The Sarbanes-Oxley Act [pdf] (“SOX”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) both include protections for employees who blow the whistle on corporate fraud. One question that remains unsettled is whether employees who are outside the United States can sue for retaliation if they are terminated in retaliation for reporting corporate fraud.
Courts answering this question regarding the anti-retaliation provisions of SOX have largely decided the question based on the citizenship of the employee, among other factors. U.S. citizens who work abroad for U.S. public companies or subsidiaries of U.S. public companies have been allowed to pursue lawsuits under SOX, whereas, foreign citizens in the same position have not been permitted to seek remedies under SOX.
Unlike SOX cases, the one case to address this issue regarding the Dodd-Frank Act, Asadi v. G.E. Energy (USA), LLC, has not extended extraterritorial application to a U.S. citizen working abroad for a U.S. public company even where the company had explicitly invoked the U.S. at‑will employment law when terminating the employee. However, this case is currently pending appeal in the Fifth Circuit. Further, it is unclear whether other courts would arrive at the same determination. Employers are best advised to make employment decisions based upon the employee’s performance or the Company’s business needs without regards to the employee’s whistleblowing conduct.