DOL Confirms SOX Whistleblower Protections Do Not Apply Extraterritorially

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At a time when the extraterritorial reach of U.S. regulations seems to grow at a rate faster than the economy, U.S. employers breathed a sigh of relief when the U.S. Department of Labor’s Administrative Review Board (ARB) confirmed by a 3-2 vote that the whistleblower provision of Title VIII of the Sarbanes-Oxley Act (SOX) has no extraterritorial application.

In Villanueva v. Core Labs. NV, Saybolt de Colombia Limitada, ARB Case No. 09 108 (ARB Dec. 22, 2011), the ARB affirmed a decision dismissing a whistleblower complaint, despite the fact that the alleged retaliatory decision occurred in the U.S., because the complaint involved a foreign citizen who alleged violations of foreign law by his foreign employer.

The difficulty in future cases will be determining the extent to which the essential claims at issue trigger extraterritorial application of SOX.

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