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U.S. Supreme Court Looks at Whistleblower Protections

The Wall Street Journal

The U.S. Supreme Court is considering what whistleblowers must do to qualify for protection against retaliation under the 2010 Dodd-Frank financial law. Government agencies’ ability to interpret a broad range of laws could be at stake as well.

Digital Realty Trust Inc. v. Paul Somers, scheduled for argument on Tuesday, looks at whether a person must report alleged wrongdoing to the Securities and Exchange Commission, rather than simply up the chain of command at work, in order to be protected from on-the-job retaliation under Dodd-Frank. The part of the law that deals with reward payments for whistleblowers defines them as people who report wrongdoing to the SEC, but commission rules implementing the law say people who only report in-house are protected too.

The matter dates back to 2014, when Mr. Somers sued Digital Realty, a real-estate investment trust that develops data centers, in district court in Northern California, alleging it had fired him in retaliation after he reported wrongdoing by his supervisor, among other claims. A Digital Realty spokesman said the company has investigated Mr. Somers’s allegations and is confident it followed all the relevant laws. Mr. Somers didn’t respond to a request for comment sent via his lawyers, who argue that even whistleblowers who don’t report to the SEC are eligible for Dodd-Frank protection.

Appellate courts have split on the question, and the stakes are high.

“This really is an interesting test of how far their power extends, or any federal agency’s power extends,” Michael Celio, a partner with the law firm Keker Van Nest & Peters LLP, said of the SEC. Mr. Celio has helped companies defend themselves against whistleblowers but has no involvement in the Somers matter.

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