Until recently, the question of whether Dodd-Frank retaliation protections applied to whistleblowers who only reported their tips to internal corporate compliance programs—not the Securities and Exchange Commission (SEC)—was a subject of fierce debate.
The SEC argued that, because its office did not require whistleblowers to submit information directly to the SEC, these whistleblowers should be protected. Meanwhile, employers and their attorneys argued that the Dodd-Frank Act made no mention of whistleblowers who only reported to internal compliance programs, meaning they were not entitled to legal protection from employer retaliation.
The Supreme Court of the United States (SCOTUS) recently issued a decision on the matter: Whistleblowers, should they hope to be protected under Dodd-Frank, must report their tip to the SEC.
The Dodd-Frank Act was enacted to offer protection from retaliation for would-be whistleblowers. The act specifically states that these protections extend to whistleblowers who report to the SEC, those who are involved in an SEC investigation in any way, and those who disclose information that pertains to the SEC.
It makes no mention of whistleblowers who report their findings to their company’s internal compliance program being afforded the same protections. This ambiguous phrasing led to the act being interpreted by the courts—until SCOTUS issued its decision in February 2018.
The Sarbanes-Oxley Act (SOX) is very similar to Dodd-Frank, except that it does explicitly state that any whistleblower who reports a tip—whether it’s to an internal compliance program or the SEC—will be protected from retaliation by his or her employer.
The main difference between SOX and Dodd-Frank is the statute of limitations for complaints about employer retaliation. For Dodd-Frank, it’s six years. SOX, on the other hand, requires filing a complaint with the Department of Labor within 180 days of the retaliation.
Another key difference: The amount a whistleblower can recover if a retaliation complaint is successful is double retroactive pay in Dodd-Frank, but it’s only back-pay with interest in SOX.
If you are a potential whistleblower, this means you will need to report any information you have regarding securities violations and other investment schemes to the SEC in order to be fully protected from retaliation by your employer.
In most cases, you won’t want to wait for your case to be resolved internally—you may be unprotected from retaliation if you do not report to the SEC before reporting to your company’s internal compliance office.
If you would like more information about the Dodd-Frank or SOX protections against retaliation, or if you believe you have been a victim of whistleblower retaliation, contact an SEC whistleblower lawyer at Meissner Associates. We can help you hold your employer accountable for retaliatory behavior.
Give our office a call at 1-866-764-3100 or fill out the secure contact form at the bottom of this page to schedule your free, no-obligation case assessment today.