The anti-retaliation provisions of Dodd-Frank don’t apply abroad, according to a federal appeals court decision on Thursday.
In the decision, the 2nd Circuit Court of Appeals granted the motion to dismiss a case brought by Meng-Lin Liu, a former compliance officer at Siemens China, who said he was retaliated against for reporting alleged wrongdoing.
The 2010 DoddFrank Wall Street Reform and Consumer Protection Act includes a provision that prohibits employers from retaliating against whistleblower employees who make certain protected disclosures — but doesn’t specify if this applies abroad.
“We conclude that that provision does not apply extraterritorially,” the Thursday opinion says, citing a 2010 U.S. Supreme Court decision that says that legislation does not apply abroad unless there is evidence Congress indicated otherwise. The opinion also states that “because Liu’s complaint alleges that he was a noncitizen employed abroad by a foreign company, and that all events allegedly giving rise to liability occurred outside the United States, applying the anti-retaliation provision to these facts would constitute an extraterritorial application of the statute.”
The ruling upholds an earlier ruling by a New York district court judge that Liu appealed.
In an interview with ThinkAdvisor, Thomas Gorman, a partner at international law firm Dorsey Whitney, said the court made it very clear how focused and limited this case was: a foreign worker employed abroad by a foreign corporation where all events related to the disclosures occurred abroad.
Because of the very limited extent of this case, Gorman said of the ruling, “I think it’s difficult to judge how big of an impact this case will have at this point in time.” He added that because everything was overseas, he didn’t think this case would have an effect on domestic cases.
The one effect it could have, Gorman added, is how a whistleblower reports a tip.