The U.S. Supreme Court has ruled unanimously that employees who “blow the whistle” on suspected securities law violations cannot sue for unlawful retaliation under the 2010 Dodd-Frank Wall Street Reform Act (Dodd-Frank) unless they reported the alleged misconduct externally to the U.S. Securities and Exchange Commission (SEC), and not just internally to their employer.

Reversing a ruling by the Ninth Circuit Court of Appeals, and agreeing with arguments made in a “friend-of-the-court” brief we filed in the case, the Court found that the term “whistleblower” as used in Dodd-Frank – defined as anyone providing “information relating to a violation of the securities laws to the [SEC]” – is “unequivocal.” Accordingly, the Court declined to give any deference to a contrary interpretation by the SEC extending protection to employees who file only an internal complaint.

Importantly, the High Court’s ruling neither expands nor narrows federal whistleblower laws, but rather clarifies which protections apply to different circumstances. Although the ruling makes clear that an employee must file an external complaint with the SEC to claim whistleblower retaliation protection under Dodd-Frank, employees who claim retaliation for blowing the whistle internally remain free to seek relief under the Sarbanes-Oxley Act (SOX) – an earlier federal law that overlaps in many respects with Dodd-Frank.

Members of the Center for Workplace Compliance (CWC) can read more here.