On February 21, 2018, the Supreme Court of the United States ruled that the anti-retaliation provision of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act does not extend to an individual who has not reported a violation of the securities laws to the Securities and Exchange Commission (SEC).
In orders issued just six days apart last month, the U.S. Securities and Exchange Commission (SEC) rejected language in severance agreements requiring employees to waive rights to receive additional monetary recovery, particularly awards for providing information to government enforcement agencies. The Commission’s actions underscore its continuing scrutiny of any provisions that might impede the flow of information to the government, even where there is no evidence of any such effect.
As we forecast in our August 2015 post, “The SEC’s Interpretative Guidance on Internal Whistleblowing Under the Dodd-Frank Act,” a federal court of appeals today issued a decision in line with the U.S. Securities and Exchange Commission’s (SEC) interpretation that the Dodd-Frank Wall Street Reform and Consumer Protection Act protects an individual who reports a violation of securities laws only internally before suffering an adverse employment action. If the decision stands, the split of authority among the courts of appeals resulting from the decision sets the stage for an appeal to the Supreme Court of the United States.
On August 4, 2015, the U.S. Securities and Exchange Commission (SEC) issued an interpretive rule stating that whistleblowers who report misconduct internally—not just those who report to the SEC—are protected by the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This guidance is the SEC’s first formal pronouncement on the scope of the Dodd-Frank retaliation provision, and it comes at a time when the potential looms for a possible split among the federal courts of appeals on this important issue.
The U.S. Securities and Exchange Commission (SEC) has been vocal about its concerns regarding the effects of confidentiality provisions on the agency’s enforcement efforts and on the rights of whistleblowers, and has even asked several companies for years of employment contracts, nondisclosure agreements, and other documents formed with their employees. Chief of the SEC Office of the Whistleblower Sean McKessy said that his office would be on the lookout for contracts that have a chilling effect on employees’ bringing allegations of wrongdoing to the SEC’s attention.
The U.S. Securities and Exchange Commission (SEC) may soon be investigating the agreements companies make with their employees. According to a February 25, 2015 Wall Street Journal report, the SEC has sent requests to several companies asking for years of employment contracts, nondisclosure agreements, and other documents imposing confidentiality obligations on employees.
2014 was a record-breaking year for whistleblowers, including both the U.S. Department of Justice’s prosecution of cases under the False Claims Act (FCA) and the U.S. Securities and Exchange Commission’s prosecution of cases under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Department of Justice The U.S. Department of…..
On January 21, 2015, the Supreme Court of the United States decided whether a federal air marshal, who publicly disclosed that the Transportation Security Administration (TSA) had decided to cut costs by removing air marshals from certain flights, was entitled to whistleblower protection. According to the Court’s ruling, the air…..
The Southern District of California recently issued a favorable ruling for employers under both the False Claims Act and California’s retaliatory discharge provision codified at California Labor Code section 1102.5. The court not only rejected the relator’s claims, but it also resolved all issues in the employer’s favor on summary…..
On June 16, 2014, the U.S. Securities and Exchange Commission (SEC) resolved its first whistleblower retaliation enforcement action. The SEC’s order against Paradigm Capital Management, Inc. is the first-ever enforcement action brought by the agency under the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Employers…..
As we have discussed in earlier posts, the recent trend in court decisions under the Sarbanes-Oxley Act (SOX) has been to lighten the burden on complainants and to expand the universe of cases that proceed to decisions on the merits. Consequently, the direction has been away from victories for employers…..
Employers defending against Sarbanes-Oxley Act (SOX) whistleblower retaliation claims should be prepared for a long and potentially onerous litigation process, even if the claims lack merit. A recent district court decision vividly illustrates this point. On September 25, 2013, a federal court in the Northern District of Texas held that a…..
Attention all employers with employees in California: On October 12, 2013, California Governor Jerry Brown signed into law Senate Bill (SB) 496, amending the whistleblower retaliation provisions set forth in section 1102.5 of California’s Labor Code. These amendments, which took effect on January 1, 2014, significantly broaden the scope of…..
As we have discussed before, whistleblower and retaliation decisions—including from the Supreme Court of the United States—have created an increasingly whistleblower-friendly body of law that unifies courts across the ideological spectrum. Bunk v. Gosselin World Wide Moving, a recent decision from the Fourth Circuit Court of Appeals in Richmond, long…..
As we have discussed in earlier posts, the Administrative Review Board (ARB) has, over the last couple of years, issued a number of opinions signaling a decidedly employee-friendly interpretation of the whistleblower statutes under its purview. One example was the original 2012 ARB decision in Zinn v. American Commercial Lines……
As you may have read in our previous blog post, prudent employers should embrace the “righteous whistleblower” in service of their culture of compliance. But what is an employer to do when a whistleblower has engaged in “unrighteous” conduct, such as stealing proprietary or confidential documents? The issue of improperly…..
The process of filing whistleblower complaints just became a lot easier. On December 5, 2013, the U.S. Department of Labor’s Occupational Health and Safety Administration (OSHA) launched a new system that will allow workers to file whistleblower retaliation complaints online. Under the previous system, whistleblowers could only make complaints to OSHA…..
As highlighted in our earlier blog post, a company’s response to a whistleblower complaint is the key to how the company will fare going forward. How the company investigates the complaint will determine how the enforcement and investigatory agencies will approach the matter, as well as how the company manages…..
On January 29, 2013, the new Whistleblower Protection Advisory Committee (WPAC) held its inaugural meeting in Washington, D.C. Made up of 12 members, the WPAC includes three members representing the public, four members representing management, four members representing labor, and one member representing the Occupational Safety and Health Administration (OSHA)…..
There has been much ink, real and digital, spilled on speculating about how the U.S. Securities and Exchange Commission’s (SEC) whistleblower program may affect companies’ internal compliance programs and the volume of external reporting. A recent survey by a law firm that represents whistleblowers reports data that, while giving cause…..
Over the past two years, we have seen the approach that the Administrative Review Board (ARB) has taken with respect to the scope and coverage of Dodd-Frank. In almost every instance, the ARB has expanded the scope and coverage of the anti-retaliation coverage of the statute. We have been waiting…..
Federal agencies charged with investigating whistleblower claims—and in some cases, bringing enforcement actions—are looking hard at what companies are doing to create a “culture of compliance.” Failing to cultivate a culture of compliance can have extremely negative consequences, financial and otherwise, for a company. It simply will not suffice merely…..
The importance of prompt and effective investigations of employee reports of wrongdoing has never been higher. Dodd-Frank and its changes to Sarbanes-Oxley have yielded a large increase in the number of reports—with much higher stakes. The continuing trend of the U.S. Supreme Court’s employee-friendly retaliation standards promises an increase in…..