92 F.4th 833
9th Cir.2024Background
- Tayo Daramola, a Canadian citizen, was employed by Oracle Canada, a subsidiary of Oracle America, and worked remotely from Montreal under a contract governed by Canadian law.
- Daramola served as lead project manager for an Oracle software product implemented at U.S. colleges and believed that Oracle was defrauding customers by overpromising on the product's capabilities.
- After Daramola reported the suspected fraud to Oracle America and the SEC, he was removed from the project, had a new project offer rescinded due to his continued objections, received a downgraded performance rating, and resigned.
- Daramola sued in U.S. federal court for whistleblower retaliation under the Sarbanes-Oxley Act, Dodd-Frank Act, and California labor law.
- The district court dismissed the claims, ruling that the anti-retaliation provisions do not apply extraterritorially where the employment relationship is centered outside the U.S.
- Daramola appealed the dismissal to the Ninth Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sarbanes-Oxley and Dodd-Frank anti-retaliation provisions apply abroad | Statutes should protect foreign employees of U.S. companies for whistleblowing | Statutes are presumed to apply only domestically | They do not apply outside the U.S.; presumption against extraterritoriality not overcome |
| Whether Daramola's case involved sufficient U.S. conduct for domestic application | Work involved U.S. supervisors, servers, and U.S. clients | Core employment relationship was foreign | No permissible domestic application; relationship was in Canada |
| Whether accessing U.S.-based servers and collaborating with U.S. staff is sufficient domestic conduct | Server access and project involvement in U.S. create necessary U.S. nexus | Such connections are incidental and not dispositive | Accessing U.S. servers is insufficient to create domestic application |
| Whether California labor laws apply to Daramola's retaliation claims | Work connected to California through servers and business | Statutes presumed inapplicable to foreign occurrences | California labor laws do not apply extraterritorially in these circumstances |
Key Cases Cited
- Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247 (2010) (established the presumption against extraterritoriality in federal statutes)
- RJR Nabisco, Inc. v. European Cmty., 579 U.S. 325 (2016) (affirmed two-step analysis for extraterritoriality)
- WesternGeco LLC v. ION Geophysical Corp., 138 S. Ct. 2129 (2018) (application of focus test for statutory conduct)
- Garvey v. Admin. Rev. Bd., 56 F.4th 110 (D.C. Cir. 2022) (Sarbanes-Oxley anti-retaliation provision not applicable extraterritorially)
- Carnero v. Bos. Sci. Corp., 433 F.3d 1 (1st Cir. 2006) (similar holding for Sarbanes-Oxley in foreign employment relationship)
- Liu Meng-Lin v. Siemens AG, 763 F.3d 175 (2d Cir. 2014) (Dodd-Frank’s anti-retaliation provision does not apply extraterritorially)
- Sullivan v. Oracle Corp., 254 P.3d 237 (Cal. 2011) (California statutes presumed not to apply to out-of-state conduct unless clear intention)