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Three Dodd-Frank Whistleblower Anti-Retaliation Claims Fail

By | March 3, 2015

Courts recently issued three opinions on the whistleblower anti-retaliation provisions of the Dodd-Frank Act.

In Murray v. UBS Securities, LLC, Mr. Murray claimed he was terminated because he refused to skew his research on commercial mortgage backed securities, or CMBS. Mr. Murray brought an anti-retaliation claim under the Consumer Financial Protection Act, which is Title X of the Dodd-Frank Act.  The provision relied upon by plaintiff, 12 U.S.C. § 5567(a)(4), provides:

No covered person or service provider shall terminate … any covered employee … by reason of the fact that such employee … has … objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee … reasonably believed to be in violation of any law, rule, order, standard, or prohibition, subject to the jurisdiction of, or enforceable by, the [CFPB].

The court found the foregoing provision did not apply because at the time of the dismissal the CFPB did not regulate CMBS.

Plaintiff Tarun Kshetrapal sued former employer Dish Network LLC.  Plaintiff alleged that defendant interfered with his subsequent employment opportunities after termination. Termination occurred prior to the time the Dodd-Frank Act was signed into law.  However, the alleged interference occurred after the Dodd-Frank Act became effective, and the plaintiff sought injunctive relief with respect to continuing harassment.  The court found injunctive relief was not available under the Dodd-Frank Act.  However, plaintiff was not completely out of luck, as the plaintiff also brought a Sarbanes-Oxley anti-retaliation claim.  The court found Sarbanes-Oxley applied to former employees, and stated plaintiff could pursue that claim.

In this case, the United States District Court for the Eastern District of Missouri found that plaintiff could not proceed on a Dodd-Frank whistleblower anti-retaliation claim because plaintiff did not report the conduct to the SEC.  The courts are currently split on this issue.

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