Big Changes Ahead for Whistleblower Standards

Directors & Boards


In this article, William Barry and Jonathan Kossak* discuss how the U.S. Supreme Court's decision in Digital Realty Trust, Inc. v. Somers and the proposed amendments to the U.S. Securities and Exchange Commission's (SEC's) whistleblower program have incentivized employees to report potential problems directly to the SEC. This shift creates a stronger need for corporate directors to ensure that their company's whistleblower program and culture promote internal reporting, or risk being blindsided by an SEC investigation. "Whistleblower claims pose complicated issues for public companies, particularly in light of evolving standards regarding anti-retaliation concerns," Barry and Kossak wrote. "By directing the company to implement clear procedures that sends a strong message to personnel that retaliation will not be tolerated, boards and directors can protect the company, its shareholders, and themselves."

*Former Miller & Chevalier attorney