The United States District Court for the Western District of Tennessee recently emphasized the limited scope of what constitutes protected activity under the Dodd-Frank Act’s (the Act) whistleblower protection provision, noting that the Act protects only “certain kinds of whistleblowers who report certain kinds of violations.”  Boyle v. Evolve Bank & Trust et al, No. 16-02171, 2017 U.S. Dist. LEXIS 111964 (W.D. Tenn. July 19, 2017).

Plaintiff Jayme Boyle asserted a claim under the Act’s whistleblower-protection provision, alleging that he internally reported violations of numerous banking and lending-related statutes, rules and regulations to Defendants.  Plaintiff alleged that he was entitled to protection against retaliation under the Act because one of the defendants sold loans to institutional customers regulated by the SEC.  On a Rule 12(b)(6) motion to dismiss, Defendants argued that Plaintiff failed to identify a law, rule or regulation within the SEC’s jurisdiction under which his alleged complaints were made and that the disclosures of which he complained were not required or protected by any such law or regulation.  One of the defendants also argued that it is not required to make SEC filings (because it is a bank), and thus is not subject to the SEC’s jurisdiction.

The district court granted Defendants’ motion to dismiss. It agreed that Plaintiff did not allege that he reported violations of a law, rule or regulations subject to the jurisdiction of the SEC and that he did not allege that any disclosure he made was required or protected by a law, rule, or regulation within the SEC’s jurisdiction.  Although Plaintiff focused on whether defendants or their customers were “generally” regulated by the SEC, the Court noted that the Act’s whistleblower protection provision is not a “general-purpose anti-retaliation provision” and § 78u-6(h)(1)(A) identifies only three categories of whistleblowers entitled to protection – none of which included Plaintiff.

This is a useful decision for employers, particularly those not regulated by the SEC.  Indeed, such employers should carefully consider whether they may have success in moving to dismiss a whistleblower claim under the Act pursuant to Rule 12(b)(6) if the plaintiff fails to sufficiently allege that he/she engaged in protected activity.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and Co-Head of the Whistleblowing & Retaliation Group and the Restrictive Covenants, Trade Secrets & Unfair Competition Group.

Steven’s practice covers the full spectrum of employment law, with a particular focus on defending companies against claims of employment discrimination, retaliation and harassment; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations. He has successfully tried cases in multiple jurisdictions, and defended one of the largest Illinois-only class actions in the history of the U.S. District Court for the Northern District of Illinois. He also secured one of only a few ex parte seizures orders that have been issued under the Defend Trade Secrets Act, and obtained a world-wide injunction in federal litigation against a high-level executive who jumped ship to a competitor.

Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Steven was recognized as Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He is a Fellow of the College of Labor and Employment Lawyers.  Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven has served on Law360’s Employment Editorial Advisory Board and is a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is regularly quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

Photo of Susan McAleavey Susan McAleavey

Susan C. McAleavey is a staff attorney in the Labor and Employment Department and a member of the Employment Litigation & Arbitration Practice Group and Counseling, Training & Pay Equity Practice Group.  Susan represents employers with respect to a wide range of matters…

Susan C. McAleavey is a staff attorney in the Labor and Employment Department and a member of the Employment Litigation & Arbitration Practice Group and Counseling, Training & Pay Equity Practice Group.  Susan represents employers with respect to a wide range of matters, including compensation disputes, pay equity compensation analyses, employment discrimination and retaliation, sexual harassment, breach of contract and wage and hour issues.  She also advises on preparing, implementing and enforcing employment and separation agreements, employee handbooks and company policies.  She has experience representing employers in financial services, arts, sports and entertainment, hospitality services and health care.

Prior to joining Proskauer, Susan worked as a trial examiner for the New York City Office of Collective Bargaining, where she gained valuable insight into traditional labor law.