No Protection For Whistleblower In Overseas Tax Case

The Fifth Circuit Court of Appeals said that an employee was not engaging in protected activity when he reported a transfer pricing scheme and under-reporting of income for tax purposes to Columbian authorities. His employer was the subsidiary of a company listed on a U.S. exchange, and the whistleblower claim was made under the Sarbanes-Oxley Act. However, the court held that the employee “did not provide information regarding conduct that he reasonably believed violated one of the six provisions of U.S. law enumerated in § 806; rather, he provided information regarding conduct that he reasonably believed violated Colombian law.” In their post, Orrick, Herrington & Sutcliffe attorneys Mike Delikat and Renee Phillips call this case “a significant victory for U.S. multinationals as it will help to close the floodgates of whistleblower litigation involving alleged retaliation for reporting violations of non-U.S. laws.”