On July 17, 2013, the Fifth Circuit issued the first circuit court decision interpreting Dodd-Frank’s anti-retaliation provision.  In Asadi v. G.E. Energy (USA), L.L.C., the Fifth Circuit held that, to be protected under Dodd-Frank’s anti-retaliation provision, an individual must be a “whistleblower,” which is defined by the statute as an individual who has made a report to the SEC. Notably, this holding directly conflicts with the SEC’s regulations interpreting the Act, as well as five district court decisions that had all held that employees who make internal reports to company management are protected under Dodd-Frank even if they did not make reports to the SEC. Rejecting these analyses, the Fifth Circuit based its decision on the plain wording of the statute, which it found to be unambiguous in protecting only “whistleblowers” as defined by the Act.

Notably, the Fifth Circuit decided the case on different grounds than the district court, which held that Dodd-Frank’s anti-retaliation provision did not apply extraterritorially to Asadi, who worked in Jordan. The Fifth Circuit did not address that issue on appeal, resting its decision solely on the definition of whistleblower under the statute.

The decision is spot on in its analysis, and is a welcome development for employers and defense side whistleblower attorneys who have all along argued that Dodd-Frank’s anti-retaliation provisions were clear in only applying to “whistleblowers” who report concerns to the SEC.  With hope, Asadi will stem the tide of decisions holding that Dodd-Frank’s anti-retaliation provision covers internal reporting.