The Dodd-Frank Act prohibits retaliation against whistleblowers who report company wrongdoing. But a recent ruling of the Fifth Circuit Court of Appeal undercuts that protection by holding that employees who “blow the whistle” in-house are not statutorily protected from retaliation.
The case, Asadi v. G.E. Energy (USA), LLC, holds that the plain language of the Act prohibits retaliation only against those employees who report company wrongdoing to the Securities and Exchange Commission. In-house whistleblowers are out of luck.
The ruling contradicts both the SEC rules and the decision of nearly every other court that has considered the question. It also brings into question the effectiveness of carefully crafted corporate compliance programs.
