When Dodd-Frank was passed in 2010, one of the provisions contained in the law was a protection against retaliation for corporate whistleblowers who expose wrongdoing to the Securities and Exchange Commission.
Now, in a case that has made its way to the U.S. Supreme Court, the wording of that provision and whether it can be applied to whistleblowers who report wrongdoing up the corporate ladder rather than to the SEC will be up for interpretation.
Digital Realty Trust inc. v. Paul Somers deals with a lawsuit that Mr. Somers filed against real estate investment trust Digital Realty back in 2014. He argues he was fired in retaliation for reporting wrongdoing by a supervisor. While the Dodd-Frank provision only specifies protection for people who report wrongdoing to the SEC, a 2011 commission rule redefines the term “whistleblower” to include those who report in-house. Courts at the federal and district level agreed with Mr. Somers, saying the definition was ambiguous and that the 2011 rule redefining the term should be applied.
In addition to its implications for corporate whistleblowers, the case also has implications for a legal concept called Chevron deference. Taken from the 1984 U.S. Supreme Court case Chevron U.S.A. Inc. v. Natural Resources Defense Council, it’s a principle stating that the courts should defer to agencies interpretations of ambiguous laws, unless they are unreasonable.
Ilya Shapiro, senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the ‘Cato Supreme Court Review’; he filed an amicus brief on behalf of the petitioner, Digital Realty Trust Inc.
Sean McKessy, partner at Phillips & Cohen, a law firm representing whistleblowers; for five years, he served as the first chief at the Securities and Exchange Commission’s Office of the Whistleblower