Second Circuit Decision May Have Significant Implications for Whistleblowers and Their Employers

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On September 10, 2015, the US Court of Appeals for the Second Circuit issued a decision with significant implications for purported whistleblowers and their employers—Berman v. Neo@Ogilvy LLC, WPP Group USA, Inc., No. 14-4626 (2d Cir. Sept. 10, 2015). The Berman decision is the most recent in a string of cases interpreting the "arguable tension" between the statutory definition of the term "whistleblower" in Subsection 21F(a)(6) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), and the use of the term "whistleblower" in the anti-retaliation provision of Dodd-Frank found at Subsection 21F(h)(1)(A), which extends protections against retaliation to "a whistleblower" who "makes disclosures that are required or protected under the Sarbanes-Oxley Act of 2002" (Sarbanes-Oxley). The Berman Court resolved this "arguable tension" in a whistleblower-friendly manner that provides broad anti-retaliation protections to employees who make internal reports to their employers required or protected under Sarbanes-Oxley, even if those disclosures are not made pre-termination to the Securities and Exchange Commission (SEC). The Berman decision creates a clear split with the US Court of Appeals for the Fifth Circuit's contrary reading of the identical statutory provisions in Asadi v. G.E. Energy (USA), LLC, 720 F.3d 620 (5th Cir. 2013), and will require employers in the Second Circuit to use extra vigilance in dealing with employees reporting alleged misconduct internally.

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