Hall v. CVS Health, CVS Health Corporation, Caremark, LLC, and CVS Pharmacy, Inc., ARB No. 2022-0003, ALJ No. 2020-FDA-00007 (ARB Mar. 15, 2022) (per curiam) (Decision and Order)
SUMMARY DECISION; EMPLOYERS MUST BE ENGAGED IN A FOOD-RELATED ACTIVITY WITHIN THE SCOPE OF THE FSMA TO BE COVERED EMPLOYERS UNDER THE EMPLOYEE PROTECTION PROVISIONS OF THE FSMA
SUMMARY DECISION; SUMMARY DECISION PROPER WHERE RESPONDENT OFFERS UNDISPUTED EVIDENCE THAT THE DECISIONMAKER HAD NO KNOWLEDGE OF ALLEGED PROTECTED ACTIVITY
In Hall v. CVS Health, CVS Health Corporation, Caremark, LLC, and CVS Pharmacy, Inc., ARB No. 2022-0003, ALJ No. 2020-FDA-00007 (ARB Mar. 15, 2022) (per curiam), the ARB summarily affirmed the ALJ’s grant of summary decision of a complaint filed under the Food Safety Modernization Act (FSMA), 21 U.S.C. 399d. The ARB agreed that CVS Health, Caremark, LLC, and CVS Health Corporation are not employers covered under the FSMA’s employee protection provision because they are not engaged in any of the food-related activities that are within the scope of the FSMA. The ARB also agreed with the ALJ’s conclusion that “there were no facts in the record that would allow a finding of contributing factor causation against” the remaining respondent, CVS Pharmacy, which had “offered undisputed evidence indicating that CVS Pharmacy did not know about Complainant’s alleged protected activity at the time.” CVS Pharmacy had submitted a declaration from a Human Resources Advisor that the ALJ determined was “the only person related to CVS Pharmacy who arguably affected Complainant’s employment.” The declaration stated that “she had not read or heard anything about alleged protected activities prior to the decision to discharge Complainant.” Id. at 4. The ARB observed that “a complainant can establish either knowledge or suspected knowledge by direct or circumstantial evidence,” but noted that here, the complainant “has failed to put forth anything to negate Respondent’s showing on summary decision that there was no knowledge during the decision-making.” Id. at 5.
Priddle v. United Airlines, Inc., ARB No. 2022-0006, ALJ No. 2020-AIR-00013 (ARB Mar. 21, 2022) (per curiam) (Order Denying Interlocutory Appeal)
INTERLOCUTORY REVIEW; INTERLOCUTORY REVIEW NOT JUSTIFIED UNDER THE COLLATERAL ORDER EXCEPTION WHERE THE ORDER MAY BE APPEALED AND REVIEWED UPON ENTRY OF A FINAL JUDGMENT
In Priddle v. United Airlines, Inc., ARB No. 2022-0006, ALJ No. 2020-AIR-00013 (ARB Mar. 21, 2022) (per curiam), the ARB denied the respondent's interlocutory appeal. The respondent had been sanctioned by the presiding ALJ for discovery violations. The Board explained that it "generally disfavors interlocutory appeals," granting them only in "exceptional circumstances." The Board analyzed the respondent's request for interlocutory appeal under 28 U.S.C. 1292(b) as well as the collateral order exception.
First, the Board concluded that the respondent had not requested that the ALJ certify its appeal for interlocutory review as provided under 28 U.S.C. 1292(b). Id. at 4. Next, the Board found that the respondent has not met the collateral order exception of Cohen v. Beneficial Industrial Loan Corporation, 337 U.S. 541, 546 (1949), which requires the appellant to "establish that the order being appealed: (1) conclusively determines the disputed question; (2) resolves an important issue completely separate from the merits of the action; and (3) would be effectively unreviewable on appeal from a final judgment." Explaining that, "[t]o be 'effectively unreviewable,' denial of immediate review [must] render impossible any review whatsoever . . . ., " the Board concluded that the respondent has "not demonstrated that the Sanctions Order would be effectively unreviewable upon appeal of a final judgment." Id. at 5. The Board, after emphasizing that speeding up litigation or "a particular injustice averted" does not justify interlocutory review, explained that the respondent "may appeal the ALJ's decision, including the imposition of sanctions, to the Board upon entry of a final judgment." Id. at 6. The Board also declined the respondent's request to issue a writ of mandamus vacating the ALJ's order imposing sanctions, explaining that "the Secretary has not expressly provided mandamus authority to the Board." Id. at 9.
Administrator, Wage and Hour Div. v. Hearn's Enterprises, LLC, ARB No. 2020-0050, ALJ No. 2017-SCA-00006 (ARB Mar. 10, 2022) (per curiam) (Decision and Order)
CREDITS; EXCESS WAGE PAYMENTS IN ONE PAY PERIOD OR POST-SEPARATION HEALTH INSURANCE COVERAGE DO NOT OFFSET LIABILITY FOR UNPAID WAGES OR FRINGE BENEFITS IN OTHER PERIODS
INDIVIDUAL LIABILITY; LIABILITY UNDER THE SCA EXTENDS TO “ANY PARTY RESPONSIBLE FOR A VIOLATION” EVEN IN THE ABSENCE OF AN OWNERSHIP OR MEMBERSHIP INTEREST IN THE COMPANY
DEBARMENT; RESPONDENTS’ HISTORY OF VIOLATING THE SCA TWICE BEFORE FOR SIMILAR VIOLATIONS NECESSITATES DEBARMENT UNDER THE SCA REGULATIONS AT 29 C.F.R. § 4.188(b)(3)(i)
DISCOVERY; ALJS HAVE WIDE DISCRETION IN LIMITING DISCOVERY; FAILURE OF PARTY TO CERTIFY GOOD-FAITH EFFORT TO RESOLVE A DISCOVERY DISPUTE BEFORE FILING A DISCOVERY MOTION AND FAILURE TO PROVIDE COPIES OF DOCUMENTS AT ISSUE TO ALJ JUSTIFY DISCOVERY DENIAL
MISCONDUCT; ALLEGATIONS OF IMPROPER CONDUCT BY COUNSEL MUST BE SUPPORTED BY EVIDENCE IN THE RECORD
In Administrator, Wage and Hour Div. v. Hearn's Enterprises, LLC, ARB No. 2020-0050, ALJ No. 2017-SCA-00006 (ARB Mar. 10, 2022) (per curiam), the ARB affirmed the ALJ’s findings that the respondents “violated the SCA’s wage and health and welfare fringe benefits requirements and that the circumstances warranted Respondents’ debarment from government contracts for three years.” Id. at 2. The respondents contended that the ALJ erred in the following ways: (i) finding the respondents underpaid employees under the SCA; (ii) finding that the respondents should not receive a credit for overpayments to the affected employees; (iii) finding that Mrs. Hearn was individually liable; (iv) finding that debarment was appropriate; (v) denying certain discovery to the respondents; and (vi) not holding the "Administrator's counsel responsible for supposedly improper conduct." Id. at 5.
Regarding the ALJ’s findings on underpayments, the respondents contended that:
- (1) The timesheets upon which the Administrator and the ALJ relied were not accurate in some instances; (2) some of the affected employees overstated or misstated their hours; and (3) the Administrator’s evidence did not capture all the compensation they paid to the employees.
The Board, stating that “Respondents’ arguments are vague and conclusory,” found that “[i]n almost all instances, their arguments lack citation to supporting evidence in the record, do not identify the precise pay periods when the Administrator’s evidence and calculations were supposedly incorrect, or otherwise negate or rebut the Administrator’s evidence.” Id. at 7. The Board rejected the respondents’ arguments except as applied to one employee, where the respondents had offered undisputed evidence reflecting payment of a portion of the health and welfare benefits. The Board ordered that the payment amount should be deducted from the amount owed to the employee and otherwise affirmed the ALJ’s conclusions. Id. at 8.
The respondents requested credits for wage overpayments, a “cash out” payment, and for extra health and welfare fringe benefits paid in some pay periods. Id. at 9-11. The Board found that the ALJ was correct in denying all of these credits. The Board explained that “the regulations do not preclude a contractor from paying an employee more than the designated minimums” and that “the regulations are clear that an employer may not use excess wage payments in one pay period to offset liability for underpaid wages or fringe benefits in other periods.” Id. at 10.
Regarding the “cash out” payment, the ARB concluded that it has “no basis upon which to assess” whether it could be credited because the respondents failed to “describe the payment or indicate the purpose for which the payment was issued,” and also did not “point to any evidence in the record” that the payment was even made. Id. at 10.
Finally, the Board rejected the respondents’ argument that payments for health coverage to employees after leaving employment with the company should be credited. The Board noted that “post-separation health insurance coverage to many of the affected employees is not supported by evidence in the record.” The Board stated that, even if post-separation insurance had been provided, it “did not remedy or mitigate Respondent’s failure to timely provide the health and welfare benefit entitlements as required by the SCA.” Id. at 11. “The post-separation health insurance did not cover or apply to the periods when the affected employees had previously been denied or underpaid their health and welfare fringe benefits and did not otherwise compensate the affected employees for the specific pay periods when the violations occurred.” Id. at 11-12.
The ARB recognized that, although not present in this case, there are situations where an employer’s remedial steps may mitigate their damages. Id. at 12-13.
The ARB rejected the respondents’ argument that one of the respondents, Mrs. Hearn, is not a responsible party under the SCA because she does not have any ownership or membership in the company. The ARB explained that:
- The SCA extends liability to any ‘party responsible for a violation of a contract provision required [by the Act].’ The term ‘party responsible’ encompasses not only the contracting entity itself, but also any individuals who ‘exercise control, supervision, or management over the performance of the contract, including the labor policy or employment conditions regarding the employees engaged in contract performance, and who, by action or inaction, cause or permit a contract to be breached.’
Id. at 13.
The ARB went on:
- the regulations provide that ‘personal responsibility and liability of individuals for violations of the Act is not limited to the officers of a contracting firm,’ nor is responsibility contingent on the individual holding a ‘proprietary interest’ in the contracting entity. Thus, the mere fact that Mrs. Hearn was not a member or owner of Hearn’s Enterprises does not necessarily relieve her of liability under the SCA.
Id. at 13-14.
The ARB affirmed the ALJ’s findings on debarment, explaining that the ALJ’s finding that the respondents did not demonstrate unusual circumstances warranting relief from debarment was supported by a preponderance of the evidence. The ARB articulated the SCA’s three-part test for unusual circumstances:
- The violating contractor must meet each of the three parts of the test to receive relief. Under the first, threshold stage of the test, the contractor must establish that the conduct giving rise to the SCA violations was not willful, deliberate, or of an aggravated nature and that the violations were not the result of “culpable conduct.” The contractor must also demonstrate an absence of a history of similar violations, an absence of repeated violations of the SCA, and to the extent a contractor has violated the SCA in the past, that such violations were not serious in nature. If the contractor can pass the first part of the test, the contractor must next establish several other prerequisites to relief at the second stage. These include “[a] good compliance history, cooperation in the investigation, repayment of the moneys due, and sufficient assurance of future compliance . . . .” Finally, if the contractor has satisfied the first two parts of the test, the final stage requires consideration of a variety of other factors bearing on the contractor’s good faith . . . .
Id. at 14-15.
The ARB agreed that the respondents’ history of violating the SCA twice before for similar violations requires debarment under the regulations at 29 C.F.R. § 4.188(b)(3)(i). Id. at 15-16. The ARB also “emphasize[d], and affirme[d], the ALJ’s conclusions Respondents did not cooperate in the WHD’s investigation and did not make sufficient assurances of future compliance,” citing testimony from the WHD investigator that “Respondents resisted his efforts to obtain information from them during the investigation” and “were resistant to his explanations” of their SCA obligations. Id. at 16. The ARB rejected the respondents’ argument that its financial distress is a mitigating factor. Id. at 17.
Denial of Discovery
The ARB affirmed the ALJ’s ruling denying discovery by respondents of certain internal WHD communications that were redacted or withheld as privileged under the deliberative process privilege, the government informer’s privilege, and the investigative file privilege. Id. at 19. The ARB explained:
- The ALJ denied Respondent’s motion for two valid reasons. First, Respondents failed to certify they made a good-faith effort to resolve the discovery dispute before filing the motion, as required by the OALJ Rules of Practice and Procedure. Second, Respondents failed to provide copies of the documents at issue to the ALJ, which prevented the ALJ from being able to assess whether the privileges asserted by the Administrator were applicable or properly raised.
- ALJs have wide discretion in controlling and limiting discovery and will be reversed only when their rulings are arbitrary or an abuse of discretion. Although Respondents vaguely argue they were entitled to the discovery at issue, Respondents have not offered any explanation for their failure to follow the applicable procedural rules or to provide the materials necessary for the ALJ to resolve their motion to compel, any argument regarding the Administrator’s assertions of privilege, or any other basis to conclude that the ALJ abused his discretion or acted arbitrarily in denying the discovery.
Id. at 19 (footnotes omitted).
Allegations of Improper Conduct by Counsel for the Administrator
The ARB rejected the respondents’ argument that “counsel for the Administrator engaged in improper, and perhaps even criminal, conduct by promising witnesses money in exchange for favorable testimony and by otherwise attempting to improperly influence witnesses.” Agreeing with the ALJ that the respondents’ “claims are not supported by evidence in the record,” the Board found no basis to find that counsel for the Administrator acted improperly. Id. at 19-20.
Klein v. Bank of America, ARB No. 2022-0016, ALJ No. 2020-SOX-00039 (ARB Mar. 31, 2022) (per curiam) (Order Dismissing Complaint)
The ARB dismissed the complainant's appeal after the complainant failed to show good cause as to why he did not timely file his opening brief with the Board.
Petitt v. Delta Airlines, Inc., ARB No. 2021-0014, ALJ No. 2018-AIR-00041 (ARB Mar. 29, 2022) (per curiam) (Order of Remand)
JURISDICTION; RAILWAY LABOR ACT (RLA) PREEMPTION OCCURS ONLY WHEN THERE IS AN ACTIVE DISPUTE OVER THE MEANING OF CONTRACT TERMS
PROTECTED ACTIVITY; A COMPLAINANT ENGAGES IN PROTECTED ACTIVITY WHENEVER SHE IS ABOUT TO PROVIDE INFORMATION RELATING TO AN ALLEGED VIOLATION RELATING TO AIR CARRIER SAFETY, AND THE EMPLOYER HAS ANY KNOWLEDGE THAT THIS REPORTING IS FORTHCOMING
ADVERSE ACTION; WHETHER A MENTAL HEALTH INVESTIGATION OR EVALUATION IS AN ADVERSE ACTION IS A CASE-BY-CASE FACTUAL DETERMINATION
CONTRIBUTING FACTOR; A CAUSAL RELATIONSHIP CANNOT BE INFERRED FROM TEMPORAL PROXIMITY ONCE THERE IS AN INTERVENING EVENT THAT INDEPENDENTLY COULD HAVE CAUSED THE ADVERSE ACTION
DAMAGES; FRONT-PAY MUST APPROXIMATE THE CONSEQUENCES OF AN UNLAWFUL TERMINATION OR A LOSS OF POSITION OR SENIORITY, OR PUT THE COMPLAINANT BACK TO THE IDENTICAL FINANCIAL POSITION SHE WAS IN BEFORE THE AIR 21 VIOLATION
DAMAGES; FUTURE LOST EARNINGS BASED ON REPUTATIONAL DAMAGE MUST BE SUPPORTED BY EVIDENCE IN THE RECORD
DAMAGES; COMPENSATORY DAMAGES FOR EMOTIONAL DISTRESS, HUMILIATION, OR LOSS OF REPUTATION MUST BE SUPPORTED BY EVIDENCE AND THE DISTRESS MUST BE ATTRIBUTED TO THE RETALIATION
In Petitt v. Delta Airlines, Inc., ARB No. 2021-0014, ALJ No. 2018-AIR-00041 (ARB Mar. 29, 2022) (per curiam), the ARB affirmed the ALJ’s decision in part, vacated the ALJ's awards of front pay and compensatory damages, and remanded for further proceedings on front pay and compensatory damages.
First, the ARB dismissed the respondent’s argument that the Railway Labor Act (RLA) precludes DOL jurisdiction over the matter. The ARB explained that “RLA preemption occurs when there is “an active dispute over the meaning of contract terms,’” citing Alaska Airlines, Inc. v. Schurke, 898 F.3d 904, 921 (9th Cir. 2018). The ARB concluded that “there is no need to resolve a disputed interpretation over the [Pilot Working Agreement’s] meaning” because the language at issue was not contained in the relevant portion of the PWA. Id. at 11.
Next, the ARB affirmed the ALJ’s finding that an email the complainant had sent to superiors was protected activity, finding that it was supported by substantial evidence. The ARB observed that, in the email, the complainant: (i) raised concerns about compliance with the FAA-regulated Safety Management Systems (SMS) program, citing “Respondent’s inappropriate behavior and fear-based tactics [as being] inconsistent with SMS and a culture of safety”; and (ii) “requested a meeting with supervisors to discuss information relating to a purported violation . . . relating to air carrier safety.” Id. at 13. The ARB found that the email was protected activity, clarifying that:
A complainant engages in protected activity whenever she “is about to provide (with any knowledge of the employer) or cause to be provided to the employer or Federal Government information relating to any violation or alleged violation of any order, regulation, or standard of the [FAA].”
Id. at 13 (emphasis in original).
The ARB affirmed the ALJ’s finding that the respondent took an adverse action against the complainant when it referred her for a Section 15 mental health evaluation, finding substantial evidence for the ALJ’s conclusion that the Section 15 investigation was undertaken in bad faith. Id. at 15, 17. However, the ARB disagreed with the ALJ’s conclusion “that any referral to a Section 15 mental health evaluation constitutes an adverse employment action.” The Board clarified that “not all investigations or evaluations are automatically considered adverse actions” and Board emphasized that the analysis “is a case-by-case factual determination.” Id. at 15. The Board stated that:
In the context of AIR 21’s implementing regulations, an employer’s investigation or initiation of a compulsory medical evaluation under negotiated procedures mandated by a CBA is not necessarily, in and of itself, a threat or form of intimidation. However, an investigation or compulsory medical evaluation can constitute an adverse action if “it is retaliatory, a pretext, performed in bad faith, or otherwise constitutes harassment.” An investigation or a compulsory medical evaluation might accompany other material consequences that affect the employee’s terms, conditions, and privileges of employment or otherwise dissuade a reasonable employee from engaging in protected activity.
Again, whether an employer’s investigation or evaluation is an adverse action is a case-by-case factual determination. Factors that may be considered include, but are not limited to, the length of investigation, whether the investigation is used as a form of harassment (bad faith investigation), whether it was a routine investigation (good faith investigation), or whether the employee was treated differently than similarly situated employees who did not engage in protected activity.
Id. at 15-16.
The ARB next clarified that where causation is based on temporal proximity, “[o]nce there is an intervening event that independently could have caused the adverse action, there is no longer a logical reason to infer a causal relationship between the activity and the adverse action.” The ARB disagreed with the respondent’s assertion that there was an intervening event in this case, observing that the respondents proposed the Section 15 process “months before” the purported intervening event. The ARB affirmed the ALJ’s contributing factor analysis, finding that the ALJ applied the correct legal standard and finding the ALJ’s conclusions to be supported by substantial evidence. Id. at 18-19.
The ARB articulated the affirmative defense standard:
After Complainant establishes her case, the Act provides, “[r]elief may not be ordered . . . if the employer demonstrates by clear and convincing evidence that the employer would have taken the same unfavorable personnel action in the absence of that behavior.” “Clear and convincing evidence or proof denotes a conclusive demonstration; such evidence indicates that the thing to be proved is highly probably or reasonably certain.”
Id. at 19 (footnotes omitted).
The ARB found that the following statement by the ALJ as part of his affirmative defense analysis was harmless error: “Respondent must prove clearly and convincingly that it, in no way, considered her protected activity when instituting the Section 15.” The ARB reasoned that the ALJ “also cited and accurately applied the correct legal standard” and found the ALJ’s conclusions to be supported by substantial evidence. Id. at 19.
Front Pay Damages
The ALJ ordered the respondent to “compensate Complainant at a wage no lower than the highest salary provided for any other Respondent-First Officer.” Id. at 22. The ARB vacated the ALJ’s award of front pay damages as legal error, explaining:
A front pay award is meant to “approximate” the consequences of an unlawful termination, or a loss of position or seniority. The ALJ’s award of front pay in the form of presumably increasing Complainant’s salary does not remedy the effects an unlawful termination or loss of position or seniority, nor does the award put Complainant back to the identical financial position that she was in prior to the AIR 21 violation. Rather, if this front pay award were executed, Complainant would be in a better position than she was prior to the violation because of a salary increase.
Id. at 22.
The ARB further found that the ALJ’s award of future lost earnings based on reputational damage was “based on mere speculation” and directed that, “[o]n remand, the ALJ may reopen the record to determine whether Complainant can prove that Respondent’s violation of AIR 21 caused lost future earnings.” Id. at 23.
The ARB vacated the ALJ’s award of $500,000 in non-economic compensatory damages for emotional distress, humiliation, and loss of reputation, finding that:
The record in this case is insufficient to support the ALJ’s award of $500,000 in non-economic compensatory damages. The evidence of record consists of damages that normally accompany a retaliatory discharge. As currently stated, Complainant’s testimony lacks sufficient support to prove that her emotional distress was severe, and that her humiliation, and loss of reputation supports an award in the amount of $500,000.
Importantly, the record does not reflect that Complainant lost income and suffered the consequences of lost income as demonstrated in other cases where a large award was affirmed. Complainant did not support her claim with supporting medical or professional evidence, or testimony from her family supporting her claim that Respondent’s unfavorable personnel action caused severe mental suffering or emotional anguish. Although expert medical or psychiatric testimony is not required, the ALJ’s analysis solely relied on Complainant’s testimony that she suffered sleepless nights but otherwise speculated to the loss of reputation that she might have endured. There is no other evidence in the record indicating that any mental or psychological condition was attributable to the retaliation she suffered.
Id. at 26 (footnotes omitted).
The ARB instructed the ALJ to reconsider the award of compensatory damages “in light of other cases with similar characteristics as Complainant’s” and specified that “the ALJ may reopen the record to take additional evidence on Complainant’s emotional distress, humiliation, and loss of reputation . . . .” Id. at 27.
Back Pay Damages
The ALJ found that the complainant had exhausted her vacation days to avoid being placed on disability pay and ordered the respondent to either reimburse the vacation days used or pay the amount calculated for those days. The ARB affirmed the ALJ’s award of back pay damages as supported by substantial evidence and “because it restores Complainant to the position she would have been in the absence of Respondent's unlawful retaliation.” Id. at 27.