Second Circuit Allows Whistleblower Retaliation Protection Without Reporting To SEC

On September 10, 2015, in a 2-1 decision in Berman v. Neo@Ogilvy LLC, the US Court of Appeals for the Second Circuit ruled that whistleblowers who report securities law violations internally but not to the US Securities and Exchange Commission (SEC) are protected under the Dodd-Frank Act from employer retaliation. No. 14-4626, 2015 WL 5254916, at *9 (2d Cir. Sept. 10, 2015). The decision creates a split with the Fifth Circuit, which ruled in Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013), that Dodd-Frank anti-retaliation provisions protect only whistleblowers who report to the SEC.

Background

Since 2011, the federal courts have focused on an inconsistency between two provisions in Section 21F of the Securities Exchange Act of 1934, as modified by Dodd-Frank. See, e.g., Egan v. TradingScreen, Inc., No. 10 CIV. 8202, 2011 WL 1672066, at *4 (S.D.N.Y. May 4, 2011). On the one hand, Section 21F(a)(6) defines a "whistleblower" as an individual who