cd calOn September 8, 2015, the United States District Court for the Central District of California dismissed a whistleblower retaliation claim, ruling that Dodd-Frank’s anti-retaliation provision only protects whistleblowers who provide information to the SEC.  The court’s decision (which was issued two days before the Second Circuit’s decision in Berman v. Neo@Ogilvy) demonstrates that courts continue to be divided about the scope of Dodd-Frank’s anti-retaliation provision.


Plaintiff Jennifer Davies, a former labor and employment attorney for Defendant Broadcom Corp., filed suit against the Company after her employment was terminated in March 2014.  Plaintiff asserted ten claims against the Company, including a whistleblower retaliation claim under Dodd Frank, 15 U.S.C. § 78u-6.  Plaintiff did not allege that she ever reported any securities law violations to the SEC.  Accordingly, the Company moved to dismiss Plaintiff’s whistleblower claim on the grounds that she does not qualify as a “whistleblower” under Dodd-Frank.

The Court’s Ruling

In dismissing Plaintiff’s whistleblower claim, the district court ruled that Dodd-Frank unambiguously provides that only employees who communicate with the SEC about securities laws violations are “whistleblowers.”  The court rejected the Plaintiff and SEC’s arguments that requiring an individual to report to the SEC to qualify as a “whistleblower” renders Dodd-Frank’s anti-retaliation provision “superfluous.”  Rather, the court held that the anti-retaliation provision describes what is protected, not who, and that it is “entirely plausible that Congress meant to protect from retaliation only those individuals who report to the SEC,” noting that “[p]erhaps, for example, Congress meant to limit frivolous retaliation claims by disgruntled employees by requiring them to allege something more than internal reporting–an allegation easily made but not easily discredited.”  Accordingly, the court declined to defer to the SEC’s rule expanding the scope of Dodd-Frank to also protect employees who complain about securities laws to their employer, holding that the SEC’s rule “is not a valid exercise of its authority.”


The court’s decision only enhances the uncertainty for Dodd-Frank litigants in California.  In fact, in July 2015 the Northern District of California in Somers v. Digital Realty Trust, Inc. issued a contrary opinion — holding that despite Dodd-Frank’s clear definition of “whistleblower,” the statute’s legislative history suggests that the statute’s use of the term “whistleblower” was an apparent oversight by Congress.  Moreover, as we recently reported, on September 10, 2015, the Second Circuit similarly held that internal complaints are protected under Dodd-Frank thereby creating a split with the Fifth Circuit, which held in Asadi v. G.E. Energy (USA) LLC, that the statute’s definition of whistleblower is clear.  It remains to be seen how district courts outside of the Second and Fifth Circuits will construe the scope of Dodd-Frank’s whistleblower provision.  As always, we will keep our loyal readers up-to-date on the state of the law.