Whistleblower Protection Afforded by Federal Law Limited by Fifth Circuit

A whistleblower is usually an individual who works for a private company involved in business with the government or a government employee who witnesses some sort of inappropriate or even illegal conduct. Usually, when a whistleblower reports this type of conduct to its employer under a federal law, that federal law contains anti-retaliation provisions to protect the employee.

With specific regard to whistleblowing, Under the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, at least five federal trial courts have found that whistleblowers still qualify for protection against retaliation even if they did not report the misconduct to the government, but instead only reported it to their employer.* In a recent decision by the United States Court of Appeals for the Fifth Circuit, the appellate court held differently.*

In Asadi v. G.E. Energy (USA), L.L.C., the Fifth Circuit held that an employee who reported a violation of the Foreign Corrupt Practices Act violation to his employer alone did not qualify for protection as a whistleblower because he did not report the violations to the U.S. Securities and Exchange Commission.* This decision went against many lower court decisions holding the opposite and even contradicted a Securities and Exchange Commission regulation specifying that defined whistleblower as someone who reported to their employer internally or directly to the SEC.*

As one article has pointed out, when an individual is required to report to the SEC to receive whistleblower protection, his or her employer is often deprived of the opportunity to conduct an appropriate internal investigation and to remedy any potential violations of the law.* This is because, once the government becomes involved, the employer will be burdened by a government investigation at the same time.*

If you have witness potentially illegal conduct by an entity doing business with the government, please contact Audet & Partners, LLP by calling us toll free at 800.965.1461. Alternatively, please complete and submit our confidential inquiry form on the right side of this page.  Please act now, since the law may limit your right to recovery if you delay.

* http://www.forbes.com/sites/insider/2013/08/07/when-is-a-whistleblower-not-really-a-whistleblower/