United States: Supreme Court Holds Dodd-Frank Whistleblower Protection Only Covers Individuals Who ‘Tell The SEC'

Last Updated: February 28 2018
Article by Sarah Bouchard, Susan D. Resley, Allyson Ho and W. John Lee

In a 9-0 decision in Digital Realty Trust Inc. v. Somers, the US Supreme Court held that the whistleblower protection provisions contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act apply only to individuals who report securities law violations to the US Securities and Exchange Commission—and not to those who report such concerns only through internal channels with their employer.

The Court's February 21 decision resolves a circuit split—between the US Court of Appeals for the Fifth Circuit, on one hand, and the Second and Ninth Circuits, on the other hand—as to whether an individual must first report to the US Securities and Exchange Commission (SEC or the Commission) to be entitled to protection by the Dodd-Frank whistleblower protection provision.


Plaintiff Paul Somers worked as a vice president for Digital Realty Trust Inc. from 2010 to 2014. Mr. Somers alleged that Digital Realty terminated his employment shortly after he reported suspected securities law violations by the company to its senior management. Mr. Somers did not report his concerns to the SEC before his termination. He also did not file an administrative complaint within 180 days of his termination, which rendered him ineligible for relief under the whistleblower provision in the Sarbanes-Oxley Act of 2002.1 Digital Realty moved to dismiss, arguing that Mr. Somers did not qualify as a whistleblower under Dodd-Frank because he did not report his concerns to the SEC before his termination, but rather reported them only internally to Digital Realty.

The district court denied the motion, holding that Mr. Somers' internal report to Digital Realty qualified him as a whistleblower subject to protection under the Dodd-Frank whistleblower provision. The Ninth Circuit affirmed, joining the Second Circuit in Berman v. Neo@Ogilvy LLC2 in holding that internal reports of securities law violations to employers are protected by the Dodd-Frank whistleblower provision, which prohibits employers from retaliating against "whistleblowers" who engage in certain types of protected conduct. The anti-retaliation language under 15 USC Section 78u-6(h)(1)(A) states the following:

No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower

  1. in providing information to the Commission in accordance with this section;
  2. in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or
  3. in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), this chapter, including section 78j–1(m) of this title, section 1513(e) of title 18, and any other law, rule, or regulation subject to the jurisdiction of the Commission.

(emphasis added).

Dodd-Frank also defines the term "whistleblower" to mean "any individual who provides . . . information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission."3

Both courts found that there was tension between Dodd-Frank's definition of "whistleblower," which limits protection to individuals who make reports "to the Commission," and the anti-retaliation provision, which prohibits retaliation for "making disclosures that are required or protected under [Sarbanes-Oxley], this chapter, . . . section 1513(e), and any other law, rule or regulation subject to the jurisdiction of the Commission."4

Given this purported ambiguity, the Ninth Circuit and the Second Circuit applied Chevron deference to 17 CFR Section 240.21F-2, an SEC regulation indicating that individuals who do not report to the SEC and instead report securities law violations internally are protected by the Dodd-Frank whistleblower protection provision. The Fifth Circuit, however, in Asadi v. G.E. Energy (USA) LLC,5 had held that under the unambiguous definition of "whistleblower" in Dodd-Frank, an employee must take his or her concern to the SEC in order to qualify for Dodd-Frank whistleblower protection, and it rejected the SEC regulation to the contrary.

The Supreme Court's Opinion

The Opinion, authored by Justice Ruth Bader Ginsburg, held that Dodd-Frank unambiguously limits its anti-retaliation provision to only those individuals who meet the statutory definition of "whistleblower"—meaning individuals who report information to the SEC. The Court reasoned that, on its face, the definition of "whistleblower" applies to the entirety of Section 78u-6, including the anti-retaliation provision contained in Section 78u-6(h). Accordingly, the Court determined that the definition of "whistleblower" in Section 78u-6(a)(6) describes who is eligible for protection, and Section 78u-6(h) then describes three types of conduct which, when engaged in by a "whistleblower," are protected. As such, the Court reasoned that an individual must both meet the definition of "whistleblower" and engage in one of the three types of protected conduct in order to qualify for whistleblower protection under Dodd-Frank. Thus, only individuals who report securities violations to the SEC are protected by the Dodd-Frank whistleblower provision.

The Court explained that its interpretation is supported by the "core purpose" of Dodd-Frank, which is to aid the Commission's enforcement efforts by motivating people who know of securities law violations to "tell the SEC." The Court pointed out that Dodd-Frank's reward program, which provides substantial monetary rewards to whistleblowers who furnish actionable information to the SEC, and the whistleblower anti-retaliation program, "work synchronously to motivate individuals with knowledge of illegal activity to 'tell the SEC.'"6 In other words, the US Congress complemented the Dodd-Frank monetary incentives for SEC reporting by heightening protection against retaliation for whistleblowers who report to the SEC. Whistleblowers who raise concerns about securities violations already are covered by the Sarbanes-Oxley whistleblower provision.7 Under Sarbanes-Oxley, if an employee files an administrative complaint within 180 days of the termination or retaliation, and prevails in the complaint, they may recover backpay with interest. Dodd-Frank enhanced the protection already provided by Sarbanes-Oxley if a whistleblower takes the extra step of providing information to the SEC. In that case, a Dodd-Frank whistleblower retaliation claim may be filed directly in federal court, is subject to a six-year statute of limitation, and entitles a prevailing Dodd-Frank whistleblower to recover double backpay with interest.   

The Court also observed that its interpretation was reinforced by the fact that another whistleblower provision in Dodd-Frank related to the Consumer Fraud Protection Act explicitly covers internal complaints to employers and does not require a report to the Consumer Financial Protection Bureau. According to the Court, the inclusion of this language by Congress in one whistleblower provision in Dodd-Frank but not in Section 78u-6 suggests that Congress intended to exclude internal complaints from coverage under Section 78u-6.  

The Court also rejected arguments that Dodd-Frank is ambiguous and that the Court should defer to the SEC regulation indicating that individuals who do not report to the SEC and instead report internally are protected by the Dodd-Frank whistleblower protection provision.8 The Court found no ambiguity in the Dodd-Frank whistleblower provision, given that the definition of "whistleblower" plainly requires an individual to make a report "to the Commission."

The Court also rejected the argument that the definition of "whistleblower" in Section 78u-6(a)(6) and clause (iii) of Section 78u-6(h)(1)(A) are inconsistent. Rather, these provisions unambiguously protect "whistleblowers" who make reports both to the SEC and to a second entity, and who are retaliated against for the second report. As a result, the Court found that the SEC regulation extending Dodd-Frank whistleblower protection to internal whistleblowers was not entitled to deference.

The Court also found unpersuasive the argument that the Court's interpretation unfairly would exclude from Dodd-Frank's whistleblower protection provision individuals such as auditors, attorneys, and other employees required to report information internally before making external disclosures. The Court reasoned that these individuals would be shielded by Dodd-Frank as soon as they disclosed to the SEC, and that Congress may have determined that these individuals already were adequately protected by Sarbanes-Oxley's whistleblower protections even if they do not disclose to the SEC. As noted above, Sarbanes-Oxley contains a whistleblower provision that prohibits employers from discharging or otherwise retaliating against individuals who raise concerns internally about certain enumerated securities violations.9


An individual who reports a securities violation only internally to the employer or to a government agency other than the SEC is not covered by Dodd-Frank, but may still be covered by the Sarbanes-Oxley whistleblower protection provision. Employers should continue to promote internal reporting through various compliance channels, as that is the best way to learn of issues and remediate them prior to SEC involvement. 


1 18 U.S.C. § 1514A et seq.

2 801 F.3d 145, 155 (2d Cir. 2015)

3 15 U.S.C. § 78u-6(a)(6) (emphasis added)

4 15 U.S.C. § 78u-6(a)(6); id. § 78u-6(h)(1)(A)(iii)

5 720 F.3d 620, 621 (5th Cir. 2013)

6 The Court gleaned this purpose from a Senate Report regarding the Act. Justice Thomas filed a concurring opinion joined by Justice Alito and Justice Gorsuch, objecting that Justice Ginsburg's reliance on legislative history is inappropriate where, as here, the statute is unambiguous. Justice Sotomayor also filed a concurring opinion, joined by Justice Breyer, disagreeing with Justice Thomas' concurrence and arguing that legislative history is an appropriate aid even when interpreting an unambiguous statute.  

7 18 U.S.C. § 1514A

8 17 C.F.R. § 240.21F-2

9 18 U.S.C. § 1514A

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions