Digital Realty Trust, Inc., a San Francisco, California-based REIT, terminated Paul Somers, vice president, portfolio management, Asia-Pacific and Europe, circa June 2014. Somers claimed that just before he was terminated, he had reported internally several times that his supervisor apparently eliminated certain internal controls mandated by the Sarbanes-Oxley Act of 2002, and concealed approximately $7 million in cost overruns. However, Somers never alerted the SEC to the suspected securities law violations. Instead, circa seven months later, Somers filed suit against Digital Realty Trust, seeking protection under the Dodd-Frank Act. Digital Reality moved to dismiss the claim on the ground that Somers was technically not a whistleblower, because he did not alert the SEC to the suspected violations prior to his termination. This case eventually made its way to the U.S. Supreme Court.

Supreme Court Decision

On Feb. 21, Justice Ruth Bader Ginsburg delivered the unanimous opinion of the court, which held the anti-retaliation provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act do not extend to employees who have reported internally but extend only to employees who have reported suspected securities law violations to the Securities and Exchange Commission, which reversed the U.S. Court of Appeals for the Ninth Circuit decision.