House Financial Services Committee Passes Bill to Expand Dodd-Frank Whistleblower Protection to Internal Whistleblowers
On May 8, 2019, the House Committee on Financial Services passed H.R. 2515, the Whistleblower Protection Reform Act of 2019, which would amend Section 922 of Dodd-Frank to extend the statute’s anti-retaliation protections to employees who report alleged misconduct internally.
Digital Realty Trust v. Somers
H.R. 2515 was proposed in direct response to the U.S. Supreme Court’s holding last year in Digital Realty Trust, Inc. v. Somers, 138 S. Ct. 767 (2018). As detailed in our blog, in Digital Realty, the Court unanimously held that Dodd-Frank’s anti-retaliation provision only applied to individuals who provide information regarding a violation of securities law to the SEC. The Court declined to defer to the SEC’s prior Rule 21F-2, which had permitted an individual to gain anti-retaliation protection without providing information to the SEC. As we reported, following the Digital Realty decision, the SEC voted in favor of amending Rule 21F-2 so that it comported with the Court’s holding.
H.R. 2515’s Expanded Protections
The language passed by the Financial Services Committee on May 8th extends Dodd-Frank’s anti-retaliation protections to any individual who provides information regarding any conduct that the individual “reasonably believes constitutes a violation of any law, rule, or regulation” subject to the SEC’s jurisdiction to: “(a) a person with supervisory authority over the … [individual] at the … [individual’s] employer; and/or (b) any person working for the employer who has the authority to “investigate, discover, or terminate misconduct.”
H.R. 2515 was originally introduced by Representative Al Green, D-Texas, on May 3, 2019. It now moves on to the full House of Representatives.
Implications for Employers
If enacted, H.R. 2515 would significantly expand the scope of protections under the Dodd-Frank Act, and could lead to an increase in claims. We will monitor this legislation and keep our readers posted on developments.