[00:00:01] Speaker 03:
Case number 21-1182, Christopher Garvey, petitioner, versus Administrative Review Board, United States Department of Labor.

[00:00:10] Speaker 03:
Mr. Garvey for the petitioner, Mr. Fuentes for the respondent, Mr. Camilli for the interviewer.

[00:00:22] Speaker 04:
Good morning, Mr. Garvey.

[00:00:23] Speaker 02:
You may proceed when you're ready.

[00:00:38] Speaker 05:
More than your owners, may it please the court.

[00:00:40] Speaker 05:
My name is Christopher Garvey.

[00:00:41] Speaker 05:
I'm here as a practitioner.

[00:00:46] Speaker 05:
I'm very grateful for the opportunity to be here this morning and to answer your questions, albeit without the representation account.

[00:00:55] Speaker 05:
I'd like to start, if I may, by summarizing the issues that bring us before the court.

[00:00:59] Speaker 05:
You have to speak up just a little bit.

[00:01:02] Speaker 05:
I'd like to start by summarizing these issues and bring this before the court, and I'd like to reserve two minutes for rebuttal if I may.

[00:01:09] Speaker 04:
In terms of the question whether the conduct at issue here was domestic or foreign, you only, I think in your reply brief, do you mention that the statute is primarily a securities law and that therefore because the protection is protection,

[00:01:29] Speaker 04:
of the integrity of the U.S.

[00:01:31] Speaker 04:
stock exchange.

[00:01:33] Speaker 04:
The locus of the conduct is domestic.

[00:01:35] Speaker 04:
Did you make that argument anywhere before the reply brief?

[00:01:41] Speaker 05:
I think so, Your Honor.

[00:01:42] Speaker 05:
I think from the outset, I've made fear that the way to interpret Section 806 is in the context of the greater regulatory scheme to which it contributes.

[00:01:57] Speaker 05:
which is Sarbanes-Oxley, I think I make the crux of where the board went wrong, Your Honor, is precisely interpreting this statute as a domestic labor law focused exclusively on the employee and the terms and conditions of employment.

[00:02:20] Speaker 05:
But I think in doing so, Your Honor, it has failed to take account of the fact

[00:02:27] Speaker 05:
Section 806 is an integral part of the Sarbanes-Oxley Act.

[00:02:34] Speaker 05:
And Sarbanes-Oxley, Your Honor, passed in 2002 in the wake of Enron, Worldcom, and Global Frosting is unmistakably a securities statute, an anti-fraud measure.

[00:02:48] Speaker 05:
And it contains numerous provisions, but all of those provisions contribute to a single purpose.

[00:02:59] Speaker 05:
that the board has failed to give any weight what so ever.

[00:03:10] Speaker 05:
To issues to be protected activity and the

[00:03:24] Speaker 05:
conduct by the party subject, the covered entity subject to the prohibition on retaliation.

[00:03:37] Speaker 05:
I would argue, Your Honours, that compensation to an employee is not here the focus of the statute.

[00:03:54] Speaker 05:
Compensation to an employee is similar, in this case, to the reward to an informant.

[00:04:02] Speaker 05:
It serves a purpose, which is to encourage people with far-standing knowledge of fraud to raise their hand and step forward.

[00:04:13] Speaker 05:
But it is, to look at it exclusively as a domestic labor law, I think, entirely misses the point you're on.

[00:04:28] Speaker 04:
You focused on the fact that you came to the United States, on the fact that communicated with the legal department in the United States.

[00:04:39] Speaker 04:
I think the ALJ determination is in the passive voice about who made the decisions that you allege were retaliation.

[00:04:48] Speaker 04:
Were they made by Morgan Stanley US, or were they made by the Hong Kong subsidiary?

[00:04:55] Speaker 04:
And what were the decisions that you allege?

[00:04:58] Speaker 04:
constituted constructive discharge or retaliation?

[00:05:02] Speaker 05:
Sure.

[00:05:04] Speaker 05:
Those decisions were all made here in the United States.

[00:05:07] Speaker 05:
At least they were approved and initiated.

[00:05:10] Speaker 05:
My supervisors, I reported directly, but it was located in Hong Kong.

[00:05:15] Speaker 05:
I've never challenged that, Your Honor.

[00:05:17] Speaker 05:
But I reported directly to people here in the United States, in New York,

[00:05:23] Speaker 05:
And the retaliation that I suffered, one was a reduction in pay.

[00:05:30] Speaker 05:
That reduction in pay was authorized and agreed here in, it was agreed in New York by Morgan Stanley's chief legal officer.

[00:05:45] Speaker 04:
Was it initiated in Hong Kong?

[00:05:51] Speaker 05:
I guess it's a complicated search.

[00:05:53] Speaker 05:
The pay, Morgan Stanley's pay structure is such that all decisions around pay are controlled in the US.

[00:06:05] Speaker 05:
I believe it would have been a combination.

[00:06:07] Speaker 05:
It's in the record.

[00:06:12] Speaker 05:
The reduction in pay was agreed in order to quote unquote deliver a message.

[00:06:20] Speaker 04:
who's who are you quoting?

[00:06:23] Speaker 05:
It this is, um.

[00:06:26] Speaker 05:
I'll find the reference.

[00:06:28] Speaker 05:
And if you don't mind when I come back in rebuttal, but it's in the joint appendix, your honor, it's a It's an email that was exchanged on Christmas Eve, December 24th.

[00:06:39] Speaker 05:
2015 between, um,

[00:06:46] Speaker 05:
Morgan Stanley's legal department's chief operating officer, James Murray, Chris Liddell, who is one of my direct supervisors, and they refer to a conversation between, I guess, approval by Eric Grossman, who is Morgan Stanley's chief legal officer.

[00:07:07] Speaker 05:
But it comes at the best, I think, of a gentleman by the name of

[00:07:12] Speaker 05:
Bill Park, who is Morgan Stanley's Chief Operating Chief International General Counsel.

[00:07:20] Speaker 05:
The other retaliation I suffered, Your Honor, was a threat to future promotion prospects.

[00:07:27] Speaker 05:
That arose in the context of raising concerns about the manipulation of the investigation into the facts that I had raised.

[00:07:36] Speaker 05:
And that retaliation, the comment that I got in response to raising those concerns was, well, you should be careful because the very people who you're accusing of being involved in the wrongdoing are the very same people you need approval from to obtain promotion.

[00:07:59] Speaker 04:
All right.

[00:08:00] Speaker 04:
I think I found the email that you're referring to, which I believe is on JA64.

[00:08:05] Speaker 04:
Thursday, December 24, 2015, it says, Phil wants to reduce Garvey.

[00:08:13] Speaker 04:
This is from James Murray.

[00:08:16] Speaker 05:
Yes, correct.

[00:08:17] Speaker 04:
To Odell.

[00:08:19] Speaker 04:
Phil wants to reduce Garvey.

[00:08:20] Speaker 04:
Thinks flat is the wrong message.

[00:08:23] Speaker 05:
Correct.

[00:08:25] Speaker 04:
I'm not sure that that's send him a message, but thinks flat is the wrong message.

[00:08:28] Speaker 04:
Eric not opposed.

[00:08:32] Speaker 04:
And Phil is where?

[00:08:35] Speaker 05:
Bill is the International General Counsel.

[00:08:38] Speaker 05:
He's based in London.

[00:08:45] Speaker 05:
And then the final piece of retaliation that I think this court should take account of is the intimidation of counsel that occurred post-termination of employment here in Washington, DC.

[00:09:00] Speaker 05:
I retained the services.

[00:09:04] Speaker 05:
I'm Katz Marshall in banks.

[00:09:07] Speaker 04:
I think the difficulty there is that retaliation that you were no longer employed and to see that as retaliation by an employer in the course of employment is the basis of the ALJ's determination was that it's not employment retaliation.

[00:09:24] Speaker 04:
It's something else.

[00:09:26] Speaker 05:
Correct, Your Honor.

[00:09:27] Speaker 05:
And I believe that's exactly the mistake because they looked at this as purely an employment-related issue.

[00:09:34] Speaker 05:
The retaliation, the interference with an employee's ability to obtain representation and to file their claims under section 806, I would argue is distinct from the merits of their claim.

[00:09:50] Speaker 05:
To allow employers like Morgan Stanley with hugely disproportionate resources and extrajudicial fat to determine which employees are entitled to file suit

[00:10:03] Speaker 05:
and to obtain representation of counsel in connection with doing so, I would argue is contrary to the spirit and intention, if not explicitly, of Section 806A2 itself, but it allows an extrajudicial plan to determine who can sue them, which I would argue, Your Honor, is an obstruction of justice, and I don't believe that that's

[00:10:29] Speaker 05:
would have been within the contemplation of Congress either for this statute or indeed any other statute whistleblower provision that Department of Labor administered.

[00:10:39] Speaker 04:
One of the major difficulties is this notion that Congress would have contemplated a Department of Labor administered

[00:10:48] Speaker 04:
whistleblower protection scheme to apply employees whose place of employment in your case is in Hong Kong, the Department of Labor would under your reading of the statute have to investigate theoretically whether people in Hong Kong were taking retaliatory action against you.

[00:11:10] Speaker 04:
They'd have to look at the, you know, claims of

[00:11:15] Speaker 04:
in a classic case, claims whether adverse action was taken based on the quality of work or not.

[00:11:25] Speaker 04:
It's a very fact-intensive and extensive kind of inquiry that can happen in retaliation cases.

[00:11:33] Speaker 04:
The Department of Labor, no indication that Congress thought the Department of Labor was going to be conducting overseas investigation.

[00:11:41] Speaker 05:
That may be the case, Your Honor, but I don't believe it's any different, frankly, to cases here.

[00:11:46] Speaker 05:
I think that the language of the statute, in my opinion, clearly and unmistakably, extends the coverage of Section 806, the company to foreign companies, with a class of securities registered under Section 12, and or affiliates whose financial information is included in the consolidated financial statements of the issuer.

[00:12:12] Speaker 05:
That's crystal clear from the language.

[00:12:14] Speaker 05:
And many of those companies, Your Honor, don't have domestic employees.

[00:12:21] Speaker 05:
To accept the board's interpretation of that language would involve significant redundancy.

[00:12:27] Speaker 05:
I think because the language would apply to a significant number of companies who do register securities under Section 12, but who don't have domestic employees.

[00:12:40] Speaker 05:
And I believe when confronted with two competing versions, two competing interpretations of the same statute, one of which involves significant redundancy and one of which doesn't, I believe this works that adopt that interpretation which avoids significant redundancy, particularly whereas in this case, the interpretation that avoids significant redundancy is

[00:13:06] Speaker 05:
consonant with the in the overall goals of the statute, which again I argue are prevent and detect and prosecute fraud to protect U. S. Investors here in the United States.

[00:13:21] Speaker 05:
I see them all right time owners.

[00:13:27] Speaker 04:
Thank you.

[00:13:28] Speaker 05:
Thank you.

[00:13:56] Speaker 01:
see when you're ready thank you your honor has made it please the court renalda fuentes for the u.s department of labor for respondent this court should affirm the administrator review board's dismissal of mr garvey's complaint for a straightforward reason section 806 of the sergeants actually act does not apply to employees whose primary or principal place employment is on foreign soil the supreme court has repeatedly held that after the clear affirmative statement from congress

[00:14:21] Speaker 01:
Courts that presume the federal statutes do not apply extraterritorially fear Section 806 does not contain such a clear affirmative statement.

[00:14:30] Speaker 04:
Why isn't the definition of listing companies that includes foreign companies that list on U.S.

[00:14:35] Speaker 04:
exchanges enough?

[00:14:37] Speaker 01:
Yes, Your Honor.

[00:14:38] Speaker 01:
We do understand that the coverage extends to some foreign employees under both Section 12 and Section 15D, as Mr. Garvey has alleged.

[00:14:45] Speaker 01:
What we're concerned with is the geographic reach of the statues, not necessarily the companies that are covered under that statue.

[00:14:52] Speaker 01:
We also contemplate a scenario where Congress considered the foreign companies to ensure that they are covered under the anti-retaliation statute if they operate within the domestic grounds of the United States.

[00:15:04] Speaker 01:
And so that's why it goes to that first step, the Morrison first step analysis, which is, is there a clear unmistakable

[00:15:12] Speaker 01:
statement from Congress that the statute is meant to apply extraterritorially.

[00:15:15] Speaker 01:
And here, there is not, because the text and the structure and the legislative history of Section 806 indicate that Congress was not concerned necessarily with the international conduct and the retaliation that, not necessarily the retaliation, the international conduct as it relates to Section 806.

[00:15:33] Speaker 04:
The counter-argument clearly is that what Congress was concerned about was the integrity of U.S.

[00:15:39] Speaker 04:
stock exchanges.

[00:15:41] Speaker 04:
And it would seem to blow a big hole in the safety net that Sarbanes-Oxley erects to say, well, if you're employing people overseas,

[00:15:53] Speaker 04:
And under your reading, they're sitting overseas, but they're actually reporting directly to US managers.

[00:15:59] Speaker 04:
They're making decisions that affect the value and the integrity of stocks that are traded on US exchanges.

[00:16:08] Speaker 04:
And although we want to encourage employees throughout publicly traded companies to speak up,

[00:16:16] Speaker 04:
and they see something unlawful, we don't want foreign employees who are located overseas to speak up.

[00:16:24] Speaker 04:
It seems to me that that creates incentives for companies to move their employees overseas and do whatever hanky-panky the Sarbanes Oxley provision was trying to put a stop to.

[00:16:35] Speaker 01:
You shared that the government's position would not be that this creates a hole that eviscerates protections that Sarbanes-Oxley was enacted to remedy.

[00:16:43] Speaker 01:
We do recognize, and we agree with Mr. Garvey, that the meta-purpose, the broader purpose of Sarbanes-Oxley is to perform a noble goal, which is to ensure that we have a regulated securities market that is safe for all investors.

[00:16:55] Speaker 04:
Is it your position that 806 obligations apply?

[00:16:58] Speaker 04:
It's just the individual employee's remedy doesn't apply?

[00:17:02] Speaker 01:
If the employees

[00:17:07] Speaker 01:
the United States and yes those protections necessarily would apply because Congress wrote the statute to apply to the retaliation of employees but did not provide extraterritorial enforcement.

[00:17:19] Speaker 04:
You just said did not provide extraterritorial enforcement and my question was is it only enforcement that's not available but is the obligation

[00:17:29] Speaker 04:
on those issuers that they can't retaliate even overseas.

[00:17:35] Speaker 04:
Department of Labor won't go after them, but they are legally obligated by U.S.

[00:17:39] Speaker 04:
law not to retaliate against those whistleblowers, or is that not

[00:17:43] Speaker 01:
Correct.

[00:17:44] Speaker 01:
The retaliation provisions, yes, do not extend to those companies necessarily under 806 to the employees that are engaged and whether primary or principal placement employment is abroad.

[00:17:54] Speaker 01:
But that doesn't stop international enforcement entirely.

[00:17:56] Speaker 01:
And that goes actually to a question that helps illuminate Section 806 entirely.

[00:18:01] Speaker 01:
When Section 806 was amended after the Morrison decision, Congress gave extraterritorial enforcement jurisdiction to the SEC to presume to perform

[00:18:11] Speaker 01:
the types of international investigations that, as Your Honor Judge Bode mentioned, the DOL is not in a position necessarily to investigate.

[00:18:19] Speaker 01:
At the same time, they amended Section 806 and did not give it explicit extraterritorial reach.

[00:18:24] Speaker 01:
And so we can surmise from that exchange and from the way that the legislation was drafted initially, that there is not extraterritorial reach.

[00:18:33] Speaker 01:
And so that is one of the facts that confirms Congress's intent.

[00:18:38] Speaker 04:
Can you be more concrete?

[00:18:39] Speaker 04:
You say that there is international enforcement.

[00:18:42] Speaker 04:
What are you citing, chapter and verse?

[00:18:45] Speaker 01:
Oh, the SEC, and forgive me, I don't have the statutory citation.

[00:18:49] Speaker 01:
The SEC has the provisions of the Dodd-Pring Act to perform international enforcement of some securities laws violations.

[00:18:55] Speaker 01:
And here, they may not be able to reach the type of retaliation claims that perhaps the whistleblower might be able to identify.

[00:19:02] Speaker 01:
But absent a clear expression from Congress that Section 806 would apply to employees' primary, principal place of employment as abroad, we would be violating that presumption.

[00:19:13] Speaker 01:
And we want a clear statement from Congress.

[00:19:15] Speaker 04:
In terms of the locus of whether it's domestic retaliation or foreign retaliation,

[00:19:23] Speaker 04:
The place where the person is employed seems to me not a very persuasive test.

[00:19:34] Speaker 04:
So under your test, if Morgan Stanley New York employs people and says, you know, having learned from remote work during the pandemic, you can be anywhere in the world you want to be, but you report to us.

[00:19:51] Speaker 04:
But if the person is in Hong Kong, it's your position where they sit in a chair at a desk in Hong Kong.

[00:20:01] Speaker 01:
My first response to that answer was that the ARB is not defined precisely what primary principal place of employment would necessarily mean in every circumstance.

[00:20:09] Speaker 01:
And they recognize there could be factual scenarios in the future that present more complicated questions.

[00:20:15] Speaker 01:
Like what?

[00:20:16] Speaker 01:
For example, an employee who may be remote or employee who is on detail, somebody whose primary principal place of employment could be in the United States.

[00:20:23] Speaker 04:
Why was Mr. Garvey not effectively on detail?

[00:20:26] Speaker 04:
He said that he reported to people in New York.

[00:20:31] Speaker 01:
Yes, and to the question of reporting, absolutely.

[00:20:34] Speaker 01:
We have ARB decisions in WHO, the First Circuit in Carnero, the Supreme Court in Cuyahogao recognizing that there can be domestic connections, including corporate decision-making, that could

[00:20:46] Speaker 01:
flowed down and affects necessarily how the employment relationship is being governed.

[00:20:51] Speaker 01:
But they're not necessarily dispositive of the question around extraterritorial reach.

[00:20:55] Speaker 04:
Corporate decisions, that's a much more general, you know, making policy decisions that, you know, tangentially affect the employee.

[00:21:01] Speaker 04:
But I take Mr. Garvey to be saying, I was working for the New York folks directly.

[00:21:07] Speaker 01:
Well, in this circumstance, Mr. Garvey was employed for the Asian subsidiary of Morgan Stanley, worked primarily in Hong Kong, had an employment agreement that was governed by the laws of Hong Kong.

[00:21:17] Speaker 01:
In fact, we want to avoid these types of foreign complex in the future.

[00:21:20] Speaker 01:
That's what animates the presumptions concerned.

[00:21:22] Speaker 01:
But here, Mr. Garvey's connections merit very similar to Carnero, the first circuit decision that was decided

[00:21:27] Speaker 01:
before the Morrison decision, which actually indicated that there was corporate decision-making, decision-makers sitting in the United States who might have made a decision to retaliate or initiated that system.

[00:21:38] Speaker 01:
And there was no extraterritorial reach for section 806.

[00:21:41] Speaker 01:
And I see that I'm out of my time, but if your honors have any further questions, I'm happy to answer.

[00:21:49] Speaker 04:
What's your best response to the,

[00:21:54] Speaker 04:
description in Mr. Garvey's brief, page 11 in Walters saying, section 806 does not protect employees for the sake of improving labor standards or conditions.

[00:22:07] Speaker 04:
Whistleblowers act on a voluntary basis.

[00:22:10] Speaker 04:
If they remain silent, their jobs are not in jeopardy.

[00:22:13] Speaker 04:
They can get along if they go along.

[00:22:15] Speaker 04:
The primary goal of section 806 is not labor protection.

[00:22:20] Speaker 04:
is to encourage employees to voluntarily take action that Congress thought was in the public interest.

[00:22:27] Speaker 04:
It's about protecting the stock market from fraud.

[00:22:34] Speaker 01:
It's just that the government doesn't disagree that a whistleblower's complaint and engagement in protected activity might somehow reduce the results of the surveillance actually as a whole.

[00:22:44] Speaker 04:
It's not incidental.

[00:22:45] Speaker 04:
It might somehow produce.

[00:22:47] Speaker 04:
We're going to keep your job safe.

[00:22:48] Speaker 04:
And because you're a happy employee, you might, you know, tell someone if something goes wrong.

[00:22:53] Speaker 04:
No, no.

[00:22:54] Speaker 04:
The whole point of it is tell us.

[00:22:58] Speaker 04:
Because the market depends on it.

[00:23:00] Speaker 04:
We live through it.

[00:23:01] Speaker 01:
Absolutely.

[00:23:02] Speaker 01:
And the legislative history indicates that Congress was concerned with domestic whistleblowing.

[00:23:06] Speaker 01:
That Congress, there was evidence in the legislative record that there was a patchwork of whistleblower protections for domestic employees that Congress sought remedy for Section 806 by creating a floor.

[00:23:16] Speaker 01:
Some states had stricter laws, some had none whistleblower protections.

[00:23:20] Speaker 01:
And so that's what animated congressional concern.

[00:23:22] Speaker 01:
And Congress had two lights at the apple, both when they enacted Servants Oxley and when they amended Section 806 to provide express extraterritorial reach.

[00:23:30] Speaker 01:
and they failed to do so.

[00:23:32] Speaker 01:
And I think that is a telling example of why this would not reach.

[00:23:37] Speaker 04:
Colleagues, questions?

[00:23:39] Speaker 04:
Roger?

[00:23:46] Speaker 03:
All right.

[00:23:47] Speaker 04:
Here for Mr. Cannelli.

[00:23:49] Speaker 03:
Thank you.

[00:23:49] Speaker 04:
Thank you.

[00:24:06] Speaker 04:
Good morning, Mr Kelly.

[00:24:07] Speaker 04:
You may proceed.

[00:24:08] Speaker 00:
May it please the court.

[00:24:09] Speaker 00:
The ARB in the first and second circuits are right to hold section 806 does not extend to employment outside the United States.

[00:24:17] Speaker 00:
And I think here it's really critical to recognize section 806 as a statute that has implications for employment in foreign countries because the Supreme Court has said in a series of cases dating back to Foley's brothers in 1949 and Aramco again in

[00:24:33] Speaker 00:
one, but this is a setting where the possibility for international friction is very high.

[00:24:39] Speaker 00:
And when you add the private right of action that's in Section 806B, that only increases.

[00:24:46] Speaker 00:
And so I think the ARB and the courts have latched on to that quality of Section 806 in characterizing its focus

[00:24:55] Speaker 00:
As being about the terms and conditions of employment and adverse personnel action rather than section.

[00:25:01] Speaker 00:
I'm sorry, the Sarbanes actually act broader purpose of protecting the integrity of the markets because Congress has at its disposal set of tools to calibrate the right amount of

[00:25:13] Speaker 00:
interference with employment relationships abroad if it thinks that for its policy objectives, it's appropriate to do so.

[00:25:21] Speaker 00:
So I just want to point out a couple of examples where Congress has done exactly that.

[00:25:25] Speaker 00:
And most notably, I think Title VII, after Aramco held that no foreign

[00:25:32] Speaker 00:
employment was covered under Title VII.

[00:25:35] Speaker 00:
Congress came back and didn't say, yes, it all is, or didn't say that all US employer subsidiaries are covered.

[00:25:43] Speaker 00:
It said that US citizens with respect to employment in foreign country are covered.

[00:25:48] Speaker 00:
And I think that that's an important limitation and the kind of limitation that Congress can draw when it's cognizant of the possibility of international discord.

[00:25:57] Speaker 04:
Is the same conduct, if it reached the level of criminal intent, reachable under Sarbanes' accent?

[00:26:09] Speaker 04:
In other words, retaliating against someone who's trying to come forward to expose fraud.

[00:26:16] Speaker 04:
My impression was that there is extraterritorial criminal jurisdiction.

[00:26:23] Speaker 00:
for whistleblowing in particular, Your Honor.

[00:26:25] Speaker 00:
I'm not sure about that.

[00:26:27] Speaker 00:
There are, as Mr. Fuentes pointed out, amendments in 2010 through Dodd-Frank to increase the SEC's power to go after fraud overseas.

[00:26:37] Speaker 00:
I'm not sure.

[00:26:38] Speaker 00:
Usually whistleblower actions like this are at the civil level and

[00:26:44] Speaker 00:
You know, there are others as well.

[00:26:46] Speaker 00:
There's one actually in Dodd-Frank.

[00:26:48] Speaker 00:
The Second Circuit has construed it as not having extraterritorial reach either.

[00:26:54] Speaker 00:
But I'm not aware of a criminal

[00:26:57] Speaker 00:
version of this particular statute.

[00:27:01] Speaker 00:
But I do think it's important not to lose sight of that private right of action.

[00:27:04] Speaker 00:
And I think when you're looking at the focus under step two of Morrison, the Supreme Court's discussion in RJR and Abisco, I think, is very instructive in going by subdivision, subsection by subsection through RICO to look at the focus.

[00:27:18] Speaker 00:
And then at Western Gecko as well, they look not only at the damages provision, but also the infringement provision to find out the focus at issue in that case.

[00:27:27] Speaker 04:
out the whether this even raises a overseas application at all.

[00:27:33] Speaker 04:
Why sounds from the allegations like the Department of Labor could just investigate Morgan Stanley in New York.

[00:27:40] Speaker 00:
I don't think that's true, Your Honor, and I think that underlying facts here about the protected activity, the alleged protected activity illustrate the difficulties with litigating this kind of case, because a lot, if it went to the merits, say, in front of the agency, a lot will turn on the nature of the report and whether

[00:27:58] Speaker 00:
Morgan Stanley took it seriously or whether it decided to sweep it under the rug and retaliate against Mr. Garvey.

[00:28:06] Speaker 00:
We obviously don't think that that's what the facts would show.

[00:28:08] Speaker 00:
But the underlying events here concern investments in a power plant in India and investments in China.

[00:28:14] Speaker 00:
These are very complicated international transactions that would implicate the merits of the claim.

[00:28:22] Speaker 00:
to see whether there's a causal connection between the protected activity and the alleged retaliation.

[00:28:27] Speaker 00:
And so I think the issues get very complicated very quickly.

[00:28:32] Speaker 00:
And that explains why the possibility for international friction is not just at the level of the employment relationship, but also investigating the underlying protected activity.

[00:28:44] Speaker 04:
I'm not sure I entirely follow that in this case.

[00:28:46] Speaker 02:
I'm not following that at all because it's complicated.

[00:28:48] Speaker 02:
Suppose he was sitting in the U.S.

[00:28:49] Speaker 02:
and there's no doubt it's not extraterritorial.

[00:28:53] Speaker 02:
He's here.

[00:28:53] Speaker 02:
he's making the same kinds of claims.

[00:28:55] Speaker 02:
You're going to come back and say, well, some of them are complicated and involve international companies?

[00:29:00] Speaker 00:
No, I'm sorry.

[00:29:01] Speaker 00:
I didn't mean to suggest that.

[00:29:03] Speaker 00:
Obviously, that's an easier case with respect to the regulation of the employment relationship because that he wouldn't have a contract governed by Hong Kong law as he does here.

[00:29:12] Speaker 00:
I'm just saying that I don't want to give the impression that the

[00:29:18] Speaker 00:
international character of the underlying events here are only superficial.

[00:29:25] Speaker 00:
He had a portfolio involving Asian Pacific legal issues.

[00:29:31] Speaker 00:
And he said, J.A.

[00:29:32] Speaker 00:
296, that Morgan Stanley did not rely on him for the delivery of any US law advice.

[00:29:39] Speaker 00:
So I just wanted to give, didn't one of the courts have the impression that this case is really about US law 100%?

[00:29:47] Speaker 04:
But what I'm taking from your answer is that if it happened that Mr. Garvey were doing the same work and actually sitting in the offices in New York, that somehow the Department of Labor couldn't feasibly do, consistent with international comedy, do an investigation, but I gather that it would be required to.

[00:30:12] Speaker 00:
No, I think that's because the focus of Section 806 is on the employment action itself.

[00:30:17] Speaker 00:
The Department of Labor would not be investigating the underlying alleged fraud.

[00:30:22] Speaker 00:
That would be under the SEC's purview, if anything.

[00:30:24] Speaker 00:
So I actually think that this helps support our interpretation of the focus of Section 806.

[00:30:29] Speaker 04:
But because the Department of Labor's standard just looks to where he sits, it didn't inquire whether the retaliation alleged here was actually emanating from New York, taking place in New York.

[00:30:42] Speaker 04:
some of this record evidence suggests, and Mr. Garvey claims is the case.

[00:30:48] Speaker 00:
Well, I think in any of these cases where the employee sits will be part of where the retaliation occurs because you cannot have.

[00:30:55] Speaker 04:
But that's what they're, they limit their inquiry to that.

[00:30:57] Speaker 04:
And that seems wrong.

[00:30:58] Speaker 04:
Even under your analysis, it just seems clunky and narrow and not really indicative of, of the question that, that extraterritoriality or not requires us to ask.

[00:31:11] Speaker 00:
I don't think so, your honor.

[00:31:12] Speaker 00:
And I think, I mean, remember that Mr. Garvey is alleging primarily a constructive discharge claim.

[00:31:17] Speaker 00:
So he resigned from Hong Kong.

[00:31:20] Speaker 00:
And so the alleged retaliation, if any, occurred in Hong Kong, not in the United States.

[00:31:25] Speaker 00:
And many of these cases, the Hu case, the Ulrich and Asadi case, even some of the Carnero case involved levels of oversight in the United States.

[00:31:37] Speaker 00:
even though the employee was located abroad.

[00:31:39] Speaker 00:
And all of those cases draw the same line that we're advocating for here.

[00:31:43] Speaker 02:
In your mind, what's the most telling consideration to show that this is extra territory?

[00:31:49] Speaker 00:
I think the location of the work site, which is where the alleged adverse effect on terms and conditions of employment was felt, is the most important consideration.

[00:32:03] Speaker 04:
Thank you.

[00:32:03] Speaker 00:
Thank you, Your Honor.

[00:32:08] Speaker 04:
Did Mr. Garvey have any remaining time?

[00:32:11] Speaker 04:
All right, Mr. Garvey, we will give you two minutes for rebuttal.

[00:32:25] Speaker 05:
Thank you, Your Honors.

[00:32:26] Speaker 05:
I'd just like to quickly address a couple of points that my friends have raised.

[00:32:35] Speaker 05:
I think is a little bit of a red herring here.

[00:32:38] Speaker 05:
I'm not seeking reinstatement.

[00:32:42] Speaker 05:
And I believe court has ample flexibility in what relief to award.

[00:32:52] Speaker 05:
And so I don't believe that would be an impediment to hearing this case and accepting jurisdiction.

[00:33:02] Speaker 05:
I'd like to point out, too, that the Carnero decision, Your Honor, was ultimately rendered on the basis that there was, in fact, no, there was no protected activity under the statute because of concerns that Mr. Carnero raised, in fact, about violations of laws of Brazil and potentially Argentina, and not U.S.

[00:33:28] Speaker 05:
laws.

[00:33:29] Speaker 05:
I raised here

[00:33:30] Speaker 05:
concerns directly about U.S.

[00:33:35] Speaker 05:
law and domestic fraud, which is precisely the interest, I would argue, that this statute serves to protect.

[00:33:46] Speaker 05:
And finally, Your Honor, I would just address the point that the statute itself in 2010, when Congress amended the Sarbanes-Oxley Act in 2010,

[00:34:01] Speaker 05:
I believe that amendment, it introduced language which said that it clarified what had become what was unclear as a result of Carnero, did our subsidiaries include it or not?

[00:34:14] Speaker 05:
The formulation that Congress used very specifically for the second time running extends to foreign company.

[00:34:23] Speaker 05:
Formulation, Your Honor, is that it includes subsidiaries or affiliates

[00:34:32] Speaker 05:
statements of the issuer.

[00:34:35] Speaker 05:
That formulation is a technical formulation, does not respect boundaries, Your Honor.

[00:34:40] Speaker 05:
It does not respect national boundaries.

[00:34:42] Speaker 02:
But that doesn't reach all employees who are working overseas.

[00:34:45] Speaker 02:
It reaches all employees who are subsidiaries that fit that definition, that's all.

[00:34:51] Speaker 05:
Well, Your Honor, the Supreme Court's case of Lawson versus FMR, which also interpreted the language of Section 806, concluded that

[00:35:02] Speaker 05:
statute refers to a covered entity.

[00:35:06] Speaker 05:
It refers to that covered entity.

[00:35:08] Speaker 05:
It imposes an obligation on that covered entity not to retaliate against its own employees.

[00:35:16] Speaker 02:
I mean, that's a very strange way for Congress to amend the statute to get the result that you're now urging.

[00:35:22] Speaker 02:
Because all you have to do is say extraterritoriality is

[00:35:29] Speaker 02:
in discussion to do it by saying these companies who are registered, certain subsidiaries, employees in that situation will have protection and that's it.

[00:35:41] Speaker 02:
That's a real stretch.

[00:35:42] Speaker 02:
I don't know how to write that.

[00:35:44] Speaker 05:
I hear what you're saying, Your Honor, but to that point, I think, again, it would only be emphasizing, reinforcing what was already the case, the precise language of Section 8.6,

[00:35:59] Speaker 05:
coverage of companies covered with a class.

[00:36:02] Speaker 02:
The coverage of those things that you'd face spatially.

[00:36:06] Speaker 02:
I think facial your honor isn't the way I read your argument.

[00:36:09] Speaker 02:
Initially, you seem to accept the problem of extra

[00:36:14] Speaker 02:
for reality and then you were working your way through in the brief to see if you could find some openings here or there.

[00:36:21] Speaker 02:
But the assumption that you have the extraterritorial bar and that you were in a bad situation there, but you were trying to find other ways out.

[00:36:29] Speaker 02:
You had connections to New York, et cetera.

[00:36:31] Speaker 02:
I'm really surprised to hear this argument now.

[00:36:33] Speaker 02:
That is not the argument I got from your brief.

[00:36:37] Speaker 05:
Your Honor, I would disagree.

[00:36:41] Speaker 05:
I believe that the language, frankly,

[00:36:44] Speaker 05:
is unmistakably extends extra-territorial.

[00:36:46] Speaker 05:
I agree the statute unhelpfully doesn't use the language or the words foreign or extra-territorial, but I don't believe it's necessary where the implication of- Is there a presumption I'm supposed to follow as a judge?

[00:37:02] Speaker 05:
Well, there's a presumption.

[00:37:03] Speaker 05:
The presumption against extra-territoriality, sure, Your Honor, but it is just a presumption.

[00:37:08] Speaker 05:
And that presumption is

[00:37:11] Speaker 05:
I think what we can all agree on is it doesn't operate as a limit on Congress's power to legislate.

[00:37:18] Speaker 05:
And where the text is clear, as I argue, as I would suggest that the coverage of companies with a class of securities registered under section 12 is abundantly clear.

[00:37:32] Speaker 05:
Those are creations of Congress itself.

[00:37:35] Speaker 02:
I mean, I was, the 210 amendment, the 210 amendment I think just hurt you badly.

[00:37:40] Speaker 02:
because if you're starting out with what you say, there's no extraterritorial bar.

[00:37:46] Speaker 02:
There was no reason for that later amendment.

[00:37:48] Speaker 02:
And then when you get the later amendment, it's limited to certain situations and employees in those limited situations.

[00:37:55] Speaker 02:
But I don't know how that helps you.

[00:37:56] Speaker 02:
I think that as soon as I saw that, I said that really is a damning consideration here because Congress could have easily said if there's any confusion about extraterritoriality, we're getting it out.

[00:38:09] Speaker 02:
any kind of ownership relationship at all, they're covered.

[00:38:13] Speaker 02:
That's not what they said, right?

[00:38:16] Speaker 05:
Congress was not as clear as perhaps it could have been, Your Honor, but I would argue that again, the case law subsequent to Carnero immediately before the passage of the Dodd-Frank Act in section 929A, you have the case that Judge Pillard referred to, which is Walters versus Deutsche Bank,

[00:38:36] Speaker 05:
which is in 2009, it's an ALJ decision, it's not a board decision.

[00:38:41] Speaker 05:
But I think it signified pretty clearly at that time that the Department of Labor itself was leaning in the direction of the arguments that I'm presenting here this morning.

[00:38:53] Speaker 05:
Thank you.

[00:38:54] Speaker 05:
Thank you.

[00:38:57] Speaker 04:
Mr. Rogers, any questions?

[00:39:01] Speaker 04:
Thank you very much.