Wall Street’s War Against Corporate Whistleblowers and Compliance Programs Heats Up

September 21, 2017. Washington, D.C. Internal corporate compliance programs will be crippled if the U.S. Supreme Court rules in favor of the employer in the case of Digital Realty Trust v. Somers. The issue before the Court this term is whether the anti-retaliation provision in the Dodd-Frank Act (DFA) protects whistleblowers who report misconduct internally, or whether a whistleblower must contact the Securities and Exchange Commission (SEC) (by-passing internal compliance) to receive protection?

If the Court should side with Digital, “the results will be catastrophic, not only for the employees who lose their jobs for trying to do the right thing, but also for investors,” according to an article published yesterday in Law360, by leading whistleblower attorney Stephen M. Kohn.

The implications of this case are far-reaching. Numerous whistleblower laws define protected activity similarly to the DFA. The precedent set in Digital Realty Trust v. Somers could weaken the protections provided whistleblowers in laws such as the Clean Air Act, the Federal Water Pollution Control Act, the Surface Mining Act, and the banking whistleblower laws. 

Kohn surmises that severe damage to internal compliance programs has been done, even if Digital’s arguments are dismissed. The corporate lobby has played its hand by exhibiting such an intense hostility toward whistleblowers. He advises whistleblowers to “bypass internal programs and file their claims directly with the SEC, anonymously and confidentially” in order to ensure that they are protected under the law. 

The National Whistleblower Center will be submitting a brief to the Supreme Court urging full protection for internal whistleblowers. The case is expected to be argued in November 2017. 

• Read Kohn’s full Law360 article here: Digital Realty Trust V. Somers May Kill Corporate Compliance
• Related blog post: Wall Street’s Attack on Internal Whistleblowers Rebutted
• Somers v. Digital Realty Trust (9^th Cir. 2017)
• Chamber of Commerce Brief urging the Court to strip internal whistleblowers from DFA.