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Proskauer Whistleblower Defense

M.D. Florida: Employee Must Report To SEC To Be A Protected Dodd-Frank Whistleblower

Posted in Dodd Frank

Two weeks ago, the U.S. District Court for the Middle District of Florida dismissed with prejudice a former employee’s Dodd-Frank whistleblower claim on the ground that the employee was not a “whistleblower” within the meaning of the Dodd-Frank Reform Act because she did not provide information relating to a violation of the securities law to the SEC.  Englehart v. Career Educ. Corp., No. 8:14-cv-444-T-33EAJ, 2014 U.S. Dist. LEXIS 64994 (M.D. Fla. May 12, 2014).

The Court aligned itself with the Fifth Circuit, which held that the Dodd-Frank Reform Act whistleblower-protection provision “creates a private cause of action only for individuals who provide information relating to a violation of the securities laws to the SEC.”  Recognizing that a number of District Courts reached a conclusion contrary to the Fifth Circuit’s holding, the Middle District concluded that the Dodd-Frank Reform Act provides unambiguous statutory language as to the definition of a “whistleblower,” and it is not the role of the Court “to expand explicit definitions within a statute to reach a desired result.”

While the contours of the Dodd-Frank law are still being defined by courts, the Middle District’s rejection of the expansive definition of a “whistleblower” will be further legal authority that an internal complaint (without a report to the SEC) does not implicate the provisions of Dodd-Frank.