In 2010, Congress passed the Dodd Frank Act which in part was designed to expand legal protection to whistleblowing employees of publicly traded companies who disclose, object to or refuse to participate in conduct that violates federal securities laws. On June 26, 2017, the United States Supreme Court agreed to hear an appeal from the 9th Circuit Court of Appeals in San Francisco to decide whether the Dodd Frank Act protects a whistleblowing employee who objects to federal securities laws violations to company management but not to the Securities and Exchange Commission (SEC). Thus, the Supreme Court will resolve conflicting rulings between the 2d Circuit Court of Appeals in New York and the 9th Circuit which ruled that the whistleblower need not report the violation to the SEC in order to successfully prosecute a whistleblower claim under Dodd Frank as opposed to the 5th Circuit Court of Appeals (New Orleans) who ruled that a whistleblower must have reported the illegal conduct to the SEC in order to successfully prosecute a claim. This writer predicts that the decision will turn on Chief Justice Roberts' and Justice Kennedy's interpretation of the Dodd Frank statute and whether they both follow their previous rulings and rationales on how statutes should be interpreted. If they do follow their prior rulings, then they will vote to uphold the 2d and 9th Circuits' interpertation of Dodd Frank.
However, if the Supreme Court rules consistent with the 5th Circuit's interpretation of Dodd Frank, will that irreparably curtail whistleblower rights that affect federal securities laws? Not necessarily as a whistleblower can also vindicate their rights under the Sarbanes Oxley Act of 2002. For a brief overview of how the Dodd Frank and Sarbanes Oxley Acts apply, please go to our whistleblower retaliation page. If you believe that you may be a whistleblower in this context who has suffered illegal retaliation, please feel free to contact us at (973) 695-7777 or through our website in the box immediately to the right of this blog