Supreme Court: Dodd-Frank Whistleblower Protection Is Narrow

Supreme Court: Dodd-Frank Whistleblower Protection Is Narrow
The Supreme Court said Wednesday that whistleblower protections passed by Congress after the 2008 financial crisis only apply to people who report problems to the government, not more broadly.


The justices ruled that a part of the Dodd-Frank Act that protects whistleblowers from being fired, demoted or harassed only applies to people who report legal violations to the U.S. Securities and Exchange Commission. They said employees who report problems to their company's management but not the commission don't qualify.


People who report issues to their company's management are still protected against retaliation but under an older law, the 2002 Sarbanes-Oxley Act. But the two laws differ in a number of ways, including how long people have to bring a lawsuit and how much money they can get in compensation.


The court's ruling comes at a time when the Trump administration has already laid out changes it wants to make to the 2010 Dodd-Frank Act, which the administration believes went too far and has hurt economic growth. President Donald Trump has repeatedly attacked the law as a ``disaster'' and has promised to do ``a big number'' on it. The Trump administration had nonetheless argued that the law did provide broad protection. Businesses had opposed that reading of the law.


The case the court ruled in involves Paul Somers, who worked for San Francisco-based Digital Realty Trust Inc., a real-estate investment trust that owns data centers worldwide. Somers was the company's second in command in Singapore when he made accusations to senior managers that his boss had hidden millions of dollars in cost overruns, granted no-bid contracts and made payments to friends, among other things. Somers was fired in 2014 after making the allegations. He sued, saying his firing was a retaliation that violated the Dodd-Frank Act. He also alleged he had been discriminated against for being gay.


Lower courts had sided with Somers, saying he was entitled to whistleblower protections even though he didn't disclose his allegations to the Securities and Exchange Commission.