The SEC’s implementing rule provides protection from retaliation to workers who make protected disclosures regardless of whether they report the information to the SEC or another source. However, courts disagree over whether the agency’s interpretation should be given deference.

In Asadi v. G.E. Energy (USA), LLC, the Fifth Circuit Court of Appeals limited the scope of protection to those who report directly to the SEC. Earlier this summer, the U.S. District Court for the Southern District of New York took the opposite approach, finding that Dodd-Frank “does not clearly and unambiguously limit whistleblower protection to individuals who report violations to the SEC.”

Last month, the Second Circuit Court of Appeals ruled that Congress did not intend for the law to apply extraterritorially. Accordingly, it denied a whistleblower claim by a Taiwanese national who alleged he was terminated for reporting corruption at Siemens AG’s Chinese affiliate.

The ongoing litigation and potentially conflicting court decisions highlight that the Dodd-Frank Act is still in its infancy. Over the next few years, the law’s provisions will continue to be tested until a reliable body of law is developed around it. In many cases, it may be up to the U.S. Supreme Court to provide the final word.

If you have questions about this post or would like to discuss how your business may be impacted by the Dodd-Frank Act, please contact me, attorney Kenneth Oh, or a member of the Corporate Transactions & Business Law Group at Scarinci Hollenbeck  with whom you work.