In Dressler v. Lime Energy, No. 14-cv-07060 (D.N.J. Aug. 13, 2015), the district court joined a majority of courts holding that an employee who raised concerns about securities violations internally, but did not communicate those concerns to the SEC, may still state a claim for improper retaliation. The Dodd-Frank Act defines a “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission . . . .” 15 U.S.C. § 78u-6(a)(6). The Act’s whistleblower retaliation provision protects three categories of whistleblower activity, including “making disclosures that are required or protected under the Sarbanes-Oxley Act.” 15 U.S.C. § 78u-6(h)(1)(A)(iii). Sarbanes-Oxley, in turn, affords protection to an employee who gives ‘information or assistance’ to ‘a person with supervisory authority over the employee” or to any other “such person working for the employer who has the authority to investigate, discover, or terminate misconduct.” 18 U.S.C. § 1514A(a)(1)(C). The SEC’s rules implementing the Dodd-Frank whistleblower retaliation provision state that a whistleblower is protected if the information is provided in a manner described in the section of Dodd-Frank incorporating Sarbanes-Oxley. The court decided that the Dodd-Frank provisions create ambiguity and that the SEC’s rule is a reasonable interpretation of those provisions and thus was entitled to deference. Accordingly, following a majority of district courts but disagreeing with the Fifth Circuit’s opinion in Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013), the district court in New Jersey found that the whistleblower need not have raised concerns with the SEC in order to maintain a Dodd-Frank retaliation claim.
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