NWC Statement Clarifies History Behind Dodd-Frank Anti-Retaliation Provisions

Corporate Attack on Internal Whistleblowers Rebutted

In an article published on June 22, 2017, by Law360, Stephen M. Kohn, executive director of the National Whistleblower Center (NWC) and partner in the whistleblower rights law firm of Kohn, Kohn and Colapinto, revealed previously unknown information regarding the legislative history of the anti-retaliation language in the Dodd-Frank Act (Dodd-Frank). A controversy exists regarding these provisions which has resulted in a split in the U.S. Courts of Appeal interpreting the scope of protected activity. 

The anti-retaliation provision in Dodd-Frank is the most litigated and controversial part of the securities law. At issue is whether the Act protects a whistleblower who reports misconduct to a corporate compliance office. This issue has resulted in a circuit split and several strong dissenting opinions at the appellate court level. It is also the source of numerous conflicts in district courts.

Kohn issued the following statement Thursday:

Although it is the policy of the National Whistleblower Center not to release its private communications with Congress on legislative matters, because of the split among the appellate courts and confusion at the district court level, we have made an exception.

When the NWC purposed explicit protections for internal whistleblowers and employees who report to compliance departments, we assumed it would be uncontroversial. In the debates leading up to the passage of the Dodd-Frank Act, Wall Street firms emphasized the importance and effectiveness of their internal compliance programs. Given the position taken by the U.S. Chamber of Commerce and other corporate lobbyists surrounding the law’s passage, we were led to believe that employee-whistleblowers who reported violations internally would be fully protected, and we addressed this in recommendations to the Senate Banking Committee.

After Dodd-Frank was passed, we were shocked when numerous corporations argued in court that internal whistleblowing was not protected. We were also very troubled by the confusion this position caused, and the bad-faith arguments raised by Wall Street to justify firing numerous whistleblowers.

The NWC hopes that the publication of Dodd Frank’s untold legislative history in Law360 helps clear up the confusion on this controversy. The redacted versions of email correspondence between the NWC and the Senate Banking Committee are linked below in addition to the court decisions demonstrating the split in the appellate circuits.

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