The U.S. Court of Appeals for the Ninth Circuit recently issued a decision that highlights an area where the circuit courts are divided on how to handle an issue. The decision involves the treatment of internal whistleblowers, and the court ruled that employees who report suspected violations of federal securities laws to others within their workplace and not to the SEC fall within the whistleblower protection provisions of the Dodd-Frank Act. The decision is intended to compel those people within a place of work to whom potential violations are reported to handle the reporting parties with care and respect because any retaliation could trigger a whistleblower protection claim.

Section 21F of the Dodd-Frank Act states that employers may not harass, threaten, intimidate, or take any other type of adverse action against an employee who reports a suspected violation of securities law or other statutes. The Act provides a remedy for any employee who does experience harassment, threats, intimidation, or adversity in the form of a federal whistleblower protection claim. Damages that an employee may pursue through a whistleblower protection claim include reimbursement for legal fees and costs, reinstatement to their former position, and an amount of compensation equal to twice the amount of their back pay, plus interest.

This particular decision turned on the definition of the term “whistleblower,” as defined by the Dodd-Frank Act. Attorneys for the whistleblower’s employer argued that since the term “whistleblower” is defined in Section 21F of the Dodd-Frank Act as a person who reports suspected violations of the federal securities laws to the SEC, the plaintiff should not be allowed to bring a whistleblower protection claim under the Dodd-Frank Act because he had not brought his concerns to the SEC before he got fired. The court disagreed with that argument and ruled that distinguishing between internal whistleblowers and those who have gotten as far as reporting the suspected violations to the SEC would unnecessarily narrow the applicability of the Dodd-Frank Act. Whistleblowers usually report suspected violations to the SEC after attempts to have their concerns addressed by the company go unheeded. Not all whistleblowers can get to that point before they get terminated from their position. It doesn’t make sense to protect only whistleblowers who get past a particular stage in the process of reporting a suspected violation and attempting to get it addressed because the vulnerability that the Dodd-Frank Act was designed to protect begins as soon as an employee reports an alleged violation, whether that statement gets made internally or externally.

Barrett Law PLLC:  Protecting Mississippi Whistleblowers

Whistleblowers become vulnerable at the moment that they report a possible breach of the law to anyone, whether within their company or outside of it. They become open to the threat of all kinds of mistreatment, and they risk losing the income that they use to support themselves and the career that they worked so hard to build. If you got harmed after becoming a whistleblower, the Mississippi Whistleblower Attorney at Barrett Law PLLC might be able to help. Call us today, at 1 (601) 790-1505 to arrange an initial consultation.