It is illegal to retaliate against a whistleblower, but who is considered a whistleblower? In Digital Realty Trust, Inc. v. Somers, the U.S. Supreme Court will consider the question of whether internal whistleblowers, not just those who report alleged misconduct to the SEC, are protected against retaliation under the Dodd-Frank Act. The Digital Realty Trust case, scheduled for oral argument on November 28, stems from a conflict between two relevant provisions of the Dodd-Frank Act. The Dodd-Frank Act defines the term “whistleblower” to mean anyone who provides information relating to a violation of the securities laws “to the Commission,” which seems to clearly exclude internal whistleblowers who fail to report to the SEC. However, the Dodd-Frank Act’s “Prohibition Against Retaliation” provision seems to extend its protections to those filing an internal whistleblower report under, for example, the Sarbanes Oxley Act of 2002.

The conflicting statutory provisions have resulted in a split among the three federal circuit courts that have considered the question. In a 2013 case, the Fifth Circuit relied on the Dodd-Frank Act’s definition of “whistleblower” to dismiss a claim by an internal whistleblower. In a 2015 case, the Second Circuit noted the statutory ambiguity and deferred to the SEC’s more expansive interpretation of statute, concluding that whistleblowers are protected from retaliation regardless of whether they report internally or to the SEC. In March 2017, in deciding the case that is now before the U.S. Supreme Court, the Ninth Circuit sided with the Second Circuit and denied Digital Realty Trust’s motion to dismiss its former employee’s complaint.