Legal Newsline

Thursday, October 17, 2019

Fired Wis. employee not a whistleblower; Decision part of circuit split

By Dawn Geske | Aug 26, 2016

MILWAUKEE (Legal Newsline) – A recent Wisconsin decision attempting to determine who is a whistleblower under the Dodd-Frank anti-retaliation protection provision is part of a growing split among circuits, a New York attorney says.

Plaintiff Lisa Lamb alleged she was a victim of whistleblower retaliation from her supervisor. Lamb, a former employee at Rockwell Automation, says she was terminated because she complained about her supervisor’s alleged securities law violation.

Lamb alleges, under Dodd-Frank and Sarbanes Oxley provisions, she was subjected to whistleblower retaliation that caused her to be terminated. Although Lamb alleged she was a whistleblower, she hadn’t recorded any complaints with the U.S. Securities and Exchange Commission (SEC) upon being terminated.

The court recognized that the definition of who falls under the Dodd-Frank whistleblower provisions is a decision that has been split between the U.S. courts of appeal for the Fifth and Second circuits and is an issue that could come before the Supreme Court.

Lamb's case was heard in a Wisconsin federal court, part of the Seventh Circuit.

“It could definitely end up before the Supreme Court given that there’s a split between the Fifth and the Second Circuit to address this statute in different fashions,” Harris Mufson, senior counsel at Proskauer told the Legal News Line.

“The Fifth Circuit says to be a whistleblower you have to complain to the SEC. The Second Circuit says you don’t necessarily have to justify to the SEC to be a whistleblower. You can also complain internally.

"There’s a difference of opinion between those two courts, and those sort of issues are the ones that the Supreme Court is really interested in and they take up to resolve."

In Lamb's case, Judge J.P. Stadtmueller sided with the defendant. He dismissed the case and interpreted the language of the statute that defines a whistleblower as one that reports the information to the SEC, which Lamb failed to do when terminated.

“I think the court strictly construed the language of the statue and how the statute defines whistleblower,” Mufson said. “It has a definition, and the definition is an individual that provides information to the SEC.

"Other courts that have ruled in a contrary fashion have concluded that the language of the statute is ambiguous, but the Wisconsin court, like the Fifth Circuit, said the language is unambiguous and it says what it says."

Although if the Wisconsin court would have followed a much broader interpretation of the statute as the Second Circuit Court has, Lamb may have been considered a whistleblower in the case under this interpretation.

“I think if you took a broad view of the facts of the case then the SEC’s definition would apply and the plaintiff would have been a whistleblower,” Mufson said.

“If the Wisconsin court would have followed the rational of the Second Circuit or the SEC, the plaintiff would have been considered a whistleblower under Dodd.”

Want to get notified whenever we write about U.S. Securities and Exchange Commission ?

Sign-up Next time we write about U.S. Securities and Exchange Commission, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. Securities and Exchange Commission