November 30, 2021

Volume XI, Number 334

Advertisement
Advertisement

November 30, 2021

Subscribe to Latest Legal News and Analysis

November 29, 2021

Subscribe to Latest Legal News and Analysis

Wisconsin District Court Follows 5th Circuit: Internal Tipsters Are Not Considered “Whistleblowers” Under Dodd-Frank

On August 12, 2016, the U.S. District Court for the Eastern District of Wisconsin in Lamb v. Rockwell Automation Inc., No. 15-CV-1415-JPS (E.D. Wis. Aug. 12, 2016) held that the Dodd-Frank whistleblower protection provision (Section 922) only protects individuals who provide information to the SEC.  In so holding, the court adopted the Fifth Circuit’s holding in Asadi v. F.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) and rejected the SEC’s regulatory guidance and the Second Circuit’s holding in Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015).  

Background

Plaintiff Lisa Lamb, a former employee of Rockwell Automation Inc. (“Company”), alleged that she was subject to “whistleblower retaliation” under both Sarbanes Oxley and wisconsin court sealDodd-Frank.  According to Plaintiff, she faced retaliation from her direct supervisor and was eventually terminated for internally complaining about her supervisor’s potential securities law violation.  Notably, at the time of her termination, Plaintiff had not made any complaints to the SEC.

Ruling

In granting the Company’s motion to dismiss Plaintiff’s Dodd-Frank retaliation claim, the court recognized that the question of “who is a Dodd-Frank whistleblower?” is the subject of a circuit split between the Fifth and Second Circuits.  The court also noted that the SEC’s interpretation of the anti-retaliation provision (upon which the Second Circuit relied in its decision addressing the question) is that “individuals who report to persons or governmental authorities other than the Commission” are protected by the provision.

The court, like the Fifth Circuit, concluded that the language of Section 922 was unambiguous because the statute contains “only one category of whistleblowers: individuals who provide information relating to a securities law violation to the SEC.”  Therefore, it declined to afford deference to the SEC’s regulatory guidance.

Implications

This decision demonstrates the growing split amongst courts regarding the scope of Dodd-Frank’s anti-retaliation provision.  Notably, as we previously reported, this is the second district court within the Seventh Circuit to follow Asadi.  As more district courts continue to grapple with this question, we expect additional circuit courts to weigh in and the issue may likely be resolved by the Supreme Court.

© 2021 Proskauer Rose LLP. National Law Review, Volume VI, Number 229
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement

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,...

212-969-3794
Associate

Esther Y. Pak is an associate in the Labor & Employment Law Department. She assists clients in a wide range of labor and employment law matters at the state and federal levels, including employment discrimination, retaliation claims and breach of employment contracts.

Prior to joining Proskauer, Esther served as a judicial law clerk to Justice Barry T. Albin of the New Jersey Supreme Court.

While attending Rutgers School of Law – Newark, Esther was managing notes editor of the Rutgers Law Review. She authored...

973-274-3224
Advertisement
Advertisement
Advertisement