* Court: SEC notice not needed before suing under Dodd-Frank
* WPP's Neo@Ogilvy unit was sued over executive's firing
* U.S. courts divided over scope of whistleblower protection (Adds details from majority and dissenting opinions, comments,case citation, byline)
By Jonathan Stempel
NEW YORK, Sept 10 (Reuters) - A divided U.S. appeals courton Thursday made it easier for some corporate whistleblowers tosue over alleged retaliation, raising the prospect that the U.S.Supreme Court may need to address the issue.
By a 2-1 vote, the 2nd U.S. Circuit Court of Appeals in NewYork revived a lawsuit in which Daniel Berman, a former financedirector at the Neo@Ogilvy unit of advertising company WPP Plc, claimed he was fired because he reported accountingirregularities to his superiors.
Circuit Judge Jon Newman accepted the U.S. Securities andExchange Commission's view that Berman could seek whistleblowerprotection under the 2010 Dodd-Frank financial reforms eventhough he did not report his concerns to the SEC before hisfiring.
Lower courts have been divided over whether there is areporting requirement, and the 5th U.S. Circuit Court of Appealsin New Orleans in 2013 said one exists. The Supreme Court oftenreviews issues where circuit courts are split.
"From the employer perspective, it raises the stakes and theimportance of avoiding retaliation claims," said Jill Rosenberg,an employment law partner at Orrick, Herrington & Sutcliffe."This is an issue the Supreme Court will have to decide."
Neo@Ogilvy, its lawyers and Berman's lawyers did notimmediately respond to requests for comment. The 2nd Circuitcovers New York, Connecticut and Vermont.
At issue was a last-minute Dodd-Frank insertion creating aprivate cause of action for whistleblowers whose employersretaliate against them for lawfully providing information to theSEC or making protected disclosures under the Sarbanes-Oxleygovernance law.
Berman said he was fired in April 2013 after uncoveringsuspected fraudulent transactions, including delayed paymentsand improperly recognized revenue. He went to the SEC six monthslater and sued in January 2014.
In December, U.S. District Judge Gregory Woods in New Yorkdismissed Berman's lawsuit, saying Dodd-Frank's "plain language"required whistleblowers to tell the SEC about alleged securitieslaw violations before suing employers.
But Newman said this would leave only "extremely limited"opportunities to pursue Dodd-Frank claims, whose statute oflimitations is longer than Sarbanes-Oxley's.
Newman said some whistleblowers might fear a "substantial"risk of retaliation by going to the SEC first, while others,including auditors and lawyers, cannot report wrongdoing to theSEC at all before telling their employers.
"We think it doubtful" that Congress intended the law to beread so narrowly, Newman wrote.
Circuit Judge Dennis Jacobs dissented, saying the law shouldnot be twisted because the SEC thought it "sub-optimal," andthat whistleblowers still enjoyed Sarbanes-Oxley protections.
"No markets collapse, no castles fall," he wrote. "A shorterstatute of limitations may be inconvenient for some plaintiffs,but it does not threaten the entire statutory scheme."
The appeals court returned the case to Woods to reviewwhether Berman's retaliation claims were legally sufficient.
The case is Berman v Neo@Ogilvy LLC et al, 2nd U.S. CircuitCourt of Appeals, No. 14-4626. (Reporting by Jonathan Stempel in New York; Editing by ChizuNomiyama and Lisa Von Ahn)
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