On Tuesday, November 28, 2017, the U.S. Supreme Court heard oral arguments in the case of Digital Realty Trust, Inc. v. Paul Somers. While the Supreme Court’s ruling on this case is not expected until next June, the outcome, as well as the arguments made this week, have serious ramifications for the accepted legal definition of “whistleblowing” and the protections that definition provides.
Paul Somers was the Vice President at Digital Realty Trust, Inc., from 2010 to 2014, during which time he filed reports to senior management about possible securities law violations by the company. When Digital Realty fired Somers, he filed suit in the U.S. district court for California, alleging that Digital Realty fired him for his reports of securities law violations in violation of the anti-retaliation protections created by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank was passed in 2010 in the wake of the 2008 financial crisis and expanded the whistleblower incentives and protections under the 2002 Sarbanese-Oxley Act. (Here is a side-by-side comparison of these two whistleblowing acts, including both the definitions they use and the protections they provide.) Although the district court held Somers to be a “whistleblower” under the statute, and the Ninth Circuit affirmed the district court’s decision on behalf of Somers, Digital Realty appealed to the Supreme Court on the grounds that Somers was not a “whistleblower” as defined by Dodd-Frank because Somers did not report his concerns to the Securities and Exchange Commission (SEC) before he was terminated.