On Feb. 22, the U.S. Supreme Court issued a decision that significantly restricts the rights of whistleblowers, but ultimately may cause headaches for the targets of their whistleblower complaints. The Dodd-Frank Wall Street Reform and Consumer Protection Act defines a “whistleblower” to be someone who provides information concerning potential securities law violations to the U.S. Securities and Exchange Commission (SEC). The SEC and some federal courts took a broader view and interpreted the Dodd-Frank whistleblower definition to include those employees who report their complaints internally to their employer but not to the SEC. In Digital Realty Trust v. Somers, 583 U.S ____ (2018), issued on Feb. 22, the court disagreed and ruled that a whistleblower must report suspected securities violations to the SEC to be protected by Dodd-Frank. This decision likely will change how whistleblowers report their complaints and how companies respond to them.

The Digital Realty Decision

Respondent Paul Somers was, at one time, employed by Petitioner Digital Realty Trust, Inc., and reported suspected securities law violations to the company's senior management. Somers was terminated shortly after making his report. After his termination, Somers filed a suit in federal court against Digital Realty that included a claim of whistleblower retaliation under Dodd-Frank. He failed, however, to file an administrative complaint with OSHA as required under the Sarbanes-Oxley Act.