SEC Whistleblower Retaliation Claims
The SEC’s Whistleblower Program Protects Employees Who Report Securities Law Violations from Unlawful Retaliation
The U.S. Securities and Exchange Commission’s (SEC) Whistleblower Program allows corporate insiders to report violations of the federal securities laws in exchange for the possibility of structured protection, through the Dodd-Frank Act’s anti-retaliation provision. The program also protects whistleblowers from retaliation—although whistleblower retaliation claims can and do arise. In these cases, whistleblowers must engage with experienced legal counsel to protect their rights.
What Constitutes Retaliation Under Federal Securities Law?
For whistleblowers who report violations of the federal securities laws to the SEC, any adverse employment action qualifies as retaliation in an SEC whistleblower retaliation claim. The SEC’s FAQs state that, “an employer may not discharge, demote, suspend, harass, or in any way discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee . . . in making a whistleblower report.” Termination, demotion, and suspension are relatively self-explanatory. Examples of other forms of whistleblower retaliation include:
- Interviewing or speaking with the whistleblower about why he or she filed a report (with or without the presence of internal or external legal counsel);
- Engaging in conduct that is designed to make the whistleblower’s work environment uncomfortable or intolerable (i.e., creating a hostile work environment);
- Reducing the whistleblower’s hours or work assignments, or otherwise interfering with the whistleblower’s ability to earn a living; and,
- Taking or threatening to take other adverse personnel actions that would negatively impact the whistleblower’s employment or employment prospects.
For employees who have their employer’s best interests in mind, it can be difficult to come to terms with the need to blow the whistle. However, once you make the decision to report your employer’s violation(s) of the federal securities laws to the SEC, you are protected against any form of retaliation. If you are experiencing any of the adverse employment consequences listed above after blowing the whistle, we encourage you to speak with one of our attorneys as soon as possible.
The SEC’s Stance on Whistleblower Retaliation
The SEC takes whistleblower retaliation claims seriously. The Commission understands that whistleblowers serve an essential role in bringing otherwise-unknown securities law violations to the government’s attention, and it does not want to discourage individuals from coming forward.
In fact, the SEC’s whistleblower program is designed to ensure that whistleblowers and their complaints are handled confidentially. As a result, if you are experiencing retaliation at work, it is worth considering whether your superior’s conduct is based on the mere suspicion that you may have blown the whistle rather than the knowledge that you filed a whistleblower claim. Even in this situation, however, you are entitled to protection, and you should speak with a lawyer about your legal rights.
The Importance of Experienced Legal Representation When Facing Retaliation as an SEC Whistleblower
If you have experienced retaliation after reporting your employer’s violation(s) of the federal securities laws to the SEC, you should consult with a lawyer about your legal rights promptly. This is important for two main reasons.
First, as we just discussed, you are entitled to protection. You should not have to deal with the consequences of blowing the whistle, and you should not be forced out of your job simply because you did the right thing.
Second, if you have already filed a claim with the SEC, then you most likely have the right to file a retaliation claim as well. If you have not yet filed a claim, then you may be facing a difficult situation. While you may still be entitled to protection (as discussed above), it will be more challenging to prove that you are entitled to protection as a whistleblower.
What Should You Do if You Are Facing Retaliation as an SEC Whistleblower?
If you are facing retaliation as an SEC whistleblower, what should you do? Here are five key steps:
- Document Everything – As a whistleblower, it is important that you document everything. This includes both documenting the violation that you uncovered and documenting any retaliation you experience. While the SEC provides confidential whistleblower protection, you cannot simply rely on the SEC to protect you. You need to protect yourself as well.
- Do Not Engage – If your employer or supervisor is trying to force you out, do not engage. Do not give your employer any reason to terminate your employment, and do not voluntarily give up your job. Even if this means putting up with unfair or discriminatory treatment, this is what you need to do for the time being.
- Continue Performing Your Job to the Best of Your Ability – As an employee, you should continue doing your job to the best of your ability. Continue coming to work, continue submitting your timesheets, and continue communicating with your employer as necessary. You want to make it patently obvious that any adverse employment action you experience is retaliation for filing a whistleblower claim.
- Consult with a Lawyer – You should speak with a lawyer as soon as possible. Your lawyer will be able to explain your legal rights, help you make informed decisions, and work on your behalf to protect your job.
- Be Prepared to Take Legal Action if Necessary – Even if you are not prepared to file a lawsuit against your employer right now, you need to be prepared to take legal action if necessary. This means that you need to be prepared to work with your lawyer, and you need to be prepared to share all of the information you have regarding your circumstances.
FAQs: What SEC Whistleblowers Need to Know Before Filing Retaliation Claims
What constitutes retaliation under federal securities law?
Retaliation includes any adverse action taken against a whistleblower by their employer in response to a lawful whistleblower complaint. Retaliatory actions can include termination, demotion, suspension, and harassment among others.
How does the SEC handle whistleblower retaliation claims?
The SEC takes whistleblower retaliation claims seriously. The Commission understands that whistleblowers serve an essential role in bringing otherwise-unknown securities law violations to the government’s attention, and it does not want to discourage individuals from coming forward. The SEC’s whistleblower program is designed to ensure that whistleblowers and their complaints are handled confidentially. As a result, if you are experiencing retaliation at work, it is worth considering whether your superior’s conduct is based on the mere suspicion that you may have blown the whistle rather than the knowledge that you filed a whistleblower complaint. Even in this situation, however, you are entitled to protection, and you should speak with a lawyer about your legal rights.
Can I file a retaliation claim even if the company didn’t violate securities laws?
Yes, you can file a retaliation claim even if the company didn’t violate securities laws. As the SEC explains, “an individual may be subject to retaliation for whistleblowing that is protected by another provision of law. In such circumstances, the individual may be able to bring a claim under another provision of law and we may provide assistance in determining other avenues of redress.” If you believe that your employer is retaliating against you based on the suspicion that you may have reported a violation of the federal securities laws, when in fact this is not the case, we encourage you to contact us so that we can help you make an informed decision regarding your next steps.
Does the SEC protect whistleblowers who reported violations internally?
Yes, the SEC protects whistleblowers who reported violations internally. As the SEC explains, “an individual may be subject to retaliation for whistleblowing that is protected by another provision of law. In such circumstances, the individual may be able to bring a claim under another provision of law and we may provide assistance in determining other avenues of redress.” If you believe that your employer is retaliating against you based on the suspicion that you may have reported a violation of the federal securities laws, when in fact this is not the case, we encourage you to contact us so that we can help you make an informed decision regarding your next steps.
What should I do if I have experienced retaliation after filing an SEC whistleblower claim?
If you have experienced retaliation after filing an SEC whistleblower claim, you should speak with a lawyer about your legal rights right away. Your lawyer will be able to explain your legal rights, help you make informed decisions, and work on your behalf to protect your job.
Speak with an SEC Whistleblower Lawyer at Spodek Law Group
If you have questions about SEC whistleblower retaliation protection, we encourage you to schedule a free and confidential consultation at Spodek Law Group. We represent SEC whistleblowers nationwide. To speak with our legal team about your situation in confidence, please call 212-300-5196 or tell us how we can help online today.
