Trepanier MacGillis Battina P.A. 8000 Flour Exchange Building 310 Fourth Avenue South Minneapolis, MN 55415 612.455.0500
Trepanier MacGillis Battina P.A. 8000 Flour Exchange Building 310 Fourth Avenue South Minneapolis, MN 55415 612.455.0500

The Dodd-Frank Act: Expansion of Whistleblower Protections

The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), Pub. L. No. 111-203, H.R. 4173, 111th Cong. (2010), was signed into law on July 21, 2010 by President Obama. The Dodd-Frank Act provides substantial reform to the regulation of U.S. financial markets. The Act also expands whistleblower protection for employees by eliminating some defenses that employers previously relied upon to defeat whistleblower claims, offering increased bounties and incentives to encourage employees to report fraud, and by creating new private causes of action.

Sarbanes-Oxley Act of 2002
The Dodd-Frank Act expands section 806 of the Sarbanes-Oxley Act of 2002 (“SOX”) (15 U.S.C. § 7201 et seq.). Section 929A of the Dodd-Frank Act expands coverage of entities subject to whistleblower provisions to include “any subsidiary or affiliate whose financial information is included in the consolidated financial statements of such company.” Nationally recognized statistical rating organizations are also included under the Dodd-Frank Act. See Dodd-Frank Act § 922. The previous 90-day statute of limitations under § 806 of SOX is lengthened to 180 days under the Dodd-Frank Act. Id. The Dodd-Frank Act also creates a right to a jury trial in SOX actions that are removed to federal district courts. Id. Pre-dispute arbitration agreements or any other “agreement, policy, form, or condition of employment” that requires a waiver of rights under SOX are prohibited under the Dodd-Frank Act. Id.

Securities Exchange Act of 1934
The Dodd-Frank Act also amends the Securities Exchange Act of 1934 (“SEA”). Section 922 requires the Securities Exchange Commission (“SEC”) to provide a monetary award or bounty to individuals who provide “original information” to the SEC that results in sanctions exceeding $1 million. The SEC has discretion to award 10%-30% of the total amount of the sanctions. See Dodd-Frank Act § 922. A private cause of action for employees claiming employer retaliation exists under section 922 of the Dodd-Frank Act. The private cause of action allows whistleblowers to file directly in federal court, rather than first filing an administrative claim with the Occupational Safety and Health Administration (“OSHA”). The statute of limitations under § 922 allows employees to file a case up to six years after the violation occurred or three years after he or she knew or reasonably should have known of facts material to the violation, so long as the complaint is filed within ten years of the violation. Remedies under § 922 include employee reinstatement without loss of seniority, double back-pay, and attorneys’ fees and costs.

Commodity Exchange Act
The Dodd-Frank Act further amends the Commodity Exchange Act (“CEA”). Section 748 provides whistleblower protections for the first time under the CEA. The amendments are similar to those of the SEA, but the statute of limitations is only 2 years.

Employees in Consumer Financial Product and Service Fields
Finally, Section 1057 of the Dodd-Frank Act includes a new cause of action for employees who work in consumer financial product and service fields. Employers are prohibited from retaliating against employees who report information or violations of the Consumer Financial Protection Act of 2010 (which is Title X of the Dodd-Frank Act), or any other provision of law subject to the jurisdiction of the Bureau of Consumer Financial Protection, to be established under the Act. The cause of action must be filed with OSHA within 180 days and a complainant has the option of proceeding administratively or removing the claim to federal court. See Dodd-Frank Act § 1057. Claims under Section 1057 may not be waived by any agreement, policy, form or condition of employment, including by any pre-dispute arbitration agreement. Id.

If you have any questions about the Dodd-Frank Act, or need assistance in a whistleblower lawsuit, please contact one of the employment law attorneys at Trepanier MacGillis Battina P.A.


About the Author:
Minneapolis employment attorney Craig W. Trepanier practices extensively in the field of employment law, including representing employers and employees in whistleblower claims. Craig may be reached at 612.455.0502 or Trepanier MacGillis Battina P.A. is a Minneapolis employment law firm located in Minneapolis, Minnesota.