Ingrodi v. CSX Transportation, Inc., ARB No. 2020-0030, ALJ No. 2019-FRS-00046 (ARB Mar. 31, 2021) (Order Vacating and Remanding)
PROTECTED ACTIVITY; ARB REITERATES ITS HOLDING IN CIESLICKI THAT REPORTING, OR REFUSING TO WORK BECAUSE OF, A PERSONAL, NON-WORK RELATED ILLNESS MAY CONSTITUTE
PROTECTED ACTIVITY UNDER SECTION 20109(b)(1) OF THE FRSA; COMMUNICATION OF SUCH TO RESPONDENT MUST MEET THE NOTICE OR REPORTING REQUIREMENTS OF FRSA SECTION 20109(b)(1)
In Ingrodi v. CSX Transportation, Inc., ARB No. 2020-0030, ALJ No. 2019-FRS-00046 (ARB Mar. 31, 2021), alleged that Respondent violated the FRSA by terminating his employment after he refused to work when he had a non-work related illness. Complainant had been suffering from vomiting and diarrhea, and “believed that if he had worked that day, his medical condition would have affected his ability to safely operate a train and make him a danger to himself and/or co-workers.” Slip op. at 2. The ALJ granted Respondent’s motion for summary decision determining, based on the decisions of several federal courts, that a personal, non-work related illness does not constitute a hazardous condition under the FRSA. The ARB remanded for further proceedings based on its subsequent decision in Cieslicki v. Soo Line Railroad Co., ARB No. 2019-0065, ALJ No. 2018-FRS-00039 (ARB June 4, 2020), holding that a “hazardous safety or security condition” may result from an employee working in an impaired or diminished physical state and that the FRSA “does not require that a condition be ‘work-related’ or state that the condition cannot relate to an employee’s physical condition.” Id. at 6 (citing 49 U.S.C. § 20109(b)(1)(A) and (B)). The ARB wrote:
We reiterate our conclusion in Cieslicki that Section 20109(b)(1) of the FRSA “does not require that a condition be ‘work-related’ or state that the condition cannot relate to an employee’s physical condition.” Consistent with this conclusion, we hold that an employee impaired by an illness can create a hazardous safety or security condition under the FRSA. Depending on the circumstances of the particular case, a worker impaired by illness, like a worker impaired by alcohol or like a faulty or unsafe piece of equipment or line of track, could present a danger or threat of serious harm or injury to the worker, to his or her colleagues, and to the public. To hold otherwise could implicitly incentivize impaired employees to work despite the risk of causing great harm or injury to themselves or those around them, for fear of discipline. In light of Section 20109(b)(1)’s broad and general language, the overarching purposes of the FRSA, and our precedent in the same and analogous contexts, we hold that reporting, or refusing to work because of, a personal, non-work related illness may constitute protected activity under Section 20109(b)(1) of the FRSA.
Although there is the possibility that a personal, non-work related illness could, under certain circumstances, create a hazardous safety or security condition, we do not opine on whether Ingrodi’s illness created such a condition. Additionally, we do not opine on whether Ingrodi reported and/or notified CSX of the purported hazardous safety or security condition, as required by the FRSA.
Based on the current record, the evidence shows that Ingrodi initially communicated that he was sick and could not work, and that the treating emergency room doctor ordered him to remain off work for two days (but only later communicated that he explicitly believed his illness prevented him from safely conducting a train). Accordingly, we remand the matter to the ALJ to further develop the record, as reasonably necessary, and determine whether Ingrodi’s nonwork-related illness, and concomitant refusal to work, constituted a “hazardous safety or security condition” that is protected activity under FRSA. In reaching this determination, the ALJ should consider evidence concerning, for example, the nature and extent of Ingrodi’s illness and symptoms, the nature of the work he was expected or could have performed, and the impact his illness and symptoms would have had on his ability to perform that work.
In addition, the ALJ must determine on remand whether Ingrodi’s communication to CSX satisfied the notice or reporting requirements of FRSA Section 20109(b)(1). These issues present factual or legal questions that should be resolved by the ALJ on remand in light of our holding in Cieslicki.
Id. at -9 (footnotes omitted).
Moody v. National Western Life Insurance Co., ARB No. 2020-0014, ALJ No. 2019-SOX-00031 (ARB Mar. 31, 2021) (per curiam) (Decision and Order)
COVERED EMPLOYEE UNDER SOX; “FUNCTIONAL EMPLOYEE” THEORY DID NOT BRING COMPLAINANT WITHIN SOX COVERAGE WHERE THE SOX COMPLAINT SOUGHT RELIEF FOR COMPLAINANT’S COMPANY RATHER THAN COMPLAINANT PERSONALLY AS AN EMPLOYEE
In Moody v. National Western Life Insurance Co., ARB No. 2020-0014, ALJ No. 2019-SOX-00031 (ARB Mar. 31, 2021) (per curiam), Complainant was the owner, president, and CEO of Moody Insurance Group (MIG), a company which sells insurance for and on behalf of Respondent. Complainant also entered into a contract with MIG and with Respondent in his personal capacity as a managing general agent. Complainant was also a major shareholder in Respondent. Complainant raised a concern that Respondent had not fully disclosed in a 10-Q conduct that had resulted in a significant administrative penalty in Brazil, and later filed a shareholder derivative lawsuit that was dismissed. Complainant alleged that thereafter Respondent retaliated by cancelling a major contract for a top selling MIG agent, by causing communication problems with MIG agents resulting in delays and cancellation of certain contracts, and by causing Complainant to file the shareholder derivative suit to try to secure corrective action. OSHA dismissed the complaint, and the ALJ granted summary decision in favor of Respondent on the ground that Complainant was not a covered employee under the SOX retaliation provision.
On appeal, Complainant argued that he was a covered “employee” as an “agent” of Respondent, citing the Supreme Court’s decision in Lawson v. FMR LLC, and the ARB’s decision in Spinner v. Landau. The ARB was not persuaded under the facts of the case, which indicated that Complainant was seeking relief on behalf of MIG rather than for the impact of Respondent’s actions on his own employment. The ARB stated:
Under these principles, Complainant argues that an agent for a public company is protected against discrimination by the public company if is functionally acting as an employee of the public company. Complainant contends that he is a “functional employee” of Respondent because he sold insurance on behalf of Respondent and acted on behalf of Respondent when he reported the alleged misconduct. Complaint cites three federal district court cases in which he alleges that the “functional employee” concept is used to permit a contractor employee to bring a whistleblower claim against a public company.
A critical difference between Complainant’s claim and the actions in the three cases he cites, however, is that all the plaintiffs in the district court cases alleged retaliatory measures, mainly termination, that “discriminated against [the plaintiff] in the terms and conditions of [their] employment,” as prohibited by Section 806. Here, Complaint does not allege Respondent affected the terms or conditions of his employment. Rather, Complainant alleges that Respondent cancelled the contract of an agent that works for Complainant, delayed communications with MIG agents, and caused him to file a shareholder derivative lawsuit. In fact, Complainant affirms that his employment remains unaffected, pleading that his contracts with Respondent are still “in full force and effect.”
The lack of actionable retaliatory measures under the SOX is evinced in the remedies requested in the complaint. Section 806 provides that a covered employee is entitled to relief necessary to make them whole, including “reinstatement with the same seniority status that the employee would have had, but for the discrimination” and “back pay, with interest.” These remedies may be employed to remedy against an act that affects the terms and conditions of the complainant’s employment, such as termination, demotion, or suspension. In his complaint, however, Complainant seeks compensation for what appears to be loss of revenue for his business, rather than his own employment. Relief under Section 806 also includes litigation costs, but such relief may be awarded only if the litigation related to the terms and conditions of the employment. Complainant’s derivative lawsuit largely concerns his status as a shareholder in Respondent, not his employment as an insurance agent.
Accordingly, Complainant has failed to establish that SOX covers his claim under these unique set of facts. In order for a claim to be within the scope of the SOX whistleblower statute, a complainant must allege that a covered employer discriminated against them in the terms and conditions of their employment because they engaged in activity protected by the SOX. Here, Complainant’s claim is not within the scope of the SOX because he in effect brought this claim on behalf of his company, rather than on behalf of himself as an employee. As noted by the ALJ, Congress did not intend for Section 806 to be used as “creative alternative mechanisms for business disputes and corporate litigation.” We therefore affirm the ALJ’s conclusion that Complainant is not a covered employee under the SOX.
Slip op. at 7-10 (footnotes omitted).
CONVERSION OF MOTION TO DISMISS TO MOTION FOR SUMMARY DECISION WHERE BRIEFING PRESENTS EVIDENCE OUTSIDE THE PLEADINGS IS ROUTINE
In Moody v. National Western Life Insurance Co., ARB No. 2020-0014, ALJ No. 2019-SOX-00031 (ARB Mar. 31, 2021) (per curiam), Respondent filed with the ALJ a motion to dismiss arguing that Complainant was not a covered employee. Respondent attached supporting exhibits. Complainant’s response brief also included exhibits. Because the parties both submitted and relied upon evidence outside of the pleadings, the ALJ treated the motion as one for summary decision under 29 C.F.R. § 18.72. The ALJ granted summary decision. On appeal, Complainant argued that the ALJ erred by converting to motion to dismiss to a motion for summary decision by considering evidence outside the pleadings. The ARB, however, found that the case cited by Complainant, actually stated the opposite -- specifically, “the district court erred when it considered evidence outside the pleadings—and not referred to therein—without converting the motion to dismiss into a motion for summary judgment.” Brand Coupon Network, LLC v. Catalina Mktg. Corp., 748 F.3d 631, 635 (5th Cir. 2014). The ARB stated: “Indeed, the Board regularly affirms ALJ decisions that treat motions to dismiss as motions for summary decision when the ALJ considers evidence outside of the pleadings.” Slip op at 9-10 (footnote omitted).
SUMMARY DECISION; PRINCIPLE STATED BY THE ARB IN SYLVESTER THAT SOX CLAIMS ARE RARELY SUITED FOR DISMISSAL UNDER SUMMARY DECISION DOES NOT APPLY TO AN EXPANDED COMPLAINT FILED BY COUNSEL BEFORE THE ALJ; SUCH AN EXPANDED COMPLAINT SHOULD BE ABLE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED
In Moody v. National Western Life Insurance Co., ARB No. 2020-0014, ALJ No. 2019-SOX-00031 (ARB Mar. 31, 2021) (per curiam), argued that the ALJ improperly granted summary decision after having converted Respondent’s motion to dismiss to a motion for summary decision, on the ground that Complainant was not a covered employee. Complainant argued that the ALJ erred because the ARB had instructed in Sylvester v. Parexel Int’l LLC, ARB No. 2007-0123, ALJ Nos. 2007-SOX-00039, -00042 (ARB May 25, 2011) that SOX claims “are rarely suited for Rule 12 dismissals” and “ALJs should freely grant parties the opportunity to amend their initial filings to provide more information about their complaint.” The ARB, however, found that the situation in the instant case was distinguishable, as the question of coverage had been addressed in an “expanded” complaint filed by Complainant’s counsel before the ALJ during formal adjudication. The ARB wrote:
The Board’s concern in Sylvester, holding an informal complaint made by the complainant to begin an OSHA investigation to the same standard as a formal complaint made during litigation, however, does not apply in this case. Here, the ALJ considered the complaint filed by counsel before the ALJ, not the complaint filed with OSHA to initiate an investigation. Complainant’s counsel amended the original complaint to OSHA and then supplemented it with several exhibits through the briefing on the Motion to Dismiss. “An expanded complaint” that is “filed by counsel directly with the” ALJ “should be able to state a claim upon which relief can be granted without unwarranted presumptions and pass muster when subjected to the scrutiny applied to any other complaint.”
Moreover, Complainant fails to articulate how he would have avoided dismissal or summary decision of his complaint if the ALJ had not converted the motion or gave him an opportunity to amend his complaint. Complainant had already submitted additional evidence to support his contentions, which the ALJ explicitly considered in the decision. Complainant claims he would have offered even more evidence or presented his arguments differently if he knew that he was being held to a summary decision standard but fails to articulate what evidence or how he would have argued otherwise.
Complainant, however, clearly demonstrates in his briefings and complaint that his employment has not been affected by Respondent. Complainant had pled that the contracts between Respondent and himself, which he attached to the briefings, remain in effect, and Respondent does not dispute any material facts presented by Complainant concerning the alleged adverse actions. It is difficult to imagine how Complainant could have avoided the result below. Thus, the ALJ did not commit any reversible error when dismissing the complaint.
Slip op. at 11 (footnotes omitted).
Patricia Reed, Administratrix of the Estate of S. Scott Sittner v. Jacobs Engineering Group, ARB Nos. 2019-0062 and -0066, ALJ No. 2017-PSI-00001 (ARB Mar. 31, 2021) (per curiam) (Decision and Order)
PROTECTED ACTIVITY UNDER THE PSIA; COMPLAINANT’S REPORTED BELIEF THAT QUALITY CONTROL AUDITORS’ TRAINING WAS SO INADEQUATE AS TO WARRANT A “STOP WORK” CONDITION WAS NOT PSIA PROTECTED ACTIVITY, WHERE THOSE AUDITORS WORK WAS NOT MANDATED BY LAW OR DIRECTIVE OF THE STATE UTITILIES COMMISSION, BUT WAS MERELY AN INTERNAL AUDITING PROCESS ON COMPLETENESS OF REPORTS AND NOT A VALIDATION OF THE ACCURACY OF THE INFORMATION REPORTED
In Patricia Reed, Administratrix of the Estate of S. Scott Sittner v. Jacobs Engineering Group, ARB Nos. 2019-0062 and -0066, ALJ No. 2017-PSI-00001 (ARB Mar. 31, 2021) (per curiam), Complainant had been hired by a consulting company on a two month trial basis. Complainant’s duties included managing Quality Auditors and updating a Quality Plan in support of services his employer provided to Respondent SoCalGas, which was indirectly owned by Respondent Sempra. The Quality Plan was a not mandated by the state public utilities commission, or by any federal or state law. During his trial period, Complainant had professional and personal conflict with his employer’s staff, and was failing to produce tangible work product on revision of the Quality Plan. Complainant also raised concerns to his supervisor, and to SoCalGas’s Quality Risk and Compliance Manager, about the adequacy of the training of the Quality Auditors. He reported to his supervisor and the supervisor’s supervisor, his belief that the training problem was severe enough to warrant a “stop work” condition. The supervisor did not believe that the training issue addressed a safety regulation or standard that applied to the gas industry, and did not believe that Complainant had reported a safety concern or violation. Eventually, after consultation with the SoCalGas manager, Complainant’s employer decided to end the trial period two weeks early based on his failure to update the Quality Plan, and his performance of the job in an unprofessional and disruptive manner. Complainant then filed a PSIA retaliation complaint with OSHA. Following a hearing, the ALJ found both that Complainant failed to prove that he engaged in protected activity, and that Respondents demonstrated that they would have taken the same personnel action in the absence of Complainant’s asserted protected activity.
The ARB determined that Complainant’s alleged protected activities included his assertion that a “Stop Work” condition existed, and complaints about the qualifications and methods of the Quality Auditor, were not PSIA-protected activity. His belief that a “Stop Work” condition existed was based on his belief that the Quality Auditors had been inadequately trained. The Quality Auditors’ tasks, however, were governed only by the Quality Plan, which was an internal auditing process that was separate and distinct from regulatory or state public utilities commission requirements. Their reports went to content and completeness of documentation, and not they did not validate the accuracy of the information presented. The ARB found no legal support for Complainant’s contention that the Auditors were performing their task in violation of any law.
AFFIRMATIVE DEFENSE UNDER THE PIPELINE SAFETY IMPROVEMENT ACT; RECORD SUPPORTED ALJ’S DETERMINATION THAT COMPLAINANT’S TRIAL EMPLOYMENT PERIOD WAS NOT EXTENDED DUE TO COMPLAINANT’S UNPROFESSIONAL APPROACH TO HIS JOB AND HIS FAILURE TO MAKE PROGRESS ON AN ASSIGNMENT RATHER THAN ANY PURPORTED PROTECTED ACTIVITY
In Patricia Reed, Administratrix of the Estate of S. Scott Sittner v. Jacobs Engineering Group, ARB Nos. 2019-0062 and -0066, ALJ No. 2017-PSI-00001 (ARB Mar. 31, 2021) (per curiam), Complainant had been hired by a consulting company on a two month trial basis. Complainant’s duties included managing Quality Auditors and updating a Quality Plan in support of services his employer provided to Respondent SoCalGas, which was indirectly owned by Respondent Sempra. The Quality Plan was a not mandated by the state public utilities commission, or by any federal or state law. During his trial period, Complainant had professional and personal conflict with his employer’s staff, and was failing to produce tangible work product on revision of the Quality Plan. Complainant also raised concerns to his supervisor, and to SoCalGas’s Quality Risk and Compliance Manager, about the adequacy of the training of the Quality Auditors. He reported to his supervisor and the supervisor’s supervisor, his belief that the training problem was severe enough to warrant a “stop work” condition. The supervisor did not believe that the training issue addressed a safety regulation or standard that applied to the gas industry, and did not believe that Complainant had reported a safety concern or violation. Eventually, after consultation with the SoCalGas manager, Complainant’s employer decided to end the trial period two weeks early based on his failure to update the Quality Plan, and his performance of the job in an unprofessional and disruptive manner. Complainant then filed a Pipeline Safety Improvement Act of 2002, 49 U.S.C. § 60129 (2020) (PSIA) retaliation complaint with OSHA. Following a hearing, the ALJ found both that Complainant failed to prove that he engaged in protected activity, and that Respondents demonstrated that they would have taken the same personnel action in the absence of Complainant’s asserted protected activity.
The ARB found that the record supported the ALJ’s conclusion that Complainant’s alleged protected activity did not contribute to the termination of his trial period. The record shows that Complainant performed his job duties in an unprofessional manner and antagonized a number of co-workers; that Complainant’s supervisor and the SoCalGas manager were dissatisfied with Complainant’s performance prior to any communication that could potentially qualify as protected activity. Complainant had been at the mid-point of his trial period that it was unlikely that he would be offered a permanent position, Complainant admitted that he acted unprofessionally and purposely misrepresented his knowledge of applicable regulations. The ARB agreed with the ALJ that “Sittner’s work conduct and performance never approached anything that could be legitimately described as satisfactory to Respondents.”
COVERED EMPLOYER; REMAND FOR ALJ TO ISSUE RULING AS TO COVERAGE NOT NECESSARY WHERE ARB AFFIRMED ALJ’S DISMISSAL OF THE COMPLAINT ON OTHER GROUNDS
In Patricia Reed, Administratrix of the Estate of S. Scott Sittner v. Jacobs Engineering Group, ARB Nos. 2019-0062 and -0066, ALJ No. 2017-PSI-00001 (ARB Mar. 31, 2021) (per curiam), the ARB affirmed on appeal the ALJ’s determinations that Complainant failed to prove that he engaged in protected activity under the Pipeline Safety Improvement Act of 2002, 49 U.S.C. § 60129 (2020) (PSIA), and that Respondents also established their same-action defense. On appeal, Respondents asked the ARB to also find that they could not be liable under the PSIA because they were not Complainant’s employer. They had raised the issue before the ALJ, but he did not reach the issue because he was dismissing on other grounds. The ARB agreed with the ALJ that it was not necessary to make specific findings on the coverage issue, and because it was affirming the ALJ’s dismissal on the other grounds, a remand to the ALJ was not needed.
American Security Programs, Inc. v. USDOL, Wage and Hour Div., ARB No. 2019-0084 (ARB Mar 25, 2021) (per curiam) (Decision and Order)
SERVICE CONTRACT ACT SECTION 4(c); TEMPORARY INTERIM CONTRACTS THAT ALLOW SUFFICIENT TIME TO SOLICIT BIDS FOR A FULL TERM CONTRACT DO NOT NEGATE THE APPLICATION OF SECTION 4(c) TO FULL TERM SUCCESSOR CONTRACT
In American Security Programs, Inc. v. USDOL, Wage and Hour Div., ARB No. 2019-0084 (ARB Mar 25, 2021) (per curiam), SecTek, Inc., provided security guard services to NARA. Wage rates and fringe benefits were established in the collective bargaining agreement (CBA) between the International Guards Union of America, Local 153 (IGUA) and SecTek (the SecTek CBA). After the base year, NARA decided not to exercise the second option year with SecTek, and awarded a sole-source contract to American Security Programs, Inc. (ASP). During the period of the sole-source contract, ASP was the successful bidder for the next contract. ASP entered into a CBA with IGUA, and requested NARA to increase the price for base year and to incorporate the wage and fringe benefits provided for in the new CBA into the wage determination of the contract. NARA requested a determination from the WHD Administrator. The Administrator ruled that Section 4(c) of the SCA required a wage determination for the ASP/NARA full-term contract based upon the SecTek CBA, not ASP’s own CBA.
The Administrator explained that under the applicable regulations, ASP’s sole-source contract was a temporary interim contract that did not break the predecessor/successor contract relationship under Section 4(c) between the SecTek/NARA full term contract and that ASP/NARA full term contract.16 The Administrator concluded that Section 4(c) required ASP to pay its workers during the base year of the ASP/NARA contract no less than the wages and fringe benefits that the workers would have received under the SecTek CBA.
Slip op. at 5 (footnote omitted).
The ARB affirmed the Administrator’s determination. The ARB ruled that
Temporary interim contracts that provide a contracting agency “sufficient time to solicit bids for a full term contract do not negate the application of Section 4(c) to a full term successor contract.” Thus, we agree with the Administrator that the SecTek/NARA contract was the predecessor full term contract, and, therefore, the SecTek CBA constitutes the applicable Section 4(c) WD for the base year of the successor contract between ASP and NARA.
Id. at 7 (footnote omitted). The ARB found without merit ASP’s contention that the sole-source contract was a full term successor contract, and not a temporary interim contract. The ARB stated:
The SCA does not impose the requirement of an interruption of services for a contract to be considered a temporary interim contract; nor does it provide a fixed limit for the length of what is to be considered a temporary interim contract. Neither do the SCA’s implementing regulations. Section 4.163(h) plainly does not require an agency to experience an interruption of contract services before it may enter into a temporary interim contract. This regulation also does not place any fixed limit on how long a temporary interim contract can last.
Id. at 8 (footnote omitted).
The ARB also was not persuaded by ASP’s argument that “its CBA should set the wage determination because it provides higher wages and fringe benefits than the SecTek CBA.” Id. The ARB stated:
However, the “Administrator specifies the minimum monetary wages and fringe benefits to paid as required under the Act” by either a prevailing locality rate or by wages rates and fringe benefits contained in a CBA through the successorship doctrine.” Thus, the SCA’s successorship doctrine does not prohibit ASP from paying wages and fringe benefits that are higher than the SecTek CBA.
Id. (footnotes omitted).
Leviege v. Vodafone US, Inc., ARB No. 2019-0058, ALJ No. 2016-SOX-00001 (ARB Mar. 19, 2021) (per curiam) (Decision and Order)
PROTECTED ACTIVITY; ARB AFFIRMS ALJ’S FINDING THAT COMPLAINANT HAD NOT REPORTED ANY VIOLATIONS OF THE LAWS ENUMERATED IN SOX, AND THEREFORE DID NOT ENGAGE IN PROTECTED ACTIVITY; ALJ’S FINDING WAS LARGELY BASED ON CREDIBILITY DETERMINATIONS
In Leviege v. Vodafone US, Inc., ARB No. 2019-0058, ALJ No. 2016-SOX-00001 (ARB Mar. 19, 2021) (per curiam), the ARB affirmed the ALJ’s Decision and Order finding that Complainant had not engaged in activity protected under Section 806 of the Sarbanes-Oxley Act. The ALJ’s finding that Complainant had not reported any SOX violations was largely based on the ALJ’s determination that Complainant’s testimony had not been credible.
Complainant alleged that Respondent billed a client for services not yet performed, but the ALJ found that the client had agreed to billing of parts of the project prior to completion. The ARB noted that the relevant service agreement was in the record and that Complainant pointed to no provision that was violated and did not explain why the billing was a violation of the laws listed in SOX.
Complainant argued that Respondent overstated its earnings by reporting income from unpaid invoices, but the ALJ relied on contrary testimony of two of Respondent’s managers, and Complainant did not address that ALJ ruling in the appeal.
Complainant alleged that a supervisor encouraged her to forge inventory information, but the ALJ cited to Complainant’s deposition testimony downplaying the significance of that alleged request, and the ALJ found that the supervisor had credibly denied that Complainant ever complained about fraudulent billing or accounting practices, or SOX violations.
Complainant cited an email the supervisor sent to several individuals, but the ARB noted that Complainant had not explained how the email described an illegal act.
Complainant had, on one occasion, paid employees twice their salary in a single pay period. The ALJ, however, found this was an unintentional error.
Klinger v. BNSF Railway Co., ARB No. 2019-0013, ALJ No. 2016-FRS-00062 (ARB Mar. 18, 2021) (Order Reversing and Remanding)
CONTRIBUTORY FACTOR CAUSATION; INEXTRICABLY-INTERTWINED/CHAIN-OF-EVENTS CAUSATION WAS REJECTED IN THORSTENSON; ALJ MUST BE CAREFUL TO EVALUATE CIRCUMSTANTIAL EVIDENCE IN THE CONTEXT OF CONDUCT PROTECTED BY THE FRSA AND NOT AS TO GENERALIZED IMPROPRIETY OF RESPONDENT’S ACTIONS
SAME-ACTION DEFENSE; ; INEXTRICABLY-INTERTWINED/CHAIN-OF-EVENTS CAUSATION WAS REJECTED IN THORSTENSON; ALJ MUST BE CAREFUL TO EVALUATE CIRCUMSTANTIAL EVIDENCE IN THE CONTEXT OF CONDUCT PROTECTED BY THE FRSA AND NOT AS TO GENERALIZED IMPROPRIETY OF RESPONDENT’S ACTIONS
NINTH CIRCUIT’S REVERSAL OF ARB’S DECISION IN THORSTENSON; ARB EXPLAINS THAT, IN LIGHT OF THE COURT’S ABBREVIATED DISCUSSION IN AN UNPUBLISHED OPINION, THE ARB WILL CONTINUE TO ADHERE TO ITS OPINION THAT APPLYING AN INEXTRICABLY-INTERTWINED OR CHAIN-OF-EVENTS ANALYSIS FOR THE ISSUES OF CAUSATION AND THE SAME-ACTION DEFENSE IS REVERSIBLE ERROR
In Klinger v. BNSF Railway Co., ARB No. 2019-0013, ALJ No. 2016-FRS-00062 (ARB Mar. 18, 2021), the ARB remanded the case to the ALJ to reassess the contributory factor and “same-action” defense elements of the case because the ALJ had cited and applied the “inextricably intertwined” analysis that later had been rejected by the ARB in Thorstenson v. BNSF Ry. Co., ARB Nos. 2018-0059, -0060, ALJ No. 2015-FRS-00052 (ARB Nov. 25, 2019).
ALJ appears to have applied “but for” reasoning
The ARB found that it appeared that the ALJ determined that Complainant’s reporting of an injury contributed to his suspension because it prompted his automatic enrollment in Defendant’s voluntary Medical Care Management Program (MCMP), which in turn – as unfairly applied – resulted in discipline of Complainant. Essentially, Complainant – who was on an extended disability leave – had not been responsive to medical information requests from the MCMP’s field manager, and eventually the Division’s General Manager directed Complainant to provide the information – but this time as an order of the employer rather than a request from the MCMP. Complainant’s failure to ensure that the medical information was timely delivered resulted in a 30 day suspension. The ARB elaborated: “Stated another way, the ALJ appears to have found that the MCMP never would have been invoked, and Klinger therefore never would have been unreasonably disciplined for his refusal to provide his medical information as part of that program, but for his reporting of a workplace injury.”
The ARB reviewed the ALJ’s decision and concluded that it could not ascertain “whether the ALJ would have concluded that Klinger’s protected activity contributed to his suspension had he not applied the inextricably intertwined analysis to link BNSF’s objectionable conduct to Klinger’s reporting of a workplace injury.” Slip op. at 9.
ALJ appears to have been influenced by Respondent’s general objectionable conduct
The ARB also determined that the ALJ’s contributory factor causation analysis had been driven in part by a conclusion that BNSF’s decision to discipline Complainant was egregious and unfair; that the BNSF’s conduct had been misleading, heavy-handed and an unfair departure from company policy; and that BNSF’s attempts to obtain Complainant’s medical records was an unreasonable invasion of Complainant’s privacy. The ARB stated that, even if this was true, it did not necessarily establish contributory factor causation. The ARB stated: “Although BNSF may have engaged in objectionable conduct, and although that objectionable conduct may be sequentially linked to Klinger’s reporting of a workplace injury, the ALJ must nevertheless assess whether Klinger’s protected activity, alone or with other factors, actually influenced BNSF’s conduct.” Id. at 12 (footnote omitted). The ARB continued:
We do not discount the possibility that the ALJ may appropriately find on remand that the way BNSF treated Klinger in the context of the MCMP and its demands for his medical records constitutes circumstantial evidence that Klinger’s reporting of a workplace injury contributed to BNSF’s decision to suspend him. As the Board has repeatedly emphasized, a complainant’s protected activity need only be one, even insubstantial, factor in the employer’s adverse action, and may still “contribute” to the adverse action even if other factors also influenced the decision. We have also often stated that inconsistent application of a company’s policies could be circumstantial evidence of retaliation. The ALJ may also consider other circumstantial evidence, including temporal proximity, shifting explanations for BNSF’s actions, antagonism or hostility towards Klinger’s protected activity, the falsity of BNSF’s explanation for the adverse action taken, or a change in BNSF’s attitude towards Klinger after he engaged in protected activity.
However, it is crucial on remand that the ALJ not simply evaluate the merits of the MCMP, BNSF’s deviations from the MCMP policy as described on paper, or the fairness of BNSF’s conduct in its interactions with Klinger in the abstract, independent of whether the reporting of Klinger’s workplace injury itself influenced that conduct in some way. Similarly, the ALJ should not merely assess the general propriety or validity of BNSF’s demands for Klinger’s medical records and the potential invasion of his privacy rights that may come from requesting medical records. It is not enough that the reporting of a workplace injury may have been the incidental factual or initiating predicate for the unfair, unreasonable, or objectionable conduct that followed with the MCMP. If the ALJ reaches the same outcome on remand, he should explain how these findings, or others, support the ultimate conclusion that Klinger’s reporting of an injury contributed to his suspension, without utilizing the inextricably intertwined analysis and without casting it as a mere sequential link to Klinger’s protected activity.
Id. at 12-13 (footnotes omitted). The ARB found that the same errors in the causation analysis impacted the ALJ’s analysis of the same-action defense.
ARB explains that it will continue to adhere to its interpretation in Thorstenson regarding inextricably intertwined and chain of events analyses despite the Ninth Circuit’s unpublished reversal
In footnote 58 of the slip opinion, the ARB addressed the Ninth Circuit’s unpublished reversal of the ARB’s decision in Thorstenson. The Ninth Circuit had held that “the ARB imposed a new burden of proof for causation under which FRSA claimants must demonstrate that the protected activity was a proximate cause of the adverse action. A proximate cause standard is inconsistent with this circuit’s law regarding the requirements of the FRSA, which requires plaintiffs to prove only that their protected conduct was a ‘factor, which alone or in connection with other factors, tended[ed] to affect in any way the outcome of the decision.’ Frost v. BNSF Ry. Co., 914 F.3d 1189, 1195 (9th Cir. 2019) (quoting Rookaird v. BNSF Ry. Co., 908 F.3d 451, 461 (9th Cir. 2018)….” Thorstenson v. United States Dep’t of Labor, 831 F. App’x 842, 843 (9th Cir. 2020).
In the footnote in Klinger, the ARB noted that the Ninth Circuit’s decision was “abbreviated and unpublished,” and appeared to rely on a “more rigorous definition of ‘proximate case’ than the ARB’s citation,” and “did not discuss the Board’s principal holding in Thorstenson that the inextricably intertwined and chain of events analyses were improper substitutes for the statutory causation and same-action defense analyses.” Slip op. at 9, n.58. Accordingly, the ARB concluded: “Absent elaboration or further guidance from the Ninth Circuit, and in light of the unpublished nature of the Ninth Circuit’s reversal, we continue to adhere to our opinion that applying an inextricably intertwined or chain of events analysis for the issues of causation and the same-action defense is reversible error.” Id.
Dissent finds that ALJ’s analysis had been consistent with the ARB’s Thorstenson decision
One member of the ARB dissented. This member concluded that the ALJ had not strictly or exclusively applied an inextricably-intertwined or chain-of-events causation analysis, and instead conducted an analysis consistent with the principles expressed by the Board in Thorstenson. The ALJ had weighed the evidence, and had acknowledged that intervening events could break a chain of events. This member found that the ALJ had not committed legal error, and, that substantial evidence supported the ALJ’s factual findings. In view of the age of the case, this member would have brought the case to closure rather than remanding merely for the ALJ to refine his opinion.
PUNITIVE DAMAGES MUST BE BASED ON DEFENDANT’S LIABILITY AND CULPABILITY FOR A VIOLATION OF THE FRSA, RATHER THAN ITS LIABILITY OR CULPABILITY FOR OTHER MISCONDUCT
In Klinger v. BNSF Railway Co., ARB No. 2019-0013, ALJ No. 2016-FRS-00062 (ARB Mar. 18, 2021), the ARB remanded the case to the ALJ to reassess the contributory factor and affirmative defense elements of the case because the ALJ applied an inextricably-intertwined or chain-of-events causation analysis that had been rejected the Board in Thorstenson after the ALJ had issued his decision, and appeared to have been influenced by consideration of whether BNSF’s procedures in the matter had been heavy handed generally. The Board also vacated the ALJ punitive damages award because those legal errors may have influenced that award. The ARB stated:
Because we vacate the ALJ’s decision with respect to BNSF’s liability, we also vacate the ALJ’s award of damages. If the ALJ reaches the same outcome as to BNSF’s liability on remand, we will review that decision and any award of damages in due course. Just as our holding today does not preclude the possibility that the ALJ may appropriately find BNSF liable on remand, we also do not discount the possibility that the ALJ may appropriately find that punitive damages are warranted under the standard articulated above. However, we observe that as with the liability analysis, it appears that the ALJ’s punitive damages analysis may have veered towards a skewed judgment of the merits of the MCMP and BNSF’s conduct in the abstract and may have been premised, at least in part, on the ALJ’s assessment that BNSF violated Klinger’s privacy rights. We repeat again that a significant, intentional, or reckless departure from law may offer evidence not only of BNSF’s liability, but also its culpability for purposes of awarding punitive damages. However, the ALJ must assess BNSF’s liability and culpability for a violation of the FRSA, rather than BNSF’s liability or culpability for other misconduct.
Slip op. at 16 (footnote omitted).
Govindarajan v. N2 Services, Inc., ARB No. 2020-0032, ALJ No. 2020-LCA-00001 (ARB Mar. 17, 2021) (per curiam) (Order Dismissing Complaint)
The ARB dismissed the Prosecuting Party’s LCA appeal for failure to adequately explain, in response to an order to show cause, why he failed to serve his brief on the Respondent in compliance with the ARB’s briefing schedule’s requirements.
Clem v. Computer Sciences Corp., ARB No. 2020-0025, ALJ Nos. 2015-ERA-00003, -00004 (ARB Mar. 10, 2021) (per curiam) (Decision and Order)
CONTRIBUTORY FACTOR CAUSATION; ARB WILL AFFIRM ALJ’S FINDINGS IF SUPPORTED BY SUBSTANTIAL EVIDENCE EVEN IF REASONABLE MINDS COULD HAVE COME TO A DIFFERENT CONCLUSION BASED ON THE RECORD
AFFIRMATIVE DEFENSE; ARB WILL AFFIRM ALJ’S FINDINGS IF SUPPORTED BY SUBSTANTIAL EVIDENCE EVEN IF RESPONDENT CAN POINT TO EVIDENCE SUPPORTING ITS CONTENTION THAT IT HAD A GOOD FAITH BELIEF THAT COMPLAINANTS VIOLATED COMPANY POLICY BY SHARING INFORMATION WITH A COMPETITOR
SUBSTANTIAL EVIDENCE STANDARD OF REVIEW; ALJ IS NOT REQUIRED IN THE DECISION TO DISCUSS EVERY PIECE OF EVIDENCE SUBMITTED, AND ALJ’S HAVING NOT CITED SPECIFIC EVIDENCE DOES NOT INDICATE THAT SUCH EVIDENCE WAS NOT CONSIDERED
DAMAGES; ARB APPLIES SUBSTANTIAL EVIDENCE STANDARD OF REVIEW
COMPENSATORY DAMAGES; CAUSAL LINK BETWEEN RETALIATION AND EMOTIONAL DISTRESS; WEIGHT GIVEN TO TESTIMONY OF TREATING PHYSICIAN
ISSUES FOR REVIEW; ARB DECLINES TO CONSIDER COMPLAINANTS’ ARGUMENTS AS TO WHY ALJ’S DAMAGES AWARDS SHOULD BE INCREASED
In a fact-specific decision, the ARB in Clem v. Computer Sciences Corp., ARB No. 2020-0025, ALJ Nos. 2015-ERA-00003, -00004 (ARB Mar. 10, 2021) (per curiam), affirmed the ALJ’s decision on remand in favor of Complainants in consolidated ERA retaliation cases. In brief, Complainants were Senior Programmer Analysts who raised concerns whether an electronic records management program for providing occupational medical services at DOE’s Hanford Site and National Laboratory would be functionally reliable by the go-live date. Eventually Complainants raised their complaints with the DOE employee-concerns program. During Complainants’ employment, the subcontractor responsible for the records system development changed, and there was a rumor that another company was bidding on IT work for the clinic. Complainants were suspended, apparently on the ground that Respondent believed that Complainants had aided a competitor and supplied it with confidential business information. Later, one Complainant was not retained for a follow-on contract, and both Complainants were not paid special pay promised for additional or overtime hours for the records system implementation. Complainants filed ERA complaints, and both OSHA and the ALJ found that Respondent violated the ERA’s retaliation provision. On appeal, the ARB affirmed the ALJ’s findings of protected activity; that Respondent was aware of the protected activity; and that Respondent took adverse employment actions against Complainants. The ARB, however, found error in the ALJ’s description of the standards for contributing-factor causation and the “same-action” defense. The ARB remanded for the ALJ to apply the correct standards; the ARB also vacated the ALJ’s damages award. On remand, the ALJ again found in favor of Complainants.
Contributory Factor Causation – Substantial Evidence Standard of Review
On appeal, Respondent first argued that the record did not support the ALJ’s finding that Complainants’ protected activity contributed to the adverse actions taken against them. The ARB reviewed Respondent’s challenges, and conceded that they made a persuasive argument for a finding that differed from the ALJ’s. The ARB, however, noted that under the substantial evidence standard of review, “[e]ven if a reviewing court disagrees with the ALJ’s factual findings, the court will still uphold the findings if substantial evidence supports the conclusion.” Slip op. at 16 (footnote omitted). The ARB determined that the record contained support for the ALJ’s findings: temporal proximity and testimony indicating that protected activity had some effect on Complainant’s suspension. The ARB noted that reasonable minds could come to different findings than those of the ALJ but that “at this point, the egg in this case has been scrambled, as we are unable to substitute our judgment with the ALJ’s under the applicable standard of review. We therefore hold that substantial evidence supports the ALJ’s finding that Complainants’ protected activity contributed to their suspension.” Id. at 17. The ARB similarly found that substantial evidence supported the ALJ’s findings of contribution of the failure to retain or rehire one Complainant, noting that “the ALJ is not ‘required to discuss every piece of evidence submitted’ in its decision, and his ‘failure to cite specific evidence does not indicate that such evidence was not considered.’” Id. at 18, quoting Brault v. Soc. Sec. Admin., Comm’r, 683 F.3d 443, 448 (2d Cir. 2012) (citations omitted).
The ARB noted that Respondent had not presented argument concerning the failure to provide Complainants the special pay.
Same-Action Defense –Substantial Evidence Standard of Review
The ALJ discussed on remand Respondent’s argument that it had a good-faith belief that Complainants violated company policy by meeting and sharing proprietary information with a competitor, and that this violation warranted the adverse actions against Complainants. The ALJ, however, found that Respondent did not have such a good faith belief, noting that Complainants were not in a position to share proprietary information and that testimony indicated that no proprietary information was discussed at Complainants’ meeting with personnel from the competitor.
On appeal, Respondent argued that “the ALJ improperly focused on what actually happened, as opposed to what [Respondent] believed to have happened, and failed to address the evidence regarding the attempt to replace [Respondent] with [the competitor] on the IT subcontract. “ Id. at 18 (emphasis as in original) (footnote omitted). Again, the ARB acknowledged that Respondent was able to point to evidence that could have been sufficient for the ALJ to have found that Respondent had the good faith belief as it contended; however, the ARB stated that the concern before it was whether substantial evidence supported the ALJ’s finding that Respondent did not have such a good faith belief. The ARB found that the ALJ’s finding that Respondent failed to prove its defense by clear and convincing evidence was supported by substantial evidence, and that it would affirm the ALJ’s finding.
Damages Award – Substantial Evidence Standard of Review; Impact of Testimony of Treating Physician
Respondent contested several aspects of the ALJ’s damages award. The ARB first found that substantial evidence supported the ALJ’s finding on loss of contribution to one Complainant’s 401(k) retirement account, even though it was based only on the most recent year of pay stubs. The ARB also found that substantial evidence supported the ALJ’s finding on failure to receive all of promised special pay, even though it was based only a Complainant’s testimony.
Respondent also contended that causation had not been proven between one Complainant’s emotional distress and the adverse employment actions, citing testimony from a treating physician that this Complainant had a history of mental health conditions and that the suspension did not lead to any further conditions. Respondent argued that Rodriguez v. Bowen, 876 F.2d 759 (9th Cir. 1989), supported its argument that the ALJ must accept the opinion of a treating physician. The ARB was not persuaded:
Under the ERA, however, a complainant needs only to prove that the adverse action caused emotional pain and suffering or mental anguish, not a diagnosed mental health condition. Further, while Rodriguez does give a treating health professional’s opinion special weight, the expert opinion is not necessarily conclusive and may be disregarded for specific, legitimate reasons. Here, Dr. Boyd, who had treated Clem many more times than Dr. Lowe, opined that the suspension caused Clem emotional distress, including sleep issues, lack of confidence, anxiety, and depression. Dr. Lowe did not deny that the retaliation caused Clem emotional distress, so his testimony did not negate Dr. Boyd’s. Clem’s compensatory damages award, therefore, is supported by substantial evidence.
Id. at 22 (footnotes omitted).
As to the other Complainant, Respondent argued that the ALJ’s compensatory damages award must be reversed because Complaint “had already resigned and found a new job, did not seek mental health treatment, and any stress he experienced came from the job’s long hours.” Id. (footnote omitted). Again, the ARB found that the ALJ’s findings of fact were adequate to support the award. The ALJ cited to Complainant’s testimony about sleeping issues after the suspension and his worries about getting a job in the future. The ALJ also cited Complainant’s wife’s testimony that Complainant became withdrawn, lacked energy, and had difficulty sleeping. The ARB noted that the ALJ had awarded a smaller amount to this Complainant as compared to the other Complainant.
Complainant’s Challenge to Damages Award Untimely
The ARB noted that Complainants also contested the damages award, arguing that the ALJ should have awarded higher amounts. The ARB declined, however, to consider these arguments because they had not filed a petition for review of the damages award.
Chambers v. BNSF Railway Co., ARB No. 2019-0074, ALJ No. 2018-FRS-00086 (ARB Mar. 5, 2021) (per curiam) (Decision and Order)
AFFIRMATIVE DEFENSE; CLEAR AND CONVINCING EVIDENCE THAT RESPONDENT’S DECISION MAKERS HONESTLY BELIEVED COMPLAINANT HAD FALSIFIED ANSWERS ON A PRE-EMPLOYMENT MEDICAL QUESTIONNNAIRE (FAILURE TO DISCLOSE PRIOR INJURY AND RELATED LAWSUIT AGAINST HIS PRIOR EMPLOYER), AND THAT RESPONDENT HAD A LEGITIMATE INTEREST IN ITS POLICY TO DISMISS EMPLOYEES FOUND TO BE DISHONEST
In Chambers v. BNSF Railway Co., ARB No. 2019-0074, ALJ No. 2018-FRS-00086 (ARB Mar. 5, 2021) (per curiam), when Complainant applied for employment with Respondent he failed to disclose on a pre-employment medical questionnaire a previous an injury, surgery and related lawsuit against his prior employer. The questionnaire warned that incomplete or false answers may be grounds for withdrawal or termination of employment. A few years after being hired, Complainant reported an injury, and Respondent discovered the potential failure to disclose. After an investigation, Respondent dismissed Complainant for dishonesty on his pre-employment medical questionnaire. Complainant then filed a FRSA complaint alleging that he was fired for reporting the injury. OSHA and the ALJ dismissed the complaint. On appeal, the ARB affirmed the ALJ's finding that Respondent provided by clear and convincing evidence that BNSF decision-makers dismissed Complainant solely because they honestly believed that Complainant falsified his answers on his pre-employment questionnaire. The ALJ’s decision had been based in part on credibility determinations. In addition to the ALJ’s finding that Respondent’s decision makers honestly believed that Complainant provided false answers on the questionnaire, the ALJ found that Respondent had policies prohibiting dishonesty, had a legitimate interest in enforcing those policies, and had consistently dismissed employees found to be dishonest.