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Labor & Employment Law

: Jottings By An Employer's Lawyer

5th Circuit's View on Extraterritorial Application of SOX? Not Yet

By Michael W. Fox, Esq.

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One of the many issues still to be decided for whistle-blowing claims under Sarbanes Oxley is how far does the law extend, if at all, for conduct outside the United States.

A Colombian national who had alleged his employer, an affiliate of a U.S. company, was violating Colombian tax law hoped to find the answer to that question.

OSHA had rejected his complaint, finding that because the adverse employment actions, the denial of a pay raise and his termination, had occurred outside the U.S. it had no jurisdiction.  Following his appeal, the Administrative Law Judge agreed, finding §806 of SOX has no extra-territorial application. The Administrative Review Board agreed, primarily because there was no connection between the alleged violation of Colombian law and U.S. securities or financial disclosure law.

Undaunted,  he turned to the 5th Circuit Court of Appeals, but fared no better. Agreeing his complaint failed because it failed to allege a violation of  ?one of the six enumerated provisions of U.S. law.?

The question of extraterritorial application? A decision for a later day:
Because we affirm on this narrower ground, we need not reach the argument, advanced by the government and Core Labs, that § 806 does not apply extraterritoriality.

Full post as published by Jottings By An Employer's Lawyer on February 13, 2014 (boomark / email).

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