WHO HEARS A WHISTLE BLOW?

New laws mean new lawsuits.  The Affordable Care Act and its regulations have alone gone to the Supreme Court three times – on the question of the individual mandate, the contraception mandate, and the availability of subsidies on the federal marketplace.  Those percolated up from dozens of lawsuits, with undoubtedly dozens more on other topics.

Dodd-Frank, the post-recession law regulating the financial industry, is next.  Its whistleblower provision, meant to protect employees of publicly traded companies who report securities fraud, was just in the news.  The question this time is whether Dodd-Frank protects those who are disciplined or fired after making an internal report, or whether the Act kicks in when the employee informs the SEC.

The answer, for now, is that it depends where you live.  The U.S. Circuit Courts of Appeals, each of which have jurisdiction over a different chunk of the country, have reached different conclusions.  The Court of Appeals covering Florida has not issued an opinion on the topic yet.  But one federal trial court in the state has.

The Middle District of Florida took on the case of an accountant whose duties included preparing her company’s budget.  She subsequently opposed the company’s filing with the SEC as containing false information.  In the conflict that arose with her supervisors, she was eventually fired.  But she had only taken the topic up with her boss, and did not report anything to the SEC.  The Court came on the side of those Circuits that decided only a statement to the government triggers Dodd-Frank’s whistleblower protection.  It dismissed the accountant’s claim.

But that does not mean the employee is without recourse, or that the company is out of the woods.  There may well be remedies available under state law, if the employer’s action was in fact retaliatory.  What rights an employee has in court, or what exposure an employer may have, are questions that will depends on a variety of often complex factors.  An attorney can help.