On August 12, 2016, the U.S. District Court for the Eastern District of Wisconsin in Lamb v. Rockwell Automation Inc., No. 15-CV-1415-JPS (E.D. Wis. Aug. 12, 2016) held that the Dodd-Frank whistleblower protection provision (Section 922) only protects individuals who provide information to the SEC.  In so holding, the court adopted the Fifth Circuit’s holding in Asadi v. F.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013) and rejected the SEC’s regulatory guidance and the Second Circuit’s holding in Berman v. Neo@Ogilvy LLC, 801 F.3d 145 (2d Cir. 2015).  

Background

Plaintiff Lisa Lamb, a former employee of Rockwell Automation Inc. (“Company”), alleged that she was subject to “whistleblower retaliation” under both Sarbanes Oxley and Dodd-Frank.  According to Plaintiff, she faced retaliation from her direct supervisor and was eventually terminated for internally complaining about her supervisor’s potential securities law violation.  Notably, at the time of her termination, Plaintiff had not made any complaints to the SEC.

Ruling

In granting the Company’s motion to dismiss Plaintiff’s Dodd-Frank retaliation claim, the court recognized that the question of “who is a Dodd-Frank whistleblower?” is the subject of a circuit split between the Fifth and Second Circuits.  The court also noted that the SEC’s interpretation of the anti-retaliation provision (upon which the Second Circuit relied in its decision addressing the question) is that “individuals who report to persons or governmental authorities other than the Commission” are protected by the provision.

The court, like the Fifth Circuit, concluded that the language of Section 922 was unambiguous because the statute contains “only one category of whistleblowers: individuals who provide information relating to a securities law violation to the SEC.”  Therefore, it declined to afford deference to the SEC’s regulatory guidance.

Implications

This decision demonstrates the growing split amongst courts regarding the scope of Dodd-Frank’s anti-retaliation provision.  Notably, as we previously reported, this is the second district court within the Seventh Circuit to follow Asadi.  As more district courts continue to grapple with this question, we expect additional circuit courts to weigh in and the issue may likely be resolved by the Supreme Court.