On December 8, 2014, the Third Circuit ruled that Dodd-Frank’s anti-arbitration provisions do not invalidate pre-dispute arbitration agreements with respect to whistleblower retaliation claims brought pursuant to the anti-retaliation provision in Dodd-Frank, 15 U.S.C. §78u-6(h)(1)(A).  Khazin v. TD Ameritrade Holding Corp., No. 14-689, –F.3d–, 2014 WL 6871393 (3d Cir. 2014).


Plaintiff Boris Khazin (Plaintiff), a former investment oversight officer, commenced a lawsuit against the Company in the District of New Jersey, alleging that it terminated his employment in retaliation for whistleblowing activity in violation of Dodd-Frank, §78u-6(h)(1)(A).  The Company moved to compel arbitration pursuant to the parties’ predispute arbitration agreement, asserting that Dodd-Frank’s anti-retaliation provisions (i) did not apply to Plaintiff’s Dodd-Frank retaliation claim, and (ii) should not be applied retroactively.  As discussed in our March 21, 2014 post, the district court granted the Company’s motion on the grounds that Dodd-Frank’s anti-arbitration provisions do not retroactively bar predispute arbitration agreements.  Because the parties executed the arbitration agreement prior to Dodd-Frank’s enactment, the district court dismissed the lawsuit and compelled arbitration.  The court passed on the issue of whether Dodd-Frank’s anti-arbitration provisions applied to Plaintiff’s Dodd-Frank retaliation claim.  Plaintiff appealed.

Third Circuit’s Ruling

The Third Circuit affirmed the decision compelling arbitration, but on different grounds.  It expressed “no opinion” on Dodd-Frank’s anti-arbitration provisions’ retroactivity and, instead, concluded that the Dodd-Frank retaliation claim is not subject to anti-arbitration provisions.  It ruled that the “text and structure of Dodd-Frank compel the conclusion that whistleblower retaliation claims brought pursuant to 15 U.S.C. §78u-6(h) are not exempt from predispute arbitration agreements.”  It explained that although the anti-arbitration provisions are included in Dodd-Frank, they are “expressly limited to” specific sections of other whistleblower laws—i.e., Section 806 of SOX, the Commodity Exchange Act, 7 U.S.C. §26(n)(2) and the Consumer Financial Protection Act, 12 U.S.C. §5567(d)(2)—and “expressly” placed their constituent parts in those sections.  It went on to explain that Congress’s omission of Dodd-Frank retaliation claims was “deliberate” and that the differences between a SOX retaliation claim and a Dodd-Frank retaliation claim might “explain Congress’s reluctance to exempt Dodd-Frank claims from arbitration.”


This is the first federal appellate decision to address the issue of whether Dodd-Frank’s anti-arbitration provisions invalidate pre-dispute arbitration of Dodd-Frank retaliation claims.  This decision, however, is consistent with the case law being developed at the district court level.