On July 17, 2013, in Asadi v. G.E. Energy (USA), LLC, No. 12-20522, the Fifth Circuit Court of Appeals narrowed the class of persons who can sue as “whistleblowers” under the Dodd-Frank Act. Rejecting district court decisions to the contrary, the Fifth Circuit held that only persons who have actually provided information to the SEC itself may sue as Dodd-Frank whistleblowers. Asadi, the first federal circuit court decision on the question, is likely to influence future district and circuit court decisions concerning who may sue under Dodd-Frank’s whistleblower provision.

Congress enacted the Dodd-Frank Act in the wake of the 2008 financial crisis. The Act expressly prohibits retaliation by employers against “whistleblowers,” and provides “whistleblowers” with a private cause of action if they are discharged or discriminated against by their employers in violation of the Act. Some district courts had previously held that Dodd-Frank allowed lawsuits by persons who made disclosures “required or protected” by various federal statutes, regardless of whether the disclosures were actually made to the SEC.1

The Fifth Circuit, by contrast, held that “the whistleblower-protection provision unambiguously requires individuals to provide information relating to a violation of the securities laws to the SEC” to receive protection from retaliation. The Fifth Circuit explained that Dodd-Frank defines the term “whistleblower” as “any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission, in a manner established, by rule or regulation, by the Commission.”

Section 78u-6(h), titled “Protection of whistleblowers,” provides whistleblowers a private right of action against employers who take retaliatory actions against the whistleblower when the whistleblower engages in certain protected actions, including making disclosures “required or protected” by specific federal laws.

The Fifth Circuit held that “under Dodd-Frank’s plain language and structure, there is only one category of whistleblowers: individuals who provide information relating to a securities law violation to the SEC.” The Court further clarified that the categories listed in section 78u-6(h) define the protected activity of a whistleblower, but do not “define which individuals qualify as whistleblowers.” By so holding, the Fifth Circuit narrowed the class of persons entitled to bring Dodd-Frank whistleblower claims.