Extraterritorial Application Of Dodd Frank’s Anti–Retaliation Provision

In Asadi v. G.E. Energy (USA), LLC, Civil Action No. 4:12–345, 2012 WL 2522599, at *7 (S.D. Tex. June 28, 2012), the district court held that “Dodd–Frank’s Anti–Retaliation Provision per se does not apply extraterritorially.” The claimant, a dual United States – Iraqi citizen, was employed in Jordan as the GE-Iraq Country Executive by GE Energy (USA), LLC, a wholly owned, direct subsidiary of General Electric Company. Id. at *1 * n.4.

The Asadi court held that it need not decide whether the Act’s protections extended to individuals whose disclosures were not made to the SEC. Id. at *3. Instead, the court first considered whether the Act’s anti-retaliation provision applied extraterritorially. Relying on the presumption against extraterritoriality recently applied by the Supreme Court in Morrison v. Australia Bank, Ltd., 130 S. Ct. 2869 (2010), and the Act’s explicit grant of extraterritorial jurisdiction for certain enforcement actions other than the anti-retaliation provisions, the Asadi court held that the anti-retaliation protection of the Act did not apply extraterritorially. Id. at *4.

The Asadi plaintiff argued that even if the Act’s anti-retaliation protection did not apply extraterritorially, he was eligible for protection, apparently based in large part on an e-mail from GE Energy which terminated his employment “as an at-will employee, as allowed under U.S. law” and stated that “[a]s a U.S. based employee you will be terminated in the U.S.” Id. at * 5 & n.46. In contrast to its extended discussion of extraterritorial application, the court dismissed this factual argument in a single paragraph, noting that the plaintiff admitted that “the majority of events giving rise to the suit occurred in a foreign country,” the e-mail was sent to plaintiff in Jordan, related to his employment in Jordan, and noted that a letter would be sent to his home in Jordan.” Id. at *5.

Hat tip: An outstanding article that covers the law and final regulations in comprehensive fashion is Dodd-Frank and the SEC Final Rule: From Protected Employee To Bounty Hunter, ST001 ALI-ABA 1487 (July 28-30, 2011), which was written by Littler Mendelson, P.C. lawyers John S. Adler, Edward T. Ellis, Barbara E. Hoey, Gregory C. Keating, Kevin M. Kraham, Amy E. Mendenhall, Kenneth R. O’Brian, and Carole F. Wilder. This post is partially derived from that article.

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