Thousands of Whistleblowers At-Risk of Losing Protection
WASHINGTON, DC – DISTRICT OF COLUMBIA, UNITED STATES, November 28, 2017 — The United States Supreme Court will hear oral argument today in a major precedent setting whistleblower case, Digital Realty Trust v. Somers. the first whistleblower case under the Dodd-Frank Act (DFA) to reach the Supreme Court.
At issue is whether or not employees who raise concerns to their supervisors are protected under the Dodd-Frank Act’s anti-retaliation law. Digital Realty, backed by the U.S. Chamber of Commerce, is arguing that “whistleblowers” under the DFA must disclose their concerns directly to the U.S. Securities and Exchange Commission (SEC) to be protected.
Most employees initially report fraud concerns to their supervisors. Digital is asking the Supreme Court to permit companies to fire employees who alert their managers about fraud.
According to Stephen M. Kohn, Executive Director of the National Whistleblower Center, the case will impact the rights of thousands of employees:
“Digital’s argument defies logic and common sense. Employees should be encouraged to report fraud, not fired when they have the courage to do so. Why would corporations want to discourage employees from reporting fraud to their supervisors or in-house compliance programs? Firing employees who report fraud internally will have a massive chilling effect and undermine investor confidence.”
Numerous other whistleblower laws define “whistleblower” in a manner similar to the DFA, and will also be impacted by the Court’s ruling. These include the whistleblower provisions in the Commodity Exchange Act, Clean Air, Water Pollution, Toxic Substances and Surface Mining Acts, and all the major banking whistleblower laws, including those covering credit unions, FDIC-insured institutions, and international monetary transactions.”
Numerous public interest groups and government officials supported the whistleblower, Paul Somers, and filed friend of the court briefs urging the Supreme Court to protect internal whistleblowers. These included the SEC, Senator Charles Grassley, and the National Whistleblower Center.
Important Links:
- Nov. 27, 2017, Law360 article: Whistleblower Protections Are at Risk At The High Court.
- Brief of the National Whistleblower Center
- Brief of the SEC
- Brief of Senator Charles Grassley
- Brief of Paul Somers
- Brief of Chamber of Commerce
- Brief of Digital Realty
- Lower Court Decision (9th Cir.) under review