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).
Background
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.
Implications
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.
[View source.]
