‘appreciable difference' between the ratings and lay off percentages of white and African American employees." Id. at 3. Smith further contended that Hewlett Packard did not disclose but covered up the results of the AIR. Smith argued, "This willful nondisclosure and cover-up of this known data, in my opinion, constitutes fraud on Hewlett Packard's behalf to its employees, shareholders, (particularly special populations segments who use diversity numbers, pay equity and upward mobility figures as primary criteria as to whether or not they will invest in a company.) [sic] the general public, and enforcing agencies such as the [Office of Federal Contract Compliance Programs]." Id.

    The ARB's jurisdiction to review the ALJ's decision is set out in Secretary's Order 1-2002, 67 Fed. Reg. 64,272 (Oct. 17, 2002), which delegated to the ARB the Secretary's authority to review ALJ decisions issued under the SOX. 18 U.S.C.A. § 1514A.

    The ARB reviews the ALJ's factual determinations under the substantial evidence standard. 29 C.F.R. § 1980.110(b). In reviewing the ALJ's conclusions of law the ARB, as the Secretary's designee, acts with "all the powers [the Secretary] would have in making the initial decision . . . . " 5 U.S.C.A. § 557(b) (West 1996). Therefore, the

Board reviews the ALJ's conclusions of law de novo. Henrich v. Ecolab, Inc., ARB No. 05-030, ALJ No. 2004-SOX-051, slip op. at 7 (ARB June 29, 2006).

    Legal Standard

    The employee protection provisions of the SOX generally prohibit covered employers and individuals from retaliating against employees for providing information or assisting in investigations related to listed categories of fraud or securities violations. That provision states:

(a) 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)), or any officer, employee, contractor, subcontractor, or agent of such company, 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–

(1) to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail fraud], 1343 [wire, radio, TV fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to or the investigation is conducted by–

(A) a Federal regulatory or law enforcement agency;
(B) any Member of Congress or any committee of Congress; or
(C) a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct); or

(2) to file, cause to be filed, testify, participate in, or otherwise assist in a proceeding filed or about to be filed

(with any knowledge of the employer) relating to an alleged violation of section 1341, 1343, 1344, or 1348, 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.A. § 1514A.

    The SOX's employee protection provisions thus protect employees who provide information to a covered employer regarding conduct that the employee reasonably believes constitutes a violation of 18 U.S.C.A. §§ 1341 (mail fraud), 1343 (wire, radio, TV fraud), 1344 (bank fraud), or 1348 (fraud "in connection" with "any security" or the "purchase or sale of any security"), any rule or regulation of the Securities and Exchange Commission (SEC) (see, e.g., 17 C.F.R. Part 210 (2007), Form and Content of the Requirements for Financial Statements), or any provision of Federal law relating to fraud against shareholders.

    Complaints filed under the SOX are governed by the legal burdens of proof set forth in the employee protection provision of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, (AIR 21), 49 U.S.C.A. § 42121 (West Supp. 2005). 18 U.S.C.A. § 1514A(b)(2)(C). To prevail, a SOX complainant must prove by a preponderance of the evidence that: (1) he engaged in a protected activity or conduct (i.e., provided information or participated in a proceeding); (2) the respondent knew of the protected activity; (3) he suffered an unfavorable personnel action; and (4) the protected activity was a contributing factor in the unfavorable personnel action. See Platone v. FLYi, Inc., ARB No. 04-154, ALJ No. 2003-SOX-027, slip op. at 14-16 (ARB Sept. 29, 2006); Harvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114, 115, ALJ Nos. 2004-SOX-020, 36, slip op. at 9-10 (ARB June 2, 2006); Getman v. Southwest Sec., Inc., ARB No. 04-059, ALJ No. 2003-SOX-008, slip op. at 7 (ARB July 29, 2005). Cf. 29 C.F.R. §§ 1980.104(b), 1980.109(a). See AIR 21, § 42121(a)-(b)(2)(B)(iii)-(iv). See also Peck v. Safe Air Int'l, Inc. d/b/a Island Express, ARB No. 02-028, ALJ No. 2001-AIR-003, slip op. at 6-10 (ARB Jan. 20, 2004).

   If the complainant establishes by a preponderance of the evidence that his protected activity was a contributing factor in the adverse action, then the respondent can still avoid liability by providing by clear and convincing evidence that it would have taken the same unfavorable personnel action in the absence of the protected activity. Platone, slip op. at 16; Harvey, slip op. at 10; Getman, slip op. at 8. Cf. 29 C.F.R. § 1980.104(c). See § 49 U.S.C.A. § 42121(a)-(b)(2)(B)(iv). See also Peck, slip op. at 10.

   Coverage

   Smith timely filed a complaint with OSHA invoking the employee protection provisions of the SOX. It is undisputed that at all relevant times, Hewlett Packard was a publicly traded company with a class of securities registered pursuant to Section 12 of the Securities and Exchange Act of 1934, and was required to file reports pursuant to Section

15(d) of that Act. 15 U.S.C.A. § 781. It is also undisputed that Smith was a Hewlett Packard employee who suffered an unfavorable personnel action when Hewlett Packard terminated his employment on April 22, 2005, effective April 25, 2005. The determinative issue before the ARB is whether Smith engaged in activity that the SOX protects.

   Smith's Alleged Protected Activity

   Smith must establish that he provided information, prior to his April 22, 2005 termination, regarding conduct that he reasonably believed constituted mail, wire, radio, TV, bank, or securities fraud, or violated any SEC rule or regulation, or any provision of Federal law relating to fraud against shareholders. 18 U.S.C.A. § 1514A; Harvey, slip op. at 14. Smith complained to Fuentes-Wegner that Hewlett Packard was engaged in systemic racial discrimination through its employee performance rating system and, because Hewlett Packard's response to the alleged discrimination was inadequate in his view, he would take his concerns to the appropriate federal agency. Neither Smith's allegations that Hewlett Packard was engaged in systemic racial discrimination, nor his threat to file a discrimination claim with the federal government complain of conduct even remotely related to 18 U.S.C.A. §§ 1341 (mail fraud), 1343 (wire, radio, TV fraud), or 1344 (bank fraud). Therefore, to bring himself within the protection of the SOX, Smith must have complained of conduct under any of the three remaining enumerated categories of protected activity, namely securities fraud, 18 U.S.C.A. § 1348, a violation of any SEC rule or regulation, or a violation of any provision of Federal law relating to fraud against shareholders.

elements of a cause of action for securities fraud, such as a violation of SEC Rule 10b-5, are rooted in common law tort actions for deceit and misrepresentation. Id. at 16 (citing Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341 (2005)). The basic elements include a material misrepresentation (or omission), scienter, a connection with the purchase or sale of a security, reliance, economic loss and loss causation – a causal connection between the material misrepresentation and the loss. Dura Pharm., 544 U.S. at 341-342. A fact is material if the reasonable investor would consider it significant to his trading decision. Basic Inc. v. Levinson, 485 U.S. 224, 240 (1998); see Platone, slip op. at 16. With respect to omissions of fact, "there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix' of information made available. Basic, 485 U.S. at 231-232 (citing TSC Indus., Inc. v. Northway Inc., 426 U.S. 438, 449 (1976)).

   In Harvey, an ARB decision also issued subsequent to the ALJ's R. D. & O., the ALJ had determined that the complainant did not timely file a SOX complaint. The ARB decided that the original OSHA complaint, even if read to claim a right to recover against the complainant's employer for fraud or securities violations under the SOX, was untimely filed. Harvey, slip op at 13. The ARB thus affirmed the ALJ's determination. Id. The ARB, however, also reviewed timely-filed letters to determine if in any of them the complainant alleged a cause of action or violation under the SOX. The ARB determined that the complainant's complaints to management of racial and employment discrimination, personnel actions, executive decisions and corporate expenditures with which he disagreed, were not protected conduct under the SOX because they did not directly implicate the listed categories of fraud or securities violations. Id. at 14-15. The ARB stated, "A mere possibility that a challenged practice could adversely affect the financial condition of a corporation, and that the effect on the financial condition could in turn be intentionally withheld from investors, is not enough." Id. at 15. The ARB concluded in Harvey that because the complainant did not allege that he raised specific concerns about corporate fraud or securities violations or that those complaints were a contributing factor in his termination, he failed to state a SOX-protected complaint. Id. at 16. Finding no basis to relax the limitations period, the ARB found that the ALJ had not erred in dismissing the original complaint. Id. at 20.

   Thus, to come under the protection of the SOX, the whistleblower must ordinarily complain about a material, misstatement of fact (or omission) about a corporation's financial condition on which an investor would reasonably rely. The protected complaint must "definitively and specifically" relate to the SOX subject matter, be specific enough to permit compliance, and support a complainant's reasonable belief. See Harvey, slip op. at 14-15.

   We apply the principles enunciated by the ARB in Platone and Harvey to Smith's alleged protected activity. Smith alleges that Hewlett Packard terminated his employment in retaliation for his having complained to Fuentes-Wegner that Hewlett Packard was engaged in systemic discrimination of African-American employees and had not adequately addressed the discrimination, so that he intended to file a discrimination claim with the federal government. The ALJ determined that the conduct of which Smith complained, systemic racial discrimination, was not related to corporate fraud or securities violations and thus concluded that it did not constitute protected activity. We agree with the ALJ's conclusion. Smith's allegation of systemic racial discrimination and threat to file a discrimination claim with the federal government do not directly implicate corporate fraud or a securities violation. Smith did not allege, as he must, that Hewlett Packard engaged in securities fraud by misrepresenting (or omitting) any material fact in connection with the purchase or sale of a security, that Hewlett Packard violated a SEC rule or regulation, or that Hewlett Packard violated any Federal law relating to fraud against shareholders. Platone, slip op. at 17, 21, 22; Harvey, slip op. at 14-15, 16. Therefore, Smith did not engage in protected activity in this instance.

constitutes fraud on Hewlett Packard's behalf to its employees, shareholders, (particularly special populations segments who use diversity numbers, pay equity and upward mobility figures as primary criteria as to whether or not they will invest in a company.) [sic] the general public, and enforcing agencies such as the [OFCCP]." Complaint at 3. Smith reiterated to the ARB his argument that Hewlett Packard concealed the results of the AIR which, he asserted, constitutes fraudulent conduct. Smith does not specify how alleged systemic racial discrimination involves securities fraud, violates any SEC rule or regulation, or violates any Federal law relating to fraud against shareholders. Smith's argument does not even approximate any of the basic elements of a SOX claim - a material, misstatement of fact (or omission) about a corporation's financial condition on which an investor would reasonably rely. Moreover, a complainant who reasonably believes that his employer is engaged in securities fraud would not file that complaint with the EEOC.

   In any event, the relevant inquiry is not what Smith alleged in his OSHA complaint, but what he actually communicated to his employer prior to his April 22, 2005 termination. Platone, slip op. at 17. Smith did not allege to the ALJ or to the ARB that he complained prior to his termination that Hewlett Packard was engaged in securities fraud or had violated a SEC rule or regulation or any Federal law relating to fraud against shareholders, by not disclosing the results of the AIR.

    We agree with the ALJ's conclusion that Smith did not prove that he engaged in SOX-protected activity. Therefore, we agree with the ALJ's decision to dismiss the complaint. We thus AFFIRM the ALJ's R. D. & O. and DISMISS Smith's complaint.

    SO ORDERED.

            WAYNE C. BEYER
            Administrative Appeals Judge

            M. CYNTHIA DOUGLASS
            Chief Administrative Appeals Judge