Ga. District Court Dismisses Dodd-Frank Whistleblower Claims

On September 30, 2020, the U.S. District Courtroom for the Northern District of Georgia granted an employer’s movement to dismiss a Dodd-Frank whistleblower declare on the bottom that the alleged whistleblower didn’t complain to the SEC previous to his termination. The court docket additionally granted Plaintiff’s SOX whistleblower declare as in opposition to three associates of Plaintiff’s employer, holding that Plaintiff had didn’t exhaust administrative treatments as to these defendants as a result of he didn’t specify the allegedly wrongful conduct attributable to every of them in his administrative grievance. Slawin v. Financial institution of America Service provider Companies., et al., No. 19-cv-04129 (N.D. Ga. Sept. 30, 2020).

Background

Plaintiff, a former Vice President and Operations Management Officer on the Firm, filed a whistleblower retaliation motion in opposition to Firm, its mum or dad, and two joint venturers (the “non-Firm Defendants”), alleging his employment was terminated in retaliation for his complaints relating to Firm’s purported failure to adjust to Fee Card Business (“PCI”) requirements. Particularly, he alleged that the Firm, an entity that offered fee processing providers to different corporations and municipalities, not solely didn’t deal with customers’ private knowledge in compliance with PCI requirements, but additionally knowingly misled its prospects into believing that it was, in reality, PCI compliant. Following his termination, Plaintiff filed whistleblower retaliation complaints with the SEC and OSHA, alleging wrongful conduct by the Firm however solely naming the remaining defendants within the context of explaining their relationship to the Firm.

All 4 Defendants moved to dismiss, with the Firm shifting as to Plaintiff’s Dodd-Frank and CFPA claims, and the three remaining defendants looking for dismissal of the complete grievance as in opposition to them. Particularly, Defendants argued that Plaintiff’s Dodd-Frank declare ought to be dismissed as a result of he didn’t make a report back to the SEC previous to his termination, and his CPFA declare ought to be dismissed as a result of Defendants didn’t qualify as “lined individuals” or “service suppliers” below that statute as a result of they didn’t present providers to “prospects.” The three non-Firm Defendants additional argued that Plaintiff’s SOX and CFPA claims ought to be dismissed as to them as a result of Plaintiff didn’t exhaust his administrative treatments by not attributing any alleged conduct to them in his SEC or OSHA complaints.

Ruling

Counting on the Supreme Courtroom’s determination in Digital Realty Tr., Inc. v. Somers, 138 S. Ct. 767 (2018) (our put up on that call is right here), the court docket held that as a result of Plaintiff didn’t present data to the SEC earlier than his termination, he didn’t qualify as a “whistleblower” below Dodd-Frank on the time of the alleged retaliation. Accordingly, the court docket dismissed Plaintiff’s Dodd-Frank declare as to all Defendants.

Equally, the court docket granted the non-Firm Defendants’ movement as to Plaintiff’s SOX declare, holding that Plaintiff had didn’t exhaust his administrative treatments as to them. Particularly, counting on the Eleventh Circuit’s unpublished determination in Smith v. Psychiatric Sols., Inc., 358 Fed. Appx. 76, 78 (11th Cir. 2009), wherein that court docket affirmed a call discovering lack of exhaustion in opposition to defendants not named as respondents within the administrative grievance. After particularly noting that it didn’t learn Smith as adopting a per se rule requiring naming a SOX defendant as a respondent in an administrative grievance to exhaust treatments as to that defendant, the court docket famous that the few references to those defendants in Plaintiff’s OSHA Criticism had been inadequate.

Implications

This determination serves as a reminder that Dodd-Frank’s anti-retaliation provisions are solely triggered the place a plaintiff makes a pre-termination exterior report back to the SEC. It additionally highlights an avenue to hunt dismissal of a SOX whistleblower retaliation grievance naming a number of company defendants the place the plaintiff doesn’t sufficiently specify in an administrative grievance alleged wrongful acts dedicated by every defendant.