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U.S. whistleblower law doesn’t protect overseas workers

On Behalf of | Jan 10, 2023 | Uncategorized, Whistleblower Protection

A three-judge panel at the D.C. Circuit Court of Appeals rejected an appeal by a former Morgan Stanley lawyer based in Asia who claims he was forced to resign. The judges again determined that whistleblower protections enjoyed in the U.S. do not apply to employees working overseas for American-based companies. The court ruled on December 23 that federal law does not apply to overseas operations and the lawyer’s situation.

The claim

The lawyer claimed he was dismissed after raising concerns about what he believed to be illegal activities by Morgan Stanley employees that mainly took place outside the U.S. He believed that the company’s actions violated the Sarbanes-Oxley Act of 2002 (SOX), which protects against securities violations.

The ruling

However, in this case, the court ruled that SOX does not prohibit securities fraud; thus, the impact on the U.S. would be irrelevant. It further added that the critical question in applying the law is whether the employee is based in the U.S., where it has jurisdiction. This unanimous ruling follows similar rulings by the 1st Circuit of Boston and the 2nd Circuit of New York.

Whistleblowers or those contemplating reporting employer malfeasance often can get helpful guidance from attorneys that handle state or federal whistleblower protection cases involving SOX or other laws and regulations. These legal professionals can help clients get the legal and government protection they need.