Washington, D.C. December 22, 2015. On December 8, 2015, the Eastern District of Tennessee dismissed a whistleblower’s claims, finding that the Plaintiff was not entitled to protection under the whistleblower provisions of the Dodd-Frank Act. Verble v. Morgan Stanley Smith Barney LLC et al., 3:15-cv-00074 (E.D. Tenn. Dec. 8, 2015).  The court’s decision further divides the split amongst circuits regarding the scope of the Dodd-Frank’s whistleblower protection provision.

The whistleblower, John S. Verble, was a financial advisor at Morgan Stanley who assisted the FBI in an investigation against the company as a confidential informant. He was terminated in 2013 and then filed his claim for whistleblower retaliation under the Dodd-Frank Act.

The Court held that reporting to “governmental authorities other than the Commission” and making reports to internal compliance departments is not protected under Dodd-Frank.

“This ruling is at war with whistleblowers,” stated National Whistleblower Center Executive Director Stephen M. Kohn. He explained, “It undermines corporate compliance programs and threatens every employee who raises concerns with termination. Under this ruling I advise whistleblowers to use the SEC’s confidential and anonymous reporting program when they want to report violations.”

“By discouraging employees from making internal reports, corporate America is cutting off its nose to spite its face,” Kohn surmised.