Dodd-Frank does not apply overseas

Under the Dodd-Frank Act, employers cannot retaliate against employees who blow the whistle on certain improprieties. This case examines the territorial reach of that statute.

The case is Meng-Lin v. Siemens AG, decided on August 14. Plaintiff worked as a compliance officer in the health care division of Siemens China, Ltd. The New York connection to this firm was that Siemens China is a wholly owned subsidiary of Siemens AG, a German corporation with shares listed on the New York Stock Exchange. Plaintiff was shown the door after he reported that "Siemens employees were indirectly making improper payments to officials in North Korea and China in connection with the sale of medical equipment in those countries." Plaintiff sued in federal court to challenge his termination, but the case was dismissed under Rule 12. The Court of Appeals affirms, and the case is over.

The Court of Appeals (Lynch, Raggi and Lohier) says that what happened to plaintiff was a foreign event, not a domestic event, and that Dodd-Frank therefore does not provide him any redress. We presume that laws passed by Congress apply domestically. The Court quickly finds that plaintiff's retaliation was not a domestic event. Everything happened abroad. Plaintiff is a resident of Taiwan and reported the corruption to superiors in China and Germany. Superiors in China and/or Germany decided to fire him. The Court says it doesn't matter that the company had a class of securities listed on New York Stock Exchange.

The question then becomes whether plaintiff may still invoke the statute. He cannot. "There is absolutely nothing in the [statute], or in the legislative history of the Dodd-Frank Act, that suggests that Congress intended the antiretaliation provision to regulate the relationships between foreign employers and their foreign employees working outside the United States." While plaintiff's lawyer offers various arguments to get around this, the Court is not buying it, prefacing its analysis as follows: "Liu's effort to cobble together indirect, circumstantial suggestions of extraterritorial application faces powerful headwinds."