The Supreme Court has resolved a circuit split on whether Dodd-Frank’s whistleblower protections apply only to employees who report their concerns to the Securities and Exchange Commission (SEC). On Wednesday, in Digital Realty Trust, Inc. v. Somers, the Supreme Court ruled 9-0 in favor of limiting the Dodd-Frank Act’s definition of whistleblower to those who report their allegations to the SEC, thus excluding from whistleblower protection individuals who report their complaints internally. The issue before the Supreme Court was the language of Dodd-Frank, which defines “whistleblower” as “any individual who provides . . . information relating to a violation of the securities laws to the Commission, in a manner established . . . by the Commission” (15 U.S.C. § 78u-6(a)(6)).

The refrain of the opinion is that a would-be whistleblower must “tell the SEC” in order to benefit from Dodd-Frank’s anti-retaliation provision. It’s always notable when all nine justices agree, and here the Supreme Court relied on the unambiguous, clear, and conclusive language of the statute to hold that anti-retaliation protection does not apply unless and until the SEC is notified of alleged securities law violations. Despite urging from the Solicitor General to expand the whistleblower definition for anti-retaliation purposes, the Supreme Court held that anti-retaliation protection does not extend to an individual who has not reported a violation of securities law to the SEC. The decision reversed the Ninth Circuit and resolved a circuit split. The Fifth Circuit had previously held that employees are required to provide information to the SEC to take advantage of Dodd-Frank’s anti-retaliation safeguard, while the Second and Ninth Circuits extended Dodd-Frank remedies to employees who reported alleged wrongdoing only to their employers.

The Supreme Court emphasized that the holding is consistent with the purpose of Dodd-Frank, the “core objective” of which is to motivate people to tell the SEC about violations of securities laws. The Supreme Court acknowledged that giving the statute its plain-text reading “shields fewer individuals from retaliation than the alternative,” but again emphasized that Dodd-Frank’s main goal is to incentivize reporting alleged violations to the SEC.

Time will tell whether the Supreme Court’s ruling will affect the number of whistleblower actions. The decision is limited to the Dodd-Frank whistleblower statute involving securities laws and does not affect the numerous other whistleblower protection statutes. As an illustration, the Supreme Court distinguished actions under the Consumer Financial Protection Bureau’s (CFPB) jurisdiction and noted that the CFPB whistleblower-protection statute permits a covered employee to provide information to an employer, the CFPB, or a local, state, or federal government authority or law enforcement agency.  Accordingly, in the CFPB context, whistleblower protection still applies when a covered employee reports alleged misconduct solely to their employer.