Helgeson v. Soo Line Railroad Co., ARB No. 2019-0054, ALJ No. 2016-FRS-00084 (ARB Jan. 13, 2021) (per curiam) (Decision and Order Approving Settlement Agreement and Dismissing Case with Prejudice)

The ARB approved the parties’ settlement agreement and dismissed the complaint with prejudice.

Stolarik v. National Express, LLC, ARB No. 2021-0011, ALJ Nos. 2020-SOX-00036, 2020-STA-00089 (ARB Jan. 7, 2021) (Order Dismissing Complaint)

The ARB dismissed the case where Complainant failed to respond to the ARB’s order to show cause directing Complainant to explain why his appeal should not be dismissed for failing to identify Respondent and its counsel and to show proof of service.

Denneny v. MBDA, Inc., ARB No. 2018-0027, ALJ No. 2016-SOX-00032 (ARB Jan. 8, 2021) (per curiam) (Decision and Order)

PROTECTED ACTIVITY UNDER SOX MUST RELATE TO ONE THE SIX SPECIFICALLY ENUMERATED CATEGORIES SPECIFIED IN SECTION 806; COMPLAINANT DID NOT ESTABLISH THAT COMPLAINTS ABOUT INVESTMENT RETURNS AND ABOUT COMPANY’S ABILITY TO FULFILL A CONTRACT RELATED TO SUCH CATEGORIES; SOX SECTION 806 IS NOT A GENERAL ANTI-RETALIATION STATUTE

PROTECTED ACTIVITY UNDER SOX; COMPLAINANT’S RAISING OF POSSIBILITY THAT INTERIM CEO/BOARD CHAIR COULD HAVE A CONFLICT OF INTEREST IN POSSIBLE PARTNERSHIP NEGOTIATION NOT SHOWN TO BE OBJECTIVELY REASONABLE UNDER THE FACTS OF THE CASE, WHERE – INTER-ALIA - THAT PERSON HAD SELF-DISCLOSED THE POTENTIAL CONFLICT AND COMMITTED TO MANAGE IT; POTENTIAL HARM TO SHAREHOLDERS OF PUBLICLY TRADED  SUBCONTRACTOR TO RESPONDENT DID NOT GIVE RISE TO A REASONABLE BELIEF OF SHAREHOLDER FRAUD WHERE IT WAS BASED ON SEVERAL SPECULATIVE CONTINGENCIES 

In Denneny v. MBDA, Inc., ARB No. 2018-0027, ALJ No. 2016-SOX-00032 (ARB Jan. 8, 2021) (per curiam), the ARB affirmed the ALJ’s Decision and Order granting Respondent’s motion for summary decision and dismissing Complainant’s SOX complaint.  

Although the ALJ had granted the motion on the ground that MBDA was not a covered employer under SOX, and much of the briefing on appeal was devoted to this issue, the ARB declined to resolve that dispute because it affirmed the ALJ’s alternative conclusion that Complainant had not create a genuine issue of material dispute that he in engaged in conduct protected by SOX.

The ARB began with a summary of the standards for demonstrating SOX protected activity:

     To demonstrate that he engaged in SOX-protected activity, a complainant must prove that (1) he subjectively believed that the conduct complained of constituted a violation of one of the laws listed in Section 806, and (2) a reasonable person of similar experience, training, and factual knowledge would objectively believe that a violation had occurred. A complainant need not cite a specific code provision he believes was violated to engage in protected activity, but nonetheless has to complain or provide information about conduct that he reasonably believes concerns one of the six specifically enumerated categories in the statute: mail fraud, bank fraud, wire fraud, securities fraud, any provision of Federal law relating to fraud against shareholders, or any rule or regulation of the SEC. General assertions of wrongdoing untethered from these enumerated categories are not protected, nor are general inquiries. Moreover, although a complainant need not prove an actual violation of law, he must do more than speculate, argue theoretical scenarios, or share mere beliefs that some corporate activity is wrong and may theoretically affect the corporation’s financial statements and its shareholders.

Slip op. at 10 (footnotes omitted).

In the instant case, Complainant asserted three types of protected activity in the form of complaints to MBDA board members and executives.

The first asserted protected activity concerned Complainant’s complaints that MBDA’s “SABER” munitions program had a limited customer interest and was not a good investment.  The ARB agreed with the ALJ that this was not protected activity, explaining:

Even if public companies were involved in the sale or development of SABER, Denneny’s concerns about SABER’s viability, customer interest, and investment returns are not sufficiently connected to one of the six enumerated categories in Section 806.  Denneny vaguely asserts on appeal that he believed he was reporting “fraud that could impact a publicly traded company.”  However, he has not explained why he believed his complaints about the product’s viability or the company’s wasteful spending could have amounted to fraud on another company’s shareholders, nor has he explained why such a belief would have been objectively reasonable. 

Id. at 11 (footnotes omitted).  

The second asserted protected activity involved Complainant’s revealing at a board meeting that a lease from a facility needed to manufacture certain missiles had been terminated, jeopardizing MBDA’s ability to fulfill its contract with the U.S. government.  The ARB agreed with the ALJ that Complainant had not alleged that he reasonably believed that one of the laws enumerated in SOX was violated:

Denneny alleged only that he believed the termination of the Redstone Arsenal lease could cause MBDA to breach its contract with Boeing, thereby potentially affecting Boeing’s ability to fulfill its contract with the Navy. Denneny has not shown on appeal that he objectively believed that the alleged withholding of information regarding the Redstone lease from MBDA’s board or the impact the loss of the lease had on MBDA’s ability to fulfill its contract with Boeing constituted mail, wire, bank, securities, or shareholder fraud, or violated any rule or regulation of the SEC. As we have recently reiterated, SOX is not a general anti-retaliation statute. Thus, we agree with the ALJ that Denneny failed to create a genuine issue that his concerns about the Redstone lease were protected by SOX.

Id. at 12 (footnote omitted).

The third asserted protected activity concerned Complainant’s raising of a potential conflict of interest of MBDA’s interim CEO and board chair in regard to the fact that he was also serving on a board of directors with which MBDA was in discussions with to possibly provide a missile motor.  The ARB again affirmed the ALJ’s finding that this was not protected activity.

     We agree with the ALJ that SOX does not protect Denneny’s concerns about Webster’s potential conflict of interest. Although Denneny asserts that he feared Webster’s conflict could ultimately result in fraud against Boeing’s shareholders, Denneny failed to create a genuine dispute that his fear was objectively reasonable.

     Denneny admits that by sending the April 21, 2015 email, he was merely attempting to get ahead of a potential problem regarding Webster’s dual membership before any developed. Denneny does not suggest there was any evidence that Webster, who had previously self-disclosed his role with Orbital ATK and committed to managing any conflict, had taken any efforts to steer MBDA into partnering with Orbital ATK on Brimstone II missiles. Assuming those efforts might have occurred, Denneny also failed to allege that there was any connection between such efforts and harm or fraud on Boeing’s shareholders. Viewing the facts in the light most favorable to Denneny, Denneny was merely concerned that Webster’s dual membership might cause him to improperly influence MBDA’s actions and might allow him to steer MBDA to choose an inferior motor, which might negatively affect Boeing. The possibility that a challenged practice could take place, and that it could potentially adversely affect the financial condition of a publicly traded company, is not sufficient to establish an objectively reasonable belief that shareholder fraud was occurring or was likely to occur. The potential harm to Boeing’s shareholders is based on several speculative contingencies and too remote to give rise to a reasonable belief of shareholder fraud.

Id. at 13 (footnotes omitted).

Whiting-Turner/Walsh Joint Venture, ARB Nos. 2018-0008, -0010, -0012. -0013, ALJ No. 2015-DBA-00014 (ARB Jan. 8, 2021) (Order Granting Dismissal)

Case dismissed based on settlement of the parties.

Forrand v. FedEx Express, ARB No. 2019-0041, ALJ No. 2017-AIR-00016 (ARB Jan. 4, 2021) (per curiam) (Decision and Order)

PROTECTED ACTIVITY; ARB SUMMARIZES CURRENT STATE OF THE LAW ON WHAT CONSTITUTES PROTECTED ACTIVITY UNDER AIR21; INFORMATION PROVIDED MUST BE SPECIFIC AS TO AIRCRAFT SAFETY; AIR21 IS NOT A GENERAL REMEDY FOR EMPLOYMENT GRIEVANCES

PROTECTED ACTIVITY; WHERE EMPLOYER ACCEPTED COMPLAINANT’S SUGGESTION TO IMPROVE CLARITY OF POLICY ON AVOIDING DAMAGE TO PLANE DOORS, THE ARB FOUND THAT THE SUBJECTIVE AND OBJECTIVE REASONABLENESS OF COMPLAINANT’S BELIEF WAS UNDISPUTED

PROTECTED ACTIVITY; COMPLAINANT’S PRINTING OF DOCUMENTS TO PROVIDE TO OSHA WAS PROTECTED ACTIVITY UNDER AIR21’S ELEMENT OF “ABOUT TO PROVIDE” ANY INFORMATION ABOUT AN ALLEGED VIOLATION OF FEDERAL LAW RELATED TO AIR SAFETY

In Forrand v. FedEx Express, ARB No. 2019-0041, ALJ No. 2017-AIR-00016 (ARB Jan. 4, 2021) (per curiam), the ARB affirmed the ALJ’s Decision and Order denying Complainant’s AIR21 retaliation claim in a per curiam decision in which the ARB limited its discussion to Complainant’s arguments on appeal and to clarification of certain of the ALJ’s rulings.

In regard to protected activity, the ARB initially summarized the legal standard under AIR21:

     Protected activity under AIR 21 has two elements: (1) the information that the complainant provides must involve a purported violation of a regulation, order, or standard of the FAA or federal law relating to air carrier safety, though the complainant need not prove an actual violation; and (2) the complainant’s belief that a violation occurred must be subjectively held and also objectively reasonable. The information provided to the employer or federal government must be specific in relation to a given practice, condition, directive, or event that affects aircraft safety. A complainant’s belief is objectively reasonable if it is one that a person of similar training and experience would hold.

Slip op. at 3-4 (footnotes omitted).  In regard to the reasonableness of the complainant’s belief, the ARB noted “the obvious fact that the text of the statute directs us to consider whether the safety of the flying public is, or might be, enhanced by the whistleblower’s behavior. Air 21 is not a general remedy for employment grievances unrelated to air safety.”  Id. at 3, n.8.

The ALJ found that Complainant established one instance of protected activity.  The ARB, however, found three instances.  The ARB only discussed the two additional instances in its decision.

First, the ARB noted that—although the ALJ had discussed an incident in which Complainant had e-mailed his supervisor about the wording of a policy statement on avoiding damage to plane doors by moveable elevators that resulted in the policy being modified to improve clarity based on Complainant’s feedback—the ALJ had not considered whether this was protected activity.  The ARB determined that “Complainant’s e-mail to his supervisor about the policy is protected activity because it relates to protecting the airplane’s doors and, obviously, to air safety. The Complainant’s subjective belief and objective reasonableness of that belief are undisputed because Respondent accepted Complainant’s suggestion and took action in response to it.”  Id. at 4.

Second, the ALJ found that Complainant’s printing of documents at one of Respondent’s facilities for the purpose of supplying them to OSHA was “not protected activity because Complainant’s ‘individual steps’ of printing the documents were not discreet protected activity under the Act.”  Id. at 4-5 (footnote omitted).    The ARB, however, found that this was protected activity under the “about to provide” element of AIR21:

Th[e ALJ’s finding] is correct as far as it goes, but AIR 21 protects an employee from retaliation when the employee is “about to provide” any information about an alleged violation of Federal law related to air safety. The Board has held that “an employee engages in protected activity if he attempts to provide information of retaliation that violates AIR 21.” In this instance, Complainant printed documents. In printing the specific documents he did, Complainant was “about to provide” relevant information for his AIR 21 complaint, which concerned an alleged violation of Federal law related to air safety. Complainant therefore engaged in protected activity.

Id. at 5 (footnotes omitted).  The ARB noted, however, that this was harmless error by the ALJ because Complainant had not been subjected to retaliation.
 
ADVERSE ACTION; ARB SUMMARIZES CURRENT STATE OF THE LAW ON WHAT CONSTITUTES ADVERSE ACTION UNDER AIR21

ADVERSE ACTION; SUPERVISOR’S ALLEGED STATEMENT TO BE CAREFUL BECAUSE “THEY ARE WATCHING YOU” FOUND NOT TO ESTABLISH ADVERSE ACTION UNDER THE FACTS OF THE CASE WHERE RESPONDENT MAINTAINED THAT THE COMMENT RELATED TO THE FACT THAT COMPLAINANT WAS WEARING A HAT, MAKING IT DIFFICULT TO DETERMINE WHETHER HE WAS WEARING THE CORRECT SAFETY HEAD GEAR, AND WHERE ANOTHER MANAGER HAD ASSURED COMPLAINANT THAT HE WAS NOT UNDER SURVEILLANCE

In Forrand v. FedEx Express, ARB No. 2019-0041, ALJ No. 2017-AIR-00016 (ARB Jan. 4, 2021) (per curiam), the ARB affirmed the ALJ’s Decision and Order denying Complainant’s AIR21 retaliation claim in a per curiam decision in which the ARB limited its discussion to Complainant’s arguments on appeal and to clarification of certain of the ALJ’s rulings.

In regard to adverse action, the ARB initially summarized the legal standard under AIR21:

     AIR 21 prohibits an employer from discharging or otherwise discriminating “against an employee with respect to compensation, terms, conditions, or privileges of employment” for engaging in protected conduct. It is illegal “to intimidate, threaten, restrain, coerce, blacklist, discharge or in any other manner discriminate against any employee” who engages in protected activity.” The Board has said that adverse action may also include firing, failure to hire or promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. An adverse action is “more than trivial” when it is “materially adverse” so as to “dissuad[e] a reasonable worker” from protected activity.

Slip op. at 5 (footnotes omitted).   The ARB affirmed the ALJ’s finding that Complainant suffered adverse actions as supported by substantial evidence and consistent with the law.  The ARB, however, addressed an additional allegation by Complainant that Respondent surveilled him or threated him when a supervisor told him to “be careful, they are watching you.”  The ALJ had not addressed this allegation specifically in his opinion as adverse action, although he had made credibility findings on the relevant events.  The ARB found that the record did not establish that this was protected activity, stating:

Respondent claims it was difficult to tell if Complainant was wearing the correct safety gear on his head because he was wearing a hat, which prompted the comment. Subsequently, Complainant met with another manager about the conversation and said he felt threatened. The manager assured Complainant that he was not under surveillance. Afterwards, Complainant filed a workplace violence complaint.  We find that a supervisor’s comment of this kind, without more, is not an adverse action.

Id. at 5-6.

HOSTILE WORK ENVIRONMENT; ARB SUMMARIZES CURRENT STATE OF THE LAW ON WHAT CONSTITUTES A HOSTILE WORK ENVIRONMENT UNDER AIR21; CLAIM MUST ESTABLISH INTENTIONAL HARASSMENT RELATED TO PROTECTED ACTIVITY, WHICH IS SUFFICIENTLY SEVERE OR PERVASIVE AS TO ALTER THE CONDITIONS OF EMPLOYMENT, AND TO CREATE AN ABUSIVE WORKING ENVIRONMENT SUCH THAT IT WOULD HAVE DETRIMENTALLY AFFECTED A REASONABLE PERSON AND DID DETRIMENTALLY AFFECT COMPLAINANT

HOSTILE WORK ENVIRONMENT; ALJ SHOULD HAVE ACKNOWLEDGED AND CONSIDERED ALL INCIDENTS ALLEGED BY COMPLAINANT AS SHOWING A HOSTILE WORK ENVIRONMENT—BUT—FAILURE TO DO SO WAS HARMLESS ERROR WHERE SUBSTANTIAL EVIDENCE SUPPORTED ALJ’S CONCLUSION THAT COMPLAINANT FAILED TO ALLEGE SUFFICIENTLY SEVERE AND PERVASIVE HARASSMENT

In Forrand v. FedEx Express, ARB No. 2019-0041, ALJ No. 2017-AIR-00016 (ARB Jan. 4, 2021) (per curiam), the ARB affirmed the ALJ’s Decision and Order denying Complainant’s AIR21 retaliation claim in a per curiam decision in which the ARB limited its discussion to Complainant’s arguments on appeal and to clarification of certain of the ALJ’s rulings.

In regard to hostile work environment, the ARB initially summarized the legal standard under AIR21:

     Our final issue is Complainant’s hostile work environment claim. To prevail, Complainant must prove that: 1) he engaged in protected activity; 2) he suffered intentional harassment related to that activity; 3) the harassment was sufficiently severe or pervasive so as to alter the conditions of employment and to create an abusive working environment; and 4) the harassment would have detrimentally affected a reasonable person and did detrimentally affect the complainant. 

     Proving a hostile work environment is a high bar. Discourtesy or rudeness is not harassment, nor are the ordinary tribulations of the workplace, such as sporadic use of abusive language, joking about protected status or activity, and occasional teasing. Relevant circumstances to consider in assessing whether conduct amounts to a hostile work environment include “the frequency of the discriminatory conduct; its severity, whether it is physically threatening or humiliating, or a mere offensive utterance, and whether it unreasonably interferes with an employee’s work performance.”

Slip op. at 6 (footnotes omitted).

In his decision, the ALJ had addressed the circumstances surrounding Complainant’s earlier AIR21 complaints and other ongoing incidents detailed in the AIR21 complaint.  The ARB also noted a few “smaller events” alleged by Complainant as contributing to a harassing environment, such as—among other examples—a discussion about a possible transfer to a department where Complainant had a negative history, and a supervisor’s offer to drive Complainant home rather than provide a cab ride when Complainant had been upset.  The ARB noted:  “In sum, he argues his employer has retaliated against him in ways both large and small, and that the alleged retaliation is sufficiently pervasive to create a hostile work environment.”  Id. at 7.  The ARB determined that the ALJ should have acknowledged and considered the “smaller incidents,” but that the failure to do so was harmless error.  The ARB stated:

The ALJ correctly held that Complainant failed to prove that he was subject to a hostile work environment. He held that Complainant only satisfied the first prong—engaging in protected activity—of the four prong test. However, the ALJ failed to specifically acknowledge the smaller incidents Complainant alleged. Because a hostile work environment is an alternative theory of relief, those small incidents should be noted and given consideration. Despite a less than complete analysis, the ALJ’s conclusion is sound—Complainant makes no allegations that amount to a sufficiently severe and pervasive harassment. The ALJ’s conclusion here, as elsewhere, is supported by substantial evidence and is consistent with the law.

Id. (footnote omitted).