specific instances where the individual has reported the violations in question directly to the SEC. Digital…
