Shaikh v. National Bank of Pakistan (agency decision, February 14, 2019)

Plain-English summary

Zubair Shaikh alleged that National Bank of Pakistan discharged him for protected activity under Sarbanes-Oxley. The bank supplied an affidavit stating that it was not publicly traded and was not an officer, employee, contractor, subcontractor, or agent of a publicly traded company. Shaikh did not dispute those facts and instead argued that Section 806 protects employees of every U.S. employer. The Board rejected that interpretation because the statute limits coverage to specified public companies, related entities, rating organizations, and their personnel or contractors. It affirmed summary decision on coverage and did not decide whether Shaikh's complaint was also untimely.

Decision snapshot

• Cited authorities: 18 U.S.C. § 1514A; 29 C.F.R. § 18.72(a)
• Outcome: Summary decision on lack of SOX coverage affirmed and complaint denied; timeliness issue not reached.
• Key point: Sarbanes-Oxley Section 806 does not cover every U.S. employer, and the undisputed record did not connect this bank to a covered public company.

Full text (DOL official public release)

U.S. Department of Labor Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210

  In the Matter of:


  ZUBAIR SHAIKH,                                       ARB CASE NO. 2017-0049

                  COMPLAINANT,                         ALJ CASE NO. 2017-SOX-00025

         v.                                            DATE: February 14, 2019

  NATIONAL BANK OF PAKISTAN,

                  RESPONDENT.


  BEFORE:         THE ADMINISTRATIVE REVIEW BOARD

  Appearances:

  For the Complainant:
         Zubair Shaikh; pro se; Bronx, New York

  For the Respondent:
         Harris M. Mufson, Esq.; Proskauer Rose LLP; New York, New York; and Dana
         Berber, Esq.; Proskauer Rose LLP; Newark, New Jersey

  Before: William T. Barto, Chief Administrative Appeals Judge; James A. Haynes and Daniel
  T. Gresh, Administrative Appeals Judges

  PER CURIAM


                               FINAL DECISION AND ORDER

         The Complainant, Zubair Shaikh, filed a retaliation complaint under Section 806 of the
  Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act,
  18 U.S.C. § 1514A (2010) (SOX) and its implementing regulations, 29 C.F.R. Part 1980 (2018).



  Section 806 prohibits certain covered employers from discharging, demoting, suspending,
  threatening, harassing, or in any other manner discriminating against employees who provide
  information to a covered employer or a federal agency or Congress regarding conduct that the
  employee reasonably believes constitutes a violation of 18 U.S.C. §§ 1341 (mail fraud), 1343
  (wire, radio, TV fraud), 1344 (bank fraud), or 1348 (securities fraud), or any rule or regulation of
  the Securities and Exchange Commission, or any provision of Federal law relating to fraud
  against shareholders. 18 U.S.C. § 1514A(a)(1).

          Shaikh alleged that his former employer, National Bank of Pakistan, violated the SOX
  whistleblower protection provisions by discharging him on May 2, 2016, because he engaged in
  protected activity. Shaikh filed his initial complaint of unlawful retaliation with the United
  States Department of Labor on November 3, 2016. The Department’s Occupational Safety and
  Health Administration (OSHA) dismissed Shaikh’s claim because it was untimely filed and
  because the National Bank of Pakistan, the Respondent, is not a SOX-covered entity.

          Shaikh appealed the OSHA decision to the Office of Administrative Law Judges (OALJ).
  Before the ALJ, Respondent filed a motion for summary decision on the two grounds that OSHA
  relied upon in denying the complaint: 1) because Shaikh’s complaint was untimely, and 2)
  because Respondent is not a publicly traded company, it is not a covered entity under the SOX.
  Shaikh responded to the motion and requested that it be denied. Upon consideration of the
  motion for summary decision and Shaikh’s response, the ALJ issued his Order Granting Motion
  for Summary Decision (Order) on both grounds that Respondent asserted. Shaikh filed a petition
  requesting that the Administrative Review Board (ARB or the Board) review the ALJ’s order.
  We affirm because Respondent is not a covered SOX employer and is therefore not subject to its
  prohibitions. The second issue decided below regarding the timeliness of Shaikh’s complaint is,
  therefore, moot and we offer no opinion concerning it.


                              JURISDICTION AND STANDARD OF REVIEW

         The Secretary of Labor has delegated to the Board his authority to issue final agency
  decisions under the SOX. 1 The ARB reviews an ALJ’s grant of summary decision de novo
  under the same standard the ALJ applies. Summary decision is permitted where “there is no
  genuine dispute as to any material fact and the movant is entitled to decision as a matter of law.”

  1
         Secretary’s Order No. 02-2012 (Delegation of Authority and Assignment of Responsibility to the
  Administrative Review Board), 77 FR 69378-01 (Nov. 16, 2012).




  29 C.F.R. § 18.72(a) (2018). The ARB views the record on the whole in the light most favorable
  to the non-moving party. Micallef v. Harrah’s Ricon Casino & Resort, ARB No. 16-095, ALJ
  No. 2015-SOX-025, slip op. at 3 (ARB July 5, 2018).


                                             DISCUSSION

          An employee alleging employer retaliation in violation of the SOX must demonstrate that
  his or her employer is a covered company under the SOX whistleblower provisions. To be
  covered by SOX, Respondent must meet one of the requirements set forth below:

         Whistleblower Protection for Employees of Publicly Traded Companies.--No
         company with a class of securities registered under section 12 of the Securities
         Exchange Act of 1934 (15 U.S.C. 78l), or that is required to file reports under section
         15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) including any
         subsidiary or affiliate whose financial information is included in the consolidated
         financial statements of such company, or nationally recognized statistical rating
         organization (as defined in section 3(a) of the Securities Exchange Act of 1934 (15
         U.S.C. 78c), or any officer, employee, contractor, subcontractor, or agent of such
         company or nationally recognized statistical rating organization, may discharge,
         demote, suspend, threaten, harass, or in any other manner discriminate against an
         employee in the terms and conditions of employment because of any lawful act done
         by the employee . . . .

  18 U.S.C. § 1514A(a).

          In its motion for summary decision, Respondent submitted the affidavit of Nasir Qureshi,
  Respondent’s Executive Vice President, who attested that Respondent is not a publicly traded
  company, or an officer, employee, contractor, subcontractor, or agent of a publicly traded
  company. 2 In response to Respondent’s assertion, Shaikh does not argue that Respondent is a
  publicly traded company under the SOX. Instead, Shaikh argues that the SOX whistleblower
  protection provisions cover every U.S. employer. As the ALJ explained, complainants seeking
  SOX-whistleblower protection must demonstrate that the employers they file against are covered
  employers under the SOX whistleblower provisions. Shaikh has failed to raise a genuine issue of



  2
         See ALJ’s Order at 5.




  material fact on this matter and, therefore, we affirm the ALJ’s Order granting summary decision
  regarding it. 3


                                                ORDER

         Accordingly, we AFFIRM the ALJ’s Order Granting Motion for Summary Decision
  regarding coverage and DENY Shaikh’s complaint.

         SO ORDERED.




  3
         Because we affirm the ALJ’s conclusion that Shaikh has failed to raise a genuine issue of
  material fact regarding the Respondent’s coverage under the SOX, we need not discuss the ALJ’s
  holding on the timeliness of Shaikh’s complaint or any assignments of error in regard to that issue.