Hu v. PTC, Inc. (agency decision, September 18, 2019)

Plain-English summary

Hu Li Tao worked entirely in China for a Chinese subsidiary of U.S.-based PTC and alleged that reporting false sales orders led to his suspension and discharge. The Board held that Sarbanes-Oxley Section 806 does not apply outside the United States because Congress gave no clear indication of extraterritorial reach. It further held that Section 806 focuses on retaliation affecting employment terms, making the employee's principal or permanent worksite the key location. A possible U.S. termination decision and possible effects on U.S. markets did not turn Hu's China-based employment claim into a domestic one. The Board affirmed summary decision and dismissed the complaint.

Decision snapshot

• Cited authorities: 18 U.S.C. § 1514A; 49 U.S.C. § 42121; 29 C.F.R. § 18.72
• Outcome: Summary dismissal affirmed and the SOX complaint dismissed.
• Key point: A foreign employee's principal worksite controls whether a Section 806 retaliation claim is domestic, despite a U.S. parent or U.S.-based decision-making.

Full text (DOL official public release)

U.S. Department of Labor Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210

  In the Matter of:



  LI TAO HU,                                              ARB CASE NO. 2017-0068

                  COMPLAINANT,                            ALJ CASE NO. 2017-SOX-00019

         v.                                               DATE: September 18, 2019

  PTC, INC.,

                  RESPONDENT.



  Appearances:

  For the Complainant:
        Li Tao Hu, 1 Pro se, Shanghai, China

  For the Respondent:
        David S. Rubin, Esq.; Joseph T. Toomey, Esq.; Nutter McClennen &
        Fish, LLP, Boston, Massachusetts

  Before: William T. Barto, Chief Administrative Appeals Judge; James A.
  Haynes and Thomas H. Burrell, Administrative Appeals Judges.



  1        We note that Complainant refers to himself as “Hu Li Tao” in his complaint and all other
  submissions to the Board while the Decision and Order below refers to him as “Li Tao Hu.” We
  presume that naming conventions differ in China and that Complainant’s “last name” or “family
  name” is “Hu” and that it would be placed first rather then last in Chinese usage. In the interest of
  consistency we will not revise Complainant’s file name. We acknowledge the inconsistency and will
  refer to him as “Hu.”



                               FINAL DECISION AND ORDER

         THOMAS H. BURRELL, ADMINISTRATIVE APPEALS JUDGE. This case arises
  under the whistleblower provision of the Sarbanes-Oxley Act of 2002 (Section 806 or
  SOX), 18 U.S.C. § 1514A (2010), as amended, and its implementing regulations at
  29 C.F.R. Part 1980 (2016). At the time in question, Hu Li Tao was an employee of
  PTC, China, a foreign subsidiary of PTC, Inc., a U.S. company (hereinafter PTC,
  USA). Hu filed a complaint alleging that his suspension and termination violated
  the whistleblower provisions of Section 806. PTC, USA, filed a motion for summary
  decision in which it argued that Section 806 does not apply extraterritorially. The
  Administrative Law Judge (ALJ) granted the motion, and we now affirm that
  decision.

                                           BACKGROUND 2

         Complainant Hu Li Tao was an employee of PTC, China, which is a
  subsidiary of PTC, USA. PTC, USA is headquartered in Needham, Massachusetts,
  and is registered under Section 12 of the Securities and Exchange Act of 1934, 15
  U.S.C. 78l.

         It is undisputed that Hu worked entirely in China. Hu asserts that although
  he worked for and was paid by PTC, China, he was a sales employee who received
  sales quotas and signed a sales-incentive plan directly from PTC, USA, through a
  global internet sales platform. Hu claims that he was substantially supervised by
  PTC, USA, and that PTC, USA, controls PTC, China’s decisions, including hiring
  and termination decisions. Decision and Order (D. & O.) at 3; Hu Br. at 5-6.




  2       We restate facts taken from the ALJ’s Decision and Order or the parties’ allegations where
  indicated. We make no independent findings of fact on appeal. We note that the filings and evidence
  before the ARB and the ALJ contain documents in a foreign language. The ALJ did not have these
  documents translated. While not always required, given Hu’s self-represented status and our
  uncertainty as to his translation resources in China, we suggest for future reference that ALJs
  consider the use of translation services available to federal agencies. https://www.oalj.dol.gov/
  TRANSLATION_AND_ INTERPRETATION.HTM. In this case, however, we are able to affirm the
  ALJ’s decision on the undisputed facts.




         Hu avers that he was ordered by his managers to book false orders including
  future sales orders. 3 According to Hu, PTC, USA, derived illegal income and profits
  from these transactions in violation of U.S. securities laws. D. & O. at 4; Hu Br. at
  11-12. Hu claims that he reported his concerns about these transactions to his
  managers but was told not to worry. According to Hu, some of the alleged
  misconduct occurred outside of China. D. & O. at 4. According to PTC, USA, all of
  the alleged misconduct took place in China. D. & O. at 1.

         Hu claims that on or about July 14, 2016, he was told to resign and collect a
  severance package or be placed on a performance-improvement plan. On or about
  August 4, 2016, Hu was placed on a performance-improvement plan by PTC, China.
  Hu Br. at 3. On that same day, August 4, 2016, Hu filed an internal report via an
  online complaint portal pursuant to internal ethics guidelines. Hu alleged that PTC,
  USA, engaged in misconduct and falsification of records. D. & O. at 4. On August 5,
  2016, Hu was called into a meeting to discuss the report. 4

         Yvonne Zhang, Legal Manager, and Anthony Yan, Human Resources
  Director, both employees of PTC, China, suspended Hu on September 6, 2016. D. &
  O. at 4. According to Hu, Jerry Luo, Compliance Manager of PTC, China, told him
  that PTC, USA, had made the decision. Hu also claims that the Vice President of
  PTC, China, fired him on November 1, 2016, and that he was told again that the
  decision was made by PTC, USA. Hu Br. at 4, 6-7.

        Hu filed a SOX complaint with the Occupational Safety and Health
  Administration (OSHA) on or about January 5, 2017. OSHA dismissed the case on
  January 20, 2017, for lack of jurisdiction. Hu filed objections on or about February
  15, 2017, with the Office of Administrative Law Judges.

         Before the assigned ALJ, PTC, USA, filed a request to dismiss the complaint
  on the grounds that SOX does not apply to employees working outside of the United
  States, citing Morrison v. Nat’l Australia Bank, Ltd., 561 U.S. 247 (2010). In
  response, the ALJ issued a show cause order asking the parties why the case should
  not be dismissed. Hu responded to the Order.

  3      Hu Br. at 3. The record does not include an allegation of the number or dates of the orders or
  why they were false.

  4      Jerry Luo, Compliance Manager, and Yvonne Zhang, Legal Manager, both of PTC, China,
  attended the meeting. An attorney for PTC, USA, attended the meeting by phone.



         On August 2, 2017, the ALJ granted PTC, USA’s motion for summary
  decision. The ALJ noted that the uncontroverted evidence of record was that Hu
  was a Shanghai-based employee of a Chinese subsidiary of PTC, USA, and worked
  entirely in China. Hu was not hired in the U.S., and the ALJ reasoned that
  although decision-makers in the U.S. might have orchestrated his termination, this
  fact did not confer jurisdiction or authorize application of Section 806 of SOX to
  Hu’s case. D. & O. at 6. Hu appealed the ALJ’s decision to the Administrative
  Review Board (ARB or Board).

                       JURISDICTION AND STANDARD OF REVIEW

         The ARB has jurisdiction to review the ALJ’s decision under Secretary’s
  Order No. 01-2019 (Delegation of Authority and Assignment of Responsibility to the
  Administrative Review Board), 84 Fed. Reg. 13,072 (Apr. 3, 2019); 29 C.F.R. Part
  1980. The ARB reviews an ALJ’s grant of summary decision de novo. Siemaszko v.
  First Energy Nuclear Operating Co., Inc., ARB No. 09-123, ALJ No. 2003-ERA-013,
  at 3 (ARB Feb. 29, 2012). Under 29 C.F.R. § 18.72, an ALJ may enter summary
  decision for either party if the pleadings, affidavits, material obtained by discovery,
  or matters officially noticed show that there is no genuine issue as to any material
  fact and that based on the law a party is entitled to summary decision.

         To avoid summary decision, the non-moving party must rebut the motion and
  evidence presented by the moving party with contrary evidence sufficient to create a
  genuine issue of material fact. That rebuttal, or answer, “may not rest upon mere
  allegations or denials in his pleadings, but must set forth specific facts showing that
  there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
  (1986); Siemaszko, ARB No. 09-123, at 3. In assessing this, or any, summary
  decision, both the ARB and the ALJ must view the evidence, along with all
  reasonable inferences, in the light most favorable to the non-moving party.

                                       DISCUSSION

       Section 806’s employee-protection provision generally prohibits covered
  employers and individuals from retaliating against employees because they provide





  information or assist in investigations related to the categories listed in the SOX
  whistleblower statute. 5

        To state a claim under Section 806, a complainant must allege that he
  engaged in protected activity, the employer took an unfavorable action against him,
  and that the protected activity was a contributing factor in the adverse action. See


  5      Section 806 states the following:

                  (a) Whistleblower Protection For Employees Of Publicly Traded
                  Companies.—No company with a class of securities registered under
                  section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l), or
                  that is required to file reports under section 15(d) of the Securities
                  Exchange Act of 1934 (15 U.S.C. 78o(d)), including any subsidiary or
                  affiliate whose financial information is included in the consolidated
                  financial statements of such company, or nationally recognized
                  statistical rating organization (as defined in section 3(a) of the
                  Securities Exchange Act of 1934 (15 U.S.C. 79c), or any officer,
                  employee, contractor, subcontractor, or agent of such company, may
                  discharge, demote, suspend, threaten, harass, or in any other manner
                  discriminate against an employee in the terms and conditions of
                  employment because of any lawful act done by the employee—

                         (1) to provide information, cause information to be provided,
                         or otherwise assist in an investigation regarding any conduct
                         which the employee reasonably believes constitutes a
                         violation of section 1341, 1343, 1344, or 1348, any rule or
                         regulation of the Securities and Exchange Commission, or any
                         provision of Federal law relating to fraud against
                         shareholders, when the information or assistance is provided
                         to or the investigation is conducted by—

                                 (A) a Federal regulatory or law enforcement agency;
                                 (B) any Member of Congress or any committee of
                                 Congress; or
                                 (C) a person with supervisory authority over the
                                 employee (or such other person working for the
                                 employer who has the authority to investigate,
                                 discover, or terminate misconduct); or

                         (2) to file, cause to be filed, testify, participate in, or otherwise
                         assist in a proceeding filed or about to be filed (with any
                         knowledge of the employer) relating to an alleged violation of
                         section 1341, 1343, 1344, or 1348, any rule or regulation of
                         the Securities and Exchange Commission, or any provision of
                         Federal law relating to fraud against shareholders.

  18 U.S.C. § 1514(a).




  Prioleau v. Sikorsky Aircraft Corp., ARB No. 10-060, ALJ No. 2010-SOX-003, at 5
  (ARB Nov. 9, 2011). Under 18 U.S.C. § 1514A(b)(2)(C), SOX complaints are decided
  using the legal burdens of proof set forth in the employee-protection provision of
  the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century
  (AIR-21), 49 U.S.C. § 42121.

         It is undisputed that Hu is a foreign citizen who worked for PTC, China,
  during all relevant periods. It is likewise undisputed that PTC, China, is a foreign
  subsidiary of PTC, USA, a U.S. company registered under Section 12 of the
  Securities Exchange Act of 1934. Hu alleges that he reported misconduct to both his
  direct employer and to PTC, USA, and that the wrongdoing he reported affected the
  U.S. company financials and the U.S. markets. He further alleges that he was
  suspended and terminated by PTC, China, on instructions from PTC, USA.

         The sole issue before the ALJ and before the ARB on appeal is whether
  Section 806 reaches, or covers, Hu’s complaint alleging a retaliatory discharge in
  China. The ALJ granted Respondent’s motion for summary decision based on the
  legal argument that the statute does not reach acts committed outside the United
  States. As we noted previously, the ALJ noted that the evidence was uncontroverted
  that Hu was not hired and never worked in the United States. Although decision-
  makers in the U.S. might have orchestrated his termination, this fact does not
  confer jurisdiction or permit adjudication of Hu’s case under Section 806. D. & O. at
  6.

         The Supreme Court has ruled on a similar question in a case arising out of
  securities law rather than an anti-retaliation statute like Section 806. In Morrison
  v. Nat’l Australia Bank, Ltd., 6 the Court announced a two-step framework for
  analyzing extraterritoriality. 7 In step one of its two-part test, the Supreme Court
  considered whether the statute at issue reaches extraterritorially beyond the U.S.

  6
          In Morrison, Australian investors had filed claims in a United States federal court pursuant
  to Section 10(b) of the Securities Exchange Act of 1934, alleging, among other things, that the
  defendant Australian bank committed securities fraud.

  7       561 U.S. 247 (2010). Before Morrison, courts applied the “conducts and effects” test. Under
  the Second Circuit’s “conducts and effects” test, a court has jurisdiction when there is substantial
  conduct in the United States or the alleged violation had substantial effects in the United States.
  SEC v. Berger, 322 F.3d 187, 192-93 (2d Cir. 2003). Morrison rejected the conducts and effects test.





  The Court in Morrison applied a fundamental presumption that, in the absence of
  evidence to the contrary, Congress intends its legislation to apply domestically and
  not outside the U.S. The Court concluded that the text of the statute at issue did not
  provide for extraterritorial reach and the presumption against extraterritoriality
  had not been rebutted when looking beyond the text. Morrison, 561 U.S. at 265.

         If a statute is not extraterritorial, the Morrison analysis continues with a
  second step. In step two, the Court examines the essential or primary focus of a
  statute and where the activity comprising that focus occurred. If that activity
  occurred within the United States, a statute’s lack of extraterritorial reach is not
  relevant. The Morrison Court concluded that the essential focus of the claim at
  issue was manipulation or deception in connection with the sale or purchase of
  securities. Plaintiffs’ transactions had occurred extraterritorially and beyond the
  domestic reach of the statute. Morrison, 561 U.S. at 273. Having failed both
  Morrison steps, the Court concluded that plaintiffs’ claims failed to state a cause of
  action upon which the U.S. courts were able to grant relief.

         Applying Morrison to Hu’s claim, we confront the explicit language of the
  Supreme Court in Morrison noting a “longstanding principle of American law ‘that
  legislation of Congress, unless a contrary intent appears, is meant to apply only
  within the territorial jurisdiction of the United States.’” 561 U.S. at 255 (quoting
  EEOC v. Arabian American Oil Co. (Aramco), 499 U.S. 244, 248 (1991)). “This
  principle represents a canon of construction, or a presumption about a statute’s
  meaning, rather than a limit upon Congress’s power to legislate.” Id. “It rests on the
  perception that Congress ordinarily legislates with respect to domestic, not foreign
  matters.” Id.

         Whether a statute has extraterritorial reach turns on the statutory text, the
  relevant statutory context, and the legislative intent. “‘[U]nless there is the
  affirmative intention of the Congress clearly expressed’ to give a statute
  extraterritorial effect, ‘we must presume it is primarily concerned with domestic
  conditions.’” Id. (quoting Aramco, 499 U.S. at 248). The conduct or effect in any
  particular case does not alter a statute’s extraterritorial reach.





         As we held before and reaffirm now after Morrison, Section 806 is not
  extraterritorial in its reach. 8 The text and legislative history of Section 806 does not
  contain a clear, affirmative indication that Congress intended extraterritorial
  application. Finding no indication of extraterritoriality, we hold that Section 806 is
  not extraterritorial. 9 The facts in this case line up with those in Carnero v. Boston
  Sci. Corp., 433 F.3d 1 (1st Cir. 2006). Carnero was an Argentine citizen who was
  employed and terminated by a foreign subsidiary of a U.S. parent company and who
  also alleged a violation of Section 806. The Court of Appeals for the First Circuit

  8       Before Morrison, the ARB had held that Section 806 does not apply extraterritorially. Ede v.
  The Swatch Group Ltd., ARB No. 05-053, ALJ Nos. 2004-SOX-068, -069 (ARB June 27, 2007); Salian
  v. Reedhycalog UK, ARB No. 07-080, ALJ No. 2007-SOX-020 (ARB Dec. 31, 2008); Ahluwalia v. ABB,
  Inc., ARB No. 08-008, ALJ No. 2007-SOX-044 (ARB June 30, 2009).

  9        The Board has also grappled with this question after the ALJ’s decision in Hu. In a divided
  opinion in which each of the three panel members issued a separate opinion, the Board evaluated
  different approaches to the extraterritorial reach of SOX generally and Section 806 in particular. See
  Blanchard v. Exelis Sys. Corp., ARB No. 15-031, ALJ No. 2014-SOX-020 (ARB Aug. 29, 2017). Two
  members of the panel affirmatively held that Section 806 had extraterritorial reach as a matter of
  statutory construction. However, two of the panel members also held that Blanchard’s appeal could
  and should be resolved as a domestic application of Section 806 rather than as an extraterritorial
  matter. Whether viewed as an essential holding or as dicta, Blanchard’s discussion of
  extraterritoriality failed to appreciate the significance of Morrison and the absence of any action by
  Congress after Morrison to give Section 806 a clear reach beyond the domestic jurisdiction of the
  United States. Likewise, Blanchard’s reliance upon RJR Nabisco v. European Community, 136 S. Ct.
  2090 (2016), is misplaced. The Court in RJR Nabisco held that the federal RICO statute could be
  applied extraterritorially in those cases in which the predicate offense statutes applied
  extraterritorially. 136 S. Ct. at 2102. The Board in Blanchard overlooked both the deep skepticism
  expressed by the Court in RJR Nabisco toward private foreign injury claims absent “clear direction
  from Congress,” id. at 2107, and the fact that Section 806 is just such a private cause of action: a
  whistleblower protection law wherein a successful complainant need only show a reasonable belief of
  a violation of one of the six categories of protected activity and retaliation because of that protected
  activity. As we now hold, Congress did not provide a clear indication of extraterritorial reach or
  address the concerns raised by applying Section 806 to foreign employment settings.

           We agree, however, that the Blanchard case is properly understood as a domestic application
  of the law. We quote with approval, the concurring opinion of Chief Judge Igasaki in Blanchard:

                Because I believe that this case is a domestic one, involving a U.S.
                Corporation with securities listed on a U.S. exchange, contracting with the
                U.S. military on a U.S. base that is [a] U.S. territory for purposes of the law
                and facts of this case, and employing a U.S. citizen employee contesting the
                application of U.S. rules and actions taken against him by managers in the
                U.S. or acting on their decisions, I do not agree that it presents an
                opportunity to define the general extraterritoriality of §806, or, as the ALJ
                has done, rule against Complainant because the matter is extraterritorial.

  Blanchard, slip op. at 21.




  held that Carnero’s complaint “faces a high and we think insurmountable hurdle in
  the well-established presumption against the extraterritorial application of
  Congressional statutes.” Id. at 7. The court observed that “[w]here, as here, a
  statute is silent as to its territorial reach, and no contrary congressional intent
  clearly appears, there is generally a presumption against its extraterritorial
  application.” Id. “Not only is the text of 18 U.S.C. § 1514A silent as to any intent to
  apply it abroad, the statute’s legislative history indicates that Congress gave no
  consideration to either the possibility or the problems of overseas application.” Id. at
  8. We concur with this analysis. 10 There is no clear indication in the text or
  legislative history that Congress intended for Section 806 to apply extraterritorially.
  Morrison, 561 U.S. at 255 (“[w]hen a statute gives no clear indication of an
  extraterritorial application, it has none”).

        Our conclusion on this point is significantly bolstered by the fact that
  Congress amended Section 806 in 2010 following Morrison but did not provide for
  extraterritorial reach as part of that amendment. Congress enacted Section 929A of
  the Dodd-Frank Act, Pub. L. No. 111-203, 124 Stat. 1376, 1852 (2010), to clarify
  that Section 806(a) of SOX applies to “any subsidiary or affiliate whose financial
  information is included in the consolidated financial statements” of an otherwise
  covered company. In the same legislation, Congress expressly provided for the
  extraterritorial application of an enforcement action brought by the Securities and
  Exchange Commission (SEC). This was to address the impact of Morrison on
  extraterritorial enforcement of securities laws. 11 Congress was obviously aware of
  Morrison and enacted clear, affirmative text rebutting the presumption against
  extraterritoriality.

         Congress did not add similar language in the amendments to Section 806. It
  is a commonplace of statutory interpretation that where Congress “includes

  10      We consider it to be significant that Carnero was issued in 2006, before Morrison (which was
  issued in 2010), and that it considered precisely the provision of SOX which is before us. In the time
  since 2006, neither the Supreme Court nor Congress have disturbed the specific holding of Carnero
  that Section 806 is domestic and not extraterritorial in its reach.

  11       Section 929P of the Dodd-Frank Act, 124 Stat. 1864-1865, expands the scope of federal
  courts’ jurisdiction over actions or proceedings brought or instituted by the Securities Exchange
  Commission or the United States alleging a violation involving conduct within the United States in
  furtherance of a violation and conduct occurring outside the United States that has a foreseeable
  substantial effect within the United States. 124 Stat. 1864-1865 (referring to authority of SEC and
  United States to bring actions in federal courts under specified statutes).




  particular language in one section of a statute but omits it in another section of the
  same Act, it is generally presumed that Congress acts intentionally and purposely
  in the disparate inclusion or exclusion.” Russello v. United States, 464 U.S. 16, 23
  (1983). However we need not rely only on general rules of interpretation where the
  Supreme Court has clearly stated that statutes without some obvious indication of
  extraterritorial reach should be regarded as territorial. Likewise, where Carnero
  holds that Section 806 is domestic in its reach and stands uncontradicted and
  unmodified on that point, the question of extraterritorial application of that section
  is not close. Finally, when, as noted above, Congress has declined to amend Section
  806 in almost a decade since Morrison, we find it beyond cavil that Section 806 is
  domestic in it application.

        Applying the second step of the Morrison analysis, as we must, we next
  conclude that the primary focus of Section 806 is on the retaliatory adverse
  personnel action. While Sarbanes-Oxley’s overarching purpose may be to protect
  the markets from fraud, that meta-purpose is not dispositive of the question before
  us. Rather, we look to the text of the statute at issue and the primary focus of
  Section 806 itself. 12 Section 806 provides that “[n]o [covered] company . . . may
  discharge, demote, suspend, threaten, harass, or in any other manner discriminate
  against an employee in the terms and conditions of employment because of [the
  employee’s protected activity].” 18 U.S.C. § 1514A(a). For the specific application of
  Morrison, the primary focus of Section 806 is necessarily connected to the
  employee’s terms and conditions of employment. This focus helps to explain why
  Section 806 is administered by the U.S. Department of Labor and not by the SEC.

         Because we conclude that the primary focus of Section 806 is necessarily
  linked to deterring and punishing retaliation against an employee’s terms,
  conditions, and privileges of employment, the location of the employee’s permanent
  or principal worksite is the key factor to consider when deciding whether a claim is
  a domestic or extraterritorial application of Section 806. 13 The focus is the employee

  12      In Blanchard, the ARB, examining Villanueva v. Core Laboratories, NV, ARB No. 09-108,
  ALJ No. 2009-SOX-006 (ARB Dec. 22, 2011), held that the primary focus of Section 806 was
  preventing fraud and protecting the financial markets. We conclude this is error because it fails to
  account for Section 806’s specific statutory text and conflates the primary focus of Section 806 with
  other aspects and goals of Sarbanes-Oxley as a whole.

  13      The determination of “principal worksite” or “permanent worksite” is dependent upon the
  evidence in individual cases and we decline the task of establishing a general definition in this
  opinion. The case before us can be resolved without reaching this issue.



  and the controlling authority is labor and employment law rather than securities
  law. Accordingly, the location of other conduct, which may be the subject of other
  requirements, regulation or prohibitions under SOX, becomes less critical, if not
  irrelevant. In perhaps a majority of extraterritorial complaints under section 806
  there is some tangential connection to the United States. Morrison, 561 U.S. at 266
  (“[T]he presumption against extraterritorial application would be a craven
  watchdog indeed if it retreated to its kennel whenever some domestic activity is
  involved in the case.…”). But a Section 806 complaint concerning an adverse action
  which affected an employee at a principal worksite abroad does not become
  territorial because the alleged misconduct occurred in the U.S., or because it had,
  or would have, effects on U.S. securities markets, or because the alleged retaliatory
  decision was made in the United States.

         Applying the above reasoning to Hu’s Section 806 complaint, we conclude
  that it is not a domestic application of Section 806. At the time in question, Hu was
  a foreign citizen working for a foreign subsidiary of a publicly traded U.S. company.
  It is undisputed that Hu’s principal place of work was in China and not the United
  States. 14 The only domestic contacts are that the termination decision may have
  been made directly or indirectly in the U.S. and that the U.S. markets were, or
  would be, affected by the conduct identified in Hu’s allegations. These facts do not,
  in and of themselves, create a domestic application of Section 806.

                                            CONCLUSION

        We conclude that Section 806 is not extraterritorial in application and the
  primary focus of Section 806 is on the retaliatory action as it affects the employee’s
  terms, conditions, and privileges of employment.

         Applying these conclusions to Hu’s claim, we AFFIRM the ALJ’s decision as
  correct in fact and law. Accordingly, the complaint is hereby DISMISSED.

         SO ORDERED.



  14      The question of whether Hu’s principal place of employment placed his complaints within the
  domestic jurisdiction of SOX is easily answered in this case because Hu has never worked in the
  United States. More difficult fact patterns will arise but we consider the principal or primary
  worksite of the Complainant to be the factor which will guide the analysis of whether a claim is
  within the jurisdiction of section 806 of SOX, or is extraterritorial and outside that jurisdiction.