New York Law Journal Writes About Significance of Decision Obtained by Parzivand Law Firm Regarding Extraterritoriality of Corporate Whistleblower Retaliation Provisions
On August 29, 2017, a Parzivand Law Firm client received a landmark decision from the Administrative Review Board of the Department of Labor. The client had worked on Bagram Air Base in Afghanistan and was allegedly terminated in retaliation for reporting fraudulent activities of his company. The initial judge assigned to the case dismissed the case, because the client was not employed in the United States. The Parzivand Law Firm PLLC along with co-counsel Sehic Law challenged this ruling to the Administrative Review Board of the Department of Labor. The Administrative Review Board held that Sarbanes-Oxley’s retaliation provisions apply extraterritorially and therefore applied to the firm’s client, Gary Blanchard.
The New York Law Journal acknowledged the importance of this decision as follows:
“In a late-August decision with potentially far-reaching implications for foreign and multinational employers, the U.S. Department of Labor Administrative Review Board (ARB), held that SOX's whistleblower provisions have extraterritorial application…”
The article also acknowledged that the Blanchard case is groundbreaking precedent:
“Nevertheless, until now, federal courts, and even the Labor Department, have almost uniformly held that overseas whistleblowers have no remedy under SOX for claims of alleged wrongful conduct occurring outside the United States.”
Finally, the New York Law Journal acknowledged that corporations will have to change their practices in handling whistle blower complaints in response to Blanchard:
“Most U.S. multinationals with a concern about potential application of whistleblower law, whether of the United States or another country, are not necessarily parsing their preventive activities by determining whether the conduct at issue touches upon U.S. conduct or the laws of the United States as opposed to the laws of any other jurisdiction.
Some foreign companies, though, may have taken a less leery view of such conduct, expecting that U.S. whistleblower laws will not touch them. Blanchard undoubtedly will change this. It greatly expands the risk of U.S. whistleblower claims to all multinationals, to the extent that the conduct at issue could be considered to violate U.S. law.”