Wednesday, February 21, 2018

Digital Realty Trust, Inc. v. Somers, Docket No. 16-1276, J. Ginsburg

Whistleblower: Sarbanes-Oxley: Dodd-Frank: SEC: Chevron deference: Jurisdiction:

Endeavoring to root out corporate fraud, Congress passed the Sarbanes-Oxley Act of 2002, 116 Stat. 745 (Sarbanes-Oxley), and the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, 124 Stat. 1376 (Dodd-Frank). Both Acts shield whistleblowers from retaliation, but they differ in important respects. Most notably, Sarbanes-Oxley applies to all “employees” who report misconduct to the Securities and Exchange Com­mission (SEC or Commission), any other federal agency, Congress, or an internal supervisor. 18 U. S. C. §1514A(a)(1). Dodd-Frank delineates a more circum­scribed class; it defines “whistleblower” to mean a person who provides “information relating to a violation of the securities laws to the Commission.” 15 U. S. C. §78u– 6(a)(6). A whistleblower so defined is eligible for an award if original information he or she provides to the SEC leads to a successful enforcement action. §78u–6(b)–(g). And, most relevant here, a whistleblower is protected from retaliation for, inter alia, “making disclosures that are required or protected under” Sarbanes-Oxley, the Securi­ties Exchange Act of 1934, the criminal anti-retaliation proscription at 18 U. S. C. §1513(e), or any other law subject to the SEC’s jurisdiction. 15 U. S. C. §78u–6(h)(1)(A)(iii).

The question presented: Does the anti-retaliation provi­sion of Dodd-Frank extend to an individual who has not reported a violation of the securities laws to the SEC and therefore falls outside the Act’s definition of “whistleblow­er”? Pet. for Cert. (I). We answer that question “No”: To sue under Dodd-Frank’s anti-retaliation provision, a per­son must first “provide . . . information relating to a violation of the securities laws to the Commission.” §78u–6(a)(6). (…) “When a statute includes an explicit definition, we must follow that definition,” even if it varies from a term’s ordinary meaning. Burgess v. United States, 553 U. S. 124, 130 (2008). This principle resolves the question before us. Our charge in this review proceeding is to determine the meaning of “whistleblower” in §78u–6(h), Dodd-Frank’s anti-retaliation provision. The definition section of the statute supplies an unequivocal answer: A “whistleblower” is “any individual who provides . . . information relating to a violation of the securities laws to the Commission.” §78u–6(a)(6) (emphasis added). Leaving no doubt as to the definition’s reach, the statute instructs that the “defi­nition shall apply” “in this section,” that is, throughout §78u–6. §78u–6(a)(6). (…) We find the statute’s defini­tion of “whistleblower” clear and conclusive. Because “Congress has directly spoken to the precise question at issue,” Chevron, 467 U. S., at 842, we do not accord defer­ence to the contrary view advanced by the SEC in Rule 21F–2. See 17 CFR §240.21F–2(b)(1). The statute’s unambiguous whistleblower definition, in short, precludes the Commission from more expansively inter­preting that term. See Burgess, 553 U. S., at 130.

To recover under §1514A, an aggrieved employee must exhaust administrative remedies by “filing a complaint with the Secretary of Labor.” §1514A(b)(1)(A); see Law­son, 571 U. S., at ___–___ (slip op., at 5–6). Congress prescribed a 180-day limitation period for filing such a complaint. §1514A(b)(2)(D). If the agency “does not issue a final decision within 180 days of the filing of a com­plaint, and the agency’s delay is not due to bad faith on the claimant’s part, the claimant may proceed to federal district court for de novo review.” Id., at ___ (slip op., at 6) (citing §1514A(b)). An employee who prevails in a pro­ceeding under §1514A is “entitled to all relief necessary to make the employee whole,” including reinstatement, backpay with interest, and any “special damages sus­tained as a result of the discrimination,” among such damages, litigation costs. §1514A(c).

Sarbanes-Oxley also prohibits retaliation against an “employee” who “files, . . . testifies, participates in, or otherwise assists in a proceeding filed or about to be filed . . . relating to an alleged violation of” the same provisions of federal law addressed in 18 U. S. C. §1514A(a)(1). See §1514A(a)(2).

(…) When enacting Sarbanes-Oxley’s whistleblower regime, in comparison, Congress had a more far-reaching objec­tive: It sought to disturb the “corporate code of silence” that “discouraged employees from reporting fraudulent behavior not only to the proper authorities, such as the FBI and the SEC, but even internally.” Lawson, 571 U. S., at ___ (slip op., at 4). Accordingly, the Sarbanes-Oxley anti-retaliation provision covers employees who report fraud not only to the SEC, but also to any other federal agency, Congress, or an internal supervisor. See 18 U. S. C. §1514A(a)(1).

(…) Somers and the Solicitor General express concern that our reading would jettison protection for auditors, attor­neys, and other employees subject to internal-reporting requirements. See Brief for Respondent 35; Brief for United States as Amicus Curiae 21. Sarbanes-Oxley, for example, requires auditors and attorneys to report certain information within the company before making disclosures externally. See 15 U. S. C. §§78j–1(b), 7245; 17 CFR §205.3. If the whistleblower definition applies, Somers and the Solicitor General fear, these professionals will be “left . . . vulnerable to discharge or other retaliatory action for complying with” their internal-reporting obliga­tions. Brief for United States as Amicus Curiae 22. Our reading shields employees in these circumstances, however, as soon as they also provide relevant information to the Commission. True, such employees will remain ineligible for Dodd-Frank’s protection until they tell the SEC, but this result is consistent with Congress’ aim to encourage SEC disclosures. See S. Rep. No. 111–176, at 38. Somers worries that lawyers and auditors will face retaliation quickly, before they have a chance to report to the SEC. Brief for Respondent 35–36. But he offers nothing to show that Congress had this concern in mind when it enacted §78u–6(h). Indeed, Con­gress may well have considered adequate the safeguards already afforded by Sarbanes-Oxley, protections specifically designed to shield lawyers, accountants, and similar professionals. See Lawson, 571 U. S., at ___ (slip op., at 17).

(U.S.S.C., Feb. 21, 2018, Digital Realty Trust, Inc. v. Somers, Docket No. 16-1276, J. Ginsburg)

Discussion et décision portant sur l'étendue de la protection, notamment contre des représailles, accordée aux lanceurs d'alertes par Sarbanes-Oxley et Dodd-Frank.

Sarbanes-Oxley protège tous les employés qui rapportent des irrégularités à la SEC, à l'administration, au Congrès, ou à un supérieur hiérarchique.

Dodd-Frank protège une classe plus restreinte d'employés : sont seuls protégés ceux qui ont rapporté à la SEC une violation du droit des Securities. C'est le rapport à la SEC qui déclenche la protection. La Cour parvient à cette conclusion après lecture de la définition donnée par la loi au terme "whistleblower", définition qui est à cet égard tout à fait clair. Le but de ce système est d'encourager les divulgations à la SEC. La SEC avait donné à ce terme une définition plus générale, qui ne saurait bénéficier de la déférence au sens de la jurisprudence Chevron, du fait de la clarté de la loi qui exclut une interprétation. Un tel employé qui dépose ainsi est donc aussi protégé par la loi pénale qui punit l'auteur de représailles contre un informant, cf. 18 U. S. C. §1513(e).

La procédure prévue par Sarbanes-Oxley est tout d'abord de nature administrative, devant le Secrétaire au Travail, éventuellement devant la cour de district fédérale si le Secrétaire ne rend pas sa décision dans un certain délai. L'employé victorieux peut obtenir une décision de réintégrande, et se voir accorder les rémunérations dues, avec intérêts, ainsi que d'autres dommages à prouver, tels par exemple les frais de la procédure.

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