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.

Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Lloyd B. Chinn Lloyd B. Chinn

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…

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, education and technology, he focuses a substantial portion of his practice on the financial services sector. He has tried to final verdict or arbitration award substantial disputes in this area.

Due to Lloyd’s litigation experience, clients regularly turn to him for advice regarding the full range of employment matters, including terminations, whistleblower policy and procedure, reductions in force, employment agreements, and employment policies. For example, in the wake of the financial crisis, he has counseled a number of firms through reductions in force and related bonus and deferred compensation disputes. Lloyd has also been retained to conduct internal investigations of allegations of workplace misconduct, including claims leveled against senior executives.

Lloyd has represented global businesses in matters involving Sarbanes-Oxley and Dodd-Frank whistleblower claims. He has taken an active role in the American Bar Association on these issues, currently serving as Co-Chair of the Whistleblower subcommittee of the ABA Employee Rights and Responsibilities Committee. Lloyd has spoken on whistleblowing topics before a numerous organizations, including the American Bar Association, ALI-ABA, Association of the Bar of the City of New York, and New York University School of Law. He has testified twice before Congressional subcommittees regarding whistleblower legislation and has also published blog postings, articles and client alerts on a variety of topics in this area, including the Dodd-Frank Act’s whistleblower provisions. Lloyd is a co-editor of Proskauer’s Whistleblower Defense Blog, and he has been widely quoted by on whistleblower topics by a number of publications, including the New York Times, the Wall Street Journal, the National Law Journal and Law 360.

Lloyd has also become active in the International Bar Association, presenting on a variety of subjects, including: the #MeToo movement, the COVID-19 pandemic and employment law, and cross-border harmonization of employment provisions in transactions. Lloyd also hosts a quarterly roundtable discussion among financial services industry in-house employment lawyers. He has also published articles and given speeches on a variety of other employment-law topics, including non-solicitation provisions, FINRA arbitration rules, cross-border discovery, e-discovery, and the use of experts.