OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE
November 28, 2017
Endeavoring to root out corporate fraud, Congress passed the
Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley) and the 2010
Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank). Both Acts shield whistleblowers from
retaliation, but they differ in important respects.
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 defines a "whistle-blower" as "any
individual who provides . . . information relating to a
violation of the securities laws to the Commission, in a
manner established, by rule or regulation, by the
Commission." 15 U.S.C. §78u- 6(a)(6). A
whistleblower so defined is eligible for an award if original
information provided to the SEC leads to a successful
enforcement action. §78u-6(b)-(g). And he or she is
protected from retaliation in three situations, see
§78u-6(h)(1)(A)(i)-(iii), including for "making
disclosures that are required or protected under"
Sarbanes-Oxley or other specified laws,
anti-retaliation provision contains an
administrative-exhaustion requirement and a 180-day
administrative complaint-filing deadline, see 18 U.S.C.
§1514A(b)(1)(A), (2)(D), whereas Dodd-Frank permits a
whistleblower to sue an employer directly in federal district
court, with a default six-year limitation period, see
The SEC's regulations implementing the Dodd-Frank
provision contain two discrete whistleblower definitions. For
purposes of the award program, Rule 2IF-2 requires a
whistleblower to "provide the Commission with
information" relating to possible securities-law
violations. 17 CFR §240.21F-2(a)(1). For purposes of the
anti-retaliation protections, however, the Rule does not
require SEC reporting. See §240.21F-2(b)(1)(i)-(ii).
Respondent Paul Somers alleges that petitioner Digital Realty
Trust, Inc. (Digital Realty) terminated his employment
shortly after he reported to senior management suspected
securities-law violations by the company. Somers filed suit,
alleging, inter alia, a claim of whistleblower
retaliation under Dodd-Frank. Digital Realty moved to dismiss
that claim on the ground that Somers was not a whistle-blower
under §78u-6(h) because he did not alert the SEC prior
to his termination. The District Court denied the motion, and
the Ninth Circuit affirmed. The Court of Appeals concluded
that §78u-6(h) does not necessitate recourse to the SEC
prior to gaining "whistle-blower" status, and it
accorded deference to the SEC's regulation under
Chevron U.S. A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837.
Dodd-Frank's anti-retaliation provision does not extend
to an individual, like Somers, who has not reported a
violation of the securities laws to the SEC. Pp. 9-19.
(a)A statute's explicit definition must be followed, even
if it varies from a term's ordinary meaning. Burgess
v. United States, 553 U.S. 124, 130. Section 78u-6(a)
instructs that the statute's definition of
"whistleblower" "shall apply" "[i]n
this section, " that is, throughout §78u-6. The
Court must therefore interpret the term
"whistleblower" in §78u-6(h), the
anti-retaliation provision, in accordance with that
The whistleblower definition operates in conjunction with the
three clauses of §78u-6(h)(1)(A) to spell out the
provision's scope. The definition first describes
who is eligible for protection-namely, a
"whistleblower" who provides pertinent information
"to the Commission." §78u-6(a)(6). The three
clauses then describe what conduct, when engaged in
by a "whistleblower, " is shielded from employment
discrimination. An individual who meets both measures may
invoke Dodd-Frank's protections. But an individual who
falls outside the protected category of
"whistleblowers" is ineligible to seek redress
under the statute, regardless of the conduct in which that
individual engages. This reading is reinforced by another
whistleblower-protection provision in Dodd-Frank, see 12
U.S.C. §5567(b), which imposes no requirement that
information be conveyed to a government agency. Pp. 9-11.
(b)The Court's understanding is corroborated by
Dodd-Frank's purpose and design. The core objective of
Dodd-Frank's whistleblower program is to aid the
Commission's enforcement efforts by "motivat[ing]
people who know of securities law violations to tell the
SEC." S. Rep. No. 111-176, p. 38 (emphasis added).
To that end, Congress provided monetary awards to
whistleblowers who furnish actionable information to the
Commission. Congress also complemented the financial
incentives for SEC reporting by heightening protection
against retaliation. Pp. 11-12.
(c) Somers and the Solicitor General contend that
Dodd-Frank's "whistleblower" definition applies
only to the statute's award program and not, as the
definition plainly states, to its anti-retaliation provision.
Their concerns do not support a departure from the statutory
text. Pp. 12-18.
(1) They claim that the Court's reading would vitiate the
protections of clause (iii) for whistleblowers who make
disclosures to persons and entities other than the SEC. See
§78u-6(h)(1)(A)(iii). But the plain-text reading of the
statute leaves the third clause with substantial meaning by
protecting a whistleblower who reports misconduct
both to the SEC and to another entity, but suffers
retaliation because of the latter, non-SEC, disclosure. Pp.
(2) Nor would the Court's reading jettison protections
for auditors, attorneys, and other employees who are required
to report information within the company before making
external disclosures. Such employees would be shielded as
soon as they also provide relevant information to the
Commission. And Congress may well have considered
adequate the safeguards already afforded to such employees by
Sarbanes-Oxley. Pp. 15-16.
(3) Applying the "whistleblower" definition as
written, Somers and the Solicitor General further protest,
will allow "identical misconduct" to "go
punished or not based on the happenstance of a separate
report" to the SEC. Brief for Respondent 37-38. But it
is understandable that the statute's retaliation
protections, like its financial rewards, would be reserved
for employees who have done what Dodd-Frank seeks to achieve
by reporting information about unlawful activity to the SEC.
(4) The Solicitor General observes that the statute contains
no apparent requirement of a "temporal or topical
connection between the violation reported to the Commission
and the internal disclosure for which the employee suffers
retaliation." Brief for United States as Amicus
Curiae 25. The Court need not dwell on related
hypotheticals, which veer far from the case at hand. Pp.
(5) Finally, the interpretation adopted here would not
undermine clause (ii) of §78u-6(h)(1)(A), which
prohibits retaliation against a whistleblower for
"initiating, testifying in, or assisting in any
investigation or . . . action of the Commission based
upon" information conveyed to the SEC by a whistleblower
in accordance with the statute. The statute delegates
authority to the Commission to establish the
"manner" in which a whistleblower may provide
information to the SEC. §78u-6(a)(6). Nothing prevents
the Commission from enumerating additional means of SEC
reporting, including through testimony protected by clause
(ii). P. 18.
(d) Because "Congress has directly spoken to the precise
question at issue, " Chevron, 467 U.S., at 842,
deference is not accorded to the contrary view advanced by
the SEC in Rule 21F-2. Pp. 18-19.
850 F.3d 1045, reversed and remanded.
GINSBURG, J., delivered the opinion of the Court, in which
ROBERTS, C. J., and Kennedy, Breyer, Sotomayor, and Kagan,
JJ., joined. So-TOMAYOR, J., filed a concurring opinion, in
which BREYER, J., joined. THOMAS, J., filed an opinion
concurring in part and concurring in the judgment, in which
ALITO and GORSUCH, JJ., joined.
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).
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
"whistleblow-er"? Pet. for Cert. (I). We answer
that question "No": To sue under Dodd-Frank's
anti-retaliation provision, a person must first
"provid[e] . . . information relating to a violation of
the securities laws to the Commission."
safeguard investors in public companies and restore trust in
the financial markets following the collapse of Enron
Corporation, " Congress enacted Sarbanes-Oxley in 2002.
Lawson v. FMR LLC, 571 U.S. 429, ___(2014) (slip
op., at 1). Most pertinent here, Sarbanes-Oxley created new
protections for employees at risk of retaliation for
reporting corporate misconduct. See 18 U.S.C. §1514A.
Section 1514A prohibits certain companies from discharging or
otherwise "discriminat[ing] against an employee in the
terms and conditions of employment because" the employee
"provid[es] information ... or otherwise assist[s] in an
investigation regarding any conduct which the employee
reasonably believes constitutes a violation" of certain
criminal fraud statutes, any SEC rule or regulation, or
"any provision of Federal law relating to fraud against
shareholders." §1514A(a)(1). An employee qualifies
for protection when he or she provides information or
assistance either to a federal regulatory or law enforcement
agency, Congress, or any "person with supervisory
authority over the employee."
recover under §1514A, an aggrieved employee must exhaust
administrative remedies by "filing a complaint with the
Secretary of Labor." §1514A(b)(1)(A); see
Law-son, 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).
issue in this case is the Dodd-Frank anti-retaliation
provision enacted in 2010, eight years after the enactment of
Sarbanes-Oxley. Passed in the wake of the 2008 financial
crisis, Dodd-Frank aimed to "promote the financial
stability of the United States by improving accountability
and transparency in the financial system." 124 Stat.
responded to numerous perceived shortcomings in financial
regulation. Among them was the SEC's need for additional
"power, assistance and money at its disposal" to
regulate securities markets. S. Rep. No. 111-176, pp. 36, 37
(2010). To assist the Commission "in identifying
securities law violations, " the Act established "a
new, robust whistleblower program designed to motivate people
who know of securities law violations to tell the SEC."
Id., at 38. And recognizing that
"whistleblow-ers often face the difficult choice between
telling the truth and . . . committing 'career suicide,
'" Congress sought to protect whistleblowers from
employment discrimination. Id., at 111, 112.
implemented these goals by adding a new provision to the
Securities Exchange Act of 1934: 15 U.S.C. §78u-6.
Section 78u-6 begins by defining a "whistleblower"
as "any individual who provides ... information relating
to a violation of the securities laws to the
Commission, in a manner established, by rule or
regulation, by the Commission." §78u-6(a)(6)
(emphasis added). That definition, the statute directs,
"shall apply" "[i]n this
section"-i.e., throughout §78u-6.
78u-6 affords covered whistleblowers both incentives and
protection. First, the section creates an award program for
"whistleblowers who voluntarily provid[e] original
information to the Commission that le[ads] to the successful
enforcement of [a] covered judicial or administrative
action." §78u-6(b)(1). A qualifying whistleblower
is entitled to a cash award of 10 to 30 percent of the
monetary sanctions collected in the enforcement action. See
§78u-6(h) prohibits an employer from discharging,
harassing, or otherwise discriminating against a
"whistleblower" "because of any lawful act
done by the whistleblower" in three situations: first,
"in providing information to the Commission in
accordance with [§78u-6], "
§78u-6(h)(1)(A)(i); second, "in initiating,
testifying in, or assisting in any investigation or . . .
action of the Commission based upon" information
provided to the SEC in accordance with §78u-6,
§78u-6(h)(1)(A)(ii); and third, "in making
disclosures that are required or protected under" either
Sarbanes-Oxley, the Securities Exchange Act of 1934, the
criminal anti-retaliation prohibition at 18 U.S.C.
§1513(e),  or "any other law, rule, or
regulation subject to the jurisdiction of the Commission,
" §78u-6(h)(1)(A)(iii). Clause (iii), by
cross-referencing Sarbanes-Oxley and other laws, protects
disclosures made to a variety of individuals and entities in
addition to the SEC. For example, the clause shields an
employee's reports of wrongdoing to an internal
supervisor if the reports are independently safeguarded from
retaliation under Sarbanes-Oxley. See supra, at
recovery procedures under the anti-retaliation provisions of
Dodd-Frank and Sarbanes-Oxley differ in critical respects.
First, unlike Sarbanes-Oxley, which contains an
administrative-exhaustion requirement and a 180-day
administrative complaint-filing deadline, see 18 U.S.C.
§1514A(b)(1)(A), (2)(D), Dodd-Frank permits a
whistleblower to sue a current or former employer directly in
federal district court, with a default limitation period of
six years, see §78u-6(h)(1)(B)(i), (iii)(I)(aa). Second,
Dodd-Frank instructs a court to award to a prevailing
plaintiff double backpay with interest, see
§78u-6(h)(1)(C)(ii), while Sarbanes-Oxley limits
recovery to actual backpay with interest, see 18 U.S.C.
§1514A(c)(2)(B). Like Sarbanes-Oxley, however,