Decisions of the Administrative Review Board
Ass't Sec'y & Bailey v. Koch Foods, LLC
, ARB No 10-001, ALJ No. 2008-STA-61 (ARB Sept. 30, 2011)
Final Decision and Order PDF | HTM
[STAA Digest V A 3]
PROTECTED ACTIVITY; REFUSAL TO DRIVE BASED ON EMPLOYEE'S OBJECTIVELY AND SUBJECTIVELY REASONABLE BELIEF THAT OPERATION OF THE VEHICLE WOULD ACTUALLY VIOLATE SAFETY LAWS
In Ass't Sec'y & Bailey v. Koch Foods, LLC , ARB No 10-001, ALJ No. 2008-STA-61 (ARB Sept. 30, 2011), the Respondent purchased three new trailers for hauling chickens. The Complainant learned that in several instances those trailers had exceeded state and federal weight limits. He had himself pulled a new trailer that exceeded the limit. He had not been told by the Respondent that instructions had been given to the chicken catchers to lighten the loads. During a subsequent shift, he arrived at a farm where one of the new trailers had been pre-loaded. Concerned that it was overweight, he decided not to haul that new trailer, but rather waited until the trailer he was delivering was loaded. A co-worker drove the pre-loaded trailer. The next day he was suspended for refusing to haul the trailer, and then terminated upon his return from the suspension for trying to hold up production. The Complainant's supervisor testified that the weight ticket showed that the new trailer had not been overweight.
The ALJ found that the Complainant's refusal to drive was protected under 49 U.S.C. § 321105(a)(1)(B)(i), which protects a refusal "to operate a vehicle because . . . the operation violates a regulation, standard, or order of the United States related to commercial motor vehicle safety, health, or security."
On appeal, the Respondent argued that the ALJ erred in finding protected activity under Section 321105(a)(1)(B)(i) because there would not have been an actual violation of any federal law because the trailer was not overweight. The ALJ had found that the Complainant was not required to prove that there would have been an actual violation; but the ALJ cited decisions that were not decided under Section 321105(a)(1)(B)(i). On appeal, the Respondent cited other decisions indicating that an actual violation must be show under this refusal to drive provision. The ARB stated that the statute does not use the word "actual," that it had not previously construed the provision so strictly, and that a literal reading of the provision would lead to an absurd result. The Office of the Solicitor argued that the refusal to drive provision protects refusals based on a reasonable belief that the operation of the truck would violate a safety violation. The ARB, therefore, reviewed the language of the statute, statutory history, caselaw, and similar whistleblower statutes. The ARB ruled:
Where a statute is unclear, we are permitted to provide a reasonable interpretation of statutes we are charged with adjudicating. In this case, we conclude that the protection afforded under Section 31105(a)(1)(B)(i) also includes refusals where the operation of a vehicle would actually violate safety laws under the employee's reasonable belief of the facts at the time he refuses to operate a vehicle, and that the reasonableness of the refusal must be subjectively and objectively determined. Under the environmental whistleblower statutes, the "subjective" component of the reasonable belief test is satisfied in the same manner as it was when it was identified as the "good faith" test � by showing that the employee actually believed that the conduct he complained of constituted a violation of relevant law. ... An objective reasonable belief is evaluated based on the knowledge available to a reasonable person in the same factual circumstances with the same training and experience as Complainant. ... For example, in recognizing the right of an employee to refuse to work "when he has a good faith, reasonable belief that working conditions are unsafe or unhealthful," the Secretary of Labor distinguished "reasonable belief" by explaining: "Whether the belief is reasonable depends on the knowledge available to a reasonable man in the circumstances with the employee's training and experience."...
USDOL/OALJ Reporter at 9-10 (footnotes and citations omitted). Under these standards, the ARB affirmed the ALJ's finding that the Complainant had engaged in protected activity.
[STAA Digest IX B 2 b 10]
BACK PAY; USE OF COMPLAINANT'S AVERAGE WEEKLY WAGE RATHER THAN EARNINGS OF REPLACEMENT DRIVERS TO CALCULATE BACK PAY AWARD
In Ass't Sec'y & Bailey v. Koch Foods, LLC , ARB No 10-001, ALJ No. 2008-STA-61 (ARB Sept. 30, 2011), the ARB affirmed the ALJ's use of the Complainant's average weekly wage to determine the amount of back pay, rather than the amount earned by similar employees after he was discharged. The ARB found that the ALJ's calculation reflected the amount that the Complainant had been able to earn when the Respondent terminated his employment.
Bechtel v. Competitive Technologies, Inc.
, ARB No. 09-052, ALJ No. 2005-SOX-33 (ARB Sept. 30, 2011)
Final Decision and Order PDF | HTM
CONTRIBUTING FACTOR; A PARTY'S BURDEN ON APPEAL IS NOT TO SHOW THAT ITS VIEW OF CASE IS SUPPORTED BY SUBSTANTIAL EVIDENCE, BUT RATHER THAT THE ALJ'S FINDINGS WERE NOT SUPPORTED BY SUBSTANTIAL EVIDENCE
CONTRIBUTING FACTOR; A COMPLAINANT DOES NOT NEED TO ESTABLISH PRETEXT TO PREVAIL; HOWEVER, A FAILURE TO SHOW PRETEXT MAY BE A NEGATIVE FACTOR IN A CIRCUMSTANTIAL EVIDENCE CASE
In Bechtel v. Competitive Technologies, Inc. , ARB No. 09-052, ALJ No. 2005-SOX-33 (ARB Sept. 30, 2011), the ARB found that substantial evidence supported the ALJ's conclusion that the Complainant had failed to prove that his protected activity under the SOX was a contributing factor in his discharge. The findings of fact supporting the ALJ's conclusion included, inter alia, a finding of no temporal proximity (the ARB also noting that because of several business challenges faced by the Respondent at the time, temporary proximity was a weak basis to establish or even infer causation) and a finding that the discharge was based on the Respondent's financial condition and revenue problems. The ARB noted that although the Complainant "was not required to prove pretext to prevail on his complaint, his failure to convince the ALJ of pretext negated a substantial portion of his circumstantial evidence regarding the issue of causation." USDOL/OALJ Reporter at 18 (footnote omitted). Although the ARB observed that the Complainant's circumstantial evidence of animus and temporal proximity had been "noteworthy," substantial evidence supported the ALJ's conclusions. The ARB noted that a party cannot prevail on appeal merely by demonstrating that substantial evidence supports that party's view; rather, the party must demonstrate that substantial evidence did not support the ALJ's findings.
DENIAL OF DISCOVERY OF GENERAL LEDGER; OFFER OF SUMMARY OF EVIDENCE AND THE REQUIREMENT OF MAKING THE SOURCE DOCUMENT AVAILABLE FOR INSPECTION OR COPYING; LIMITED RELEVANCE AND PROBATIVE VALUE OF THE GENERAL LEDGER AND THE AVAILABILITY OF THE CONTROLLER AS A WITNESS
In Bechtel v. Competitive Technologies, Inc. , ARB No. 09-052, ALJ No. 2005-SOX-33 (ARB Sept. 30, 2011), the ALJ denied the Complainant's motion to compel the Respondent to produce its general ledger because, while some of the information could corroborate or impugn the testimony of the Respondent's officials, the general ledger would be mainly irrelevant to the issues, could be obtained by other means, and was unduly burdensome for the Respondent to produce. Instead, the ALJ admitted summaries of the Respondent's personnel and direct expenses. On appeal, the Complainant argued that the ALJ abused her discretion because 29 C.F.R. § 18.1006 requires a party offering a summary of evidence to make the source documents available for examination or copying. The Complainant argued that without the general ledger, he was unable to compare financial information in the summaries with that in the general ledger to show that the Respondent's financial reasons for firing him were pretext.
The ARB found no abuse of discretion by the ALJ. In this regard, the ARB noted that at the hearing, the ALJ stated that the Respondent's whole general ledger would be relevant only if the whistleblowing activity concerned receipts, profits, or income, and that was not the case. The ARB noted that the ALJ had added that the summaries went only to the weight to be given to the Respondent's allegation of its need to cut operating costs and increase revenues, but that the general ledger was not proof of anything. The ARB observed that the ALJ noted that the Respondent was calling its controller as a witness, and that the Complainant could question her on the figures in the summaries.
Milton v. Norfolk Southern Railway Co.
, ARB Nos. 11-076, -077, ALJ Nos. 2011-FRS-4, 15 (ARB Sept. 30, 2011)
Final Decision and Order Denying Interlocutory Review PDF | HTM
Petitions for interlocutory review denied, and cases remanded for further proceedings consistent with the ARB's decision on interlocutory review on the same legal issue in Mercier v. Union Pacific R.R. Co. , ARB Nos. 09-101, -121, ALJ Nos. 2008-FRS-3, 4 (ARB Sept. 29, 2011).
Israel v. Branrich, Inc.
, ARB No. 09-069, ALJ No. 2008-STA-1 (ARB Sept. 29, 2011)
Final Decision and Order on Reconsideration PDF | HTM
[STAA Digest V A 2 c]
PROTECTED ACTIVITY; REASONABLENESS OF BELIEF OF SAFETY VIOLATION; COMPLAINT ABOUT RESPONDENT'S GOAL OF 600 MILES PER DAY WAS NOT PROTECTED ACTIVITY WHERE GOAL WAS ACHIEVABLE IN MANY CIRCUMSTANCES AND WAS ONLY A GOAL AND NOT A REQUIREMENT
In Israel v. Branrich, Inc. , ARB No. 09-069, ALJ No. 2008-STA-1 (ARB Sept. 29, 2011), the Complainant complained that the Respondent had a policy of encouraging drivers to complete 600 miles per day, a distance that the Complainant felt could not be accomplished without violating hours-of-service rules and local speed limits. The ALJ found that this was not protected activity under the STAA, 49 U.S.C. § 31105(a)(1)(A). The ALJ concluded that the Complainant's belief was unreasonable because the 600-mile goal was not a set requirement, was obtainable, and because the Respondent had a track record of compliance with hours-of-service rules. On appeal, the ARB affirmed the ALJ's legal conclusions and findings of fact.
[STAA Digest V A 2 a]
PROTECTED ACTIVITY; COMPLAINT ABOUT LENGTH OF TIME RENTAL CAR WAS PROVIDED FOR RETURN TRIP WAS NOT PROTECTED ACTIVITY BECAUSE THE RENTAL CAR WAS NOT A COMMERCIAL VEHICLE AS DEFINED BY THE STAA
[STAA Digest V A 2 a]
PROTECTED ACTIVITY; REFUSAL TO FLY ON RETURN TRIPS IS NOT PROTECTED ACTIVITY
In Israel v. Branrich, Inc. , ARB No. 09-069, ALJ No. 2008-STA-1 (ARB Sept. 29, 2011), the Respondent normally paid for drivers to fly back to the point of origin after delivering a commercial vehicle to a customer. Upon learning mid-route on the Complainant's first assignment that he could not fly due to motion sickness, the Respondent instead provided the Complainant with a 24 hour car rental. Later, the Respondent agreed to a 48 hour car rental and a single night of lodging. Ultimately, the rental and fuels costs were reimbursed, but the hotel costs were not.
In his STAA complaint, the Complainant asserted that the 24-hour rental car without hotel reimbursement encouraged him to exceed the hours-of-service requirement and violate fatigue rules. The ALJ ruled that the hours-of-service and fatigue complaints concerning the rental car were not covered as protected activity because the rental car was not a "commercial vehicle" under the Act. On appeal, finding that the Complainant had cited no legal authority to counter the ALJ's finding, the ARB affirmed the ALJ on the coverage issue.
The ARB also affirmed the ALJ's finding that the Complainant did not engage in protected activity by refusing to fly on an airplane on return trips.
Mercier v. Union Pacific R.R. Co.
, ARB Nos. 09-101, -121, ALJ Nos. 2008-FRS-3, 4 (ARB Sept. 29, 2011) (consolidated with
Koger v. Norfolk Southern Railway Co.
Final Decision and Order on Interlocutory Review PDF | HTM
FRSA ELECTION OF REMEDIES PROVISION DOES NOT BAR AN FRSA WHISTLEBLOWER COMPLAINT
In Mercier v. Union Pacific R.R. Co. , ARB Nos. 09-101, -121, ALJ Nos. 2008-FRS-3, 4 (ARB Sept. 29, 2011), the ARB held that the FRSA's election of remedies provision at 49 U.S.C.A. § 20109(f) does not bar an FRSA whistleblower complaint even though the complainant previously pursued a grievance and arbitration procedure provided in his union's collective bargaining agreement with his employer. The ARB reasoned that "the plain meaning of �another provision of law' does not encompass grievances filed pursuant to a �collective bargaining agreement,' which is not �another provision of law' but is instead a contractual agreement." Mercier, ARB No. 09-121, USDOL/OALJ Reporter at 6. The ARB thus determined that the election of remedies provision does not bar a FRSA whistleblower claim because of a previously filed or pending collective bargaining grievance.
The ARB clarified, however, that its ruling does not permit a double recovery:
While subsection (f) cannot be read to bar concurrent whistleblower and collective bargaining claims, we do understand the necessity for barring duplicative recovery under those claims. The FRSA provides that an employee prevailing in a whistleblower complaint "shall be entitled to all relief necessary to make the employee whole." 49 U.S.C.A. 20109(e)(1). Damages may include reinstatement, backpay, compensatory damages, and punitive damages not to exceed $250,000. 49 U.S.C.A. §§ 20109(e)(2), (3). In this case, Mercier appears to pursue compensatory damages for pain and suffering stemming from mental hardship, stress, and treatment for depression. See Mercier Complaint at 9. These are damages distinct to his complaint under 49 U.S.C.A. §§ 20109 that may not be available to him under the collective bargaining agreement. In any event, it is well-established that any relief to which Mercier is entitled would be that which would make him "whole" and would not include double recovery. See generally Sears Roebuck & Co. v . Metropolitan Engravers, Ltd ., 245 F.2d 67, 69-70 (9th Cir. 1956) ("a plaintiff may pursue an action against an identical defendant in several courts at the same time, even though inconsistent remedies are sought. But . . . there can be only one recovery."); Taylor v. Burlington Northern R.R. Co. , 787 F.2d 1309, 1317 (9th Cir. 1986) (same).
USDOL/OALJ Reporter at 8.
Saporito v. Exelon Corp.
, ARB No. 10-049, ALJ No. 2009-ERA-10 (ARB Sept. 30, 2011)
Final Decision and Order PDF | HTM
[Nuclear and Environmental Whistleblower Digest XII D 13]
PROTECTED ACTIVITY; REFUSAL TO HIRE; PRIOR WHISTLEBLOWER COMPLAINTS
In Saporito v. Exelon Corp. , ARB No. 10-049, ALJ No. 2009-ERA-10 (ARB Sept. 30, 2011), the Complainant alleged that the Respondents retaliated against him when they refused to hire him for any of six positions for which he applied because they knew from his resume that his employment relationship with some of his previous employers had been terminated because he had raised safety concerns with the NRC regarding operations at those employers' nuclear plants. The ARB found, however, that the Complainant failed to point to sufficient information in the record to support a factual finding that he had engaged in protected activity. The ARB noted that it was of public record in court decisions that the Complainant had been terminated for cause by one of the prior employers, and that he had admitted in another case involving that employer's refusal to rehire that he was not eligible for rehire because of the previous termination for cause. The ARB also noted that although the Complainant had alleged in his resume that he had been terminated by two other employers for filing safety complaints, both of the ERA whistleblower complaints relating to those employers had been settled without any findings regarding whether the Complainant had engaged in protected activity. The ARB found the instant complaint to be without merit and frivolous.
, ARB No. 09-077, ALJ No. 2006-SCA-9 (ARB Sept. 29, 2011)
Final Decision and Order PDF | HTM
SCA DEBARMENT; MITIGATING FACTOR OF PAYMENT OF MONIES FOUND TO BE OWED TO EMPLOYEES DOES NOT PREVENT DEBARMENT WHERE THERE WERE OTHER AGGRAVATING CIRCUMSTANCES
In VGA Inc. , ARB No. 09-077, ALJ No. 2006-SCA-9 (ARB Sept. 29, 2011), the ARB affirmed the ALJ's finding that the Respondents violated the SCA when it underpaid its employees SCA wages and fringe benefits due them under its federal service contracts. The ARB found that a preponderance of the evidence supported the ALJ's finding that the Respondent's actions in causing the SCA violations amounted to willful or culpable conduct. Thus, the ARB affirmed the ALJ's finding that "unusual circumstances" warranting relief from the debarment sanction did not exist. Although the Respondent paid the moneys found due to its employees by the Administrator, the ARB agreed with the ALJ that mitigating factors alone do not overcome strict application of SCA debarment where, as here, there were aggravating factors (limited cooperation during the investigation; a delay in coming into compliance; a previous SCA debarment).
Vannoy v. Celanese Corp.
, ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011)
Final Decision and Order of Remand PDF | HTM
PROTECTED ACTIVITY; REPORTED MISCONDUCT DOES NOT NEED TO RELATE TO SHAREHOLDER FRAUD; REPORTING ABOUT A POTENTIAL VIOLATION IS PROTECTED AS LONG AS IT IS REASONABLE TO BELIEVE THAT A VIOLATION IS LIKELY TO HAPPEN
In Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011), the ARB held that the ALJ erred in granting summary decision to the Respondent on the ground that the Complainant had not engaged protected activity under the SOX. The ALJ had determined that the Complainant's filing of a "Business Conduct Policy" complaint and a disclosure under the "IRS Whistleblower Rewards Program," and voicing several complaints to his managers about the company's record-keeping of employee credit card processes, were not protected activity because the Complainant "failed to allege a violation that definitively and specifically relates to one of the six enumerated categories considered under 1514A." The ALJ also determined that the Complainant did not have a reasonable belief that the conduct he was reporting violated one of the enumerated categories. The ALJ also found that "reporting to the IRS does not constitute a complaint to a �federal regulatory or law enforcement agency' as contemplated by 1514(A)." The ALJ found that there was no evidence that the Complainant believed that the Respondent had committed fraud when he made his complaints and that that "the belief and presence of fraud is essential for SOX violations." The ALJ determined that the Complainant failed to allege any violation that would have a "material, adverse outcome to shareholders."
The ARB held that the ALJ erred in ruling that the reported misconduct must relate to shareholder fraud, citing its decision in Sylvester v. Paraxel Int ' l LLC , ARB No. 07-123, ALJ Nos. 2007-SOX-39, -42 (May 25, 2011). The ARB wrote:
While Vannoy may not have asserted a claim of shareholder fraud specifically, under SOX he need not do so to sustain his claim of a SOX violation. Vannoy's complaints concerning Celanese's business practices, assertions as to misstated financial records, and shortcomings in the company's "accounting controls" support the reasonableness of his belief that the company was engaging in accounting misconduct in violation of SOX. We find that Vannoy alleged facts sufficient to sustain his claim that he engaged in protected activity under Section 806.
USDOL/OALJ Reporter at 11 (footnotes omitted). The ARB noted that the "definitively and specifically" standard had been rejected in Sylvester . The ARB further noted that the ALJ's erred when he based his decision on a finding that the Complainant failed to demonstrate that his belief that the Respondent had committed actual fraud at the time of his protected disclosures.. The ARB quoted its decision in Funke v. Federal Express , ARB No. 09-004, ALJ No. 2007-SOX-43, slip op. 11 (ARB July 8, 2011), where it stated that it had explained in Sylvester that "disclosures concerning violations about to be committed (or underway) are covered as long as it is reasonable to believe that a violation is likely to happen."
PROTECTED ACTIVITY; COMPLAINT FILED WITH THE INTERNAL REVENUE SERVICE THAT INCLUDES COMPLAINTS ABOUT ACCOUNTING IRREGULARITIES IMPLICATING SEC REPORTING RULES
In Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011), the Complainant had filed a disclosure under the "IRS Whistleblower Rewards Program." The ALJ found that "reporting to the IRS does not constitute a complaint to a �federal regulatory or law enforcement agency' as contemplated by 1514(A)." The ARB held that this was error because the SOX does not limit the agencies to which a complainant may report information in furtherance of enforcement of laws that fall within the SOX's coverage. The ARB held that it would be contrary to Congressional intent to construe the SOX whistleblower provision so narrowly that only reports to the SEC would warrant protection. The ARB found that the IRS complaint included complaints about accounting irregularities that affected the company's reporting requirements under SEC rules. The ARB held "Because there is no limiting language in Section 1514A that precludes complaints to agencies other than the SEC and Department of Labor, we find that in these unique circumstances, Vannoy's complaint to the IRS would fall within SOX's coverage."
ADVERSE ACTION; PAID ADMINISTRATIVE LEAVE
Paid administrative leave may be considered an adverse action under certain circumstances. Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011), citing Van Der Meer v. Western Ky. Univ. , ARB No. 97-078, ALJ No. 1995-ERA-38, slip op. at 4-5 (ARB Apr. 20, 1998), in which the ARB had held that, although an associate professor was paid throughout his involuntary leave of absence, he was subjected to adverse employment action by his removal from campus.
CAUSAL LINK BETWEEN PROTECTED ACTIVITY AND ADVERSE ACTION; SUMMARY DECISION; TEMPORAL PROXIMITY SUFFICIENT TO MEET CAUSATION ELEMENT OF PRIMA FACIE CASE IS SUFFICIENT TO CREATE GENUINE ISSUE OF MATERIAL FACT THAT MUST BE RESOLVED IN AN EVIDENTIARY HEARING
In Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011), the ARB held that the ALJ erred in granting summary decision in favor of the Respondent on the ground that the Complainant did not suffer an adverse action due to protected activity. In part, the ALJ's conclusion was based on undisputed evidence that the Complainant had received a performance bonus after filing an internal complaint, and that the Complainant was on notice that his position was scheduled for outsourcing. The ARB found other evidence of record to support the Complainant's claim that his termination was adverse action linked to his complaints to management and the IRS about the Respondent's failure to adequately substantiate business expense reporting. The ARB also found that there was sufficient temporal proximity between the protected activity and the adverse personnel actions alleged to establish the element of causation in a prima facie case, and that this was sufficient to create a genuine issue of material fact that must be resolved in an evidentiary hearing.
PROTECTED ACTIVITY; REMOVAL AND TRANSFER OF CONFIDENTIAL AND SENSITIVE INFORMATION IN VIOLATION OF COMPANY POLICY; TENSION BETWEEN SUCH A POLICY AND WHISTLEBLOWER BOUNTY PROGRAMS; WHETHER CONDUCT IS PROTECTED DEPENDS ON WHETHER IT IS THE KIND OF "ORIGINAL INFORMATION" THAT CONGRESS INTENDED TO PROTECT UNDER SUCH PROGRAMS
In Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011), the ARB held that the ALJ erred in finding, in a decision granting summary decision in favor of the Respondent, that the Complainant "did not suffer an unfavorable personnel action due to protected activity" because he was terminated due to undisputed evidence that he misappropriated employee personnel information in violation of company policy. The Complainant admitted that he had taken, without permission, business documents related to company operations that contained sensitive personal identifying information of former and current company employees. The information included employee credit card information and personal identifying information such as employee home addresses and social security numbers. The Complainant argued that the purpose of transferring this information to his home computer was to further his IRS Whistleblower program complaint.
The ARB noted legislative history related to Section 806 of the SOX indicating that the provision specifically protected lawful conduct to disclose misconduct, and that although the Complainant's conduct may have violated company policy, local police had investigated the matter but had brought no charges. The ARB then discussed what the ALJ must address in determining whether the taking of information in violation of company policy was protected under the SOX:
There is a clear tension between a company's legitimate business policies protecting confidential information and the whistleblower bounty programs created by Congress to encourage whistleblowers to disclose confidential company information in furtherance of enforcement of tax and securities laws. Passage of these bounty provisions demonstrate that Congress intended to encourage federal agencies to seek out and investigate independently procured, non-public information from whistleblowers such as Vannoy to eliminate abuses in the tax realm under the IRS Whistleblower program and now in the securities realm with the SEC Whistleblower program recently enacted in 2010. In 2010, the Dodd-Frank Act established the SEC Investor Protection fund, which is to be used to pay whistleblower claims and is funded with monetary sanctions that the SEC collects in a judicial or administrative action, or through certain disgorgements under the Sarbanes-Oxley Act of 2002. Similar to the IRS Whistleblower bounty program that Vannoy pursued, Section 21F(b) of the Dodd-Frank Act provides that the SEC "shall pay" a whistleblower who voluntarily provides original information to the SEC that leads to the successful enforcement of a covered judicial or administrative action and results in certain monetary sanctions.
Under the SEC bounty program, the whistleblower is entitled to an award of between 10 percent and 30 percent of what the SEC collects in monetary sanctions. However, the whistleblower must provide " original information to the SEC relating to a violation of the securities law." 15 U.S.C. 78u-6 (b)(1) (emphasis added). The Act defines original information as information that: (i) "is derived from the independent knowledge or analysis of the whistleblower ;" (ii) "is not known to the SEC from any other source, unless the whistleblower is the original source of the information;" and (iii) the information "is not derived exclusively from an another allegation contained in a judicial or administrative hearing, in a governmental report, hearig, audit or investigation, or from the news media, unless the whistleblower is a source of the information." 15 U.S.C. 78u-6(a)(3).
Under the terms of the SEC whistleblower bounty program, Congress anticipated that the whistleblower would provide independently garnered, insider information that would be valuable to the SEC in its investigation. Indeed, the recently issued final rule implementing the SEC bounty program contains a provision prohibiting employers from enforcing or threatening to enforce confidentiality agreements to prevent whistleblower employees from cooperating with the SEC. 17 C.F.R. § 240.21F-17(a).
The IRS whistleblower bounty program Vannoy used, like the SEC program recently established, reflects Congressional recognition of the notable contributions to law enforcement provided by whistleblowers with non public, inside information. Vannoy's allegations must be viewed in light of these significant enforcement interests. Evidence of record supports Vannoy's allegations that he procured employee data in 2005 and in 2007 as part of his efforts to facilitate his complaint with the IRS as to Celanese's accounting practices. In doing so he sent confidential information by e-mail and created compact discs containing confidential information concerning Celanese employees without the company's permission. Indeed the record shows that some of this information was transferred to a personal computer at Vannoy's home. See supra at 4. Thus the crucial question for the ALJ to resolve with a hearing on remand is whether the information that Vannoy procured from the company is the kind of " original information " that Congress intended be protected under either the IRS or SEC whistleblower programs, and whether the manner of the transfer of information was protected activity within the scope of SOX. These are mixed questions of law and fact for the ALJ to determine in the first instance.
USDOL/OALJ Reporter at 16-17.
Durham v. Tennessee Valley Authority
, ARB No. 11-044, ALJ No. 2010-CAA-4 (ARB Sept. 27, 2011)
Final Decision and Order Dismissing Appeal PDF | HTM
The ARB appeal was dismissed when the Complainant failed to establish good cause for his failure to timely file his opening brief.
Hildebrand v. H.H. Williams Trucking, LLC
, ARB No. 11-030, ALJ No. 2010-STA-56 (ARB Sept. 26, 2011)
Final Decision and Order Approving Settlement and Dismissing Complaint With Prejudice PDF | HTM
Approval of settlement agreement.
Lucia v. American Airlines, Inc.
, ARB Nos. 10-014, -015, - 016, ALJ Nos. 2009-AIR-15, -16, -17 (ARB Sept. 16, 2011)
Final Decision and Order of Remand PDF | HTM
MOOTNESS; RESPONDENT'S RESTORATION OF PAID SICK LEAVE DOES NOT MOOT THE CASE WHERE THE COMPLAINANTS ALSO SOUGHT COMPENSATORY DAMAGES AND WHERE ATTORNEYS FEES WOULD BE COMPENSABLE IF THE COMPLAINTS WERE FOUND MERITORIOUS
In Lucia v. American Airlines, Inc. , ARB Nos. 10-014, -015, -016, ALJ Nos. 2009-AIR 15, 16, 17 (ARB Sept. 16, 2011), the Complainants alleged that their paid sick leave had been changed to unpaid sick leave in retaliation for calling in sick rather than flying an aircraft in violation of the Federal Aviation Regulation, 14 C.F.R. § 61.53. While the matter was pending on appeal before the ARB, the Respondent repaid the sick leave and removed disciplinary letters from the Complainants' personnel files in accordance with an arbitration award. The Respondent argued that the AIR21 case was now moot. The ARB, however, found that compensatory damages and attorney fees could be granted if the Complainants prevailed on the merits. Accordingly, the AIR21 case was not moot.
COLLATERAL ATTACK LIMITATION; COMPLAINANTS' DECISION TO PURSUE BINDING ARBITRATION UNDER A CBA DOES NOT CONFLICT WITH PURSUIT OF AIR21 WHISTLEBLOWER COMPLAINT
In Lucia v. American Airlines, Inc. , ARB Nos. 10-014, -015, -016, ALJ Nos. 2009-AIR 15, 16, 17 (ARB Sept. 16, 2011), the ALJ dismissed the Complainants' AIR21 whistleblower complaints because they had pursued remedies in binding arbitration under a collective bargaining agreement. The ARB found that the ALJ erred in citation of 49 U.S.C. § 4212(b)(4)(B), which limits a collateral attack on an order of the Secretary of Labor under AIR21. The ARB found that a remedy in arbitration does not work to collaterally attack an AIR21 remedy because the causes of action are different and wholly independent. Although the arbitration and the AIR21 proceedings could have varying outcomes, they would not conflict because the actions have independent causes and purposes. Further, any judicial relief order could be equitably structured so to avoid duplicative recovery.
Salata v. City Concrete, LLC
, ARB Nos. 08-101, 09-104, ALJ Nos. 2008-STA-12 and -41 (ARB Sept. 15, 2011)
Final Decision and Order PDF | HTM
[STAA Digest IV A 1]
BURDEN OF PROOF AND PRODUCTION UNDER 9/11 ACT AMENDMENTS TO THE STAA; EFFECTIVE DATE
The 9/11 Commission Act of 2007, Pub. L. No. 110-53, 121 Stat. 266, amended the STAA to provide that STAA whistleblower complaints will be governed by the legal burdens set out in AIR21, 49 U.S.C.A. § 42121(b). The ARB found that because the amended provision had no expressed effective date, it became effective on the date of enactment - August 3, 2007, and that the law to be applied is the law in effect on the date that the adjudicator renders its decision. In Salata v. City Concrete, LLC , ARB Nos. 08-101, 09-104, ALJ Nos. 2008-STA-12 and -41 (ARB Sept. 15, 2011), the ARB described the legal burdens under the 2007 amendments:
Under the 2007 amendments to the STAA, to prevail on his STAA claim, [a complainant] must prove by a preponderance of the evidence that his complaints about his truck were protected activity; that his employer ... took an adverse employment action against him; and that his protected activity was a contributing factor in the unfavorable personnel action. Clarke v. Navajo Express, Inc. , ARB No. 09-114, ALJ No. 2009-STA-018, slip op. at 4(ARB June 29, 2011), citing Williams v. Domino's Pizza , ARB 09-092, ALJ 2008-STA-052, slip op. at 5 (ARB Jan. 31, 2011). A contributing factor is "any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision." Williams , ARB 09-092, slip op. at 5. [A complainant] can succeed by "providing either direct or indirect proof of contribution." Id. "Direct evidence is 'smoking gun' evidence that conclusively links the protected activity and the adverse action and does not rely upon inference." Id . If [the complainant] "does not produce direct evidence, he must proceed indirectly, or inferentially, by proving by a preponderance of the evidence that retaliation" was a contributory reason for terminating his employment. Id . "One type of circumstantial evidence is evidence that discredits the respondent's proffered reasons for the termination, demonstrating instead that they were pretext for retaliation." Id. (citing Riess, ARB 08-137, slip op. at 6). If [the complainant] proves pretext, we may infer that the protected activity contributed to the termination, although we are not compelled to do so. Williams, ARB 09-092, slip op. at 5.
If [the complainant] proves by a preponderance of evidence that his protected activity was a contributing factor in the unfavorable personnel action, [the respondent] may avoid liability if it "demonstrates by clear and convincing evidence" that it would have taken the same adverse action in any event. Williams, ARB 09-092, slip op. at 5 (citing 49 U.S.C.A. § 42121(b)(2)(B)(iv); 29 C.F.R. § 1979.109(a)). "Clear and convincing evidence is �[e]vidence indicating that the thing to be proved is highly probable or reasonably certain.'" Williams , ARB 09-092, slip op. at 5, quoting Brune v. Horizon Air Indus., Inc. , ARB No. 04-037, ALJ No. 2002-AIR-008, slip op. at 14 (ARB Jan. 31, 2006) (citing Black's Law Dictionary at 577).
USDOL/OALJ Reporter at 9.
Avlon v. American Express Co.
, ARB No. 09-089, ALJ No. 2008-SOX-51 (ARB Sept. 14, 2011)
Order Denying Reconsideration PDF | HTM
COMPLAINANT'S FAILURE TO EXPRESSLY EXCEPT TO ALJ'S FINDING OF LACK OF TIMELINESS OF COMPLAINT WHEN PETITIONING FOR ARB REVIEW; ARB MAY REVIEW ALJ'S FINDING WHERE NOT TO DO SO WOULD RESULT IN MANIFEST INJUSTICE, NO ADDITIONAL FACT-FINDING WAS REQUIRED, AND THE ISSUE HAD BEEN FULLY LITIGATED BEFORE THE ALJ
In Avlon v. American Express Co. , ARB No. 09-089, ALJ No. 2008-SOX-51 (ARB Sept. 14, 2011), the ARB had earlier held that the ALJ had erred in his determination that the Complainant's SOX whistleblower complaint was not timely filed. The Respondent filed a motion for reconsideration, arguing that that the ARB erred by ruling on the issue because the Complainant had not petitioned for review of the timeliness issue and the Complainant had therefore waived review of that issue. The regulation at 29 C.F.R. § 1980.110(a) provides that a "petition for review must specifically identify the findings, conclusions or orders to which exception is taken. Any exception not specifically urged ordinarily will be deemed to have been waived by the parties." The ARB acknowledged that it appeared that the Complainant had waived the issue by not expressly preserving it in her petition for review, but nonetheless found that it had authority to review the claim. The ARB stated: "Indeed, not reviewing that claim would render a manifest injustice as it would possibly cause her entire case to be dismissed as it is the central issue on which the ALJ's decision rests. Moreover, because no additional fact-finding is required and the parties fully litigated this issue before the ALJ �, we are well within the bounds of our discretion to address that issue on Avlon's petition for review." USDOL/OALJ Reporter at 5-6 (footnote omitted). The ARB found that the regulation at 29 C.F.R. § 1980.110(a) "does not mandate that the Board limit its review to the ALJ's holdings of fact or conclusions of law assigned as errors in the petition of review." USDOL/OALJ Reporter at n.1 (citation omitted). One member of the ARB filed a concurring opinion. That member stated that the majority's opinion bypassed the first crucial question of whether the Complainant had expressly and clearly waived all consideration of her claim that she was constructively discharged, and found that it would be absurd to dismiss the entire case merely because she broad brushed her claim. The concurring member indicated, however, that if a complainant expressly and clearly waives a claim, the ARB must follow such a choice even if the case was fully litigated below.
Wheat v. Gainey Transportation Services, Inc.
, ARB No. 10-062, ALJ No. 2009-STA-20 (ARB Sept. 14, 2011)
Final Decision and Order PDF | HTM
The ALJ found that the Respondent had been discharged in a final order of a bankruptcy court, and this order discharged the Complainant's STAA cause of action. Neither party responded to the ARB's briefing order. The ARB affirmed the ALJ's order of dismissal.
OFCCP v. Manheim, Inc.
, ARB No. 11-060, ALJ No. 2011-OFC-5 (ARB Sept. 13, 2011)
Order Granting Amended Consent Decree PDF | HTM
Order approving consent decree, as amended.
Menendez v. Halliburton, Inc.
, ARB Nos. 09-002, -003, ALJ No. 2007-SOX-5 (ARB Sept. 13, 2011)
Decision and Order of Remand PDF | HTM
PROTECTED ACTIVITY; OBJECTIVE REASONABLENESS STANDARD; ACCOUNTING ISSUES ON WHICH REASONABLE MINDS MAY DIFFER
PROTECTED ACTIVITY; MATERIALITY ELEMENT OF FRAUD NEED NOT BE ALLEGED FOR A SOX SECTION 806 COMPLAINT; EVEN IF MATERIALITY IS A THRESHOLD, OPENING OF EXTERNAL AND INTERNAL INVESTIGATIONS IS EVIDENCE OF MATERIALITY
PROTECTED ACTIVITY; REASONABLENESS OF COMPLAINANT'S POSITION ON ACCOUNTING PRACTICE IS NOT NECESSARILY UNDERMINED BY SEC FINDING APPROVING THAT PRACTICE
In Menendez v. Halliburton, Inc. , ARB Nos. 09-002, -003, ALJ No. 2007-SOX-5 (ARB Sept. 13, 2011), the ARB affirmed the ALJ's finding that the Complainant engaged in protected activity when he alleged violations of SEC rules concerning revenue recognition and joint venture accounting practices to his supervisors, the SEC, and the Board of Directors' Audit Committee. On appeal, the Respondent contended that the ALJ had erred by failing to properly evaluate the objective reasonableness of the Complainant's belief that the Respondent had violated SEC rules. The ARB found that the ALJ had employed the correct standard: an employee's reasonable belief must be both subjectively and objectively reasonable, and the determination of whether a whistleblower's belief is objectively reasonable is based on the knowledge available to a reasonable person in the circumstances with the employee's training and experience. The ARB found that the ALJ had considered the testimony of numerous witnesses in finding that the Complainant had raised issues on which reasonable minds may differ, and deferred under the substantial evidence standard of review to the ALJ's finding that the Complainant's belief was objectively reasonable.
The Respondent also contended that the ALJ should have considered the materiality of the issues raised by the Complainant. The ARB, however, noted that it had recently explained in Sylvester v. Parexel International LLC , ARB No. 07-123, ALJ Nos. 2007-SOX-39 and 42 (ARB May 25, 2011), that "a complainant need not allege the substantive elements of fraud, including materiality, to warrant Section 806 protection; the complainant need only have a reasonable belief that the activity alleged constitutes fraud." USDOL/OALJ Reporter at 13. The ARB further held that even if a materiality threshold existed, "[h]ad Menendez's complaints been immaterial or unreasonable, they would not have warranted one external and two internal investigations." Id. (footnote omitted).
Finally, the ARB the ruled that the reasonableness of the Complainant's position was "not necessarily undermined by the fact that the SEC ultimately approved Halliburton's accounting methods."
ADVERSE ACTION; REJECTION OF "TANGIBLE CONSEQUENCES" STANDARD IN SOX SECTION 806 CASES; BURLINGTON STANDARD IS STARTING POINT FOR ANALYSIS - NAMELY, DID THE RESPONDENT ENGAGE IN ACTIVITY THAT WOULD DISSUADE A REASONABLE EMPLOYEE FROM ENGAGING IN PROTECTED ACTIVITY
Section 806's intended protection is not limited to economic or employment-related actions
In Menendez v. Halliburton, Inc. , ARB Nos. 09-002, -003, ALJ No. 2007-SOX-5 (ARB Sept. 13, 2011), considered whether the adverse action standard from Burlington Northern & Santa Fe Railway Co. v. White , 548 U.S. 53 (2006), controls in a SOX Section 806 whistleblower complaint. The Board first observed that the plain language of Section 806 proscribes non-tangible activity; that such language was to be construed broadly, as had been other whistleblower laws; and that it was not necessary to turn to the definition of adverse action articulated in Title VII cases like Burlington . However, because the parties in the case sub judice, and the Board itself in other cases, had argued the relevance of the Burlington adverse action standard, the ARB went on to address the question. The ARB noted that Section 806's statutory language is on its face more expansive that either Section 703 or Section 704 of Title VII, and unlike Title VII, explicitly proscribes non-tangible activity. The Board wrote:
Considering these differences in statutory language, in Williams [ v. American Airlines, Inc . ARB No. 09-018, ALJ No. 2007-AIR-004, slip op. at. 12-15 (ARB Dec. 29, 2010)], we held that the intended protection of AIR 21 extends beyond any limitations in Title VII and can extend beyond tangibility and ultimate employment actions. Because of its similarity to the adverse action language construed in Williams and for reasons explained below, we adopt the Williams standard of actionable adverse action as likewise applicable to Section 806 cases. Under this standard, "the term �adverse actions' refers to unfavorable employment actions that are more than trivial, either as a single event or in combination with other deliberate employer actions alleged."
USDOL/OALJ Reporter at 17 (footnote omitted). The Board, however, found that the Burlington standard "serves as a helpful guide for the analysis of adverse acts under SOX." Id . The Board observed in that in Melton v. Yellow Transp., Inc. , ARB No. 06-052, ALJ No. 2005-STA-2, slip op. at 18 (ARB Sept. 30, 2008), it had recognized that there was a two-fold holding in Burlington addressing both the degree and scope of actionable adverse action, and that a majority of the Board in Melton had
� explained that "terms and conditions" language was relevant only to the scope of coverage but not the degree of actionable harm. The Melton majority reasoned that, while the scope of harm must be employment-related, the degree of actionable harm for both the Title VII anti-retaliation provision and whistleblower provision were the same � that which would deter a reasonable employee from engaging in protected activity. Broad protection effectively serves similar purposes for both provisions by effectively deterring the myriad forms that retaliation may take and frees employees to engage in protected activity.
Today, we pick up where the Melton majority left off. Rather than a limitation on what is to be considered adverse action under Section 806, we are of the opinion that "terms and conditions of employment" are not significant limiting words and should be construed broadly within the remedial context of Section 806. We find the Court's more extensive explanation in Meritor Savings Bank, FSB v. Vinson , to be more convincing:
First, the language of Title VII is not limited to "economic" or "tangible" discrimination. The phrase "terms, conditions, or privileges of employment" evinces a congressional intent "�to strike at the entire spectrum of disparate treatment of men and women'" in employment�.
Under Section 806, the language "in the terms and conditions of employment" does not limit Section 806's intended protection to economic or employment-related actions.
USDOL/OALJ Reporter at 18 (footnotes omitted).
Misapplication over past 10 years by the ARB of Title VII "tangible" consequences standard to whistleblower cases; tangible consequences goes to remedies rather than whether there has been a violation; adverse actions must be reviewed both separately and in the aggregate
The ARB noted that the ALJ's decision had reflected confusion about the proper standard to apply, which might be a reflection of the ARB's confounding precedent in the area, which the ARB attributed in part to incautious application of Title VII precedent to whistleblower cases. The ARB explained that prior to 2000, whistleblower law had consistently prohibited an expansive array of employment actions not necessarily limited to "tangible" consequences, monetary loss or ultimate employment actions; but that over the last decade the broad coverage had been replaced by adverse action standards imported from Title VII cases that had the effect of narrowing the scope of actionable activity. The ARB found that the Title VII decision in Burlington , "reinstated a broader definition of the term �adverse action' � namely, activity that would dissuade a reasonable employee from engaging in protected activity � that is consistent with the expansive construction required of whistleblower statutes. Accordingly, Burlington may provide a useful starting place for reviewing Section 806 adverse action allegations; Burlington 's deterrence standard prohibiting actions that would deter a reasonable employee from engaging in protected activity would be actionable under Section 806 as well." USDOL/OALJ Reporter at 20.
The ARB found therefore that the ALJ had erred in applying the standard of "tangible job consequences" to the adverse actions alleged in the case on appeal. The ALJ's application of the standard also failed to recognize that the body of the decisional law holds that the absence of tangible injury goes to the remedy rather than whether the employer violated the law. The ARB also concluded that the ALJ had failed to consider the adverse actions in the aggregate, as well as separately � stating that "minor acts of retaliation can be sufficiently substantial when viewed together to be actionable." USDOL/OALJ Reporter at 21 (footnote omitted).
ADVERSE ACTION; BREACH OF CONFIDENTIALITY OF COMPLAINT TO AUDIT COMMITTEE IS A VIOLATION OF SECTION 301 OF SOX AND ACTIONABLE UNDER SOX SECTION 806; FINDING THAT PERSONS TO WHOM THE IDENTITY OF THE COMPLAINANT WAS DISCLOSED WOULD HAVE GUESSED IT ANYWAY IS NOT MATERIAL TO THE RELEVANT STANDARD OF WHETHER A REASONABLE PERSON WOULD HAVE BEEN DETERRED FROM ENGAGING IN PROTECTED ACTIVITY
In Menendez v. Halliburton, Inc. , ARB Nos. 09-002, -003, ALJ No. 2007-SOX-5 (ARB Sept. 13, 2011), the Complainant, Anthony Menendez, filed confidential reports by email to the SEC and the Respondent's Audit Committee asserting questionable accounting practices with respect to revenue recognition. The Respondent's assistant general counsel forwarded the Complainant's email to the Audit Committee to the Respondent's general counsel and the CFO, in addition to the Audit Committee. The CFO forwarded this email to certain officials at the Respondent and its auditor. The SEC notified the Respondent's general counsel that it was opening an investigation and directed the Respondent to retain relevant documents. The Respondent's general counsel issued a "document retention" email to a number of company officials. That email stated that "the SEC has opened an inquiry into the allegation of Mr. Menendez." The Respondent's Chief Accounting Officer forwarded this email to 15 members of the Respondent's Finance and Accounting organization, one of whom was the Complainant. After a hearing, the ALJ concluded that the emails breaching the Complainant's confidentiality were not adverse actions under SOX Section 806 because they merely identified the Complainant to a group of people who would have known it was the Complainant in any case. The ARB disagreed because the breach violated SOX Section 301, 15 U.S.C.A. § 78j-1(m)(4), which requires that publicly traded companies to establish procedures for the confidential, anonymous submission of concerns regarding questionable accounting or auditing matters. The ARB wrote:
We consider Section 301 a critical component of SOX, legislation composed of a number of separate and distinct provisions designed to address corporate fraud and financial wrongdoing. To further this legislative intent, we necessarily construe the protection Section 301's requirement (that covered employers establish confidential channels of communication for their employees) affords consistently with SOX Section 806's anti-retaliation provisions and hold that Section 806 provides whistleblower protection to employees who make use of such channels. We agree with Menendez's argument that the right to confidentiality Section 301 affords effectively establishes a "term and condition" of employment within the meaning of Section 806's whistleblower protection provision, and that the exposure of Menendez's identity in connection with his complaint to Halliburton's Audit Committee constituted a violation of that employment term and condition.
USDOL/OALJ Reporter at 24 (footnotes omitted). The ARB found that the ALJ's conclusion that the persons receiving the email would have guessed the Complainant's identity was purely speculative and immaterial to the analysis. The ARB wrote that "Menendez need only demonstrate that such activity would deter a reasonable person from engaging in protected activity. Clearly, a reasonable employee in Menendez's position would be deterred from filing a confidential disclosure regarding misconduct if there existed the prospect that his identity would be revealed to the very people implicated in the alleged misconduct." Id . at 26 (footnote omitted).
The ARB found that substantial evidence supported the ALJ's findings that isolation, removal of duties, and demotion as alleged by the Complainant were not adverse actions. The ARB found, however, that these conditions were fallout from the disclosure of the Complainant's identity which could "constitute indicia of harm and a measure of damages to which [the Complainant] may be entitled�."
CONSTRUCTIVE DISCHARGE; SUBSTANTIAL EVIDENCE SUPPORTING ALJ'S FINDING THAT COMPLAINANT RESIGNED OVER FUNDAMENTAL DISAGREEMENT OVER ACCOUNTING PRACTICES RATHER THAN PERSONNEL RELATED ADVERSE ACTIONS
CONSTRUCTIVE DISCHARGE; THE RECORD BEFORE THE ALJ DID NOT SUPPORT A CLAIM OF CONSTRUCTIVE DISHARGE BASED ON A THREAT OF FUTURE HARM
In Menendez v. Halliburton, Inc. , ARB Nos. 09-002, -003, ALJ No. 2007-SOX-5 (ARB Sept. 13, 2011), the Respondent disclosed the Complainant's identity to several officials of the Respondent and its auditor following the filing of confidential reports by email to the SEC and the Respondent's Audit Committee asserting questionable accounting practices with respect to revenue recognition. The Complainant was stunned by the disclosure and soon found himself being avoided by coworkers and auditors with whom he normally worked closely. The Complainant's counsel requested that the Respondent provide paid administrative leave given the circumstances. The Respondent approved up to six months of paid leave with benefits conditioned on the Complainant's full cooperation in SEC and company investigations into his allegations. The Complainant was replaced as a speaker at a company conference on finance and accounting. Near the end of the six month leave of absence, and after the SEC recommended no enforcement action and the company Audit Committee's investigation concluded with no changes to the company's accounting practices, the Complainant was informed that he must return to work. He would be given the same position except that he would report to the director of external reporting. The Respondent subsequently permitted the Complainant to take additional unpaid leave prior to reporting to work. The day before the scheduled return to work, the Complainant resigned stating that he considered the condition of reporting to the director of external reporting to be a demotion. He also stated that he believed that the Respondent intended to persist in violating securities laws and filing inaccurate and misleading financial information and that professionally and ethically he could not return to active employment under those conditions. During his leave of absence, the Complainant had taken a job as a consultant with a law firm.
Following a hearing, the ALJ found that the Complainant had not been constructively discharged. The ALJ found, based on the Complainant's demeanor and testimony, that the Complainant's motive for refusing to return to work for the Respondent was fundamental disagreement over the Respondent's accounting practices, and that a return to work for the Respondent was unnecessary given that he had found another job that paid at least as well and which allowed him to advocate his views on accounting issues. The ALJ found that the Complainant's decision not to return to work for the Respondent was not based on personnel related adverse action by the Respondent. The ARB found that substantial evidence supported the ALJ's findings. The ARB also stated that it would decline to find constructive discharge "based on the speculative harm inferred in the Complainant's arguments" noting that the Complainant had not returned to work and that, although the Complainant may well have been subjected to circumstances supporting a constructive discharge claim had he returned, he was not aware at the time of discharge of an intention to strictly monitor his conduct. The ARB stated that it was not ruling that threat of future harm cannot support a constructive discharge, but that the record in the instant case did not support such a claim.
CAUSATION; FINDING OF LACK OF RETALIATORY MOTIVE NOT CREDIBLE UNDER THE FACTS OF THE CASE; RETALIATORY MOTIVE IS NOT A NECESSARY ELEMENT IN DETERMINING CAUSATION
In Menendez v. Halliburton, Inc. , ARB Nos. 09-002, -003, ALJ No. 2007-SOX-5 (ARB Sept. 13, 2011), the Complainant filed confidential reports by email to the SEC and the Respondent's Audit Committee asserting questionable accounting practices with respect to revenue recognition. The Respondent's assistant general counsel forwarded the Complainant's email to the Audit Committee, the Respondent's general counse., and the CFO. The CFO forwarded the email to certain officials of the Respondent and its auditor. The SEC notified the Respondent's general counsel that it was opening an investigation and directed the Respondent to retain relevant documents. The Respondent's general counsel issued a "document retention" email to a number of company officials. That email stated that "the SEC has opened an inquiry into the allegation of Mr. Menendez." The Respondent's Chief Accounting Officer forwarded the email to 15 members of the Respondent's Finance and Accounting organization, one of whom was the Complainant.
The ARB found disingenuous the Respondent's argument that the disclosure of the Complainant's identify was for the sole purpose of retaining documents necessary for a review of the accounting practices that the Complainant had identified to the SEC. The ARB found that the documents for retention could have been identified by subject matter rather than the Complainant's identity (as the SEC had done). The ARB noted that the general counsel would have not necessarily linked the Complainant's name to the SEC investigation had he not previously been forwarded the Audit Committee email complaint.
The Respondent argued on appeal that protected activity did not cause the breach of confidentiality because its officials harbored no retaliatory motive. The ALJ had found no retaliatory motive, concluding that the Chief Accounting Officer had credibly testified that he never intended to harm the Complainant and had believed that the Complainant would actually appreciate that his concerns were being addressed. The ARB found this testimony not to be credible or necessarily relevant to a finding of contributing factor. The ARB found that the Chief Accounting Officer had been identified by the Complainant as complicit in fraud and therefore resentful of such criticism. The ARB found that no reasonable CAO would have assumed that exposing a whistleblower's identity would be welcome. Although the CAO had counseled colleagues against retaliation, this action could not exonerate the CAO.
The ARB further stated that the ALJ's finding that the CAO lacked retaliatory motive in the breach of confidentiality does not preclude a finding of causation. "Nothing in Section 806 requires a showing of retaliatory intent. The statute is designed to address (and remedy) the effect of retaliation against whistleblowers, not the motivation of the employer. Proof of �retaliatory motive' is not necessary to a determination of causation. McCollum's breach of confidentiality, however well meaning, nonetheless demonstrates a lack of understanding of its foreseeable consequences and does not absolve Halliburton of responsibility. The ALJ thus erred as a matter of law in deciding that lack of retaliatory motive precluded a finding of causation." USDOL/OALJ Reporter at 31-32 (footnotes omitted).
The ARB remanded the matter to the ALJ to make findings on whether protected activity contributed to the breach of confidentiality and whether the Respondent could prove by clear and convincing evidence that there existed legitimate business reasons dictating the disclosure.
Wallum v. Bell Helicopter Textron, Inc.
, ARB No. 09-081, ALJ No. 2009-AIR-6 (ARB Sept. 2, 2011)
Decision and Order of Remand PDF | HTM
SUMMARY DECISION; ALJ IS REQUIRED TO PROVIDE PRO SE LITIGANTS NOTICE OF REQUIREMENTS FOR OPPOSING A MOTION FOR SUMMARY DECISION
In Wallum v. Bell Helicopter Textron, Inc. , ARB No. 09-081, ALJ No. 2009-AIR-6 (ARB Sept. 2, 2011), the Respondent, Bell Helicopter, filed a motion to dismiss the Complainant's AIR21 whistleblower complaint on the ground that it was not an air carrier or contractor and therefore not a covered employer under the Act. The ALJ treated the motion to dismiss as a request for summary decision and granted it. On appeal, the ARB noted that the Complainant, who was appearing pro se, referenced in his response to the motion to dismiss information from the Respondent's website. The ARB remanded the case for the ALJ to review that information and determine whether it raised a material issue of fact regarding the Respondent's coverage such that summary decision should be denied. The ARB then noted that it had held in Hooker v. Washington Savannah River Co. , ARB No. 03-036, ALJ No. 2001-ERA-16, slip op at 8 (ARB Aug. 26, 2004), and Motarjemi v. Metropolitan Council Metro Transit Div. , ARB No. 08-135, ALJ No. 2008-NTS-2, slip op. at 4 (AR Sept. 17, 2010), that ALJs are required "to give pro se litigants notice of the requirements for opposing a motion for summary disposition, including the right to file affidavits and other evidence in response to such motions, and that such notice be provided in a form sufficiently understandable to apprise litigants of what is required." Slip op. at 7. The ARB specifically directed the ALJ to provide in the notice: "(1) the text of the rule governing summary decisions before ALJs (i.e., 29 C.F.R. § 18.40), and (2) a short and plain statement that factual assertions in [the Respondent's] affidavits will be taken as true unless [the Complainant] contradicts [the Respondent] with counter affidavits and other documentary evidence." Slip op. at 8.
WAIVER OF FINALITY ARGUMENT; SECOND ALJ DECISION THAT WAS NOT APPEALED
In Wallum v. Bell Helicopter Textron, Inc. , ARB No. 09-081, ALJ No. 2009-AIR-6 (ARB Sept. 2, 2011), the ALJ had granted summary decision on the ground that the Respondent was not a covered employer under the AIR21 whistleblower provision. This complaint was based on the Complainant's suspension. The Complainant appealed. The Complainant filed a second complaint when he was terminated. The second complaint was adjudicated by the same ALJ, who again granted summary decision on the coverage issue. The Complainant did not appeal this second ALJ decision, and the ALJ's decision became the Secretary's final decision pursuant to 29 C.F.R. § 1979.110. The ARB stated in a footnote to a remand decision on the appeal of the first ALJ decision: "Regardless whether the finality of this second decision would have had any effect on our adjudication of the coverage issue presented in this appeal, Bell Helicopter has waived its opportunity to so argue both before the Board and the ALJ on remand (even if it had been inclined to do so) by its failure to raise the argument before the Board in this appeal." Slip op. at 2, n.3 (citation omitted).
SUBSTITUTION OF PARTY BASED ON DEATH OF COMPLAINANT; ARB APPLIES FED. R. APP. P. 25 AND 43(a)(1)
In Wallum v. Bell Helicopter Textron, Inc. , ARB No. 09-081, ALJ No. 2009-AIR-6 (ARB Sept. 2, 2011), the ALJ had granted summary decision on the ground that the Respondent was not a covered employer under the AIR21 whistleblower provision. The Complainant died while the matter was pending on appeal before the ARB, and the Complainant's widow filed a motion under Fed. R. Civ. P. 25(a)(1) for substitution of party. The Respondent did not oppose the motion but noted that if the ARB decided that it is a covered employer, it would object to the survival of any claim purporting to seek punitive or exemplary damages.
Applying Fed. R. App. P. 25 and 43(a)(1), and a three-factor analysis developed by the Sixth Circuit Court of Appeals, Murphy v. Household Fin. Corp. , 560 F.2d 206, 208-09 (6th Cir. 1977), the ARB granted the widow's motion for substitution of party. The ARB noted that AIR21 does not provide for punitive damages.