Federal Circuit Split on Whether Dodd-Frank Protects Internal Whistleblowers.

Deepening a U.S. Circuit Court split on the issue, the U.S. Court of Appeals for the 9^th Circuit found that the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act apply to whistleblowers making internal complaints, and not just those who report directly to the Securities and Exchange Commission.

In Somers v. Digital Realty Trust Inc., the 9^th Circuit joined the 2^nd Circuit in finding that Congress intended broadly to protect internal whistleblowers. Although Dodd-Frank defines “whistleblower” specifically to mean one providing information to the SEC, another part of the Act prohibits retaliation against a whistleblower for additional activities, including “making disclosures that are required or protected under Sarbanes Oxley,” which includes internal reporting. The 5^th Circuit, on the other hand, abides by the strict definition.

Given the Circuit split, it is likely that the Supreme Court will be called upon to resolve this issue at some point in the future.