The United States Court of Appeals for the DC Circuit Friday ruled that employees who work for US-based companies overseas are not protected by the Sarbanes-Oxley Act, which protects employees of publicly traded companies who report illegal activity by their employers.

Christopher Garvey, an overseas employee of US-based corporation Morgan Stanley, brought the case against the US Department of Labor Administrative Review Board (ARB) after he witnessed Morgan Stanley employees committing potential US securities law violations. According to the court, after Garvey brought his concerns to his superiors’ attention, he alleged that he received a pay cut and a recommendation to seek employment elsewhere.

After the ARB rejected Garvey’s complaint, he filed suit against the ARB on the grounds that his complaint states a cause of action for securities fraud under Section 806 of the Sarbanes-Oxley Act.

The court ruled against Garvey’s argument that his complaint stated a cause of action under Section 806, arguing that there is no cause of action for securities fraud under the provision. Instead, the provision protects employees from retaliation by making it illegal for a company to “discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [the employees protected activity].”

The court also ruled that Congress did not intend for Section 806 to extend to employees working outside of the US, so US-based employees working overseas are not protected under the provision.