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SDNY Dismisses Dodd-Frank Whistleblower Claim for Lack of Protected Activity and Causation

On February 28, 2020, the U.S. District Court for the Southern District of New York dismissed a former chief marketing officer’s claim of whistleblower retaliation under the Dodd Frank Act. Cellucci v. O’Leary No. 19-cv-02752 (S.D.N.Y. 2020).


Plaintiff is one of several former chief executives of a closely-held infrastructure technology company who were terminated.  Plaintiff alleges that on March 7, 2019, he filed a complaint with the Securities Exchange Commission (SEC) concerning the conduct of the company’s chief executive officer, who is also its president and majority shareholder.  Plaintiff’s allegations did not include details regarding what conduct he complained about to the SEC, how any securities laws were violated or that he notified anyone at the company about his allegations.  Plaintiff was terminated approximately one week after making the complaint to the SEC.


The company moved to dismiss, arguing that Plaintiff failed to state the requisite elements of a retaliation claim: 1) that he engaged in protected activity; 2) that he suffered an adverse employment action; and 3) that the adverse action was causally connected to the protected activity.  The court granted the company’s motion to dismiss, finding that the plaintiff failed to allege the first and third elements of a retaliation claim.

The court noted that to have engaged in protected activity, a plaintiff must have had an objectively reasonably belief that the defendant’s conduct violated one of the six enumerated provisions of law under 18 U.S.C. § 1514A(a)(1).  Not all conduct falls within the scope of Dodd-Frank’s whistleblower protection, and Plaintiff did not identify a specific provision or section of applicable law that may have been violated.  Nor did Plaintiff’s allegations mention the contents of his complaint to the SEC.  Finally, the court held that Plaintiff was not entitled to an inference that his SEC complaint included every allegedly improper action mentioned in his suit against the defendant, because he did not assert he had personal knowledge of any of those actions.  Thus, Plaintiff did not identify how he had engaged in activity protected under Dodd-Frank.

The court also held that Plaintiff had not pled any facts suggesting a causal connection between his termination and his complaint to the SEC.  Plaintiff did not allege that he communicated his concerns to anyone at the company, and it was undisputed that the SEC is obligated to maintain the confidentiality of all whistleblower reports.  Thus, Plaintiff did not plausibly plead facts sufficient to show how the company could have learned about his confidential SEC complaint and fired him because of it.


This decision is a helpful one for employers because it reaffirms that plaintiffs asserting Dodd-Frank whistleblower claims must plead factual allegations – and cannot rely upon inferences and speculative assertions – to satisfy their burden.

© 2023 Proskauer Rose LLP. National Law Review, Volume X, Number 98

About this Author

Harris M Mufson, Class/Collective Action Attorney, Proskauer
Senior Counsel

Harris Mufson is a senior associate in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration and Whistleblowing & Retaliation Groups.

Adept at counseling clients at every turn of the litigation process, Harris represents employers in a variety of industries, including financial services, health care, entertainment, sports and legal, with respect to a wide range of labor and employment law matters. These include compensation disputes, employment discrimination and retaliation, whistleblowing,...

Pinny Goldberg Labor and Employment Lawyer Proskauer Rose Law Firm

Pinny Goldberg is an associate in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims. 


Scott S. Tan Lawyer Proskauer  Employment Litigation & Arbitration Group

Scott Tan is an associate in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration Group.

Scott earned his J.D. from the UCLA School of Law, where he served as a problem developer and member of the Moot Court Honors Board. He also worked as a research assistant for Dean Jennifer Mnookin and Professor Hiroshi Motomura.