October 22, 2019

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SDNY Grants Summary Judgment Against Plaintiff in SOX Blacklisting Suit

The U.S. District Court for the Southern District of New York recently granted a motion for summary judgment against a Plaintiff claiming retaliatory blacklisting under SOX, holding that a former employer’s policy of refusing to conduct business with plaintiff was not actionable under the circumstances of the case.  Kshetrapal v. Dish Network, 2018 U.S. Dist. Lexis 48493 14-CV-3527 (PAC) (S.D.N.Y. Mar. 23, 2018).


In Kshetrapal, the Plaintiff was employed by Defendants and engaged in protected activity by testifying at a deposition in a related matter and internally reporting alleged misconduct by his supervisors.  In 2014, Plaintiff filed suit against his former employer and two individual employees (“Defendants”) alleging, among other claims, that he was “blacklisted” in retaliation for engaging in protected activity under SOX.   Specifically, the Plaintiff alleged four potential acts of blacklisting: (1) the formulation of a policy of avoiding doing business with Plaintiff; (2) Defendants’ communication of this policy to Plaintiff’s then employer; (3) Defendants’ alleged “interference” with Plaintiff being hired by a prospective employer; and (4) allegedly “smearing” Plaintiff’s reputation in the industry.

The Court’s Decision

The court granted Defendants’ motion for summary judgment, holding that none of Plaintiff’s allegations were actionable under SOX.  The court stated that an employer’s policy avoiding doing business with a former employee is not an adverse employment action and is not necessarily “blacklisting within the scope of SOX” because SOX’s anti-retaliation provision “is limited to discriminatory actions that affect ‘the terms and conditions of employment’” and “Plaintiff’s employment likely could only be affected by the existence of the Avoidance Policy if companies employing or potentially employing Plaintiff learned of its existence.” Id. at *28-29.  The court concluded that Defendants’ communication of its policy to Plaintiff’s subsequent employer was not an adverse action under SOX because the Plaintiff could not establish that the communication affected his employment with the employer.  In fact, the court noted that Plaintiff remained in his position for several years after the communication and received a salary increase.  Similarly, Plaintiff failed to establish that Defendants’ comments to his potential employer resulted in any harm because the Plaintiff was offered a position but declined to accept it.  Finally, the court held that Plaintiff’s allegations of “general smears” were not actionable because he failed to identify any specific instances of communications “smearing” him within the industry.


This is an important decision for employers facing blacklisting claims.  The decision shows that absent evidence of a causal connection between any action by an employer and actual harm suffered by a former employee, claims, including those related to alleged post-employment acts, will fail as a matter of law.  In addition, generalized allegations about negative remarks without more are insufficient to meet the plaintiff’s burden under SOX.

© 2019 Proskauer Rose LLP.


About this Author

Lloyd B Chinn, Financial, Whistleblower Attorney, Proskauer Law Firm

Lloyd B. Chinn is a Partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative agencies in New York and across the country. Lloyd's practice ranges from litigating compensation disputes to defending whistleblower, discrimination and sexual harassment claims. Although he represents employers in a wide range of industries, including law, insurance, health care, consulting, media,...

Harris M Mufson, Class/Collective Action Attorney, Proskauer
Senior Counsel

Harris Mufson is a senior associate in the Labor & Employment Law Department and a member of the Employment Litigation & Arbitration and Whistleblowing & Retaliation Groups.

Adept at counseling clients at every turn of the litigation process, Harris represents employers in a variety of industries, including financial services, health care, entertainment, sports and legal, with respect to a wide range of labor and employment law matters. These include compensation disputes, employment discrimination and retaliation, whistleblowing, sexual harassment, wrongful discharge, defamation, breach of contract, non-competition agreements and wage-and-hour issues. He regularly appears in state and federal courts, as well as in proceedings before the American Arbitration Association, the Financial Industry Regulatory Authority, JAMS, the Equal Employment Opportunity Commission, and other federal and state agencies.

Annabel Pollioni, Litigation lawyer, Proskaeur

Annabel Pollioni is an associate in the Labor & Employment Law Department and assists clients in a wide range of labor and employment law matters.

Prior to joining Proskauer, Annabel attended Rutgers School of Law and interned with the United States Attorney’s Office and with the Honorable Judge Esther Salas of the United States District Court for the District of New Jersey.  She also served as the Submissions Editor on the Women’s Rights Law Reporter, a teaching fellow with the Minority Student Program and a research assistant to Professor George Thomas III...