June 29 (Reuters) - A federal judge on Thursday threw out a
suit brought by a former General Electric employee who claimed
the Dodd-Frank Act's whistleblower provisions protected him from
being terminated for complaining about potential corruption at
the energy giant's Iraq operations.
U.S. District Judge Nancy Atlas in Houston ruled that the
act's anti-retaliation statute did not apply to the claims of
Khaled Asadi, who coordinated with Iraq's government to secure
energy service contracts for GE.
The decision is one of a handful to interpret the scope of
the statute's whistleblower provisions and the extent to which
they protect employees from retaliation. The ruling also marks
one of the first times a court has held the law does not apply
to whistleblowing that takes place overseas.
Sean Gannon, a spokesman for GE Energy, welcomed the court's
"We believe legitimate whistleblowers deserve to have their
claims treated with respect and investigated vigorously," Gannon
said in an email. "We also believe individuals who concoct
retaliation claims to advance their personal agendas ultimately
do a huge disservice to open reporting and people who are
legitimately raising valid concerns."
Ronald Dupree, a lawyer for Asadi, said he was disappointed
with the ruling and would evaluate his options, which could
include an appeal.
According to the complaint, Asadi said in June 2010 that one
of his Iraqi contacts told him about issues related to GE's
hiring of Iman Mahmood, a woman the complaint said had "close
ties" to Ra'ad al-Haris, the deputy minister of electricity in
Al-Haris had been overseeing negotiations for a $250 million
sole-source contract with GE, the complaint said. Asadi said his
contact made him aware of concerns within the Iraqi government
that GE had hired Mahmood "in order to curry favor" with
al-Haris during the contract talks.
Worried that Mahmood's hiring could damage negotiations and
that it might violate the Foreign Corrupt Practices Act, Asadi
said he reported his concerns to his supervisor and GE's
The FCPA is a U.S. law that makes it illegal for companies
to bribe foreign officials.
Asadi subsequently received a negative performance review
and was fired in June 2011, the complaint said.
He sued GE Energy in February, claiming his termination
violated the whistleblower retaliation provision in the
Dodd-Frank Act. The provision, which was part of the 2010
financial reform law's new incentives for whistleblowers, allows
employees to sue companies who fire them as a result of their
GE argued that Asadi did not qualify as a whistleblower
under the law, which requires that possible violations be
reported to the U.S. Securities and Exchange Commission.
Asadi countered that complaining to his superiors was
sufficient to bring a retaliation claim.
In her 25-page decision Thursday, Atlas declined to rule on
that issue, holding instead that Dodd-Frank did not apply to
whistleblower activity outside of the United States.
The judge relied heavily on the U.S. Supreme Court's 2010
decision in Morrison v. National Australia Bank, which held that
investors could not bring claims in U.S. courts involving
securities bought in foreign countries. While Morrison focused
on securities law, lower courts have applied the decision in
other types of cases.
If Asadi appeals, his case would go to the 5th Circuit Court
of Appeals. That court is already considering whether Morrison
applies to Dodd-Frank's anti-retaliation clauses in an appeal of
a decision by a U.S. Labor Department administrative appellate
The case is Asadi v. GE Energy (USA), LLC, U.S. District
Court for the Southern District of Texas, No. 12-cv-00345.
For Khaled Asadi: Ronald Dupree Jr., Dupree Law Firm.
For GE: Linda Addison and Darryl Anderson, Fulbright &
(Reporting By Nate Raymond)
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