The United States District Court for the Southern District of New York dismissed Berman’s suit, which claimed that his termination was against the Dodd-Frank Wall Street Reform and Consumer Protection Act’s whistleblower protection provision. The District Court argued that the provision only applies to those employees who report violations to the SEC not those who only report internally, as Berman’s case. The appeal reflects the recurring issues concerning the statutory interpretation of different provision terms of the same interpretation.
Plaintiff-Appellant Daniel Berman worked at Neo@Ogilvy LLC as the Finance Director. In January 2014, Berman filed a lawsuit against the Defendant-Appellee Neo and WPP for discharging him after reporting an accounting fraud he discovered in the company. Berman claimed that the discharge was inconsistent with the whistleblower protection provision of the Dodd-Frank Act, GAAP, and Sarbanes-Oxley. He also reported the allegations to the WPP Committee after he was terminated. After six months of termination after the end of his limitations period on his claims on Sarbanes-Oxley, Berman reported the violation to the SEC.
Ruling on the defendants’ motion, Magistrate Judge Sarah wrote a Report & Recommendation (“R&R”) which established that Berman is eligible to be considered as a ‘whistleblower’ according to the Dodd-Frank Act’s subdivision (iii), section 21F(h) (A) (I). However, the magistrate dismissed the retaliation claims due to legal insufficiency. Subsequently, the District Court disagreed with the ruling basing on whistleblower definition in subsection 21F (a) (6) and argued that subdivision (iii), section 21F (h) (A) (I) only protects the individuals who report the allegations to the SEC. the ambiguity in the relevant provisions of the act in question validates deference to the SEC’s interpretative legislation that is in line with Berman’s interpretation of the act. Additional proceedings were, consequently, remanded.