Select a locationselect a location

Legal Alerts

Search Legal Alerts
Search by date
Choose From Date
Choose To Date

Legal Alert: Second Circuit Rejects Extraterritorial Application of Dodd-Frank’s Whistleblower Anti-Retaliation Provision

August 18, 2014

On August 14, the United States Court of Appeals for the Second Circuit became the first U.S. appellate court to weigh in on the extraterritorial application of the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.1 In Liu v. Siemens, A.G.,2 the Second Circuit affirmed the U.S. District Court for the Southern District of New York’s dismissal of a whistleblower claim on the ground that Dodd-Frank’s anti-retaliation provision had no extraterritorial effect.

Liu, a Taiwanese resident, was employed as a compliance officer for a Chinese subsidiary of Siemens, AG, a German company (whose securities were traded on the New York Stock Exchange). Liu sued Siemens for firing him after he complained about the Chinese subsidiary’s allegedly corrupt business practices in Asia. The bases for the plaintiff’s claim were his disclosures to the U.S. Securities and Exchange Commission and Dodd-Frank’s prohibition on discriminating against a whistleblower for “making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002.”3

The trial court dismissed Liu’s complaint after reasoning that Dodd-Frank’s silence on the extraterritoriality question “invokes a strong presumption against extraterritoriality,” and therefore “does not apply overseas.”4 To survive a motion to dismiss, the Second Circuit required Liu to demonstrate facts showing a domestic application of Dodd-Frank or that the anti-retaliation provision is intended to apply extraterritorially.

The Court readily rejected the first alternative, finding that Liu, his employer, and all other related entities are all foreigners based abroad, the corrupt activity occurred abroad, and the retaliation occurred abroad. The alleged events revealed “essentially no contact with the United States regarding either the wrongdoing or the protected activity.”6

Thus, the Court turned to the extraterritorial application of Dodd-Frank. The Second Circuit reaffirmed that “it is a longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.”7 The Court concluded that “there is absolutely nothing in the text of the provision,…or in the legislative history of the Dodd-Frank Act, that suggests that Congress intended the anti-retaliation provision to regulate the relationships between foreign employers and their foreign employees working outside the United States.”8

Although Liu is only the second case9 addressing the extraterritoriality question under Dodd-Frank’s whistleblower anti-retaliation provision, the Second Circuit’s holding may represent the beginning of a consensus in favor of limiting Dodd-Frank’s anti-retaliation protections to employees in the United States whose claims are grounded in domestic activity.


1 Pub. L. No. 111-203, 124 Stat. 1376 (2010).

2 Case No. 13-4385, 2014 WL 3953672 (2d Cir. Aug. 14, 2014).

3 15 U.S.C. § 78u-6(h)(1)(A).

4 Liu v. Siemens, AG, 978 F. Supp. 2d 325, 329 (S.D.N.Y. Oct. 21, 2013).

5 2014 WL 3953672, at *3.

6 Id.

7 Id. at *2 (citing Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 255 (2010)).

8 Id. at *4.

9 See Asadi v. G.E. Energy (USA), LLC, No. 4:12-345, 2012 WL 2522599 (S.D. Tex. June 28, 2012), aff’d on other grounds, 720 F.3d 620 (5th Cir. 2013)). For details, please see the following Sutherland Legal Alert: Federal Court Bars Extraterritorial Application of Dodd-Frank’s Anti-Retaliation Provision to Whistleblowers Employed Abroad (Oct. 23, 2012),

If you have any questions about this Legal Alert, please feel free to contact any of the attorneys listed under 'Related People/Contributors' or the Sutherland attorney with whom you regularly work.

Related Practices/Industries

Our Story

Eversheds Sutherland is an international law firm helping the Fortune 100, industry leaders, sector innovators and business entrepreneurs solve their biggest challenges and reach their business goals. Dedicated to unfaltering excellence in client service, we are known for our business savvy and industry intelligence, providing creative and custom solutions for each of our clients. Industry and business experience makes the difference for our clients.

click to watch Videocast: FINRA’s 2016 Disciplinary Program:  “YUUUGE” Fines May Propel 2016 to Record-Setting Year
Videocast: FINRA’s 2016 Disciplinary Program:  “YUUUGE” Fines May Propel 2016 to Record-Setting Year
Washington, DC
Adam C. Pollet, Associate
Washington, DC
© 2017 Eversheds Sutherland (US) LLP
Add this page to MYBRIEFCASE
News/Commentary - Legal Alert: Second Circuit Rejects Extraterritorial Application of Dodd-Frank’s Whistleblower Anti-Retaliation Provision
Save ChangesDownload MYBRIEFCASEClear All