Houston Texas Business Lawyer

Supreme Court Weighs Protections For Corporate Whistleblowers

Houston business lawyerThe U.S. Supreme Court will decide whether employees who disclose corporate wrongdoing to their bosses deserve the same protections as those who make disclosures to the Securities and Exchange Commission.

While lower courts have sided with the whistleblower, the Supreme Court justices may decide against the employee in the case before them.  At Brewer & Pritchard, P.C., we believe this important case illustrates why whistleblowers should seek the advice of experienced corporate attorneys as soon as possible.

Background about the whistleblower case before the Supreme Court

Supreme Court justices on Nov. 28 heard arguments in a case involving a lawsuit over the firing of an employee who blew the whistle on his supervisor for allegedly cutting corners, according to the Los Angeles Times. The employee, a vice president and portfolio manager working for a real estate trust, reported his concerns to the company’s executives. He said he did not want to go to the SEC with his concerns because he loved his company and job.

Not long after sending his memo outlining his concerns to management, the employee was fired. He then filed a wrongful termination lawsuit claiming his termination was retaliation for making the disclosure. He argued the firing was in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank – passed in 2010 in the wake of the financial crisis – brought significant changes to U.S. financial regulation.

In the case before the Supreme Court, known as Digital Realty v. Somers and to be decided in June, the justices have suggested they will support the company’s argument and narrow the anti-retaliation provision, according to Bloomberg and several media reports.

Citing language in Dodd-Frank, attorneys for Digital Realty say whistleblowers are people who provide information to the SEC, not to the management of a company.

The former Digital Realty employee who filed the lawsuit, Paul Somers, has the backing of the Trump administration, which says internal whistleblowers deserve protection even if they don’t file a complaint with the SEC.

Should whistleblowers making disclosures outside of the SEC be protected?

Language in the Dodd-Frank act states that companies may get sued if they “discharge [or] demote” employees who are whistleblowers. However, Dodd-Frank also defines whistleblowers as people who provide information to the SEC.

The Supreme Court may decide based on the concept of “textualism.” Most of the justices follow the textualism approach, which is the interpretation of the law based on the text and not its broader purpose.

Our experienced whistleblower attorneys know how difficult it can be for employees to step forward and sound the alarm against their employers. They often put their careers on the line to do what’s right.

A Supreme Court decision in favor of the company in the Digital Realty v. Somers case will not make it any easier for employees to shine a light on corporate wrongdoing. But we believe the decision should not deter employees from speaking up.

It’s critical for whistleblowers to seek the advice of experienced corporate attorneys. If you suspect wrongdoing in your company, contact Brewer & Pritchard, P.C., for a consultation before you contact any other entity.

We make sure our clients' rights are fully protected. Don’t try to go up against a powerful corporation on your own. Make sure you have an experienced law firm on your side, looking out for your best interests. Call 800-445-8710 today or send us your information online.