Ruling boosts anti-retaliation protections for whistleblowers
Whistleblowers are no longer required to notify the Securities and Exchange Commission to receive protection from retaliation. A recent decision from a U.S. District Court in Nebraska helped broaden the whistleblower term to include any individual who reports wrongdoing and/or illegality to internal sources, authorities or another government agency. While provisions under the Dodd-Frank Act’s whistleblower bounty program dictate that tipsters must report to the SEC, U.S. District Judge John Gerrard ruled that the anti-retaliation provision of the law does not mandate that whistleblowers must contact the SEC specifically. Therefore, tipsters are protected from retaliation whether they contact the SEC or another organization. However, the ruling did stipulate that rewards under the bounty program are reserved for whistleblowers are who report to the SEC.
The Nebraska ruling found prior anti-retaliation court decisions to be under-inclusive of the majority of employees, who tend to report corruption internally before notifying authorities or the SEC. In addition, the Nebraska ruling said that the anti-retaliation should apply to an array of situations where applicable laws and regulations call for disclosure to other entities besides the SEC, including the Sarbanes-Oxley Act and other laws under the SEC’s jurisdiction.
About the Author
Jennifer Sharkey is a Senior Vice President at William Gallagher Associates and Leader of the firm’s ExecutiveRisk Practice. She is responsible for the strategic and tactical leadership of this practice by providing consulting, marketing and negotiation expertise on Directors’ & Officers’ Liability, General Partnership Liability, Private Equity/VCAP, Fiduciary Liability, Fidelity, Kidnap/Ransom & Extortion, Employment Practices Liability and Professional Errors & Omissions Liability.