Thorny Whistleblower-Retaliation Case Heads to High Court

WASHINGTON (CN) – The Supreme Court took up a securities tangle Monday involving a last-minute addition to federal anti-retaliation protections that extend whistleblower protections.

Per their custom, the justices did not issue any comment this morning in taking up the case Digital Realty Trust Inc. v Somers. When the Ninth Circuit ruled on it this past March, however, it noted the securities-law issue in question has divided several federal district and circuit courts.

The Fifth Circuit was the first to address the issue in 2013, dismissing a retaliation action because the whistleblower did not make his disclosures to the Securities and Exchange Commission.

But the Second Circuit reached an alternative conclusion two years later, saying the anti-retaliation provisions of the Dodd-Frank Act cover all those who make disclosures of suspected violations, whether the disclosures are made internally or to the SEC.

With this conflict at play, Paul Somers brought a federal complaint in California after he was fired by Digital Realty Trust.

Somers says he had been reporting possible securities law violations by the company internally shortly before his firing, but that he had not yet reported his concerns to the SEC.

Though the employer said this timing meant that Somers was not a whistleblower pursuant to Dodd-Frank, the District Court advanced the action, applying the Second Circuit’s approach.

Digital Realty Trust petitioned the Supreme Court for certiorari after the Ninth Circuit affirmed for Somers.

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