Administrative Review Board Decisions

The following case summaries were created by the Administrative Review Board staff.

Walker v. Transport Refrigeration Services, ARB No. 2025-0029, ALJ No. 2024-SOX-00043 (ARB Sept. 30, 2025) (Decision and Order of Remand)

SUBJECT MATTER JURISDICTION; CLAIMS PROCESSING RULES; ALJ ERRED IN DISMISSING SOX CLAIM FOR LACK OF SUBJECT MATTER JURISDICTION

In Walker v. Transport Refrigeration Services, ARB No. 2025-0029, ALJ No. 2024-SOX-00043 (ARB Sept. 30, 2025), the ARB vacated the ALJ's order dismissing the case for "lack of jurisdiction" and remanded to the ALJ for further proceedings.

Complainant worked for Respondent, a contractor for Walmart. Complainant filed a complaint with OSHA claiming he was retaliated against in violation of SOX when he threatened to report Respondent for reporting false inventory data to Walmart. OSHA determined that the parties were covered by SOX, but determined there was no reasonable cause to find that Respondent violated SOX in terminating Complainant's employment.

Complainant requested a hearing with an ALJ. The ALJ assigned to the case issued an Order to Show Cause Why This Matter Should Not Be Dismissed for Lack of Jurisdiction. The ALJ wrote: "A reading of the statute shows that the Sarbanes Oxley Act, or SOX, was created for banking and financial institutions. It is unclear how this complaint falls under the jurisdiction of the Sarbanes Oxley Act. . . . Complainant shall show cause why this matter should not be dismissed as falling outside the provisions of SOX, and why his Complaint should not be dismissed per the findings of the Administrator and the law."

Complainant, pro se, was not given any further instructions as to procedure or how to respond. Both parties responded to the ALJ's Order to Show Cause. Complainant responded first, followed by Respondent. In his response, Complainant repeated the merits of his claim. Respondent answered that it was not a publicly traded company. Further, even if it were covered, Respondent argued Complainant failed to allege a prima facie case of retaliation, and the ALJ should dismiss on those grounds as well.

The ALJ dismissed the claim for "lack of jurisdiction." The ALJ wrote: "Without addressing the merits of this complaint, Sarbanes Oxley Act does not provide jurisdiction for a complaint filed against a company that is not a publicly traded company. Both Complainant and Respondent agree that Respondent Transport Refrigeration Services is not a publicly traded company."

Complainant appealed to the ARB, which vacated and remanded. The ARB began by contrasting "the more serious dismissal for lack of subject-matter jurisdiction [with] those more mundane dismissals for failure to state a claim," citing recent Supreme Court instruction to courts to distinguish between true jurisdictional issues—which can be identified based on clear statements in the statute's text, context, and relevant historical treatment—and ordinary claim-processing rules. The ARB observed that numerous statutory conditions such as filing deadlines and statutory coverage-of-parties requirements are non-jurisdictional because they are not clothed in jurisdiction-granting language and they do not attach a jurisdictional consequence to the condition's satisfaction. Rather, the conditions are elements going to the merits of a successful claim.

In this case, the ARB stated that Congress assigned SOX matters to the Secretary of Labor for enforcement, which properly gave subject-matter jurisdiction to the ALJ to adjudicate Complainant's appeal. Thus, the ALJ should not have dismissed for "lack of jurisdiction." Instead, the ARB stated that the proper subject of the ALJ's Order to Show Cause concerned whether Respondent was a covered person or employer and Complainant was a covered employee under SOX. These questions of coverage are claims-processing rules. Further, the ARB observed that the Supreme Court has determined that employees of contractors may be covered employees under SOX. Thus, the ALJ's dismissal for lack of jurisdiction was in error.

O'Reilly v. Industrial Automation, Inc., ARB No. 2025-0024, ALJ No. 2023-CAA-00004 (ARB Sept. 29, 2025) (Decision and Order)

DISMISSAL OF COMPLAINT WITH PREJUDICE FOR DISCOVERY VIOLATIONS; NO ABUSE OF DISCRETION

In O'Reilly v. Industrial Automation, Inc., ARB No. 2025-0024, ALJ No. 2023-CAA-00004 (ARB Sept. 29, 2025), the ARB affirmed the ALJ's dismissal of Complainant's CAA complaint with prejudice as a sanction for Complainant's non-compliance with discovery.

In keeping with the factor analysis described in Keller v. Pittsburgh Baptist Church, ARB No. 2025-0008, ALJ No. 2023-TAX-00012 (ARB July 30, 2025), the ARB determined the dismissal was not the result of the ALJ's abuse of discretion. It concluded that Complainant's consistent refusal to cooperate in the discovery process demonstrated the willful nature of his non-compliance and the futility of a lesser sanction.

Auguste v. Safe Tech USA, ARB No. 2025-0035, ALJ No. 2023-AIR-00022 (ARB Sept. 16, 2025) (Decision and Order)

DISMISSAL OF COMPLAINT WITH PREJUDICE FOR DISCOVERY VIOLATIONS; NO ABUSE OF DISCRETION

In Auguste v. Safe Tech USA, ARB No. 2025-0035, ALJ No. 2023-AIR-00022 (ARB Sept. 16, 2025), the ARB affirmed the ALJ's dismissal of Complainant's AIR21 complaint with prejudice due to Complainant's failure to comply with the ALJ's discovery orders.

The ARB determined that the ALJ had not abused her discretion in dismissing the complaint upon closely reviewing the record and applying the factors outlined in Keller v. Pittsburgh Baptist Church, ARB No. 2025-0008, ALJ No. 2023-TAX-00012 (ARB July 30, 2025). It concluded that although the ALJ did not expressly find that Complainant's discovery non-compliance was the product of willfulness, bad faith, or fault, this error was harmless. The ARB found that in the absence of evidence credibly demonstrating Complainant's inability to comply, Complainant's discovery violations were willful.

Borris v. U.S. Department of Energy, ARB No. 2024-0051, ALJ No. 2024-ERA-00006 (ARB Sept. 16, 2025) (Order of Dismissal)

DISMISSAL OF COMPLAINT; TIMELY NOTICE OF INTENT TO FILE FEDERAL DISTRICT COURT APPEAL

In Borris v. U.S. Department of Energy, ARB No. 2024-0051, ALJ No. 2024-ERA-00006 (ARB Sept. 16, 2025), the ARB determined the Department of Labor no longer had jurisdiction over Complainant's appeal after Complainant timely filed notice of his intention to initiate an original action in district court in the same matter and promptly filed a file-stamped copy of his district court complaint with the ARB.

Dean v. Health Care District of Palm Beach County, ARB No. 2025-0055, ALJ No. 2024-AIR-00020 (ARB Sept. 4, 2025) (Decision and Order)

SOVEREIGN IMMUNITY; RESPONDENT WAS NOT AN “ARM OF THE STATE” AND WAS NOT ENTITLED TO IMMUNITY

In Dean v. Palm Beach County Health Care District, ARB No. 2025-0055, ALJ No. 2024-AIR-00020 (ARB Sept. 4, 2025), the ARB affirmed the ALJ's determination that Respondent was not an "arm of the state" of Florida, and thus was not entitled to sovereign immunity under the Eleventh Amendment of the U.S. Constitution.

Respondent is an "independent special district" created by the Florida Legislature to provide "comprehensive planning, funding, and coordination of health care service delivery" to the indigent and medically needy residents of Palm Beach County, Florida. Complainant filed a complaint alleging that Respondent terminated his employment in violation of AIR21 after he reported unsafe workplace conditions and potential violations of federal aviation regulations to Respondent and the Federal Aviation Administration. 

Before the ALJ, Respondent filed a Motion to Dismiss arguing, among other things, that it was entitled to sovereign immunity under the U.S. Constitution. The ALJ determined that Respondent did not qualify for immunity and denied the Motion to Dismiss. Respondent then filed an interlocutory appeal with the ARB.

The Eleventh Amendment to the U.S. Constitution restricts the ability of individuals to bring suit against a state in federal court or in certain administrative proceedings without their consent. Eleventh Amendment immunity extends to the states themselves, as well as to agencies and entities that function as an "arm of the state." However, immunity does not "extend to counties, municipal corporations, or similar political subdivisions of the state." In determining whether an entity functions as an "arm of the state," the Eleventh Circuit considers four factors: (1) "how state law defines the entity; (2) what degree of control the State maintains over the entity; (3) where the entity derives its funds; and (4) who is responsible for judgments against the entity." As the party asserting sovereign immunity, Respondent carried the burden of establishing that it is an "arm of the state" of Florida. The ARB addressed each factor in turn.

First, the ARB observed that the special acts governing the creation and operation of Respondent did not identify Respondent as a state agency or actor, or give any other clear indication that the Legislature intended for Respondent to serve as an "arm of the state." To the contrary, the Florida Legislature defined Respondent as an "independent special district," which Florida law defines as "a unit of local government created for a special purpose . . . which has jurisdiction to operate within a limited geographic boundary . . . ." Florida also gave Respondent almost total, independent, autonomous control over its own operations and the achievement of its mission within the boundaries of Palm Beach County. The fact that Florida granted Respondent immunity under state law did not change the analysis. Immunity under Florida law extended much further than immunity available under the U.S. Constitution.

Second, the ARB observed that the special acts granted significant autonomy to Respondent to direct its own operations and act independently, with little or no state oversight, including the power to plan and operate facilities, acquire real and personal property, sue and be sued in its own name, borrow and raise money, assess ad valorem taxes, and determine its own budget. The ARB noted that other courts have determined that similar authority and power vested in an independent entity established that the state lacked the control necessary to render the entity an arm of the state.

Third, the ARB rejected Respondent's unsupported assertion that it "receives funding from the State." Because Respondent carried the burden to establish its entitlement to immunity, its failure to cite evidence or law in support of its allegation precluded the ARB from finding that this factor weighed in its favor. Furthermore, the ARB determined that it appeared from the special acts that Respondent largely, if not exclusively, funded its own operations.

Finally, the ARB rejected Respondent's unsupported assertion that although it had the "capability of paying most adverse judgments," if it could not, "the State would ultimately have to choose between making up the shortfall or shirking its health care duties." Again, the ARB determined that Respondent's failure to offer evidence in support of its proposition precluded the ARB from finding that this factor weighed in its favor. Furthermore, the ARB determined that there was no indication in the special acts that Florida would be obligated to pay for an adverse judgment against Respondent. To the contrary, the special acts provided that Respondent could sue and be sued in its own name and could secure insurance on its own behalf.

Thus, the factors weighed against finding that Respondent was an "arm of the state" entitled to sovereign immunity.