In late June, a federal court ruled that extraterritorial (outside the U.S.) whistleblowing activity was not covered by the anti-retaliation whistleblower provisions of Dodd-Frank. This week, however, another federal court expanded whistleblower protections when it held that the Dodd-Frank amendment to Section 806 of Sarbanes-Oxley that expressly protects employees of subsidiaries of public companies (i.e., not just "employees of publicly traded companies," as stated in SOX) applies retroactively.

In Leshinsky v. Telvent GIT, the court considered the "novel question" of whether it had jurisdiction over retaliation claims by a plaintiff who worked for a subsidiary of a public company based on alleged conduct that arose prior to the 2010 Dodd-Frank amendment. In a lengthy opinion, the court considered three factors to determine whether the statutory amendment was retroactive "by virtue of being a clarification:" (1) legislative intent, (2) whether there was conflict or ambiguity regarding the meaning of the statute prior to the amendment, and (3) whether the amendment was consistent with a reasonable interpretation of the prior enactment and its legislative history.

Based on its review of these factors, the court concluded that the amendment was a "clarification" of Congress's intent with respect to the Sarbanes-Oxley whistleblower provision, and that it therefore applied retroactively to the plaintiff's claims. As such, the court ruled that it had subject matter jurisdiction over the claims, and denied the defendants' motion to dismiss.

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