“Affordable Care Act”

Keith v. Univ. of Miami, No. 19-21229 (S.D. Fla. Jan. 27, 2020) (2020 U.S. Dist. LEXIS 14796; 2020 WL 810526) (Order [Granting Defendant’s Motion to Dismiss])

Casenote(s):

FAIR LABOR STANDARD ANTI-RETALIATION PROVISIONS AT § 215(a)(3) (OVERTIME) AND § 218c (AFFORDABLE CARE ACT); ADJUNCT FACULTY MEMBER FOUND TO BE AN EXEMPT TEACHER; COMPLAINTS ABOUT OVERTIME AND ACCESS TO HEALTH INSURANCE WERE NOT OBJECTIVELY REASONABLE WHERE COMPLAINANT WAS FACTUALLY EXEMPT UNDER THE STATUTE, AND HAD BEEN SO INFORMED BY DEFENDANT’S HUMAN RESOURCES REPRESENTATIVE

In Keith v. Univ. of Miami, No. 19-21229 (S.D. Fla. Jan. 27, 2020) (2020 U.S. Dist. LEXIS 14796; 2020 WL 810526), Plaintiff, who was employed by Defendant as an Adjunct Faculty member, filed an action pursuant to the anti-retaliation provisions of the Fair Labor Standards Act of 1938 (FLSA) at 29 U.S.C. § 215(a)(3) (overtime) and 29 U.S.C. § 218c (Affordable Care Act - ACA). As an Adjunct Faculty member, Plaintiff was classified as a part-time employee paid by the hour, and was not entitled to enroll in Defendant’s ACA group health insurance policy. Plaintiff alleged that she was only compensated for hours teaching classes and not for time preparing for classes or engaging in administrative duties. She asked, and later demanded, to be promoted to a full-time position to enable her to enroll in the ACA policy. She also demanded payment for the extra “overtime” hours. Plaintiff believed that she was a FLSA covered employee because she was paid by the hour and not with a salary. Defendant’s HR representative informed Plaintiff that because she was a teacher she was exempt from the FLSA minimum wage and overtime provisions, and that because of the number of hours Plaintiff spent in class she did not qualify for ACA coverage. Plaintiff was fired less than a month later. Plaintiff alleged in an amended complaint that she was fired for complaining about entitlement to overtime compensation and health insurance. Defendants filed a motion to dismiss.

The court noted that the FLSA overtime provisions “do not apply to employees employed in a bona fide executive, administrative or professional capacity. See 29 U.S.C. § 213(a)(1). Pursuant to § 213(a)(1), the FLSA recognizes teachers as exempt professionals.” Accordingly, even Plaintiff was an hourly employee and not paid a salary, she could not maintain the § 215(a)(3) action because she “was employed by Defendants as a teacher exempt from the overtime pay requirements of the FLSA. See 29 C.F.R. § 541.303.” Slip op. at 6.

Plaintiff argued that Defendants nonetheless violated the FLSA’s anti-retaliation provision because her reasonable, good faith complaints about her part-time status and inability to enroll in the healthcare program were the basis for her termination. The court noted that “[g]enerally, complaints of legal activity can still be protected if the employee has an objectively reasonable, good faith belief that the employer’s conduct is unlawful. This standard requires the employee show that she subjectively, that is in good faith, believed that her employer was violating the law. Little v. United Techs. Carrier Transicold Div., 103 F.3d 956, 960 (11th Cir. 1997) (decided under Title VII anti-retaliation provision).” Id. at 7. The court found, however, that Plaintiff could not establish that she had an “objectively reasonable belief” that her “employer was engaged in unlawful practices.” Id. The court determined that even if Plaintiff did not know of her exempt status at the time of her complaint, it was an undisputed fact and she was informed of her exempt status by the HR representative. The court further stated:

Where, as here, Plaintiff was explicitly exempt and therefore not covered by the FLSA, the court concludes no reasonable employer, given the context and content, could have perceived her complaint as a genuine assertion of rights under the FLSA. With very clear language, Congress exempted Plaintiff from FLSA’s protections, so it is difficult to conceive how her complaint could be “under or related to” FLSA such that she raises a cognizable FLSA retaliation claim. 29 U.S.C. § 215(a)(3). Moreover, Plaintiff points to no case, and the Court has not on its own identified any, in which an employee clearly and explicitly exempted from FLSA coverage has successfully raised an FLSA retaliation claim.

The court determined that because Plaintiff was explicitly exempt and not covered by the FLSA, her cause of action under the FLSA was futile. The court thus dismissed the case with prejudice.

[Editor’s note: The court did not specifically discuss Plaintiff’s exempt status vis-à-vis the ACA provision at § 218c, although its dismissal of the action implies that the court considered the exempt status determinative both of the retaliation claims]


Aviation Investment and Reform Act for the 21st Century

Estabrook v. Administrative Review Board, USDOL, No. 19-60716 (5th Cir. June 30, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 20491; 2020 WL 3549900) (Opinion)

USDOL Case Nos.: ARB No. 17-0047, ALJ No. 2014-AIR-00022

Casenote(s):

PROTECTED ACTIVITY; COMPLAINANT’S RENEWED RAISING OF CONCERNS THAT PUBLIC POSTING OF FLIGHT AND PACKAGE TRACKING DATA COULD ASSIST TERRORISTS WAS NOT SUBJECTIVELY OR OBJECTIVELY REASONABLE WHERE THE ISSUE WAS LONG KNOWN, AND AIR SAFETY AGENCIES HAD NOT TAKEN ACTION ON THE QUESTION; IT IS THE FAA, AND NOT THE AIRLINES, THAT POSTS THE DATA; ALTHOUGH AIRLINES MAY OPT OUT OF SUPPLYING THE DATA, TO DO SO WAS NOT ILLEGAL; MERE POTENTIAL FOR IMPROVING SECURITY DOES NOT MEAN AIRLINE WAS VIOLATING A LAW OR REGULATION

CONTRIBUTING FACTOR CAUSATION; TEMPORAL PROXIMITY OUTWEIGHED BY INTERVENING EVENT OF COMPLAINANT’S OWN BEHAVIOR

In Estabrook v. Administrative Review Board, USDOL, No. 19-60716 (5th Cir. June 30, 2020) (per curiam), the Fifth Circuit held that substantial evidence supported the ALJ’s finding that AIR21 protected activities had not contributed to Respondent FedEx’s decisions to ground Estabrook and to require a compulsory medical evaluation.

The court first addressed the ALJ’s findings that comments made by Estabrook, who was an experienced pilot, during an August 9, 2013 meeting were not protected activity. Estabrook had demanded a meeting with FedEx’s CEO to report “something related to 9-11.” A meeting with senior FedEx officials (but not the CEO) took place on August 9. During the meeting Estabrook recommended that FedEx stop making flight- and package-tracking data available to the public because terrorists could make use of that data to detonate a bomb. Estabrook had raised the same claim in 2002. Estabrook also brought up that he had heard that a former colleague who had attempted to hijack a plane had converted to Islam while in jail. Estabrook thought that FedEx should go to DOJ to request eavesdropping on the former colleague, but offered no other basis for this view than his belief that the former colleague was Muslim.

Because Estabrook had not challenged DOL’s contention that to be protected, an employee’s statements indicating a belief that air-carrier safety rules exist must be subjectively and objectively reasonable, the court assumed, without deciding, that this was the correct standard. The court noted OSHA’s observation that this standard was in line with the Fifth Circuit’s interpretation of the SOX whistleblower provision, but also noted that the statutory language was different—SOX referring to reports that a complainant “reasonably believes constitutes a violation” of certain securities law—whereas AIR21 only describes the reporting of “any violation or alleged violation.”

The ALJ found that Estabrook’s comments were not subjectively reasonable because he had known about the public availability of tracking data for over 10 years, and that for several years U.S. intelligence agencies had been aware of terrorist’s plans to use such data, but the agencies had taken no steps to curtail it. As to objective reasonableness, the ALJ found that the availability of tracking information was well known to the general public, and yet aviation safety agencies had not taken action on the question. The court observed: “it is the FAA—not FedEx—that makes flight-tracking data available to the public. True, carriers can opt out of public disclosure. But all that matters is that the FAA permits disclosure of the data, so that disclosure does not violate the law. And, as the ALJ noted, the mere potential for improving security ‘does not mean that [FedEx] was violating any law or regulation.’” Slip op. at 7. The court thus did not disturb DOL’s conclusion that the August 9 comments were not protected activity under AIR21.

Estabrook alleged that a refusal to fly in April 2013, and his filing of an earlier OSHA complaint, contributed to FedEx’s decision to ground him and subject him to a mandatory medical evaluation in August 2013. The court, however, found that substantial evidence supported the ALJ’s finding that the grounding and medical evaluation were motivated by Estabrook’s unusual behavior, such as demanding a meeting with the CEO with a cryptic reference to the 911 terrorist attacks, and the recommendation during the August 9 meeting to seek monitoring of a former colleague based only on the belief that he had converted to Islam. Estabrook contended that even if his August 2013 outburst had been the principal motivating factor, lingering anger from the April 2013 event contributed to the adverse actions in August. The court reviewed the facts and found that substantial evidence supported the ALJ’s finding that the two events were not related. The court noted that any ill-feeling toward Estabrook from the April event were due to his failure to arrive at the airport, and not the refusal to fly. The failure to arrive was not protected activity. The court also noted that the demand to talk with the CEO was not protected activity. The court was not persuaded by Estabrook’s temporal proximity argument, noting that the record indicated that the intervening event of Estabrook’s behavior in August was what resulted in his grounding and mandatory evaluation. Estabrook argued that the ALJ relied on testimony unworthy of belief, but the court noted that credibility determinations and resolution of conflicting evidence are the prerogative of the fact finder.

ATTORNEY-CLIENT PRIVILEGE NOT WAIVED BASED ON ALJ’S OVERRULING OF OBJECTION TO CROSS-EXAMINATION DESIGNED TO ELICIT INFORMATION CLAIMED TO BE PRIVILEGED; ALJ PROPERLY LATER WITHHELD EMAIL RELATED TO THE TESTIMONY WHERE, UPON IN CAMERA REVIEW, ALJ FOUND THAT IT WAS COVERED BY ATTORNEY-CLIENT PRIVILEGE OR WORK-PRODUCT DOCTRINE

In Estabrook v. Administrative Review Board, USDOL, No. 19-60716 (5th Cir. June 30, 2020) (per curiam), Respondent FedEx had called its in-house counsel (Tice) to testify at the hearing before the ALJ concerning a meeting with Petitioner Estabrook. On cross-examination, Tice indicated that the meeting took place because there were concerns about whether Estabrook should be on the jumpseat. Tice was asked what the concerns were, and FedEx’s counsel objected to the extent that the question called for attorney-client privileged information. The ALJ overruled the objection, and Tice answered the question referring to a communication from FedEx’s vice-president of flight operations. During discovery, FedEx had withheld as privileged an email about that communication. Based on Tice’s hearing testimony, Estabrook’s counsel sought production of the email. FedEx reasserted the privilege, and the ALJ ordered submission of the email to him for in camera review—upon which the ALJ determined that it was covered by attorney-client privilege or the work-product doctrine.

On appeal, Estabrook’s argued that FedEx waived the privilege when Tice testified about the content of the email. The court rejected this argument, holding that “[a] party prevents the waiver of attorney-client privilege at trial by asserting that privilege whenever the opposing party asks ‘questions designed to elicit information about privileged communications.’ Nguyen v. Excel Corp., 197 F.3d 200, 207 (5th Cir. 1999).” Here, FedEx raised the objection Tice when was presented with a question that might elicit privileged information, and thus did not waive the privilege.

The court also determined that the privilege was not waived when the ALJ overruled the objection and required Tice to answer the question. The court cited authority that privilege is not waived where the disclosure was compelled erroneously. The court found that the ALJ’s initial ruling on the privilege objection must have been erroneous given that he later determined that the email was privileged. The court thus found that the ALJ correctly withheld the email from Estabrook.


Am. Airlines, Inc. v. Mawhinney, 807 Fed. Appx. 720 (9th Cir. June 5, 2020) (unpublished) (No. 19-55566) (2020 U.S. App. LEXIS 17754) (Memorandum)

Case below: Am. Airlines, Inc. v. Mawhinney, No. 18-cv-00731 (S.D. Cal., Apr. 29, 2019) (2019 U.S. Dist. LEXIS 72990)

USDOL case: ARB No. 14-060, ALJ No. 2012-AIR-17

Casenote(s):

DECISION CONFIRMING AN ARBITRATION AWARD AFFIRMED WHERE APPELLANT’S ONLY CHALLENGE WAS TO PROPRIETY OF DISTRICT COURT’S DECISION TO COMPEL ARBITRATION, WHERE THAT DECISION TO COMPEL HAD PREVIOUSLY BEEN AFFIRMED ON APPEAL

In Am. Airlines, Inc. v. Mawhinney, No. 19-55566 (9th Cir. June 5, 2020) (2020 U.S. App. LEXIS 17754) (Memorandum) (unpublished), Respondent-Appellant appealed pro se from the district court’s grant of American Airline’s petition to confirm an arbitration award. Respondent-Appellant only challenged the propriety of the district court’s decision to compel arbitration of his claim for whistleblowing retaliation under AIR21. Reviewing the question de novo, the court affirmed the district court, stating that “the order compelling arbitration of [Respondent-Appellant’s] AIR21 claim has already been affirmed in American Airlines, Inc. v. Mawhinney, 904 F.3d 1114 (9th Cir. 2018).” Slip op. at 2. The court noted that it would not consider matters not specifically and distinctly raised and argued in the opening brief.


Stonecypher v. Iasco Flight Training, Inc., No. 2:17-cv-02409 (E.D. Cal. May 20, 2020) (2020 U.S. Dist. LEXIS 89069; 2020 WL 497156) (Order)

Casenote(s):

COURT RECONSIDERED ITS DISMISSAL OF STATE RETALIATION SUIT BASED ON AIR21 PREEMPTION, WHERE ARB ISSUED RULING THAT DOL DOES NOT HAVE JURISDICTION OVER FLIGHT SCHOOLS THAT DO NOT ENGAGE IN COMMERCE WITHIN MEANING OF AIR21

In Stonecypher v. Iasco Flight Training, Inc., No. 2:17-cv-02409 (E.D. Cal. May 20, 2020) (2020 U.S. Dist. LEXIS 89069), the court had previously granted Defendant’s motion to strike Plaintiff’s state law claims for retaliation and wrongful termination based preemption, leaving only state law claims for wage and hour concerns. Plaintiff filed for reconsideration based on the ARB’s decision in Aityahia v. Aviation Academy of America, ARB No. 2018-0028, ALJ No. 2017-AIR-00029 (ARB Sept. 12, 2019) (per curiam), in which it found that the defendant was not subject to AIR21 retaliation protection because it (like the Defendant in the present case) was a flight school that contracted only with foreign air carriers and did not otherwise move passengers, cargo or mail for profit. The ARB found that the defendant in that case did not engage in commerce and did not fit within AIR21’s definition of an “air carrier of contractor or subcontractor of an air carrier” for which employees are granted federal protection from retaliation. The court agreed to reconsider, noting that “If the federal agency enforcing FAA regulations determined, as it did here, that it lacked any basis for regulating the retaliation that Plaintiff claims to have endured, it makes no sense whatsoever to defer to that agency’s determination by way of field preemption.” Slip op. at 5. The court granted the motion to reconsider and gave leave to Plaintiff to amend his complaint.


Kreb v. Jacksons Food Stores, No. 16-cv-00444 (D. Idaho Jan. 30, 2020) (2020 U.S. Dist. LEXIS 16542; 2020 WL 497156) (Memorandum Decision and Order re: Jackson Defendants' Motion to Stay Proceedings (Dkt. 104) [and] Plaintiff's Motion for Leave to File Surreply in Opposition to Motion to Stay (Dkt. 108))

Related USDOL Case: ALJ No. 2016-AIR-00028

Casenote(s):

PROCEDURE BEFORE DISTRICT COURT; MOTION FOR STAY BASED ON POTENTIAL PRECLUSIVE EFFECT OF ALJ’S FACTUAL FINDINGS IN AIR21 CASE WHICH WAS PENDING REVIEW BY THE ARB; COURT DENIES STAY OF TRIAL PREPARATION IN VIEW OF THE UNCERTAINTY OF THE RESOLUTION OF THE DOL PROCEEDINGS, BUT WOULD ALLOW A MOTION FOR APPROPRIATE RELIEF ONCE THE ALJ’S DECISION IS FINAL AND THE CONTOURS OF THE ISSUES ARE MORE CLEARLY DEFINED, OR, FOR DEFENDANTS TO RENEW REQUEST FOR A STAY IF THE ARB HAS NOT RULED BY THE TIME THE TRIAL IS SCHEDULED TO BEGIN

In Kreb v. Jacksons Food Stores, No. 16-cv-00444 (D. Idaho Jan. 30, 2020) (2020 U.S. Dist. LEXIS 16542; 2020 WL 497156), Defendants moved to stay the proceedings in federal district court on the ground of the potential preclusive effect of a DOL ALJ’s decision in a related AIR21 retaliation case. In that case the ALJ found that Plaintiff had not made a certain safety report in good faith and that it was objectively reasonable. The ALJ’s decision was pending on appeal before the ARB, and Defendants argued that if the ALJ’s decision is upheld it will have preclusive effect on critical issues in the matter before the district court. The district court denied the motion. The court stated:

   Here, the potential preclusive effect of ALJ Morris’s decision is naturally dependent upon the outcome of Plaintiff’s currently-outstanding Petition for Review. Those potential shifting sands are good reason for the Court to not issue a conditional ruling premised on an assumption that the ARB upholds ALJ Morris’s decision, especially as to possible evidentiary implications arising therefrom, including whether portions of Plaintiff’s expert’s opinions are (or would be) improper in light of such an assumed outcome. Once the review of ALJ Morris’s decision is final and the contours of these issues are more clearly defined, the parties may move the Court for appropriate relief on the more certain landscape.

   It is true that a stay would permit things to unfold without the parties having to prepare for trial while awaiting the ARB’s consideration of Plaintiff’s Petition for Review. But, the practical effect of all this is that, since July 2019 when the Jackson Defendants filed their Motion, there has been a de facto stay of sorts with virtually nothing happening in the interim. Moreover, the claimed wrongs occurred in July 2014. And, regardless of how the ARB decides, Plaintiff’s underlying claims will proceed — this is not a situation where his case completely dissolves if the ARB rules a certain way.

   This is to say that the controversy between the parties needs to move forward toward a resolution, regardless of what forum it moves forward in and regardless of the potential for some unevenness along the way. The alternative is for nothing to move forward at all, while awaiting the uncertain date when there is a decision from the ARB. Such a course is not appropriate under FRCP 1. See Fed. R. Civ. P. 1 (Federal Rules of Civil Procedure “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action and proceeding.”).

   The Court therefore concludes that the balance of equities weigh against the Jackson Defendants’ request under the existing circumstances. If the ARB has not acted on Plaintiff’s Petition for Review by the time trial is scheduled to begin, the Jackson Defendants’ may renew their request for a stay; until then, the Court will not postpone trial preparation simply due to the Petition for Review 

Slip op. at 3-4.


Consumer Financial Protection Act ("Dodd-Frank" 12 U.S.C. 5567)

Slawin v. Bank of Am. Merch. Servs., No. 19-cv-04129 (N.D. Ga. Sept. 30, 2020) (2020 U.S. Dist. LEXIS 180025; 2020 WL 5823155) (Order)

Casenote(s):

FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES AS TO PARTIES NOT NAMED OR OTHERWISE MENTIONED IN ADMINISTRATIVE COMPLAINT

COVERAGE UNDER THE CONSUMER FINANCIAL PROTECTION ACT; FACT THAT DEFENDANT’S PAYMENT PROCESSING SERVICES CUSTOMERS WERE MERCHANTS AND MUNICIPALITIES, AND NOT CONSUMERS DID NOT REMOVE DEFENDANT FROM COVERAGE

PROTECTED ACTIVITY UNDER THE CONSUMER FINANCIAL PROTECTION ACT; APPLYING THE SUBJECTIVE/OBJECTIVE REASONABLENESS TEST, THE COURT FOUND THAT PLAINTIFF MET PLAUSIBLITY PLEADING STANDARD WHERE HE HAD ALMOST 25 YEARS OF RELEVANT EXPERENCE IN THE INDUSTRY

In Slawin v. Bank of Am. Merch. Servs., No. 19-cv-04129 (N.D. Ga. Sept. 30, 2020) (2020 U.S. Dist. LEXIS 180025; 2020 WL 5823155), Plaintiff asserted that he raised with his supervisors at his former employer that it was failing to handle consumers’ Primary Account Number data in compliance with of Payment Card Industry standard, and was misleading it customers into believing that it was handing such data in compliance with the standard. Plaintiff asserted that he was fired in violation of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, the Consumer Financial Protection Act of 2010, 12 U.S.C. § 5567 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.S.C. § 78u-6. This casenote only addresses the SOX and CFPA claims.

Failure to exhaust as to parties not accused of retaliatory action in the administrative complaint

Plaintiff had exercised the “kick-out” provisions of the SOX and CFPA. Defendant asserted that Plaintiff failed to exhaust his administrative remedies under the SOX and CFPA against parties other than his direct employer because he had not named them in the caption of the administrative complaint. The caselaw on the subject was not in harmony across the circuits and the ARB. The court, however, did not find sufficient contrary persuasive authority to deviate from a decision in the same circuit, Smith v. Psychiatric Sols., Inc., No. 08-cv-3, 2009 WL 903624, at *8 (N.D. Fla. Mar. 31, 2009), in which the court found no exhaustion as to defendants who were not named “in the heading of [plaintiff’s] administrative complaint or indeed anywhere in her complaint,” even though the Eleventh Circuit’s affirmance of this ruling was arguably only dicta in a non-binding unpublished decision. 358 Fed. Appx. 76, 78 (11th Cir. 2009). The court did not find that Smith set a per se rule, but dismissed the SOX and CFPA counts against the non-employer parties, the parent company only having been mentioned in the administrative complaint to establish coverage of the employer, and the other entitles had not been accused of any retaliatory action.

Coverage under the CFPA

Defendant-employer argued that Plaintiff failed to plausibly allege that it is a covered person or service provider under the CFPA. The court looked closely at the relevant statutory provisions. Defendant did not appear to contest that it provides payment processing services or that payment processing is a financial service in the abstract. It contended, however, that “it nonetheless does not provide a ‘consumer financial product or service’ and thus is not a ‘covered person’ because, as acknowledged in the Complaint, its customers are merchants and municipalities, not consumers.” Slip op. at 21 (citations omitted). The court found the reference to consumers was a red herring. The court stated:

The statute refers to “providing” payment processing services to consumers, not “selling” or “charging for” such services. In today’s economy, consumers often expect to receive services, such as paying by credit card instead of cash, without paying extra for such services. The implication is that another entity, such as a merchant, has contracted with the service provider to pay for the service. Were the court to accept BAMS’ reading, it would appear the statute would only cover offering of payment processing services directly to consumers for use by those consumers primarily for personal, family, or household purposes, ostensibly for such crucial engagements as paying a child’s allowance by credit card.

    BAMS provided payment processing services to companies such as “Home Depot, Target, Amazon, Exon [sic] Mobile, Royal Caribbean Lines, MGM and others,” which plausibly entailed processing payments from consumers to those companies for making purchases primarily for personal, family, or household purposes. BAMS is therefore engaged in providing a consumer financial service and is thus a covered person. The Court therefore need not reach the question of whether it is also a service provider.

Id. at 22 (footnote omitted).

Protected activity; adequacy of pleading of reasonableness of Plaintiff’s belief that Defendant violated laws subject to CFPB jurisdiction

The complaint alleged that that Plaintiff believed that Defendant-employer’s non-PCI compliance and fraudulent misrepresentations to its customers violated law enforced by the Consumer Financial Protection Bureau (CFPB), and that Plaintiff had a good faith belief that Defendant-employer thus violated laws subject to the jurisdiction of the CFPB including inter alia the CFPA and the Electronic Fund Transfer Act (EFTA). Defendant-employer argued that Plaintiff’s references to violations of the CFPA were conclusory, and that the EFTA generally applies only to financial institutions, which it was not. Defendant argued that Plaintiff’s primarily referenced purported violations of law outside the CFPB’s jurisdiction. Finding little guidance on pleading under the CFPA, the court looked to SOX caselaw employing the subjective/objective reasonableness test. The court noted that Plaintiff had almost 25 years of experience in the Securities and Banking Regulatory and Compliance field, and had held regulatory and compliance positions both for governmental and regulatory agencies as well as for other banks. The court found that Plaintiff had plausibly alleged an objectively reasonable basis to belief Defendant-employer’s actions violated laws or rules subject to CFPB jurisdiction. The court thus dismissed Defendant’s motion to dismiss this count of the complaint.


Energy Reorganization Act

Criscione v. U.S. Nuclear Regulatory Commission, No. 19-cv-2087 (D. Md. Oct. 6, 2020) (2020 U.S. Dist. LEXIS 184813; 2020 WL 5912567) (Memorandum and Order)

USDOL Case Nos.: ARB No. 2018-0052, ALJ No. 2017-ERA-00009

Casenote(s):

[Nuclear and Environmental Digest XX E]
SOVEREIGN IMMUNITY; DISTRICT COURT FINDS ARB DECISION IN MULL v. SALISBURY VETERANS ADMINISTRATION TO BE PERSUASIVE; IN MULL, ARB FOUND NO LANGUAGE IN THE ERA WAIVING SOVEREIGN IMMUNITY

In Criscione v. U.S. Nuclear Regulatory Commission, No. 19-cv-2087 (D. Md. Oct. 6, 2020) (2020 U.S. Dist. LEXIS 184813; 2020 WL 5912567), Plaintiff filed an ERA whistleblower complaint against his employer, the U.S. Nuclear Regulatory Commission. The court granted the NRC’s motion to dismiss based on sovereign immunity. In this case, the ALJ had dismissed for lack of subject matter jurisdiction, and Plaintiff exercised the ERA’s “kick-out” provision before to the ARB to file his complaint in Federal district court. The district court found no Federal court precedent on whether the NRC is immune from suit under the ERA, and thus looked to the ARB’s decision in Mull v. Salisbury Veterans Admin. Med. Ctr., ARB Case No. 09-107, 2011 WL 4343277 (Aug. 31, 2011). The ARB had found no language in the ERA that expresses congressional intent to waive the federal government’s sovereign immunity. The ARB noted that the ERA remedy provision applies to “any person” but that “person” is not defined. The ARB noted that, in comparison, the Clean Air Act defines “person” to include “any agency, department, or instrumentality of the United States,” thereby unequivocally expressing the intent to waive the federal government’s sovereign immunity. The district court found the ARB’s analysis persuasive, and was not persuaded by Criscione’s arguments as to how waiver could be established.


Madison v. Dominion Energy, Inc., No. 18-cv-00036 (W.D. Va. June 1, 2020) (2020 U.S. Dist. LEXIS 96097; 2020 WL 2857169) (Memorandum)

Casenote(s):

SUMMARY JUDGMENT GRANTED DISMISSING ERA COMPLAINT OF SUPERVISOR WHO HAD BEEN FIRED FOR FALSIFICATION OF TIME RECORDS AND FALSELY CERTIFYING PERSONAL WALK-DOWN SAFETY CHECKS; RECORD UNDERMINED PLAINTIFF’S CLAIM THAT FIRING WAS MOTIVATED IN PART BY HIS REPORT THAT OTHER SUPERVISOR ALSO IMPROPERLY DELEGATED WALK-DOWN SAFETY CHECKS

In Madison v. Dominion Energy, Inc., 18-cv-00036 (W.D. Va. June 1, 2020) (2020 U.S. Dist. LEXIS 96097; 2020 WL 2857169), Plaintiff was an Electrical Maintenance Supervisor at a nuclear energy power station. He was fired for falsification of time records and violations of safety procedure — specifically falsely certifying that he personally conducted walk-down safety checks. The court granted Defendant’s motion for summary judgment dismissing Plaintiff’s ERA whistleblower complaint where Plaintiff failed to show any genuine dispute of material fact to support his claim that Defendant fired him in part because of his reporting of other supervisors who allegedly, like Plaintiff, delegated walk-down safety checks. Rather, the undisputed timing of events leading up to the firing undermined a causal connection between alleged protected activity and the firing. For example, the record showed that the Site Vice President, who ultimately made the decision to fire Plaintiff, had written to the Plant Manager days before Plaintiff reported “widespread violations,” stating that Plaintiff deserved to be fired for falsifying walkdowns of tagouts. Even before then, Plaintiff was being investigated for reports of tardiness, absenteeism, and failure to supervise employees. The Court found that even if Plaintiff established a prima facie case under § 211 of the ERA, there was clear and convincing evidence that Plaintiff would have been fired in the absence of the protected activity. The court noted that investigations substantiated Plaintiff’s falsification of time records (including going to the gym for substantial portions of the work day and logging overtime when he had not worked the requisite hours), and falsely certifying that he was personally conducting walk-down safety checks. The court noted that Plaintiff’s “supervisors and colleagues raised consistent concerns and even alarm at such practices.” Slip op. at 25. Moreover, the court noted that the NRC had investigated and concluded that Plaintiff was the only supervisor who was improperly delegating walk-down safety checks.


Fair Labor Standards Act

Keith v. Univ. of Miami, No. 19-21229 (S.D. Fla. Jan. 27, 2020) (2020 U.S. Dist. LEXIS 14796; 2020 WL 810526) (Order [Granting Defendant’s Motion to Dismiss])

Casenote(s):

FAIR LABOR STANDARD ANTI-RETALIATION PROVISIONS AT § 215(a)(3) (OVERTIME) AND § 218c (AFFORDABLE CARE ACT); ADJUNCT FACULTY MEMBER FOUND TO BE AN EXEMPT TEACHER; COMPLAINTS ABOUT OVERTIME AND ACCESS TO HEALTH INSURANCE WERE NOT OBJECTIVELY REASONABLE WHERE COMPLAINANT WAS FACTUALLY EXEMPT UNDER THE STATUTE, AND HAD BEEN SO INFORMED BY DEFENDANT’S HUMAN RESOURCES REPRESENTATIVE

In Keith v. Univ. of Miami, No. 19-21229 (S.D. Fla. Jan. 27, 2020) (2020 U.S. Dist. LEXIS 14796; 2020 WL 810526), Plaintiff, who was employed by Defendant as an Adjunct Faculty member, filed an action pursuant to the anti-retaliation provisions of the Fair Labor Standards Act of 1938 (FLSA) at 29 U.S.C. § 215(a)(3) (overtime) and 29 U.S.C. § 218c (Affordable Care Act - ACA). As an Adjunct Faculty member, Plaintiff was classified as a part-time employee paid by the hour, and was not entitled to enroll in Defendant’s ACA group health insurance policy. Plaintiff alleged that she was only compensated for hours teaching classes and not for time preparing for classes or engaging in administrative duties. She asked, and later demanded, to be promoted to a full-time position to enable her to enroll in the ACA policy. She also demanded payment for the extra “overtime” hours. Plaintiff believed that she was a FLSA covered employee because she was paid by the hour and not with a salary. Defendant’s HR representative informed Plaintiff that because she was a teacher she was exempt from the FLSA minimum wage and overtime provisions, and that because of the number of hours Plaintiff spent in class she did not qualify for ACA coverage. Plaintiff was fired less than a month later. Plaintiff alleged in an amended complaint that she was fired for complaining about entitlement to overtime compensation and health insurance. Defendants filed a motion to dismiss.

The court noted that the FLSA overtime provisions “do not apply to employees employed in a bona fide executive, administrative or professional capacity. See 29 U.S.C. § 213(a)(1). Pursuant to § 213(a)(1), the FLSA recognizes teachers as exempt professionals.” Accordingly, even Plaintiff was an hourly employee and not paid a salary, she could not maintain the § 215(a)(3) action because she “was employed by Defendants as a teacher exempt from the overtime pay requirements of the FLSA. See 29 C.F.R. § 541.303.” Slip op. at 6.

Plaintiff argued that Defendants nonetheless violated the FLSA’s anti-retaliation provision because her reasonable, good faith complaints about her part-time status and inability to enroll in the healthcare program were the basis for her termination. The court noted that “[g]enerally, complaints of legal activity can still be protected if the employee has an objectively reasonable, good faith belief that the employer’s conduct is unlawful. This standard requires the employee show that she subjectively, that is in good faith, believed that her employer was violating the law. Little v. United Techs. Carrier Transicold Div., 103 F.3d 956, 960 (11th Cir. 1997) (decided under Title VII anti-retaliation provision).” Id. at 7. The court found, however, that Plaintiff could not establish that she had an “objectively reasonable belief” that her “employer was engaged in unlawful practices.” Id. The court determined that even if Plaintiff did not know of her exempt status at the time of her complaint, it was an undisputed fact and she was informed of her exempt status by the HR representative. The court further stated:

Where, as here, Plaintiff was explicitly exempt and therefore not covered by the FLSA, the court concludes no reasonable employer, given the context and content, could have perceived her complaint as a genuine assertion of rights under the FLSA. With very clear language, Congress exempted Plaintiff from FLSA’s protections, so it is difficult to conceive how her complaint could be “under or related to” FLSA such that she raises a cognizable FLSA retaliation claim. 29 U.S.C. § 215(a)(3). Moreover, Plaintiff points to no case, and the Court has not on its own identified any, in which an employee clearly and explicitly exempted from FLSA coverage has successfully raised an FLSA retaliation claim.

The court determined that because Plaintiff was explicitly exempt and not covered by the FLSA, her cause of action under the FLSA was futile. The court thus dismissed the case with prejudice.

[Editor’s note: The court did not specifically discuss Plaintiff’s exempt status vis-à-vis the ACA provision at § 218c, although its dismissal of the action implies that the court considered the exempt status determinative both of the retaliation claims]


FDA Food Safety Modernization Act

Nguyen v. Quality Sausage Co. LLC, No. 19-cv-00150 (N.D. Tx. May 12, 2020) (2020 U.S. Dist. LEXIS 83145; 2020 WL 2425646) (Memorandum Opinion and Order)

USDOL Case No. 2019-FDA-00004

Casenote(s):

DISCOVERY; PLAINTIFF’S MOTION TO COMPEL DISCOVERY REQUESTS CONCERNING IMMIGRATION STATUS OF WORKERS GRANTED WHERE PLAINTIFF’S COMPLAINTS ABOUT USE OF ILLEGAL ALIENS PRESENTED A FACT ISSUE AS TO WHETHER SUCH COMPLAINTS WERE GROUNDED IN A REASONABLE BELIEF THAT SUCH WAS A VIOLATION OF THE FSMA AND THERE FDCA—AND WHERE DEFENDANT FAILED TO ESTABLISH WHY SUCH REQUESTS WERE IRRELEVANT

DISCOVERY; GENERAL, BOILERPLATE OPPOSITION TO DISCOVERY NOT PERMITTED UNDER FEDERAL RULES; REDACTION PERMITTED OF CONFIDENTIAL PERSONALLY IDENTIFIABLE INFORMATION (“PII”) OF NON-PARTY EMPLOYEES

In Nguyen v. Quality Sausage Co. LLC, No. 19-cv-00150 (N.D. Tx. May 12, 2020) (2020 U.S. Dist. LEXIS 83145; 2020 WL 2425646), Plaintiff alleged that Defendant retaliated against him in violation of the FDA Food Safety Modernization Act (“FSMA”), 21 U.S.C. § 399d. Defendant resisted Plaintiff’s discovery requests for admissions, a response to an interrogatory, and for production of documents regarding the immigration status of workers supplied by a services contractor. In response to a motion to compel, Defendant argued that Plaintiff’s allegations regarding citizenship did not state a proper claim under the anti-retaliation provision of the FSMA and that the discovery requests at issue were not relevant. The court found that the discovery question now before it was not the ultimate question of whether the scope of protected activity under FSMA extends to complaints about use of illegal aliens, but whether the discovery requests were sufficiently tailored to obtain relevant discovery based on the pleadings. The court noted that the FSMA protects employees who give information to their employer about conduct they reasonably believe violates the Federal Food, Drug, and Cosmetic Act (“FDCA”), even if the conduct is not in fact unlawful. The court noted the subjective/objective reasonable belief standard, and stated that whether Plaintiff held a reasonable belief that Defendant’s conduct was prohibited by the FSMA, and whether that belief was objectively reasonable, present questions of fact for the jury. The court held that Defendant had not carried it burden of showing that the discovery requests on the immigration status of Quality Sausage workers were not relevant to Plaintiff’s claims.

Discovery disputes also existed concerning requests for production concerning Plaintiff’s termination. The court noted that general, blanket, boilerplate and unsupported objections to discovery requests are prohibited by the Federal rules. The court went through each discovery request and generally granted the motion to compel. The court, however, did permit Defendant to redact confidential personally identifiable information about non-party employees, and to withhold privileged attorney-client communications.


Taft v. Paramount Coffee Co., No. 19-cv-35 (W.D. Mich. Jan. 29, 2020) (2020 U.S. Dist. LEXIS 147089) (Opinion and Order Denying Motion to Dismiss and Granting Motion for Summary Judgment)

USDOL Case Nos. ARB No. 2091-0031; ALJ No. 2019-FDA-2

Later history: Taft v. Paramount Coffee Co., No. 20-1116 (6th Cir. Mar. 24, 2020) (Plaintiff-Appellant’s appeal dismissed for want of prosecution); Taft v. Paramount Coffee Co., No. 20-1194 (6th Cir. May 20, 2020) (grant of Defendant-Appellant’s voluntary dismissal of its appeal)

Casenote(s):

TIMELINESS OF CIVIL COMPLAINT; WHERE COMPLAINT TIMELY FILED HIS OBJECTIONS TO OSHA DETERMINATION WITH THE DEPARTMENT OF LABOR BY EMAIL, COMPLAINANT’S FAILURE TO MAIL TO DEFENDANT A COPY OF THOSE OBJECTIONS DID NOT RENDER OSHA DETERMINATION THE FINAL DECISION OF THE SECRETARY SUCH AS TO DEPRIVE FEDERAL COURT OF JURISDICTION ON THE DISTRICT COURT CIVIL COMPLAINT

AFFIRMATIVE DEFENSE; SUMMARY JUDGMENT GRANTED WHERE PLAINTIFF’S RESPONSE TO DEFENDANT’S EVIDENCE WAS ONLY ARGUMENT, AND DEFENDANT’S EVIDENCE SHOWED THAT IT WOULD HAVE FIRED PLAINTIFF FOR VIOLATION OF ITS WORKPLACE VIOLENCE POLICY AND HIS REFUSAL ACCEPT THE CONDITIONS OF A SECOND CHANCE OFFER

In Taft v. Paramount Coffee Co., No. 19-cv-35 (W.D. Mich. Jan. 29, 2020) (2020 U.S. Dist. LEXIS 147089), Plaintiff filed a complaint under the Food Safety Modernization Act, 21 U.S.C. § 399d alleging that he was terminated in retaliation for refusing to work in unsanitary conditions, objecting to using expired products, and declining to falsify accountability records.

FRCP 12(b)(1)—timeliness of complaint

Defendant’s FRCP 12(b)(1) motion challenged the court’s subject-matter jurisdiction based on the argument that Plaintiff had not timely filed his complaint. The court denied the motion because the statute and regulation permitted Plaintiff to initiate judicial action if the Secretary has not issued a final decision within 210 days after the filing of the administrative complaint. Here, the administrative complaint was pending before the ALJ, and more than 210 days after passed since the filing of the administrative complaint, when Plaintiff filed his civil action. It appears that Defendant’s challenge was based on a claim that OSHA’s determination had become the Secretary’s final decision. Plaintiff had filed objections to the OSHA determination within 30 days of receipt of that determination to three different DOL email addresses. Defendant had not alleged or established that OALJ had its own email account. Although Plaintiff failed to mail copies of his objections to Defendant as required by the regulations, the court found that this circumstance did not render the OSHA determination a final decision. The court noted that the regulation imposes two different obligations on a complainant: one to file objections and one to mail copies of the objections to the other parties. The court stated: “While there may be some consequence for the failure to mail copies of the objections to the listed individuals, the language of the regulation does not suggest that failure to mail copies of an objection forecloses any possibility of review. The failure to mail copies implicates Paramount Coffee’s notice of the objections.” Slip op. at 6.

FRCP 56—summary judgment—protected conduct and affirmative defense

The court found that Plaintiff’s pro se complaint succinctly alleged sufficient facts to state a plausible retaliation claim sufficient to survive Defendant’s FRCP 12(b)(6) motion. However, it granted Defendant’s motion for summary judgment under FRCP 56. The court noted that discovery had not yet taken place, but determined that Plaintiff’s affidavits filed in response to Defendant’s motion for summary judgment did not show “‘need for discovery, what material facts it hopes to uncover, and why it has not previously discovered the information.’ Cacevic v. City of Hazel Park, 226 F.3d 483, 488 (6th Cir. 2000) (citation omitted).” Slip op. at 10.

Defendant had supported its motion for summary judgment with affidavits from the plant manager, a quality control employee, and the shift supervisor, all stating that Plaintiff never reported any concerns with or violations of federal food safety regulations. The court noted that the affidavits indicated that Plaintiff’s allegations concerned a voluntary Safe Quality Food program not mandated by federal law, and that Plaintiff appeared to admit in his response that the program he complained about was voluntary. Although Plaintiff’s response contained argument that could be construed as referring to evidence of protected conduct, he presented no evidence to support the arguments.

The court, assuming arguendo that a genuine issue of material fact existed on all the elements of a retaliation claim, nonetheless found that Defendant presented sufficient evidence to show that it would have terminated Plaintiff’s employment even if he had not engaged in protected activity — specifically, a violation of its workplace violence policy. Defendant had found credible complaints that Plaintiff verbally abused and threatened a co-worker, including a threat to kill the co-worker. Plaintiff refused Defendant’s offer of a second chance if Plaintiff would acknowledge the workplace violence policy and agree to cease any threatening communication towards his co-workers. Defendant based the termination on the incident with the co-worker and Plaintiff’s refusal to accept the terms of the second chance offer. Although Plaintiff argued in his response that Defendant did not investigate the incident, he provided no evidence to support that argument. The court noted Defendant’s argument that he was told that the co-worker had not said that Plaintiff had threatened to kill her. The court, however, found that—assuming this was true—it did not alter the outcome because the verbal abuse and physical threats had been reported and had been confirmed by Defendant; Plaintiff did not deny having a disagreement with the co-worker that included verbal abuse and physical threats; and Defendant established that it would have fired Plaintiff anyway because he refused the second chance conditions.


Watts v. USDOL, No. 19-1487 (4th Cir. Jan. 7, 2020) (Order [of Remand])

USDOL case: ARB No. 17-017, ALJ No. 2016-FDA-00003

Casenote(s):

RECONSIDERATION BY AGENCY REGARDING FDA WHISTLEBLOWER COVERAGE; FOURTH CIRCUIT GRANTS MOTION OF DEPARTMENT OF LABOR FOR REMAND TO CONSIDER FDA ANIMUS BRIEF REGARDING COVERAGE OF POULTRY BUSINESS WHICH HAD CONTRACTED WITH FARMER

In Watts v. USDOL, No. 19-1487 (4th Cir. Jan. 7, 2020), the Fourth Circuit granted USDOL’s motion to remand to the ARB for further proceedings to allow the U.S. Food and Drug Administration (“FDA”) the opportunity to participate as amicus curiae, to enable the private litigants to respond to the FDA’s views, and to allow the Board to reconsider its decision in light of those supplemental briefs.

Editor’s note: On remand, the ARB vacated its March 5, 2019 order affirming the ALJ’s decision, and remanded the case to the ALJ for further proceedings. See Watts v. Perdue Farms, Inc., ARB No. 2017-0017, ALJ No. 2016-FDA-00003 (ARB May 28, 2020), casenoted in the May 2020 list of ARB decisions. In brief, the ARB found that Perdue Farms was a covered entity subject to liability under the Section 402 whistleblower protection provision of the Food Safety and Modernization Act of 2011 (FSMA) where it supplied poultry animal feed to Complainant, who was under contract to raise chickens for Perdue.


Federal Railroad Safety Act

Kurec v. CSX Transportation, Inc., No. 18-cv-670 (N.D. N.Y. Nov. 4, 2020) (2020 U.S. Dist. LEXIS 205929; 2020 WL 6484056) (Memorandum Decision and Order)

Casenote(s):

PROTECTED ACTIVITY; OFF-DUTY PLAINTIFF CALLED TO REPORT TO DERAILMENT; PLAINTIFF’S REFUSAL TO VIOLATE FEDERAL SAFETY REGULATION AND REPORT OF HAZARDOUS SAFETY OR SECURITY CONDITION BASED ON PLAINTIFF’S HAVING BEEN INTOXICATED WHILE OFF-DUTY; NORTHERN DISTRICT OF NEW YORK DECLINES TO FOLLOW SOUTHERN DISTRICT OF NEW YORK DECISION IN LOCKHART; FINDS ARB DECISINO IN CIESLICKI TO BE PERSUASIVE

In Kurec v. CSX Transportation, Inc., No. 18-cv-670 (N.D. N.Y. Nov. 4, 2020) (2020 WL 6484056), Plaintiff alleged that Defendant violated the FRSA “by firing him after he: refused to drive to work during a snowstorm; refused to drive while fatigued; and refused to report to work while intoxicated.” Slip op. at 1. The court denied Defendant’s motion for summary judgment on the FRSA claim but granted dismissal of a state law claim.

The court declined to follow Lockhart v. Long Island R.R. Co., 266 F. Supp. 3d 659 (S.D.N.Y. 2017), aff’d sub nom. Lockhart v. MTA Long Island R.R., 949 F.3d 75 (2d Cir. 2020), in which the court had granted summary judgment to the defendant based on a holding that § 20109(a)(2) did not protect a railroad worker from discipline by his employer when he stayed home after taking Oxycodone as treatment for an injury. The district court in Lockhart had reasoned that no authority supported the extension of (a)(2) to non-railroad equipment related conditions. The court in Kurec, however, found no reason to cabin (a)(2) to refusals to violate laws and regulations pertaining to railroad machinery, noting that the plain text of the statute applies to any Federal law, rule or regulation relating to railroad safety or security, and that “regulations prohibiting on-the-job inebriation clearly ‘relat[e] to railroad safety or security….’” Id. at 12. The court was also not persuaded by the Lockhart court’s concern of an absurd result of insulating an employee immunizing himself from discipline by being under the influence for recreational purposes. The court found that a reasonable jury could conclude that Plaintiff’s refusal to report while intoxicated was done, both subjectively and objectively in good faith. In the instant case, the court noted that Plaintiff had not been on call at the time of the derailment to which he was directed to report; the parties agreed that Plaintiff was not prohibited from drinking while off duty and not on call; Plaintiff quickly arranged for another employee to report; upon learning of the derailment, Plaintiff stopped drinking, got some sleep, and when apparently sobered up in the morning, had departed for the scene before been told by a supervisor not to report. The court also noted the ARB’s decision not following Lockhart in Cieslicki v. Soo Line R.R. Co., ARB No. 2019-0065, ALJ No. 2018-FRS-00039 (ARB June 4, 2020) (per curiam), and found that it was persuasive and entitled to deference. The court also declined to apply Lockhart in the subsection (b)(1) (A) and (B) context.


Voelker v. BNSF Ry. Co., 18-cv-172 (D. Mon. Oct. 20, 2020) (2020 U.S. Dist. LEXIS 194330; 2020 WL 6149553) (Order)

USDOL Case No.: 2018-FRS-00060

Casenote(s):

DISCOVERY IN FRSA RETALIATION CLAIM IS OFTEN NECESSARILY BROAD IN VIEW OF FACT THAT CONTRIBUTING FACTOR CAUSATION CAN BE ESTABLISHED THROUGH CIRCUMSTANTIAL EVIDENCE

DISCOVERY IN FRSA RETALIATION CLAIM; COURT EXPRESSES FRUSTRATION WITH PARTIES WHERE DISCOVERY ISSUES HAD BEEN RAISED IN PRIOR SIMILAR LITIGATION INVOLVING SAME COUNSEL; COURT INDICATES ITS HOPE THAT COUNSEL WILL DISCERN A PATTERN AND CONSISTENCY IN HOW DISCOVERY ISSUES ARE VIEWED IN THE DISTRICT

DISCOVERY IN FRSA RETALIATION CLAIM; COURT REFERS TO RESOLUTION FROM PRIOR SIMILAR LITIGATION IN REGARD TO COMPARATOR DATA, DEFENDANT’S PRACTICES IN REGARD TO ELECTRONICALLY STORED INFORMATION, MANAGEMENT COMPENSATION AND BONUSES, DATABASE SEARCH, AND DESIGNATION OF RULE 30(B)(6) DEPONENTS

DISCOVERY IN FRSA RETALIATION CLAIM; COURT DECLINES TO IMPOSE ADDITIONAL RELIEF BEYOND RULING ON MOTIONS TO COMPEL, SUCH AS ATTORNEY FEES, APPOINTMENT OF SPECIAL MASTER, AND PREPARTION OF A JOINT STATEMENT AND DISCOVERY PLAN; INSTEAD EXORTS COUNSEL TO WORK TO RESOLVE DISCOVERY ISSUES AND UTILIZE MOTION PRACTICE ONLY AS A LAST RESORT

IN CAMERA REVIEW; DEFENDANT NEED NOT FILE A MOTION FOR LEAVE TO FILE UNREDACTED EMAILS UNDER SEAL WHERE COURT GRANTED UNOPPOSED MOTION FOR IN CAMERA REVIEW AND DIRECTED PRODUCTION TO THE COURT UNDER SEAL PURSUANT TO LOCAL RULE

In Voelker v. BNSF Ry. Co., 18-cv-172 (D. Mon. Oct. 20, 2020) (2020 U.S. Dist. LEXIS 194330; 2020 WL 6149553), the District Court ruled on Plaintiff’s motions to compel discovery in an action based on several federal and state laws. In regard to the discovery motions, the court indicated that Plaintiff’s FRSA retaliation claim was particularly pertinent, that the “contributing factor” causation element of an FRSA claim is particularly important in resolving discovery disputes, and that such causation can be established through circumstantial evidence. Accordingly, the court was “mindful that broad sweeping discovery is often necessary to establish an FRSA claim and is hesitant to render the claim unsuccessful by virtue of its undue constraint of the discovery process.” Slip op. at 4. The court, in ruling on the motions to compel was explicitly influenced by prior FRSA litigation in Jones v. BNSF Ry. Co., 2019 WL 6728429, *3 (D. Mont. 2019) (CV 18–146–M–DLC), and Brewer v. BNSF Ry. Co., 2016 WL 11695454, *2 (D. Mont. 2016) (CV 14–65–GF–BMM–JTJ). This casenote summary below is illustrative, and does not address all the discovery issues addressed in the court’s order.

Comparator data

In regard to Plaintiff’s discovery requests for comparator data, the court indicated irritation that this was well-trodden ground from past similar litigation. The court stated: “The Court finds the issue of comparator data old and tired (as should parties' counsel). This discovery issue has been litigated in similar cases time and time again. See Jones, 2019 U.S. Dist. LEXIS 213475, 2019 WL 6728429, *4 (collecting prior cases). The Court agrees, as it has in the past, that ‘the plaintiff is entitled to much of what he requests.’ Id.” Id. at 8. In regard to an interrogatory request for identifying circumstances in which BNSF employees from 2015 to the present had disseminated reports or information outside BNSF similar to that produced by Plaintiff, the court found that the request was relevant and proportional and appropriately limited in time. The court recognized BNSF’s argument that it would be difficult to ascertain whether or to what extent its employees may have disseminated such reports or information outside BNSF, but stated that it trusted that BNSF would make a good-faith effort to acquire any and all responsive information.

Information about BNSF practices on ESI; internal systems to ensure uniform application of employment rules

The court ordered BNSF to respond to Plaintiff’s interrogatories seeking identification of persons having the most knowledge of BNSF’s systems and how it compiles, stores and produces electronic information relevant to the case. The court recognized that once of Plaintiff’s interrogatories was difficult to track, and construed it as “seeking documents contained in BNSF’s internal systems that serve to ensure uniform application of the employment rules BNSF maintains Mr. Voelker violated.” Id. at 13. The court noted that BNSF had apparently provided information about employees disciplined for violating the same rules as had Plaintiff, but found that this was not the information sought. Rather, the court ordered BNSF to “produce any and all documents contained within BNSF’s internal systems designed to ensure uniform application of the rules BNSF maintains Mr. Voelker violated.” Id. at 14. The court directed that if BNSF does not possess responsive documents it should respond as such.

Management compensation and bonus structure

Plaintiff sought discovery on BNSF's management compensation and bonus structure; BNSF objected that certain information was not relevant to any claim or defense in the case and was harassing, and violated employee’s’ right to privacy. The court, citing prior litigation, found this issue to have been ruled in similar litigation where it was found that such information was both relevant and proportional. The court stated: “The confidentiality objections raised by BNSF have previously been overruled by this Court as ‘simply . . . not the sort of sensitive personal information giving rise to a valid objection to discovery.’” Id. at 15 (citing Jones, 2019 WL 6728429 at *6). The court, however, permitted BNSF not to produce such information in relation to two employees who played no role in the events giving rise to the case, and found that the discovery request needed to be narrowed to the years near the relevant events presented by the lawsuit.

Database search

Plaintiff made a number of discovery requests that would require database searches. The court determined that, as in past similar litigation, the resolution of the discovery dispute was the identification of the search terms to be applied. The court noted that Plaintiff had not provided any search terms. The court thus, consistent with what it did in the prior litigation, ordered BNSF to search for ten search terms of Plaintiff’s choosing.

Designation of Rule 30(b)(6) deponents; information on deletions, modifications and alterations and whether such information made be restored

Again applying rulings from prior similar litigation, the court found that Plaintiff was entitled to designation by Respondent of Rule 30(b)(6) deponents on: “(1) basic ESI; (2) ten custodial data sources likely to have discoverable information; (3) non-custodial data sources likely to have discoverable information; (4) BNSF’s organizational policies and procedures governing ESI; and (5) BNSF’s ESI data repositories containing communications related to Voelker’s termination.” Id. at 26.

In regard to Plaintiff’s request for a Rule 30(b)(6) deponent on “other communications [that] may have been deleted, modified, or altered and methods, programs or software that could search for or recover such ESI data/communications,” the court noted that “the latter portion of the request certainly tows the line between permissible discovery and the more disfavored meta-discovery.” The court stated in this regard:

However, the designation of a deponent who can testify regarding whether data in the systems at issue has been “deleted, modified, or altered” and correspondingly whether such data can be restored to its original condition is sufficiently related to the rest of the request to justify compulsion. Indeed, given that an FRSA claim can be proven through circumstantial evidence, such an inquiry may very well reveal crucial evidence. Additionally, because BNSF will have to produce a deponent for the rest of the request, additional designations related to the deletion, modification, or alteration of information in such systems is unlikely to impose an undue burden or increase the expense associated with the discovery process. As such, the Court will grant Mr. Voelker’s motion to compel a response to his sixth topic. It is ordered that BNSF shall designate a proper deponent or deponents capable of testifying as to the information enumerated in the sixth topic.

Id. at 30-31 (emphasis as in original).

Discovery requests on which BNSF had already complied; Defendant cannot produce what it does not have

On a number of discovery requests on which a motion to compel was sought, the court found that Plaintiff’s requests were relevant and proportional, but that BNSF had complied with the request and that was nothing further to compel.

Requested relief; attorneys’ fees and costs; special master; etc.

Plaintiff requested a variety of relief beyond compulsion of responses to the discovery requests. The court found that such relief was either improper or already addressed.

The court found that an award of attorneys’ fees and costs would be “unjust” under FRCP 37(a)(5)(A)(ii)-(iii), as the court had not granted Plaintiff’s motion in full, the court having “concluded that in some instances Mr. Voelker was entitled to an additional response and in other instances BNSF had fully complied with its discovery obligations,” and having found that BNSF's refusal to respond to certain requests was substantially justified. The court stated: “Finally, as stated in previous orders, the Court trusts that counsel will continue to ‘discern a pattern and consistency in how judges in this district view’ the discovery issues raised in Brewer, Wooten, Jones, and now this case. Jones, 2019 U.S. Dist. LEXIS 213475, 2019 WL 6728429 at * 11.”

As to Plaintiff’s other requests for special relief, the court found

  • that this was not a special case in which the utilization of a special master was warranted;
  • that preparation of a joint statement and discovery plan was not needed at that time, exhorting instead that counsel should “continue to work together to resolve discovery issues, utilizing motions practice only as a last resort when all other efforts to reach an agreement on the issue have failed”;
  • that the court had already addressed postponement of deadlines in the case.

In camera review

Plaintiff also sought production of various emails in redacted form. BNSF maintained that such redacted emails were protected by the attorney-client privilege and/or the work product doctrine. Plaintiff requested that the court compel production of the emails or conduct an in camera review. BNSF did not object to in camera review. The court ordered BNSF to produce unredacted copies of the emails by filing them under seal pursuant to Local Rule 5.2, noting that leave of the Court to file under seal was not required.


Laveing v. Norfolk Southern Railway Co., No. 19-cv-1095 (W.D. Pa. Sept. 28, 2020) (2020 WL 5760352) (Memorandum Order [adopting Magistrate Judge’s Report and Recommendation]); Laveing v. Norfolk Southern Railway Co., No. 19-cv-1095 (W.D. Pa. Aug. 21, 2020) (2020 WL 5768730) ([Magistrate Judge’s] Report and Recommendation)

USDOL Case No.: ALJ No. 2019-FRS-00034

Casenote(s):

PROTECTED ACTIVITY UNDER THE FRSA; AN EMPLOYEE’S MEDICAL CONDITION SUSTAINED OUTSIDE THE SCOPE OF EMPLOYMENT IS NOT A HAZARDOUS CONDITION, AND THUS PLAINTIFF'S REPORT OF ALLERGIES AND HIS REFUSAL TO WORK WHEN EXPERIENCING THE SYMPTOMS OF ALLERGIES WAS NOT FRSA-PROTECTED ACTIVITY

In Laveing v. Norfolk Southern Railway Co., No. 19-cv-1095 (W.D. Pa. Sept. 28, 2020) (2020 WL 5760352), the District Court adopted the Magistrate Judge’s Report and Recommendation in Laveing v. Norfolk Southern Railway Co., No. 19-cv-1095 (W.D. Pa. Aug. 21, 2020) (2020 WL 5768730) dismissing Plaintiff’s FRSA amended complaint. According to the Magistrate Judge’s decision, Plaintiff was a train conductor who suffered several seasonal allergies that required both prescription and non-prescription medications, which allegedly caused drowsiness and interfered with his ability to concentrate. Plaintiff would “call off” work when he felt too ill to work. Plaintiff was dismissed from employment due to excessive absences. Plaintiff claimed that “he was disciplined in retaliation for reporting an unsafe condition, namely, his own allergies, in violation of 49 U.S.C. § 20109(b)(1)(A),” and ”for engaging in a protected refusal to work, in violation of 49 U.S.C. § 20109(b)(1)(B).” Slip op. at 2. Defendant contended that these claims failed as a matter of law because Plaintiff’s “personal illness does not constitute a hazardous safety or security condition within the meaning of the FRSA and therefore neither Plaintiff's report of allergies nor his refusal to work when experiencing the symptoms of allergies is FRSA-protected activity.” Id. at 4. The Magistrate Judge determined that this issue had been conclusively decided by the Third Circuit Court of Appeals:

   Here, Plaintiff’s side effects from taking medications to treat his severe seasonal allergies is not a hazardous condition under the FRSA, as it is a non-work-related event, has no bearing on the operation of a railroad and thus reporting of his own medical condition and refusal to appear to work is not covered under the FRSA. This is especially so when faced twice with this issue, the Court of Appeals for the Third Circuit rejected the argument that employees suffering non-work-related medical conditions who report or refuse to work are covered under the FRSA. Port Auth. Trans-Hudson Corp., 776 F.3d at 166; Stokes, 657 F. App'x at 82.

   While Plaintiff argues that Norfolk had a policy requiring employees to not report to work when their ability to work safely is impaired by a medical condition or associated medication and that policy makes his reporting and refusal to work protected under the FRSA, he cites to no legal authority that a company policy expands legislation or overturns jurisprudence. The authority on this issue is settled: An employee’s medical condition sustained outside the scope of employment is not a hazardous condition under the FRSA.

   Accordingly, it is respectfully recommended that Norfolk’s motion to dismiss be granted and Count II of Plaintiff’s amended complaint related to his FRSA claim be dismissed with prejudice.

Id. at 5.


Foura v. National Railroad Passenger Corp. (AMTRAK), No. 19-cv-00394 (E.D. Pa. Sept. 16, 2020) (2020 U.S. Dist. LEXIS 169307; 2020 WL 5554465) (Memorandum)

Casenote(s):

 

CONTRIBUTORY FACTOR CAUSATION; SUMMARY JUDGMENT GRANTED WHERE IT WAS UNDISPUTED THAT PLAINTIFF WORE A BULLETPROOF VEST TO WORK AFTER AN ALTERCATION WITH HIS SUPERVISOR, AND THAT DEFENDANT BELIEVED THIS WAS A DISCHARGEABLE OFFENSE AS IT CAUSED OTHER EMPLOYEES TO FEAR FOR THEIR SAFETY

In Foura v. National Railroad Passenger Corp. (AMTRAK), No. 19-cv-00394 (E.D. Pa. Sept. 16, 2020) (2020 U.S. Dist. LEXIS 169307; 2020 WL 5554465), Plaintiff wore a bulletproof vest to work about a week after reporting a physical altercation with his supervisor. A co-worker felt unsafe because of this and reported it to Amtrak police. The Amtrak police removed Plaintiff from the shop floor an investigation. Plaintiff was charged with violated Amtrak“s Standards of Excellence and Workplace Violence Policy. The court stated that ‘[t]he charges were based on the fact that the bulletproof vest made fellow Amtrak employee’s feel ‘threatened, intimidated and distracted, fearing for their safety. ’” Slip op. at 2-3 (citation to record omitted). Plaintiff was terminated from employment following a hearing officer’s determination that Amtrak proved its case. After an appeal, Plaintiff was reinstated after signing an agreement stating that the disciplinary record demonstrated that all charges against him were provide and were terminable offenses, and that the disciplinary process was not procedurally defective. In the interim, Plaintiff filed a FRSA retaliation complaint with OSHA, which was kicked out to Federal court after 210 days had passed without a decision from OSHA. Amtrak moved for summary judgment.

The court, viewing the facts in the light most favorable to Plaintiff, found for purposes of ruling on the summary judgment motion that Plaintiff’s report of the physical altercation was protected activity under FRSA §§ 20109(a)(1)(C) and § 20109(b)(1)(A).

The court, however, found that the protected activity was not a contributing factor to the termination. Plaintiff argued that there was temporal proximity between his report of the altercation and his removal from service. The court, however, found that the wearing of the bulletproof vest was an intervening event that broke any suggestion of causation based on temporal proximity. Plaintiff argued disparate treatment, but the court found that neither Plaintiff nor the supervisor had been disciplined for the altercation. Plaintiff wore body armor to work while the supervisor did not.

Plaintiff argued that the supervisor was generally antagonistic towards him. The court, however, found that the evidence showed only antagonism prior to the protected activity, and not as the result of it. The court also found that the supervisor did not decide to terminate Plaintiff, nor were his actions the proximate cause of it.

Plaintiff argued pretext, based on the charges being inconsistent with the facts of the case and the harshness of the punishment. The court cited caselaw about what is necessary to show pretext and found that Plaintiff could not meet those tests, as it was undisputed that Plaintiff wore body armor to work and that Amtrak believed that doing so justified termination.

Plaintiff argued that his protected activity and his termination were “inextricably intertwined” creating an inference of causation. In support, Plaintiff argued that the hearing officer had found against him at least in part based on the altercation. The court was not persuaded:

   These arguments miss the mark. It doesn’t matter if the altercation is “inextricably intertwined” with Mr. Foura’s termination. The altercation is not a protected activity under the FRSA. The protected activity was Mr. Foura’s reporting of the event to his supervisor. Mr. Foura’s report of the altercation and his subsequent termination were distinct events, not one continuous chain. Amtrak’s investigation of Mr. Foura’s conduct began after he wore body armor to work, not when he reported Mr. Jefferson’s conduct. In addition, the disciplinary hearing focused on whether the vest distracted and instilled fear in his coworkers. Mr. Foura discussed his altercation with Mr. Jefferson to explain why he felt he was justified to wear the body armor to work. The altercation itself was not actually at issue during the disciplinary hearing.

Id. at 8.

In sum, the court wrote:

   Actions have consequences. Mr. Foura chose to wear a bulletproof vest to work. In this day and age, he should have known that doing so carried a risk of disciplinary action. He has not mustered evidence to show that Amtrak’s response was anything other than a normal employer’s response to conduct that created an elevated risk of workplace violence. The Court will therefore grant Amtrak’s motion. An appropriate Order follows.

Id.


Mitchell v. National Railroad Passenger Corp. (AMTRAK), No. 20-cv-01319 (E.D. Pa. Sept. 1, 2020) (2020 WL 5211205) (Memorandum Opinion)

USDOL Case Nos.: 2019-FRS-00101

Casenote(s):

KICK-OUT OF SOX COMPLAINT TO DISTRICT COURT; FAILURE OF PLAINTIFF TO SERVE PETITION FOR ARB REVIEW ON RESPONDENT DID NOT DEPRIVE DISTRICT COURT OF JURISDICTION

In Mitchell v. National Railroad Passenger Corp. (AMTRAK), No. 20-cv-01319 (E.D. Pa. Sept. 1, 2020) (2020 WL 5211205), Plaintiff filed a FRSA retaliation complaint in U.S. District Court after the ALJ dismissed the administrative complaint for failure of the complainant to timely respond to an order to show cause why the matter should not be dismissed for failure to attend the pre-hearing conference. The complainant’s counsel had, after the deadline for responding to the order to show cause, filed with the ALJ a letter advising that he intended to file an action in federal court. Plaintiff had also filed an appeal to the ARB. Presently before the District Court was Defendant’s motion to dismiss on the ground that the ARB appeal had not been perfected because it was not served on AMTRAK in compliance with the regulation at 29 C.F.R. § 1982.110(a). The court denied the motion, stating:

Although the regulation requires the petition “to be served on all parties . . . at the time it is filed with the ARB,” it does not provide any consequences for a failure to serve it. [29 C.F.R.] § 1982.110(a). Rather, it states only that the petition is deemed filed on the date it is postmarked, faxed, emailed or, if hand delivered, received. Id. . . . AMTRAK does not contend that it was prejudiced by Mitchell’s failure to serve it with his ARB petition. AMTRAK will have an opportunity to answer the complaint and defend the case. To dismiss this action in the absence of prejudice would be inconsistent with the regulation’s intent to provide “ready access to federal court.” Procedures for the Handling of Retaliation Complaints Under the National Transit Systems Security Act and the Federal Railroad Safety Act, 80 Fed. Reg. 69115, 69131.

Slip op. at 7.


Ringer v. Neb., Kan., & Colo. Ry., No. 20-cv-3056 (D. Neb. Aug. 19, 2020) (2020 U.S. Dist. LEXIS 149787) (Memorandum and Order)

USDOL Case No.: 2020-FRS-00065

Casenote(s):

FRCP 12(b)(1) MOTION; FRSA DOES NOT SUPPORT CONTENTION THAT PLAINTIFF MAY NOT EXERCISE THE “KICK-OUT” PROVISION UNTIL THE ADMINISTRATIVE PROCESS IS COMPLETED

In Ringer v. Neb., Kan., & Colo. Ry., No. 20-cv-3056 (D. Neb. Aug. 19, 2020) (2020 U.S. Dist. LEXIS 149787), Defendant railroad filed a FRCP 12(b)(1) motion to dismiss for lack of subject matter jurisdiction, apparently on the ground that plaintiff could not exercise the “kick-out” option before the administrative process was completed. Here, however, it was undisputed that more than 210 days had elapsed since Plaintiff filed his administrative claim, and that as of the date the federal district court complaint was filed, the Secretary of Labor had not issued a final decision. Moreover, there was nothing in the record suggesting that Plaintiff acted in bad faith. The court found nothing in the record supporting the railroad’s subject matter jurisdiction motion, and that it had jurisdiction pursuant to the “kick-out” provision at 49 U.S.C. § 20109(d)(3).

FRCP 12(b)(6) MOTION; EMPLOYEE RULE VIOLATION HEARINGS DID NOT HAVE RES JUDICATA OR COLLATERAL ESTOPPEL EFFECT WHERE RECORD DID NOT SHOW THAT ELEMENTS OF FRSA RETALIATION SUIT WERE CLAIMS OR ISSUES FINALLY DECIDED IN THOSE HEARINGS

In Ringer v. Neb., Kan., & Colo. Ry., No. 20-cv-3056 (D. Neb. Aug. 19, 2020) (2020 U.S. Dist. LEXIS 149787), Defendant railroad filed a FRCP 12(b)(6) motion to dismiss for failure to state a claim for relief based on res judicata and collateral estoppel. The railroad argued that Plaintiff was seeking to challenge discipline for failing to file a timely safety and hazard report, leaving a switch unlocked, and engaging in unauthorized employment. The court denied the motion. First, the court noted that Plaintiff alleged facts showing lack of a full and fair opportunity to litigate the rules violations accusations. Second, the court found a lack of identity of claims or issues between the workplace rules violation hearings and the FRSA retaliation claims before the court. Specifically, there was no indication that the elements of FRSA retaliation claim were claims or issues finally decided in the prior employee rule violation hearings, and therefore res judicata and collateral estoppel are not implicated.

FRCP 12(b)(1) MOTION; FACT THAT CERTAIN DEFENDANTS WERE NOT NAMED IN ADMINISTRATIVE COMPLAINT DID NOT SUPPORT DISMISSAL FOR LACK OF SUBJECT MATTER JURISDICTION

In Ringer v. Neb., Kan., & Colo. Ry., No. 20-cv-3056 (D. Neb. Aug. 19, 2020) (2020 U.S. Dist. LEXIS 149787), Defendant railroad’s holding company (Omnintrax Holdings, Combined Inc.) and a national rail transportation service provider (Omnitrax, Inc.) filed a FRCP 12(b)(1) motion to dismiss for lack of subject matter jurisdiction on the ground that the administrative complaint had not named these entities as defendants, and therefore Plaintiff failed to exhaust administrative remedies against them. The court noted that “Administrative rules, even if important and mandatory, that do not reference a court's adjudicative capacity are more aptly thought of as ‘claims-processing rules.’” Slip op. at 13. Here, the court found that assuming that the Omintrax Defendants were not named in an administrative complaint, that circumstance would not implicate the court’s subject matter jurisdiction. The court stated:

The timely filing of the initial complaint with the Secretary of Labor is a claims-processing requirement subject to several defenses such as waiver, estoppel, or equitable tolling, or, as the plaintiff argues here, that the Omnitrax defendants and NK&C share a substantial identity. Filing 22 at 1. The Omnitrax defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction is without support in the law.

Slip op. at 14-15.

FRCP 12(b)(6) MOTION; COURT DENIES MOTION TO DISMISS FOR FAILURE TO STATE A GROUND FOR RELIEF IN REGARD TO CERTAIN DEFENDANTS ON THE GROUND THAT THEY WERE NOT PLAINTIFF’S “EMPLOYER” WHERE THERE WERE ALLEGATIONS THAT ONE DEFENDANT WAS RESPONSIBLE FOR DENYING PAYMENT FOR ALLEGED WORKPLACE SKIN CONDITION, AND THAT THE OTHER DEFENDANT REQUIRED PLAINTIFF TO REMOVE HIS SAVING FROM HIS 401(K) ACCOUNT; COURT FINDS THAT THESE ARE ACTIONS AN EMPLOYER OR AN EMPLOYER’S AUTHORIZED AGENT MAY TAKE

FRCP 12(b)(6) MOTION; COURT DENIES MOTION TO DISMISS FOR FAILURE TO STATE A GROUND FOR RELIEF IN REGARD TO CERTAIN DEFENDANTS ON THE GROUND THAT THEY WERE NOT PLAINTIFF’S “EMPLOYER” BECAUSE FRSA COVERS “RAILROAD CARRIERS” AND THERE WERE ALLEGATIONS THAT ONE DEFENDANT CONTROLLED CERTAIN OF THE RAILROAD’S OPERATIONS AND THAT THE OTHER DEFENDANT PROVIDES RAIL TRANSPORTATION SERVICES ACROSS THE NATION

In Ringer v. Neb., Kan., & Colo. Ry., No. 20-cv-3056 (D. Neb. Aug. 19, 2020) (2020 U.S. Dist. LEXIS 149787), Plaintiff’s complaint alleged retaliation under FRSA, 49 U.S.C. § 20109, regarding Defendants' alleged negligence in exposing him to a herbicide and refusing his request for medical treatment.

Defendant railroad’s holding company (Omnintrax Holdings, Combined Inc.) and a national rail transportation service provider (Omnitrax, Inc.) filed a FRCP 12(b)(6) motion to dismiss on the ground that Plaintiff was never "employed" by the Omnitrax Defendants. These Defendants asserted that the complaint’s allegation that he was employed by all defendants was merely a legal conclusion, insufficient to satisfy the requirements to state a claim for relief.

The court, however, found that Plaintiff identified that Omnitrax was responsible for denying payment of medication prescribed by Plaintiff’s physician to treat Plaintiff’s herbicide-induced dermatitis, and that that Omnitrax required Plaintiff to remove his saving from his employee 401(k) account. The court stated that “[b]oth of these actions are the kind of actions an employer or the employer's authorized agent may take with respect to an employer's employee.” Slip op. at 15.

The court also noted the FRSA speaks to the conduct of “railroad carriers,” citing 49 U.S.C. § 20109(a)(1) and 49 U.S.C. § 10102(5). Here, Plaintiff alleged that Omnitrax Holdings “controls the operation of NK&C's interstate transportation of agricultural products, and that Omnitrax, Inc. provides rail transportation services across the nation.” Id. at 16. The court stated that “[t]hose allegations are not merely conclusory labels, and at a minimum, are sufficient to raise a reasonable expectation that discovery will reveal evidence to substantiate the plaintiff's claim that the Omnitrax defendants fit the definition of a railroad carrier, and may be liable to the plaintiff for his damages.” Id. (citation omitted).


Carman v. Cent. of Ga. R.R. Co., No. 18-cv-00230 (M.D. Ga. Aug. 7, 2020) (2020 U.S. Dist. LEXIS 141268; 2020 WL 4574492) (Order [denying summary judgment])

Casenote(s):

SUMMARY JUDGMENT DENIED WHERE REASONABLE JUROR COULD FIND CONTRIBUTORY FACTOR CAUSATION BASED ON THE FACT THAT THE RAILROAD’S REVIEW OF PLAINTIFF’S SOCIAL MEDIA POSTS OCCURRED WITHIN ONE WEEK AFTER PLAINTIFF’S REPORT OF AN ON-THE-JOB-INJURY

SUMMARY JUDGMENT DENIED ON DEFENDANTS’ AFFIRMATIVE DEFENSE WHERE REASONABLE JUROR COULD FIND THAT, BY TIME OF INVESTIGATION LEADING TO PLAINTIFF’S FIRING, DEFENDANT KNEW THAT PLAINTIFF’S SOCIAL MEDIA POSTING WAS ONLY AN “IDLE THREAT” AND THAT PLAINTIFF WAS NOT ACTUALLY GOING TO REFUSE CREW CALLS

In Carman v. Cent. of Ga. R.R. Co., No. 18-cv-00230 (M.D. Ga. Aug. 7, 2020) (2020 U.S. Dist. LEXIS 141268; 2020 WL 4574492), Plaintiff (Carman) was a conductor for Central of Georgia Railroad Company. He alleged that he was terminated in retaliation for reporting the on-the-job injury. An Assistant Division Superintendent (Brockman) had reviewed Plaintiff’s social media posts and concluded that Plaintiff had threatened to cause the railroad to “feel some pain” in regard to its mark off policy. Plaintiff was terminated from employment for conduct unbecoming an employee, in violation of the railroad’s Safety and Conduct General Rule 900.

Defendants filed a motion for partial summary judgment. Defendants first contended that Plaintiff could not establish that his protected activity was a contributing factor in his termination, and even if contributing factor causation could be established, Defendant’s evidence clearly established that Plaintiff would have been fired anyway. The court, however, found that genuine facts existed that precluded summary judgment on contributory factor causation. Specifically, Defendants started investigating Plaintiff within a week after he reported his injury.

In regard to its affirmative defense, Defendants contended that the Assistant Division Superintendent had a good faith, honest belief that Plaintiff violated the Safety and Conduct General Rule by threatening to disrupt Defendants’ operations. Defendants argued that the court must accept the Assistant Division Superintendent’s statement on this point as true, citing Stone & Webster Construction, Inc. v. U.S. Department of Labor, 684 F.3d 1127, 1132–33 (11th Cir. 2012). The court was not persuaded that Stone & Webster was on point as it was about whether the ARB applied the substantial evidence standard for review of an ALJ’s findings of fact—the 11th Circuit finding that the ARB erred in substituting its own findings of fact. Here, in contrast, the court stated that

. . . the relevant question is whether there is a genuine fact dispute on whether Brockman held a good faith, honest belief that Carman violated Rule 900. A reasonable juror could conclude that Brockman did not actually believe that Carman's June 30 statement in a comment thread among friends on Facebook was a true threat against the railroad. Brockman himself described the comment as an "idle threat," and the record viewed in the light most favorable to Carman would permit a juror to conclude, based on all the other comments and what actually happened after the June 30 Facebook post, that Brockman understood by the time of his investigation that Carman did not intend to refuse crew calls when he was needed at the railroad. Based on this genuine fact dispute, summary judgment is inappropriate.

Slip op. at 17 (footnote omitted).


Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished) (2020 U.S. App. LEXIS 19446; 2020 WL 3410888)

Case Below: 16-cv-00139 (D. Mont.)

USDOL Case No. 2016-FRS-00059

Casenote(s):

DISTRICT COURT DID NOT ABUSE ITS DISCRETION BY DENYING BNSF’S MOTION TO BIFURCATE FRSA RETALIATION AND FELA CLAIMS WHERE CONVENIENCE AND JUDICIAL ECONOMY WEIGHED IN FAVOR OF TRYING CLAIMS TOGETHER

In Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished), the Ninth Circuit determined that the district court did not abuse its discretion by denying the BNSF’s motion to bifurcate Plaintiff’s FRSA retaliation and FELA claims. The court stated that FRCP 42(b) merely allows, but does not require, a trial court to bifurcate cases. Here, “the district court determined that convenience and judicial economy weighed in favor of trying the claims together—the claims involved overlapping evidence and any potential for prejudice was reduced or eliminated by limiting instructions.”

DISTRICT COURT’S DECLINATION OF BNSF’S PROPOSED JURY INSTRUCTIONS ON HONEST BELIEF AND BUSINESS JUDGMENT WAS NOT AN ABUSE OF DISCRETION WHERE PROPER INSTRUCTIONS WERE GIVEN ON FRSA BURDENS OF PROOF

In Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished), the Ninth Circuit determined that the district court did not abuse its discretion by declining to give BNSF’s proposed honest belief and business judgment instructions, the district court having properly instructed the jury on Wooten’s burden of proof under the FRSA and on BNSF’s burden of proof on its affirmative defense, and having adequately instructed the jury on “contributing factor” causation as defined in Frost v. BNSF Ry. Co., 914 F.3d 1189, 1195 (9th Cir. 2019). The Ninth Circuit stated that because the district court’s instructions correctly stated the law, BNSF’s proposed honest belief and business judgment instructions were not necessary.

DISTRICT COURT’S DECLINATION OF JURY INSTRUCTIONS ON DECISION-MAKER KNOWLEDGE WAS NOT AN ABUSE OF DISCETION WHERE RAILROAD HAD NOT PUT ON EVIDENCE OR ARGUED THAT DECISION MAKERS WERE UNAWARE OF PLAINTIFF’S FRSA PROTECTED ACTIVITY

In Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished), the Ninth Circuit determined that the district court did not abuse its discretion by declining to give BNSF’s proposed decision-maker knowledge instruction on the FRSA claim. The court stated:

BNSF did not present any evidence, argue before the jury, or contend on appeal that its decision-makers were unaware of Wooten’s protected activity. Even if decision-maker knowledge is required under the FRSA, any error was harmless—there was ample evidence that BNSF’s decision-makers were aware of Wooten’s protected activity. See Wilkerson, 772 F.3d at 838 (“[I]f any error relating to the jury instructions was harmless, we do not reverse.”).

Slip op. at 3.

DISTRICT COURT’S DECLINATION OF KOLSTAD INSTRUCTION ON PUNITIVE DAMAGES WAS NOT AN ABUSE OF DISCRETION WHERE SUFFICIENTLY SENIOR-LEVEL OFFICIALS AT MULTIPLE LAYERS REVIEWED AND APPROVED PLAINTIFF’S DISMISSAL

In Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished), the Ninth Circuit determined that the district court did not abuse its discretion by declining to give a Kolstad v. Am. Dental Ass’n, 527 U.S. 526 (1999) instruction on punitive damages. The court stated:

    [W]e need not decide whether a Kolstad instruction on punitive damages is appropriate in a FRSA action. See Kolstad, 527 U.S. at 545. Sufficiently senior-level officials at multiple layers, including the Regional Vice-President, the Montana Division General Manager, a Director of Labor Relations, and the Director of Administration for the Montana Division, reviewed and approved Wooten’s dismissal. See Passantino v. Johnson & Johnson Consumer Prods., Inc., 212 F.3d 493, 516-17 (9th Cir. 2000).

Id. at 4.

FRONT PAY; AWARD OF FRONT PAY FOR AN EXTENDED PERIOD FOUND NOT AN ABUSE OF DISCRETION UNDER THE CASE’S HIGHLY UNUSUAL CIRCUMSTANCES WHERE PLAINTIFF CAME FROM A RAILROAD FAMILY IN A SMALL RAILROAD TOWN, AND LOSS OF RAILROAD JOB LEFT HIM WITH AN ESSENTIALLY NON-EXISTENT JOB MARKET FOR COMPARABLE JOBS

In Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished), the Ninth Circuit determined that the district court did not abuse its discretion under the usual facts of the case in awarding Wooten front pay for an extended period under the FRSA. The court stated:

Notwithstanding the temporary nature of front pay, we have upheld front pay awards for extended periods where the facts have justified such an award to make a plaintiff whole. See, e.g., Gotthardt, 191 F.3d at 1157 (affirming a front pay award covering approximately eleven years); see also Padilla v. Metro-N. Commuter R.R., 92 F.3d 117, 126 (2d Cir. 1996) (affirming a front pay award covering more than twenty years).

   Upon careful review, we conclude that the front pay award, although for an extended period, does not constitute an abuse of discretion based on the highly unusual, fact specific record before the court. Wooten had a limited education and was from a small railroad town. He came from a railroad family—his grandfather retired from the railroad—and worked at one of the best paying jobs in the area. Notably, Wooten acquired at BNSF a specific set of skills that were related only to the transportation industry. After being dismissed in violation of the FRSA, Wooten was faced with an essentially non-existent job market for comparable paying jobs.

   Indeed, BNSF’s own expert confirmed that the job market was highly unusual. The company’s vocational expert testified that Wooten had a highly specialized set of skills derived from his work at BNSF; that the most he could make working at another railroad would be $60,000 (compared to the approximately $100,000 he had been making at BNSF); that it was unclear whether another railroad would even be willing to hire him; and that his insurance job was probably the best-paying job he could otherwise hope to get. What’s more, it appears that the seniority Wooten had acquired at BNSF ensured that he would actually get put on jobs with that employer, while his lack of seniority at any other railroad might have rendered him unable to earn a full-time salary. BNSF did not show that Wooten would be able to find a comparable job at any point over his expected working career. Moreover, given the salary Wooten earned at BNSF and the benefits associated with the seniority that he enjoyed, Wooten would not have had any economically rational reason to ever leave BNSF, making it far from speculative to find that he would have stayed at the company until his retirement.

   In the vast majority of cases, a plaintiff will be able to find a comparable job within a few years, and for that reason, only a few years of front pay will be sufficient to bridge the gap in earnings. But this is not a typical situation. The district court’s findings supporting the front pay award were not clearly erroneous, and the award was not an abuse of discretion.

Slip op. at 5-6.

EMOTIONAL DISTRESS AWARD MAY BE BASED ON PLAINTIFF’S TESTIMONY; OBJECTIVE EVIDENCE IS NOT REQUIRED

In Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished), the Ninth Circuit determined that the district court did not abuse its discretion in concluding that the jury’s emotional distress award was supported by the evidence. The court stated:

“Generally, a jury’s award of damages is entitled to great deference, and should be upheld unless it is ‘clearly not supported by the evidence’ or ‘only based on speculation or guesswork.’” In re First All. Mortg. Co., 471 F.3d 977, 1001 (9th Cir. 2006) (quoting L.A. Mem’l Coliseum Comm’n v. Nat’l Football League, 791 F.2d 1356, 1360 (9th Cir. 1986)). The jury’s award was supported by Wooten’s testimony regarding the emotional impact he experienced after dismissal. Objective evidence is not required to support an emotional distress award. See Passantino, 212 F.3d at 513.

Slip op. at 7.


Vasquez v. BNSF Ry., No. 18-cv-164 (D. Mon. May 29, 2020) (2020 U.S. Dist. LEXIS 94593;2020 WL 2813700) (Order [granting summary judgment])

Casenote(s):

ADMINISTRATIVE EXHAUSTION; NEW THEORY OF RETALIATION NOT ABSOLUTELY BARRED FROM BEING RAISED IN FEDERAL COURT AS LONG AS IT REASONABLY RELATED TO ADMINISTRATIVE COMPLAINT; WHERE, HOWEVER, THE NEW CLAIM WAS COMPLETELY UNRELATED TO THE ISSUES RAISED IN THE ADMINISTRATIVE COMPLAINT, THE COURT GRANTED SUMMARY JUDGMENT DISMISSING THE COUNT FOR FAILURE TO EXHAUST

In Vasquez v. BNSF Ry., No. 18-cv-164 (D. Mon. May 29, 2020) (2020 U.S. Dist. LEXIS 94593; 2020 WL 2813700), the court granted summary judgment dismissing an allegation that Plaintiff was terminated for reporting crew fatigue where he had not made such an allegation in the complaint filed in district court or in the OSHA proceeding. The basis for this allegation did not arise until nearly a year after Plaintiff had filed the lawsuit. The court declined to rule as a matter of law that a plaintiff can never raise a new theory of retaliation in a FRSA action, but nonetheless concluded that the circumstances presented in the instant case barred its consideration. The court noted the importance of affording OSHA the opportunity to resolve allegations through the administrative process, but found that exhaustion is not required where the retaliation claim is reasonably related to the administrative complaint. This was not such a case, the fatigue-related complaints being complexly independent of his other claims.

PROTECTED ACTIVITY; COMPLAINT DID NOT REPORT OF CREW FATIGUE MERELY BY SUBMITTING OF WAGE CLAIM FORMS REQUESTING ADDITIONAL PAY, OR BY SUBMITTING “FATIGUE MONITOR” TO UNION AND UNKNOWN TO RESPONDENT’S DECISIONMAKERS; COURT REJECTS, HOWEVER, BNSF THEORY THAT FRSA IS INDIFFERENT TO COMPLAINTS REGARDING CREW FATIGUE

In Vasquez v. BNSF Ry., No. 18-cv-164 (D. Mon. May 29, 2020) (2020 U.S. Dist. LEXIS 94593), the court granted summary judgment dismissing an allegation that Plaintiff was terminated for reporting crew fatigue. The court noted as a threshold matter that it rejected BNSF’s theory that the FRSA is indifferent to complaints regarding crew fatigue, citing the court’s own recent decision in Jones v. BNSF Ry. Co., 18-cv-146 (D. Mont. Apr. 29, 2020) (2020 U.S. Dist. LEXIS 75585; 2020 WL 2062180). In the instant case, however, Plaintiff based this count on the submission of wage claim forms, requesting additional pay consistent with the CBA. The court stated: “While he did claim to have been called into service early and out of rotation, he never claimed to have been fatigued nor did he raise any safety concerns. No reasonable factfinder could conclude that Vasquez reported a hazardous safety condition when he asked for additional pay and neither requested a change in BNSF policy to protect safety nor suggested that he or any other crewmember had been fatigued.” Slip op. at 16. The court noted that Plaintiff appeared to also allege that he was fired for submitting to his union a “fatigue monitor.” The court noted that these forms are not submitted to BNSF, and there was no factual support for finding that decisionmakers were aware of Plaintiff’s submission of a fatigue monitor, let alone that it was a contributing factor in the termination decision.

PROTECTED ACTIVITY; MERE REQUEST THAT A SAFETY FEATURE BE ENGAGED IS NOT PROTECTED ACTIVITY; COURT REJECTS, HOWEVER, BNSF’S POSITION THAT AN FRSA RETALIATION COMPLAINT COULD NOT BE MAINTAINED BECAUSE FEDERAL LAW DID NOT YET MANDATE ENGAGEMENT OF THAT SAFETY FEATURE — RATHER A GOOD FAITH REQUEST THAT A RAILROAD IMPROVE ITS SAFETY POLICIES IS SUBJECT TO PROTECTION

In Vasquez v. BNSF Ry., No. 18-cv-164 (D. Mon. May 29, 2020) (2020 U.S. Dist. LEXIS 94593), Plaintiff, an engineer, noted before departure that the train should travel no faster than 45 mph due to its load. The train’s Positive Train Control (PTC), which limits train speed, was set to 55 mph. The conductor indicated to dispatch that he and Plaintiff were having trouble setting the PTC. Dispatch instructed that they could leave without engaging PTC. Although the conductor apparently agreed initially, Plaintiff remained concerned, and the conductor and Plaintiff attempted to reengage dispatch several times without success. They finally left the yard without PTC engaged. During the run the train failed to stop before a red signal. In an investigation of the incident, Plaintiff asserted that the incident would not have occurred if the PTC had been engaged or he had been working with an experienced, qualified conductor. Although later reinstated, this was Plaintiff’s second serious discipline, and he was terminated for a period without pay.

Plaintiff filed a FRSA retaliation complaint. One of his claims was that he was terminated in retaliation for complaining in regard to the PTC on the train he was operating. The court, however, determined that Plaintiff never made a complaint, but had merely attempted to reset the PTC through the dispatcher. That conversation (made through the conductor) merely reported the trouble resetting the PTC, and obtained the dispatcher’s OK to “cut out PTC,” to which the conductor replied that he understood that it was OK to cut it. Although Plaintiff attempted unsuccessfully four or five times thereafter to contact the dispatcher through the conductor about the PTC, the court found that the attempt could not be perceived as a safety complaint.

The court further stated: “Even if Vasquez had asked dispatch to initiate PTC (and the undisputed facts establish that he did not), an employee does not "report[], in good faith, a hazardous safety or security condition" by merely requesting that a safety feature be engaged. 49 U.S.C. § 42121(b)(1)(A).” Slip op. at 17-18.

The court, however, noted a disagreement with BNSF on a point of law. BNSF argued that the complaint regarding PTC made in November 2016 necessarily fails because at that time BNSF was not required to have PTC activated on the train. The court acknowledged that Federal law had not yet imposed such a requirement, and that Plaintiff testified during his deposition that he was able to safely operate trains before PTC became available. Nonetheless, the court held that “a FRSA claim does not, as a matter of law, fail whenever the complained-of activity is consistent with federal law. … Where an employee requests, in good faith, a change in railroad policies to improve safety, that employee is entitled to protection under the FRSA. 49 U.S.C. § 20109(b)(1)(A).” Id. at 17, citing the court’s own recent decision in Jones v. BNSF Ry. Co., 18-cv-146 (D. Mont. Apr. 29, 2020) (2020 U.S. Dist. LEXIS 75585; 2020 WL 2062180).


Lemon v. Norfolk Southern Railway Co., 958 F.3d 417 (6th Cir. Apr. 30, 2020) (No. 19-3906) (2020 U.S. App. LEXIS 13927) (Opinion)

Case below. N.D. Ohio No. 18-cv-01029

USDOL Case: ALJ No. 2017-FRS-00065

Casenote(s):

LEGAL FRAMEWORK FOR FRSA CASES; SIXTH CIRCUIT QUESTIONS COMMON CONCLUSION THAT FRSA ADOPTS THE AIR21 BURDEN-SHIFTING FRAMEWORK AND ITS “CONTRIBUTING FACTOR” CAUSATION ELEMENT

In Lemon v. Norfolk Southern Railway Co., 958 F.3d 417 (6th Cir. Apr. 30, 2020) (No. 19-3906) (2020 U.S. App. LEXIS 13927), the parties agreed to the legal framework for deciding a retaliation claim under the Federal Railroad Safety Act. Thus, the court stated that it had not been asked to “decide how, if at all, a burden-shifting framework applies to them, or resolve whether “contributing factor” is the correct causation standard.” Nonetheless, the court noted its hesitation to join the common conclusion that FRSA incorporated the AIR21 framework to FRSA cases in federal court generally, and that the AIR21 “contributing factor” causation standard applies. The court wrote:

   Even so, we pause to mention a few uncertainties about these premises. On the one hand, every court to consider a claim under the Act has concluded that claims under § 20109(d)(1) and § 20109(d)(3) use the “rules and procedures” and “burdens of proof” in 49 U.S.C. § 42121. See, e.g., Rookaird v. BNSF Ry. Co., 908 F.3d 451, 459 (9th Cir. 2018); Araujo v. N.J. Transit Rail Ops., Inc., 708 F.3d 152, 157 (3d Cir. 2013). Supporting that view, two other statutes that incorporate § 42121 by reference apply its burdens of proof to both agency and federal court claims. 49 U.S.C. § 31105(b)(1); 18 U.S.C. § 1514A(b)(2)(C). See, e.g., Maverick Transp., LLC v. U.S. Dep’t of Labor, 739 F.3d 1149, 1155 (8th Cir. 2014); Genberg v. Porter, 882 F.3d 1249, 1254 (10th Cir. 2018). On the other hand, § 20109 says that the portions of § 42121 that it incorporates apply only to “action[s] under paragraph [(d)](1)”—apply in other words only to agency actions, not kick-out actions under § 20109(d)(3) like this one. 49 U.S.C. § 20109(d)(2)(A). Incorporating § 42121’s procedures into federal court kick-out actions potentially reads the jury trial right out of § 20109(d)(3) and requires the Secretary of Labor to investigate midway through district court proceedings. Id. § 42121(b)(2)(A).

   Also opaque is whether “contributing factor” causation, the standard in § 42121, is one of the “rules and procedures” or “burdens of proof” incorporated into § 20109. Id. § 42121(b)(2)(B)(i). A causation requirement doesn’t seem to fit naturally into either category. And applying “contributing factor” causation to § 20109(d) actions could read the causation standard for different kinds of protected activities out of § 20109(a)—(c) (“due, in whole or in part”; “for”). Id. § 20109(a), (c)(2). That is odd because Congress tweaked one of those standards at the same time it added the reference to § 42121, suggesting the partial incorporation of § 42121 did not extend to substituting its causation standard for the ones in § 20109. P.L. 110—53, § 1521, 121 Stat. 266 (Aug. 3, 2007).

Slip op. at 3-4.

CONTRIBUTING FACTOR CAUSATION; COURT REJECTS ARGUMENT OF PRETEXT ON GROUND THAT RAILROAD REGULARLY COOKS UP REASONS TO DISCIPLINE EMPLOYEES WHO FILE INJURY REPORTS, WHERE RAILROAD HAD POLICY AGAINST MAKING FALSE STATEMENTS, AND RECORD SHOWED THAT PLAINTIFF VIOLATED THAT POLICY

CONTRIBUTING FACTOR CAUSATION; SIXTH CIRCUIT REJECTS CHAIN-OF-EVENTS THEORY OF CAUSATION

In Lemon v. Norfolk Southern Railway Co., 958 F.3d 417 (6th Cir. Apr. 30, 2020) (No. 19-3906) (2020 U.S. App. LEXIS 13927), Plaintiff-Appellant had given varying accounts of whether he had been injured on the job, or at home — and how the injury happened. The railroad, applying its policy of firing workers who make false statements at work, conducted a hearing, and afterwards fired Plaintiff for dishonesty. Plaintiff then filed a FRSA complaint with OSHA alleging retaliation for reporting a workplace injury in good faith. The complaint was ultimately kicked-out to Federal district court. The district court granted summary judgment, concluding that, because of Plaintiff’s dissembling, there was no dispute about whether the injury report was in good faith. On appeal, the Sixth Circuit questioned whether “contributing factor” causation/affirmative defense legal framework was the correct standard, but decided the appeal on that basis because the parties agreed that it applied and briefed the case on that basis. The court found that the injury report was not a contributing factor in the railroad’s decision to fire Plaintiff, and that the record confirmed that the railroad would have fired Plaintiff due to his false statements. The court noted that the railroad’s investigation was about the false statement and that was what the decisionmaker had stated.

Plaintiff’s contended that there was a fact dispute concerning whether the railroad “regularly cooks up pretextual reasons for discipline to retaliate against people who file injury reports.” Slip op. at 4. The court found problems with this argument: (1) such vague, conclusory statements are insufficient to get a case to a jury; (2) the statements in this case were inadmissible hearsay; (3) even if the railroad had such a policy, Plaintiff had not shown that the railroad retaliated against Plaintiff in particular. In contrast, the record showed that the railroad regularly enforced its false statements policy; Plaintiff admitted that discipline was appropriate for false statements; and Plaintiff stated that he had never been discouraged from reporting his injury or threatened with retaliation for it.

Plaintiff contended that “that his injury report was a contributing factor in the railroad’s decision to fire him because, without the injury report, he would not have lied to his supervisor about speaking to others, and, without that falsehood and others discovered later, he would not have been fired.” Id. at 5. The court rejected this chain-of-events theory of causation, first “because it’s hard to think of any event in a person’s life that could not be viewed as a contributing factor under this theory” and second “because it would authorize employees to engage in banned behavior so long as it occurs during protected conduct.” Id. at 5-6.


Caria v. Metro-North Commuter R.R., No. 16-CV-9501 (S.D. N.Y. Apr. 29, 2020) (2020 U.S. Dist. LEXIS 75218; 2020 WL 2061410) (Opinion and Order)

Casenote(s):

PROTECTED ACTIVITY; PLAINTIFF COULD NOT MEET SUBJECTIVE ELEMENT OF REASONABLE BELIEF STANDARD WHEN RESPONDING TO SUMMARY JUDGMENT MOTION WHERE ALL OF HIS STATEMENTS AND DEPOSITION TESTIMONY INDICATED THAT HE DID NOT BELIEVE AT THE TIME HE REPORTED TO EEO/DIVERSITY AN ALTERCATION BETWEEN TWO TRAINEES THAT A SAFETY ISSUE WAS IMPLICATED, WITH THE EXCEPTION OF ONE BRIEF PART OF HIS DEPOSITION TESTIMONY

In Caria v. Metro-North Commuter R.R., No. 16-CV-9501 (S.D. N.Y. Apr. 29, 2020) (2020 U.S. Dist. LEXIS 75218; 2020 WL 2061410), the court agreed with the conclusion of other district courts in the circuit that “under the FRSA, a plaintiff seeking to establish that he engaged in protected activity under § 20109(b) must demonstrate that he had a subjectively and objectively reasonable belief that he was reporting a safety condition.” Slip op. at 15. Applying that standard to the instant case, the court determined that Plaintiff, who was a supervisor, could not establish that he engaged in FRSA protected activity when he reported an altercation between trainees, because he admitted that he had reported the incident only to EEO/Diversity because he did not believe that the report involved a safety issue. Plaintiff had testified in a deposition, for example, that he had not been notified of the altercation until two days after it happened, and that at that time he did not consider it a safety issue. The record showed that it was only later that Plaintiff asserted in a single portion of his deposition testimony that, although there was no longer an imminent threat, it presented a safety issue for the future if left unaddressed. This subsequent testimony was at odds with many other statements making it clear that Plaintiff did not believe at the time of his report that the trainees’ altercation involved a safety issue. The court determined that the record left no genuine issue of fact that Plaintiff could not satisfy the requisite subjective component. In addition, the court noted that at the summary judgment stage, it is necessary to cite to more than one’s own deposition testimony to create a genuine issue of fact.


Jones v. BNSF Ry. Co., 18-cv-146 (D. Mont. Apr. 29, 2020) (2020 U.S. Dist. LEXIS 75585; 2020 WL 2062180) (Order [granting summary judgment])

USDOL case: ALJ No. 2018-FRS-00026

Casenote(s):

PROTECTED ACTIVITY; RAILROAD’S COMPLIANCE WITH HOURS OF SERVICE ACT AND FEDERAL RAIL SAFETY IMPROVEMENT ACT DID NOT PREEMPT OR PRECLUDE PROTECTION OF PLAINTIFF’S RAISING OF FATIGUE RELATED CONCERNS AND REQUEST FOR PREDICTIVE SCHEDULING

PROTECTED ACTIVITY; REPORT OF PERSONAL FATIGUE CAUSED BY SLEEP APNEA IS NOT A PROTECTED REPORT ABOUT RAILROAD’S SCHEDULING PRACTICES; HOWEVER, FILING OF SAFETY FORMS ASKING FOR PREDICTIVE SCHEDULING AND DISCUSSING FATIGUE IS PROTECTED

CAUSATION; EVIDENCE OF HOSTILITY TO PLAINTIFF TWO YEARS PRIOR TO DISCIPLINARY ACTIONS AT ISSUE INSUFFICIENT TO DEFEAT SUMMARY JUDGMENT WHERE THERE NO EVIDENCE OF EVENTS LINKING THE TWO

AFFIRMATIVE DEFENSE; EMPLOYEE COMPARATOR DATA ARE IRRELEVANT WHERE DECISIONMAKERS DID NOT KNOW ABOUT PROTECTED ACTIVITY

In Jones v. BNSF Ry. Co., 18-cv-146 (D. Mont. Apr. 29, 2020) (2020 U.S. Dist. LEXIS 75585; 2020 WL 2062180), Plaintiff charged that BNSF disciplined and terminated him in violation of the FRSA at least in part because he was an outspoken advocate for predictive scheduling. The court rejected, at least partially, two of BNSF’s contentions, but granted summary judgment on the contributing factor causation and employer affirmative defense elements of a FRSA claim.

Alleged preemption

BNSF’s first contention was that Plaintiff’s fatigue-related complaints were not FRSA protected activity because BNSF’s policies and procedures were consistent with the Hours of Service Act and the Federal Rail Safety Improvement Act. BNSF argued that Plaintiff’s claims were thus preempted for precluded. The court rejected this contention:

   The Hours of Service Act and the Federal Rail Safety Improvement Act demonstrate Congress’s awareness of the interplay between fatigue and rail safety. They do not crowd the FRSA, which provides for an additional mechanism to increase safety. The FRSA protects whistleblowers, some of whom may report fatigue; the Hours of Service Act sets forth minimum industry-wide standards to limit fatigue; and the Federal Rail Safety Improvement Act requires railroads to work with the executive branch to continue to find ways to decrease fatigue. Indeed, the FRSA explicitly protects employees who “accurately report hours on duty” pursuant to the Hours of Service Act. 49 U.S.C. § 20109(a)(7). The acts “are complementary and have separate scopes and purposes,” and there is no issue of preclusion. POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, 118 (2014).

Slip op. at 16-16.

[Editor’s note: The district court referred to this ruling in a similar case, Vasquez v. BNSF Ry., No. 18-cv- 164 (D. Mon. May 29, 2020) (2020 U.S. Dist. LEXIS 94593), slip op. at 15.]

Report of personal fatigue

BNSF argued that Plaintiff did not engage in a protected activity when he filled out safety reports regarding BNSF’s scheduling practices and fatigue because Plaintiff’s own “personal fatigue and non-work-related sleep apnea” are not “hazardous safety conditions” within the meaning of the FRSA. The court stated that it agreed “that the FRSA is indifferent to reports of allegedly unsafe conditions that fall outside a railroad’s control.” Id. at 16 (citations omitted). Thus, to the extent that Plaintiff reported that his sleep apnea made him too tired to safely perform his work, the report was not protected activity. The court acknowledged that BNSF’s scheduling practices may have worsened Plaintiff’s fatigue, but stated that it did not logically follow that Plaintiff reported BNSF’s scheduling practices when he asserted that he was physically tired and wanted to nap. The court, however, found that some of Plaintiff’s reports had targeted BNSF’s scheduling practices and were protected activity (such as submission of “Safety Issue Resolution Process”(SIRP) forms requesting predictive scheduling and discussing fatigue).

Causation; hostility to Plaintiff related to town hall meeting two years prior was insufficient to defeat summary judgment because of distant proximity and lack of evidence of chain of events

The court, reviewing the facts of the case, found that temporal proximity between the protected activity and the disciplinary investigation was not enough to show causation where Plaintiff had submitted a SIRP form only after the disciplinary action was initiated. Plaintiff pointed to a declaration indicating that hostility against Plaintiff may have originated when Plaintiff spoke up at a 2014 town hall meeting about the effect of erratic work schedules on staff fatigue. The court noted that there was not temporal proximity between the 2014 town hall meeting and the disciplinary actions taken in 2016, and that the record did not substantiate a chain of events between the two. The court also found that the record did not support a finding that the sole decisionmaker regarding the first “Level S” (i.e., serious) discipline was aware of the town hall meeting. The court noted that Plaintiff had not argued that a speeding event leading to a second Level S violation was not serious enough to warrant a suspension. The court concluded that Plaintiff’s argument was that he would not have been fired for the speeding event if there had not already been the first Level S discipline on his record. The court, however, found that a reasonable jury could not conclude that the first disciplinary action was retaliatory.

Affirmative defense; comparator data irrelevant where decisionmakers were unaware of protected activity

The court also granted summary judgment on the alternative ground that Plaintiff would have been terminated even if he had not been an advocate for predictive scheduling. The court found nothing in the record to support a finding that decisionmakers “were aware of — let alone relied upon — Jones’s reports regarding fatigue when they made their decisions regarding Jones’s employment.” Id. at 22 (citation omitted). Plaintiff contended that data regarding similarly situated employees were sufficient to defeat summary judgment. The court, however, stated: “where, as here, the decisionmakers were unaware of the employee’s safety reports, comparator data are unnecessary and irrelevant. BNSF does not need to “prove similar or identical issues received [the] same discipline” because it has proven that Jones’s safety reports did not factor into the decisions to discipline Jones.” Id.


Leiva v. Admin. Review Bd., 811 Fed.Appx. 237 (5th Cir. Apr. 28, 2020) (per curiam) (unpublished) (No. 19-60524) (2020 U.S. App. LEXIS 13870; 2020 WL 2078380)

USDOL Case Nos.: ARB No. 2018-0051, ALJ No. 2017-FRS-00036

Casenote(s):

CONTRIBUTORY FACTOR CAUSATION; RAILROAD’S SUPPLYING TO ADMINISTRATIVE BODY PERSONNEL RECORD THAT CONTAINED REFERENCE TO AN INCIDENT THAT SHOULD HAVE BEEN EXPUNGED PURSUANT TO SETTLEMENT OF EARLIER FRSA CASE; CAT’S PAW THEORY THAT REFERRAL OF RECORD WITH REFERENCE TO EARLIER INCIDENT HAPPENED BECAUSE PERSONS WITH RETALIATORY MOTIVE PLACED IT THERE WAS NOT SUSTAINABLE WHERE THERE WAS NO EVIDENCE THAT THIS SOMEHOW INFLUENCED CURRENT HR PERSONNEL (WHO HAD NO KNOWLEDGE OF THE EARLIER EVENTS) TO SUPPLY ENTIRE FILE TO ADMINISTRATIVE BODY

JURISDICTION FOR ENFORCEMENT OF SETTLEMENT AGREEMENT; ALTHOUGH FIFTH CIRCUIT AFFIRMED ARB DECISION IN LEIVA, IN WHICH THE ARB HELD THAT FAILURE TO EXPUNGE PERSONNEL RECORD MUST BE ENFORCED IN DISTRICT COURT AS A SETTLEMENT BREACH, COURT DID NOT SPECIFICALLY AFFIRM THIS RULING BUT INSTEAD DENIED PETITION FOR REVIEW ON CONTRIBUTORY FACTOR CAUSATION ELEMENT OF FRSA CLAIM

In Leiva v. Admin. Review Bd., 811 Fed.Appx. 237 (5th Cir. Apr. 28, 2020) (per curiam) (unpublished) (No. 19-60524) (2020 U.S. App. LEXIS 13870; 2020 WL 2078380), Leiva and Union Pacific Railroad Company had settled a FRSA complaint in 2015. One of the terms of the settlement required expungement of all references to the underlying July 2012 incident from Union Pacific’s records. Union Pacific also agreed that it would not rely on the July 2012 incident in any future disciplinary or employment decision. In the meantime, Union Pacific terminated Leiva for two safety violations, and Leiva’s union appealed the termination to another administrative body. In August 2016, a Union Pacific employee supplied Leiva’s disciplinary history to the administrative body. Leiva’s July 2012 incident appeared in the submission as one of 15 violations in Leiva’s disciplinary record. The administrative body affirmed Leiva’s termination.

Leiva filed a new FRSA complaint, alleging that the failure to expunge the July 2012 incident and informing the other administrative body of the incident was a FRSA violation. An ALJ concluded that the failure to expunge was a continuation of retaliation, and found in Leiva’s favor. The ARB, however, vacated the ALJ’s decision, holding that the failure to expunge was a violation of the settlement agreement which was to be enforced in federal district court. The Fifth Circuit sustained the ARB’s decision, albeit the court found that Leiva had failed to establish contributory factor causation rather than specifically affirming the ARB’s ruling on enforcement jurisdiction.

The court stated that Plaintiff was relying on a “cat’s paw” theory of causation, which requires a showing that a person with retaliatory animus used the decisionmaker to bring about the intended retaliatory action. Here, Leiva’s argument was that Union Pacific’s director of labor relations (Powell) submitted the July 2012 incident to the administrative body in 2016 because persons with the requisite knowledge of the 2012 protected activity had unlawfully put the false allegation in the personnel file. The court found that this argument stretches cat’s paw theory too far. The court stated:

Leiva has not pointed to evidence that anyone “with retaliatory animus used [Powell] to bring about [an] intended retaliatory action.” Zamora, 798 F.3d at 331. Indeed, Leiva has identified no evidence that anyone associated with the July 2012 incident or subsequent settlement was at all involved in the events of August 2016. We reject the argument that the initial inclusion of the July 2012 incident in Leiva’s file somehow influenced Powell to submit the entire file—which included the July 2012 incident along with several others—to the administrative body over four years later. Leiva has not shown by a preponderance of the evidence that his July 2012 protected activity was a “contributing factor” in Powell’s decision to submit his file to the administrative body in 2016.

Slip op. at 4.


Johnson v. Grand Trunk Western Ry., No. 18-13582 (E.D. Mich. Apr. 15, 2020) (2020 U.S. Dist. LEXIS 65947; 2020 WL 1873325) (Order Granting Defendant's Motion for Summary Judgment)

USDOL Nos.: ARB No. 2019-0003; ALJ No. 2018-FRS-00010

Casenote(s):

AFFIRMATIVE DEFENSE ESTABLISHED ON SUMMARY JUDGMENT; PLAINTIFF’S PROTECTED ACTIVITY WAS AN ATTEMPT TO ENFORCE A PROVISION OF AN EARLIER FRSA SETTLEMENT AGREEMENT THAT DIRECTED REMOVAL OF REPRIMAND LETTER; PLAINTIFF PRESENTED NO EVIDENCE TO SHOW THAT DECISIONMAKER ON CURRENT 50-DAY SUSPENSION LOOKED UNFAVORABLY ON THE ATTEMPT TO ENFORCE REMOVAL OF THE LETTER

In Johnson v. Grand Trunk Western Ry., No. 18-13582 (E.D. Mich. Apr. 15, 2020) (2020 U.S. Dist. LEXIS 65947; 2020 WL 1873325), Plaintiff and Defendant had resolved a 2013 FRSA complaint with a settlement agreement, a term of which required removal of a letter of reprimand for reporting a workplace injury from Plaintiff’s personnel file. In 2015, Defendant suspended Plaintiff for 50-days for violating an attendance rule (Defendant concluding that Plaintiff was marking off from calls in order to avoid work). During the investigation leading to this suspension, Plaintiff discovered that the 2013 letter of reprimand had not been removed from his file. The instant complaint alleged that Defendant violated the FRSA by relying on this letter in imposing the 50 day suspension. The district court granted Defendant’s motion for summary judgment.

The court analyzed the summary judgment motion under Plaintiff’s theory that his settlement agreement continues to protect his complaint by ordering Defendant to remove the reprimand letter from the personnel file, and thus Plaintiff’s enforcement of the agreement is also protected under the FRSA. Defendant argued that the failure to remove the letter was enforceable by a contract claim rather than a FRSA retaliation claim.

For purposes of analyzing the summary judgment motion, the court assumed that the decisionmaker on the 50 day suspension (Plaintiff’s supervisor) was aware of the reprimand letter because during the hearing Plaintiff attempted to have the letter removed, and although the decisionmaker did not attend the hearing, he should have known this from reviewing the hearing transcript. The decisionmaker, however, testified that the sole reason Plaintiff was given a 50-day suspension was because Plaintiff had an intervening 30-day suspension in 2014 for violating a mandatory directive to slow down, and the decisionmaker’s unwritten guide was to impose progressive discipline. The decisionmaker also stated that the letter of reprimand was too insignificant and low level to consider. The court was not persuaded by Plaintiff’s contention that he would not have received the 30-day suspension without the letter of reprimand, as the evidence showed that a 30-day suspension was the minimum for violating a slow-down directive.

Although there was evidence that the decisionmaker was skeptical of Plaintiff’s regular mark offs right before being called, the court found that these suspicions went to Plaintiff’s credibility and not his protected activity. The court also noted that it was not the decisionmaker who decided to investigate Plaintiff’s regular mark offs, and that Plaintiff’s admitted that the claim that the reprimand letter played a role was just a feeling rather than based on any facts. Finally, the court noted that the letter of reprimand was not itself the protected activity. Rather, the protected activity was Plaintiff’s attempts to have it removed from the personnel file. There was no evidence presented to show that the decisionmaker looked unfavorably toward these efforts. The court thus found that Defendant had established that Plaintiff would have been given the same punishment absent the letter of reprimand and Plaintiff’s protected activity.


Fresquez v. BNSF Railway Co., No. 17-cv-0844 (D. Colo. Apr. 14, 2020) (Order Denying Defendant’s Motion for Reconsideration)

Casenote(s):

DENIAL OF RECONSIDERATION

In Fresquez v. BNSF Railway Co., No. 17-cv-0844 (D. Colo. Apr. 14, 2020), the court considered, and rejected on reconsideration, Defendant’s arguments that the front pay award was based on the unproven factual contention that other railroads would not hire Plaintiff because he had been fired by BNSF; that the court erred by assuming that the only employment available to Plaintiff was comparable employment; that the front pay award was more than necessary to make Plaintiff whole; that the court erred in it calculation of but-for earning; that the court improperly rejected Defendant’s deduction of unreimbursable railroad employee expenses; and that the court had misapprehended controlling law on valuation of future medical benefits.


Williams v. Metro-North R.R., Nos. 17-CV-3092, 17-CV-9167, 18-CV-7793, 17-CV-7758, 18-CV-8350 (S.D. N.Y. Mar. 27, 2020) (2020 U.S. Dist. LEXIS 53914; 2020 WL 1489832) (Opinion and Order)

Case below: Williams v. Metro N. R.R., 2019 U.S. Dist. LEXIS 59278 (S.D.N.Y., Apr. 4, 2019)

Casenote(s):

PROTECTED ACTIVITY; FRCP 12(b)(6) MOTION TO DISMISS GRANTED WHERE SUBJECTIVELY AND OBJECTIVELY REASONABLE STANDARD NOT PLAUSIBLY PLEADED; PLAINTIFF DID NOT EXPLAIN WHY HIS ADMONISHMENT OF A CO-WORKER FOR UNSANITARY CLEANING METHODS AMOUNTED TO “A HAZARDOUS SAFETY OR SECURITY CONDITION” WITHIN THE MEANING OF THE FRSA

In Williams v. Metro-North R.R., Nos. 17-CV-3092, 17-CV-9167, 18-CV-7793, 17-CV-7758, 18-CV-8350 (S.D. N.Y. Mar. 27, 2020) (2020 U.S. Dist. LEXIS 53914; 2020 WL 1489832) (Opinion and Order), Plaintiff, who was a coach cleaner for Metro-North, filed pro se a series of actions, one count of which was a FRSA retaliation claim.

The court granted Defendants’ FRCP 12(b)(6) motion to dismiss the FRSA count on the ground that Plaintiff had not plausibly alleged facts suggesting that “a hazardous safety or security condition” existed or that he reported such a condition. The court explained: “On the contrary, Plaintiff claims only that he admonished [a co-worker] for improperly cleaning a bloody tampon. . . . While an improperly cleaned tampon may be unsanitary, Plaintiff does not explain why it would be reasonable for him to believe that [the co-worker’s] conduct amounted to ’a hazardous safety or security condition’ within the meaning of the FRSA. See Ziparo v. CSX Transp., Inc., No. 17-CV-708, 2020 WL 1140663, at *17-18 (N.D.N.Y. Mar. 9, 2020) (requiring that a plaintiff’s good faith belief in the existence of a safety hazard be ’objectively reasonable’); March v. Metro-North R.R. Co., 369 F. Supp. 3d 525, 533 (S.D.N.Y. 2019) (same). On the contrary, cleaning such materials appears to be precisely within the purview of Plaintiff’s role as a car cleaner.” The dismissal was without prejudice to file an amended complaint to correct the deficiencies.

CONTRIBUTORY FACTOR CAUSATION; FRCP 12(b)(6) MOTION TO DISMISS GRANTED WHERE COMPLAINANT, WHO HAD ADMONISHED A CO-WORKER, FAILED TO PLEAD THAT HE HAD REPORTED TO ANY SUPERVISOR THAT “HAZARDOUS SAFETY OR SECURITY CONDITION” EXISTED, THAT THERE WAS ANY TEMPORAL PROXIMITY BETWEEN SUCH A REPORT AND DISCIPLINE, OR THAT A SUPERVISOR SHOWED ANY RETALIATORY INTENT BASED ON SUCH A REPORT

In Williams v. Metro-North R.R., Nos. 17-CV-3092, 17-CV-9167, 18-CV-7793, 17-CV-7758, 18-CV-8350 (S.D. N.Y. Mar. 27, 2020) (2020 U.S. Dist. LEXIS 53914; 2020 WL 1489832) (Opinion and Order), Plaintiff, who was a coach cleaner for Metro-North, filed pro se a series of actions, one count of which was a FRSA retaliation claim.

The court granted Defendants’ FRCP 12(b)(6) motion to dismiss the FRSA count on the ground that Plaintiff had not plausibly alleged contributory factor causation. The dismissal was without prejudice to file an amended complaint to correct the deficiencies.

The court assumed arguendo that Plaintiff’s admonishment of a co-worker for engaging in an unsanitary cleaning protocol amounted to protected activity under the FRSA, but found that Plaintiff nonetheless had not alleged circumstances suggesting that his reporting of the co-worker’s conduct was a contributing factor to disciplinary proceedings. Plaintiff had been removed from service immediately following an unrelated altercation with the co-worker—and was subsequently suspended following a disciplinary proceeding. Plaintiff did not, however, indicate that the general foreman was even aware of the cleaning incident at the time he removed Plaintiff from service, the removal being based on the co-worker’s accusation that Plaintiff had acted in a threatening manner. Although Plaintiff alleged that a foreman who had been present during the cleaning incident eventually informed the general foreman about the cleaning incident, Plaintiff had not alleged when this occurred. Nor had Plaintiff alleged that he himself reported the incident, that he did so because he believed the incident reflected a “hazardous safety or security condition,” that he made such a report with temporal proximity to when he was disciplined, or that any supervisor expressed resentment or disapproval of such a report. The court stated:

In the absence of such allegations, or any other factual context surrounding any “reporting” by Plaintiff of the cleaning incident, the Court cannot plausibly infer retaliatory intent. See Niedziejko v. Del. & Hudson Ry. Co., No. 18-CV-675, 2019 WL 1386047, at *44 (N.D.N.Y. Mar. 27, 2019) (collecting cases and explaining that gaps in more than two months between a report and an adverse action are too attenuated to raise an inference of discriminatory animus or retaliatory intent); Lockhart v. Long Island R.R. Co., 266 F. Supp. 3d 659, 664 (S.D.N.Y. 2017) (“Lockhart I”) (requiring some indication of “intentional retaliatory animus” to support a FLSA retaliation claim), aff’d sub nom. Lockhart II; cf. Nichik v. N. Y. C. Transit Auth., No. 10-CV-5260, 2013 WL 142372, at *5 (E.D.N.Y. Jan. 11, 2013) (denying defendant’s motion for summary judgment because there was “direct and circumstantial evidence” that retaliatory animus was a contributing factor in the unfavorable personnel action).


Barrick v. PNGI Charles Town Gaming, LLC, 799 Fed. Appx. 188 (4th Cir. Mar. 25, 2020) (per curiam) (unpublished) (No. 19-1259) (2020 U.S. App. LEXIS 9470) (Opinion)

Case below: Barrick v. PNGI Charles Town Gaming, LLC, 365 F. Supp. 3d 672 (N.D. W. Va., Feb. 8, 2019) (No. 17-cv-00091) (2019 U.S. Dist. LEXIS 20444)

Casenote(s):

CONTRIBUTORY FACTOR CAUSATION; FOURTH CIRCUIT FINDS THAT DISTRICT COURT PROPERLY GRANTED SUMMARY JUDGMENT WHERE THERE WAS AN INTERVENING EVENT AND PLAINTIFF’S FATHER, WHO ENGAGED IN SAME PROTECTED ACTIVITY, HAD NOT BEEN FIRED

In Barrick v. PNGI Charles Town Gaming, LLC, No. 19-1259 (4th Cir. Mar. 25, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 9470), the Fourth Circuit affirmed the District Court’s grant of summary judgment dismissing Plaintiff’s Bank Secrecy Act and SOX retaliation complaint. The court concluded that Plaintiff failed to demonstrate that his protected activity was a contributing factor to his termination from employment. The court found it undisputed that Plaintiff had received a final written warning from the Casino before engaging in any protected activity, and that he was aware that any further violations would result in his termination. The termination occurred after the Casino discovered that he had engaged in a violation of its personal relationship policy. The court found this to be a “legitimate intervening event” that severed any causal connection between protected activity and the termination. The court also noted that Plaintiff’s father, who engaged in the same protected activity, remains employed by the Defendant.


Fresquez v. BNSF Ry., No. 17-cv-0844 (D. Colo. Mar. 20, 2020) (2020 U.S. Dist. LEXIS 48416; 2020 WL 1322920) (Order Granting in Part Plaintiff’s Fee Motion & Supplemental Fee Motion)

Case below: Fresquez v. BNSF Ry. Co., 2018 U.S. Dist. LEXIS 221499 (D. Colo., Sept. 17, 2018)

Casenote(s):

ATTORNEYS’ FEES; ALTHOUGH COURT ACCEPTED PLAINTIFF’S USE OF OUT-OF-STATE COUNSEL, IT REDUCED REQUESTED HOURLY RATE FROM $625 TO $450; REDUCTION FOR TRAVEL TIME NOT SPENT ON CASE; REDUCTION FOR EXCESSIVE CHARGE FOR PREPARING COSTS AND FEES PETITION; SUBTRACTION OF TIME SPENT ON MOTION FOR EXTENSION WHERE BASIS FOR MOTION WAS BASED ON COUNSEL’S MISTAKE

LITIGATION COSTS; COURT REDUCED CLAIMED NON-TAXABLE LITIGATION COSTS BY 45% WHERE PLAINTIFF FAILED TO ESTABLISH REASONABLENESS OF CHARGES FOR ONE OF DENVER’S MOST EXPENSIVE HOTELS AND WHAT MAY BE ITS MOST EXPENSIVE RESTAURANT

LITIGATION COSTS; COURT’S ROLE IS TO DO ROUGH JUSTICE AND NOT TO ACHIEVE ACCOUNTING PERFECTION

EXPERT FEES; COURT DISALLOWED EXPERT FEE FOR WITNESS WHO TESTIFIED ONLY ON AN UNCONTESTED ISSUE

EXPERT FEES; COURT ALLOWED FEE PAID TO AN ACCOUNTANT TO REVIEW THE REASONABLENESS OF FEES AND COSTS

In Fresquez v. BNSF Ry., No. 17-cv-0844 (D. Colo. Mar. 20, 2020) (2020 U.S. Dist. LEXIS 48416; 2020 WL 1322920), a jury returned a verdict in favor of Plaintiff after a six day trial, finding that Defendant retaliated against Plaintiff in violation of the FRSA. The court then considered Plaintiff’s initial and supplemental fees and costs petition.

Attorneys’ Fees

Plaintiff had engaged two attorneys as counsel. The court accepted Plaintiff’s argument that he had been unable to obtain local counsel in Colorado for his FRSA suit, and thus out-of-state rates were appropriate and reasonable. The court, however, was not persuaded that the hourly rate of $625 was reasonable. Although counsel represented that the rate was effectively $575 an hour because they had not charged for staff, the court found it impossible to determine how staff time factored into the proffered rate or the “effective” rate. The court declined to accept a location-adjusted rate based on the Laffey Matrix, noting that other courts in the District had declined to adopt it, even adjusted, outside the District of Columbia, and that counsel had not explained how they arrived at the locality adjusted rate. The court was not convinced by the declaration of other lawyers who represent injured railroad workers because they had not addressed the prevailing market rate for such work or the qualifications of one of Plaintiff’s attorneys. Exercising its discretion to use other factors to set the rate when presented within inadequate evidence of market rates, the court looked to the rates charged by employment lawyers within Colorado, the prevailing rates for those who specialize in FRSA and FELA litigation awarded by other courts nationally, and the level of competence required to successfully litigate the instant claim. The court found that the reasonable rate was $450 per hour.

The court indicated its appreciation that Plaintiff’s counsel exercised billing judgment to reduce claimed hours as the result of conferring with Defendant prior to submitting the fee petition, and summarily rejected a number of Defendant’s objections. The court, however, discussed a number of Defendant’s meritorious objections. It first noted that Plaintiff’s counsel had already reduced travel time by one-half in their initial fee motion to reflect time actually spent on the case during travel, but had failed to do so for their supplement fee petition. The court found the 50% reduction appropriate and similarly reduced the supplement. The court agreed that 69.8 hours drafting the initial fee motion was excessive and reduced this time by 50%. The court subtracted two hours charged for a motion for leave to file out of time where counsel had thought it was due the following week — the court finding it not reasonable to charge Defendant for Plaintiff’s counsel mistake.

Litigation costs

Plaintiff’s counsel sought $83,041.43 in litigation costs in addition to taxable costs. The court first rejected BNSF’s argument that “litigation costs” should be construed narrowly and limited to taxable costs under 28 U.S.C § 1920, finding that this argument had previously been rejected in Wallis and Wooten. BNSF also challenged the reasonableness of Plaintiff’s litigation costs, particularly travel expenses, expenses incurred in connection with the trial, and office supplies. The court found that Plaintiff failed to fully discharge the burden of establishing that the costs were reasonable related to the litigation, particularly in regard to troubling charges for one of Denver’s most expensive hotels and perhaps its most expensive restaurant. The court noted that there were “at least a dozen perfectly acceptable and substantially less expensive hotels within a half-mile of the federal courthouse.” Slip op. at 13. The court found, however, that some of the concerns raised by BNSF did not withstand scrutiny, and declined BNSF’s request that the court examine each receipt to determine how the cost related to the litigation and the reasonableness thereof. Rather, the court noted that the role of the court in this regard is to do rough justice rather than to achieve auditing perfection. The court found it appropriate to reduce the requested costs by 45%.

Expert fees

BNSF challenged requested fees of $28.505.66 as excessive for one expert witness who testified on track safety and defect reporting. The court agreed that Plaintiff had not shown that this fee was reasonable, particularly because the testimony was on an uncontested issue and that expert’s fee was more than double that of other experts.

The court disagreed with BNSF’s challenge to a fee paid to an accountant to review the reasonableness of fees and costs. BNSF argued that “[a]n attorney familiar with the case and with allowable costs is more qualified to perform this analysis than an accountant with no involvement in the case.” Id. at 15 (quoting BNSF objections). The court explained its disagreement: “There were a very large number of costs associated with this case, and Plaintiff’s counsel was not required to wade through piles of receipts to determine the costs incurred. Rather, it was reasonable to hire an outside professional to analyze the costs and raise issues where necessary, rather than spend attorney hours (particularly at Plaintiff’s counsel’s requested rate of $625) compiling and reviewing such information.” Id.


Ziparo v. CSX Transp., Inc., No. 17-cv-708 (N.D. N.Y. Mar. 9, 2020) (2020 U.S. Dist. LEXIS 39908; 2020 WL 1140663) (Decision and Order)

Casenote(s):

PROTECTED ACTIVITY; PLAINTIFF’S SUBJECTIVE REACTION TO CONDUCT THAT WAS OTHERWISE NOT SAFETY RELATED

In Ziparo v. CSX Transp., Inc., No. 17-cv-708 (N.D. N.Y. Mar. 9, 2020) (2020 U.S. Dist. LEXIS 39908), Plaintiff, a train conductor, asserted that Defendant took various adverse actions against him in violation of the FRSA in retaliation for complaining about supervisors’ orders to falsify information about departure time, arrival time, and the completeness of his work into Defendant’s onboard electronic system in order to improve their chances of bonuses. The court found that Defendant’s Onboard Work Order (“OBWO”) devices were used to enable customers to track their deliveries, and that OBWO was not safety equipment. Plaintiff’s assertion was essentially that he and other employees were being harassed about the OBWO entries, and that such harassment was a safety issue because it made employees unfocused and preoccupied.

The court first found that there was no admissible evidence that other employees were affected in the manner alleged. Thus, the focus was on Plaintiff’s specific situation. The court noted that even if an employee reasonably or honestly believes that the condition was unlawful, he must still show that it was a safety or security related concern. In other words, it must have been subjectively and objectively reasonable for Plaintiff to believe that the supervisor’s entreaties to falsify data constituted a “hazardous safety or security condition.”

The court stated that such conditions “have generally been found to be physical conditions that are within the control of the rail carrier employer; circumstances outside of the carrier’s control and non-work related conditions are not included.” Slip op. at 35 (citations omitted). The court found no federal court or ARB decisions “in which a plaintiff’s subjective reaction to conduct that is otherwise not safety-related, without more, was sufficient to establish a ‘hazardous safety or security condition.’” Id. at 36. Here, even if the underlying condition of the supervisors’ harassment was work-related, “Defendant had no control over Plaintiff’s reaction to that condition, and it was that reaction (rather than the condition itself) that caused the alleged ‘hazardous safety and security condition’. . . . ”Id. The court thus found as a matter of law that “the alleged condition constituted a ‘hazardous safety or security condition’ within the scope of FRSA.” Id

The court noted that no admissible evidence had been presented that the purported harassing conduct occurred while Plaintiff was engaged in safety-sensitive railroad work. The court found inapposite cases cited by Plaintiff on hostile work environment or safety-implicated poor communications. Nor had Plaintiff alleged any physical violence or threats of such—rather, the alleged threats causing stress were of insubordination charges or termination.

In sum, the court found that Plaintiff failed to establish that he reported a “hazardous safety or security condition” for the purposes of 49 U.S.C. § 20109(b)(1)(A). The court stated that it was not convinced that “based on the admissible record evidence, a reasonable factfinder could conclude that Plaintiff’s belief that his distraction under the circumstances constituted a hazardous safety or security condition was objectively reasonable.” Id. at 40. The court noted that a proffered expert opinion that Plaintiff’s distraction was a hazardous safety or security condition was insufficient to raise a genuine issue of material fact because that opinion was inadmissible either as a legal conclusion or an issue of fact reserved to the jury.

PROTECTED ACTIVITY; WHERE ADMISSIBLE EVIDENCE OF RECORD DID NOT SHOW THAT PLAINTIFF’S COMPLAINTS ABOUT AN INABILITY TO LOCATE TRAIN CARS AT THE BEGINNING OF A SHIFT RELATED TO SAFETY AT THE TIME OF MAKING THOSE COMPLAINTS, SUCH COMPLAINTS WERE NOT PROTECTED ACTIVITY

In Ziparo v. CSX Transp., Inc., No. 17-cv-708 (N.D. N.Y. Mar. 9, 2020) (2020 U.S. Dist. LEXIS 39908), Plaintiff, a train conductor, asserted that Defendant took various adverse actions against him in violation of the FRSA in retaliation for complaining about supervisors’ orders to falsify information about departure time, arrival time, and the completeness of his work into Defendant’s onboard electronic system in order to improve their chances of bonuses. The court found that Defendant’s Onboard Work Order (“OBWO”) devices were used to enable customers to track their deliveries, and that OBWO was not safety equipment. Plaintiff averred that falsification of the entries “constituted a ‘hazardous safety or security condition’ based on the inability to track the precise location of railcars on the OBWO (including those containing hazardous materials).” Slip op. at 41-42.

The court found that Plaintiff had not, based on the admissible record evidence, established that he believed he was reporting a hazardous safety condition as a result of the falsification of data specifically because of an inability to locate railcars. The court found that Plaintiff’s statement that “employees had to, at the beginning of a new shift, ‘figure out which cars had been placed and which had not’ as meaning that employees had difficulty locating railcars in the way that Plaintiff now suggests . . . .” Id. at 42-43. The court stated that “Plaintiff cannot rely on inferences he believes Defendant should have drawn to remedy his failure to report a certain basis for his belief of the existence of a ‘hazardous safety or security condition.’” Id. (citations omitted). The court found that a reasonable factfinder could not conclude based on the admissible evidence that Plaintiff had in mind an inability to locate railcars in the way he now asserts when he made his various complaints. Plaintiff was required to actually believe that it was a “hazardous safety or security condition” at the time he made his complaints.


Hunter v. Administrative Review Board, USDOL, 795 Fed.Appx. 308 (5th Cir. Feb. 27, 2020) (per curiam) (unpublished) (No. 19-604426 ) (2020 U.S. App. LEXIS 6527; 2020 WL 969106) (Opinion)

Related USDOL Case: ARB Nos. 18-044, -045, ALJ No. 2017-FRS-00007

Casenote(s):

PETITION FOR REVIEW OF DOL’S DISMISSAL OF FRSA RETALIATION COMPLAINT DENIED WHERE ALJ’S FINDINGS OF FACT WERE SUPPORTED BY SUBSTANTIAL EVIDENCE; TESTIMONY THAT EMPLOYER CONSIDERS AN ENGINEER’S LEAVING WORK WITHOUT PERMISSION TO BE A SERIOUS FORM OF INSUBORDINATION

In Hunter v. Administrative Review Board, USDOL, 795 Fed.Appx. 308 (5th Cir. Feb. 27, 2020) (per curiam) (unpublished) (No. 19-604426 ) (2020 U.S. App. LEXIS 6527; 2020 WL 969106), a locomotive engineer filed a claim of retaliatory termination in violation of the FRSA. The engineer had reported a wheel slip fault. His employer terminated his employment for leaving work before being relieved by a supervisor. The engineer claimed that the termination was in retaliation for reporting the wheel slip. The ALJ found that the engineer engaged in protected activity but had not established that this activity was a contributing factor in the termination, and that the employer demonstrated it would have taken the same adverse action in the absence of his protected activity. The ARB affirmed.

The Fifth Circuit denied the engineer’s petition for review, finding that the ALJ’s findings of fact were based on substantial evidence. The court noted that the ALJ had conducted a two-day hearing, during which supervisory employees all testified that “leaving work without permission was a brand of insubordination and a serious offense subject to discharge.” In addition, the ALJ found no evidence that the trainmaster’s knowledge of the engineer’s protected activity could be imputed to the relevant decisionmakers on the termination.


Lockhart v. MTA Long Island R.R., 949 F.3d 75 (2d Cir. Feb. 4, 2020) (No. 17-2725) (2020 U.S. App. LEXIS 3297; 2020 WL 550567) (Opinion)

District Court Case No. Lockhart v. Long Island R.R. Co., 266 F. Supp. 3d 659 (S.D.N.Y., Aug. 2, 2017)

USDOL Case: ALJ No. 2015-FRS-00055

Casenote(s):

PROTECTED ACTIVITY AND CONTRIBUTING FACTOR CAUSATION; EMPLOYEE ABSENCES DUE TO BEING PRESCRIBED NARCOTIC DRUGS; COURT FINDS THAT EMPLOYER DID NOT VIOLATE THE FRSA BY DISCIPLINING AN EMPLOYEE FOR ABSENCES WHERE THE EMPLOYEE FAILED TO SUBMIT MEDICAL CERTIFICATION FORMS REQUIRED BY EMPLOYER TO VERIFY APPROPRIATE USE OF MEDICAL LEAVE

In Lockhart v. MTA Long Island R.R., 949 F.3d 75 (2d Cir. Feb. 4, 2020) (No. 17-2725) (2020 U.S. App. LEXIS 3297), the Second Circuit affirmed the district court’s grant of MTA’s motion for summary judgment. Lockhart had filed a FRSA complaint alleging retaliation when MTA disciplined him for failing to report to work while under the influence of prescribed narcotic drugs. The district court had found that the discipline was based on Lockhart’s failure to present verifying documentation as required by MTA’s sick leave policy. The Second Circuit held that “[b]ecause the statute does not prevent employers from requesting reasonable documentation to assure themselves that employees’ absences are legitimate, we affirm.” Slip op. at 2.

The court did not reach the issue whether the FRSA covers off-duty maladies, because—assuming arguendo that it does—Lockhart failed to demonstrate that his absences, when unaccompanied by medical certification forms required by MTA to avoid a leave policy violation (“SLA-28 form”), were protected activity. The court stated:

    [N]owhere in the statute are employers prevented from using the common practice of requiring reasonable documentation to assure that an employee’s claimed medical absences are legitimate. Nor has appellant demonstrated that prohibiting such a practice only in cases involving railroad safety was a policy intended by the Congress. Because nothing in the text, structure, and purpose of the FRSA directs otherwise, the railroad was within its rights to seek verification of illnesses before excusing appellant’s absences as activity protected under the FRSA. Indeed, it would be rather adventurous to infer an FRSA requirement that a railroad take employees at their word that the reason for a failure to report to work was an easily verifiable doctor-prescribed mind-altering drug. The SLA-28 form, which requires a physician’s diagnosis, treatment plan, and signature, authenticates that information and does not overstep.

    There is also ample case law in other statutory contexts holding that employers have the right to request medical certification documenting an employee’s need for protected leave. For example, courts have held that employers may require employees to fill out standardized reasonable accommodation request forms in order to be entitled to accommodations (including sick leave) under the Americans with Disabilities Act. See, e.g., Pauling v. District of Columbia, 286 F. Supp. 3d 179, 211-12 (D.D.C. 2017); Lundquist v. Univ. of S.D. Sanford Sch. of Med., No. 09-CV-4147, 2011 WL 5326074, at *8 (D.S.D. Nov. 4, 2011); Kunamneni v. Locke, Nos. 1:09-CV-005 (JCC), 1:09-CV-450 (JCC), 2009 WL 5216858, at *11 (E.D. Va. Dec. 29, 2009). Similarly, the Family and Medical Leave Act specifies that employers may require employees to submit health care provider certifications connected to their leave. See 29 U.S.C. § 2613. Appellant has articulated no basis upon which to adopt a view that the FRSA affirmatively prohibits employers from imposing a similar requirement.

    Moreover, the SLA-28 form does not constitute a waiver of an employee’s rights prohibited by the FRSA and the form does not have to expressly reference the statute. Section 20109(c)(2) states that an employee may not be disciplined “for following orders or a treatment plan of a treating physician.” It is perfectly reasonable for a carrier to assure itself that an employee is indeed following a treating physician’s orders in missing work by verifying those orders through the submission of standardized health care provider certifications such as form SLA-13 28.

Id. at 10-12 (footnote omitted).


Dakota, Minn. & E. R.R. Corp. v. United States Dep't of Labor Admin. Review Bd., 948 F.3d 940 (8th Cir. Jan. 30, 2020) (No. 18-2888) (2020 U.S. App. LEXIS 2978; 2020 WL 486843) (Opinion)

USDOL Case: ARB Nos. 16-010, -052, ALJ No. 2014-FRS-44

Casenote(s):

CONTRIBUTORY FACTOR CAUSATION; EIGHTH CIRCUIT FINDS THAT THE ARB AND ALJ ERRED IN FAILING TO APPLY KUDUK v. BNSF RY; SUSPENSION FOR UNTIMELY FILING OF REPORT THAT RAILROAD’S RULE REQUIRES TO BE FILED PROMPTLY DOES NOT, WITHOUT MORE, ESTABLISH A FRSA RETALIATION CASE

In Dakota, Minn. & E. R.R. Corp. v. United States Dep't of Labor Admin. Review Bd., 948 F.3d 940 (8th Cir. Jan. 30, 2020) (No. 18-2888) (2020 U.S. App. LEXIS 2978; 2020 WL 486843) (case below ARB Nos. 16-010, -052, ALJ No. 2014-FRS-44), the ARB had affirmed the ALJ’s holding that Petitioner violated the whistleblower retaliation provisions of the FRSA when it suspended the complainant, a locomotive engineer, for his untimely reporting of a “work-related personal injury” or a “hazardous safety or security condition.” 49 U.S.C. §§ 20109(a)(4), (b)(1)(A), (d). On appeal, Petitioner argued that the ARB and the ALJ had failed to follow the Eighth Circuit’s ruling in Kuduk v. BNSF Ry., 768 F.3d 786, 791 (8th Cir. 2014) that “the contributing factor that an employee must prove is intentional retaliation prompted by the employee engaging in protected activity.” The court agreed, and remanded the matter to the ARB to apply the correct legal standard.

The complainant had been involved in a physical altercation with a co-worker at Petitioner’s terminal in Bensenville, Illinois. Complainant was struck by a lantern. Complainant did not report the altercation to supervisors in Bensenville. Complainant testified that after going to his hotel for a mandatory 12-hour rest period, he attempted to call his immediate supervisor in Dubuque Iowa, and sent a text, and then fell asleep. In a later phone conversation, complainant told the immediate supervisor that he had been assaulted and that he did not want to work with the co-worker again. The supervisor told complainant that he needed to make an official report in order for him to deal with it. Complainant said he did not want to get the co-worker fired and needed time to think about filing a formal report. A few hours later he did file a formal complaint. Later, he discovered a bruise where the lantern struck him and added that to his complaint.

Petitioner immediately interviewed both employees and then launched a formal investigation. Ultimately the Petitioner determined that complainant had failed to promptly report the incident, and that dismissal was warranted because complainant was under a “last chance” agreement — but that it had decided that the time complainant was withheld from service during the 47 day investigation would be assessed as formal discipline. The co-worker’s employment was terminated. The Railway Labor Board upheld complainant’s suspension, but reduced it to 15 days. Complainant then filed his FRSA complaint. The ALJ applied decisions from the ARB and other circuits holding that neither motive nor animus are required to prove causation under the FRSA as long as protected activity contributed in any way to the adverse action. The ALJ determined that complainant satisfied the contributing-factor element of his case because his report of altercation had set in motion a chain of events leading to the discipline.

On appeal to the ARB, Petitioner argued that the chain-of-events analysis was contrary to controlling 8th Circuit precedent. The ARB distinguished Kuduk, and affirmed the ALJ’s decision, stating that “‘[s]imply put, [Riley’s] reporting of the injury set in motion the chain of events eventually resulting in the investigation and is inextricably intertwined with the eventual adverse employment action.’” Slip op. at 6 (quoting ARB decision and adding emphasis). The court noted:

The ARB’s opinion included a lengthy footnote arguing that Kuduk’s intentional retaliation standard “is both conclusory and contrary to the weight of precedent” and that Kuduk erred in adopting the Supreme Court’s causation standard in Staub v. Proctor Hospital, 562 U.S. 411 (2011), because the FRSA “does not require a complainant to ’demonstrate the employer’s retaliatory motive.’”

Id. at 7.

The 8th Circuit was not persuaded by the ARB’s analysis:

   The ARB’s reasoning is both contrary to our governing precedents and fatally flawed. The FRSA prohibits a rail carrier from discriminating against an employee for engaging in protected activity. 49 U.S.C. § 20109(a). In Staub, the Supreme Court noted that intentional torts such as this require a showing that a supervisor’s “discriminatory animus” was a causal factor of the ultimate employment action. 562 U.S. at 420-21. Applying that ruling to FRSA retaliation claims, we held in Kuduk that “the contributing factor that an employee must prove is intentional retaliation prompted by the employee engaging in protected activity.” 768 F.3d at 791. To establish this element of his prima facie case, the employee does not have to conclusively prove retaliatory motive but must show more than temporal proximity between the protected activity and the adverse action. Id. at 791-92.

Id. (emphasis as in original). The court also outlined its decisions that had confirmed and followed Kuduk. The court acknowledged that in the instant case complainant’s report and the discipline were an “inextricably intertwined” “chain of events.” Nonetheless, the court stated that “no sinister inference may be drawn from this chain of events.” Id. at 9. The court elaborated:

“An injury report is a normal trigger for an investigation designed to uncover facts that can prompt corrective action that will reduce the likelihood of a future injury.” Koziara v. BNSF Ry., 840 F.3d 873, 878 (7th Cir. 2016). By ruling that this factual connection was sufficient to satisfy the contributing factor causal element of an FRSA claim, the ARB in essence held that an employee can be free of discipline and recover FRSA damages simply by disclosing misconduct of which the employer is otherwise unaware in a report that will be considered protected FRSA activity. It is well settled that “employees cannot immunize themselves against wrongdoing by disclosing it in a protected-activity report.” BNSF Ry. v. U.S. Dep’t of Labor (Cain), 816 F.3d 628, 639 (10th Cir. 2016). The principle applies in this situation: the protected activity was the untimely filing of a report that CP’s operating rules require employees to promptly file, consistent with railroad safety; a suspension imposed for violating that rule does not, without more, evidence discrimination against a good faith rail safety whistleblower

Id.


Gonzalez v. Metro-North Commuter R.R. , No. 18-cv-10270 (S.D. N.Y. Jan. 15, 2020) (2020 U.S. Dist. LEXIS 9059; 2020 WL 230115) (Decision and Order Granting Defendant’s Motion for Summary Judgment)

USDOL Case: 2018-FRS-00148

Casenote(s):

CONTRIBUTING FACTOR CAUSATION; COURT GRANTS SUMMARY JUDGMENT AGAINST PLAINTIFF BASED ON GUNDERSON FACTORS

PROTECTED ACTIVITY; RAISING OF CONCERN THAT FOREMAN LACKS PROPER QUALIFICATIONS; SUMMARY JUDGMENT GRANTED UNDER 20109(a)(2) WHERE PLAINTIFF DID NOT POINT TO A FEDERAL LAW, RULE OR REGULATION THAT HAD BEEN VIOLATED, AND UNDER 20109(b)(1) WHERE PLAINTIFF’S EVIDENCE FAILED TO SHOW THAT THE CONCERN WAS OBJECTIVELY OR SUBJECTIVELY REASONABLE

In Gonzalez v. Metro-North Commuter R.R., No. 18-cv-10270 (S.D. N.Y. Jan. 15, 2020) (2020 U.S. Dist. LEXIS 9059), Plaintiff alleged that Defendant violated the whistleblower provision of the FRSA when he was discharged for insubordination. Plaintiff alleged that the real reason for the discharge was protected activity regarding Plaintiff’s reports of unsafe conditions of company trucks and regarding Plaintiff’s questioning of whether a foreman had the proper safety qualifications to lead the gang onto the tracks. The court granted Defendant’s motion for summary judgment.

In regard to Plaintiff’s reports of unsafe trucks, the court found not a scintilla of evidence suggesting that they were a contributing factor in Plaintiff’s dismissal. The court applied the five-part test from Gunderson v. BNSF Ry. Co., 850 F.3d 962, 969 (8th Cir. 2017), and found that each relevant factor favored Defendant. First, the disciplinary investigation that led to Plaintiff’s discharge was exclusively concerned with the insubordination with no mention whatsoever of the condition of company trucks. Second, Plaintiff’s multiple incidents of insubordination and refusal to work during an emergency were intervening events that independently justified disciplinary actions. Third, Plaintiff was represented by union counsel throughout the disciplinary proceedings and the dismissal was upheld by both the railroad internally and by an independent arbitration panel. The fourth factor was inapposite because DOL never completed its investigation. Factor five weighed in Defendant’s favor because there was no showing that the lower-level supervisor accountable for addressing Plaintiff's safety complaints about the trucks played any role in the adjudication of the insubordination charges. The court noted that the evidence of record showed that repairs were made when needed, and that Plaintiff had never been disciplined for his frequent reports on truck conditions. The court noted that the manager never told Plaintiff to stop asking for truck repairs, or had even complained about Plaintiff’s reports. The court found the admissible evidence, even when considered in the light most favorable to Plaintiff, made it clear that Plaintiff was removed from service for multiple instances of insubordination compounded by an existing disciplinary record.

Reviewing Plaintiff’s questioning of the foreman’s qualifications under 49 U.S.C § 20109(a)(2), the court noted that Plaintiff had not pointed to any Federal law, rule or regulation that established minimum qualifications for taking men onto the tracks to work. Although Plaintiff stated that his training and experience suggested that proper procedures had not been followed, the court stated that the “statute [at 49 U.S.C § 20109(a)(2)] plainly requires pointing to a violation of a Federal law, rule, or regulation. Here we have no such law, rule, or regulation.” The court also found that the report about the foreman’s qualifications did not fall within 49 U.S.C § 20109(b)(1), as Plaintiff had “not provided a scintilla of evidence showing that [the foreman’s] leading the men onto the tracks that night was objectively—or even subjectively—a ‘hazardous safety or security condition’ under 49 U.S.C § 20109(b)(1)(A).” Slip op. at 18. The court found Plaintiff’s report to be objectively unreasonable because there was no evidence of record that the foreman was not qualified, and in fact, the evidence pointed to the contrary. The court found Plaintiff’s report also to be subjectively unreasonable as shown by the facts that Plaintiff did not refuse to work after the foreman gave the safety briefing, that Plaintiff’s own testimony was that because of the nature of the work being done—the foreman’s giving the briefing was not a huge risk factor, and that Plaintiff never brought a formal safety challenge about the foreman’s qualifications.

The court also found that the qualifications complaint was not a contributing factor in Plaintiff’s dismissal, again applying the Gunderson factors.


Sirois v. Long Island R.R., 797 Fed. Appx. 56 (2d Cir. Jan. 14, 2020) (unpublished) (No. 18-2858-cv) (2020 U.S. App. LEXIS 1480; 2020 WL 209282) (Summary Order)

USDOL Case: ARB No. 2018-043, ALJ No. 2017-FRS-00078

Casenote(s):

CONTRIBUTING FACTOR CAUSATION; FRCP 12(b)(6) MOTION; PLAINTIFF FAILED TO PLAUSIBLY ALLEGE CONTRIBUTING FACTOR CAUSATION WHEN THERE HAD BEEN A FOUR YEAR GAP BETWEEN PROTECTED ACTIVITY AND ADVERSE EMPLOYMENT ACTION

In Sirois v. Long Island R.R., No. 18-2858-cv (2d Cir. Jan. 14, 2020) (unpublished) (2020 U.S. App. LEXIS 1480; 2020 WL 209282), Plaintiff-appellant appealed from the district court’s grant of a motion to dismiss under FRCP 12(b)(6). Plaintiff alleged that Defendant violated the FRSAʹs anti‐retaliation provisions by changing her injury status from work‐related to non‐work‐related, resulting in the loss of certain benefits. The court noted that “[t]emporal proximity may support a prima facie inference that the protected activity was a contributing factor, but only where the protected act and the retaliation occur in quick succession.” Slip op. at 7 (citations omitted). The court noted that the Second Circuit has not drawn a bright line on when a temporal relationship is too attenuated to establish causal relationship, but instead exercises judgment on permissible inferences that can be drawn based on temporal proximity in the context of the particular case. In the instant case, over four years had passed from the protected activity of reporting the injury to the reclassification. The court held that “[a] temporal gap of over four years is too attenuated to support the requisite inference.” Id. at 8-9. The court held that Plaintiff “thus failed to plausibly allege that her protected activity was a contributing factor in the unfavorable treatment” and concluded “that the district court did not err when it dismissed Siroisʹs claim.” Id. at 9.


Rossich v. BNSF Ry. Co., No. 18-cv-5829 (W.D. Wash. Jan. 9, 2020) (2020 U.S. Dist. LEXIS 4502; 2020 WL 106735) (Order Denying Summary Judgment)

USDOL Case: 2018-FRS-00045

Later history:  Appeal voluntarily dismissed Rossich v. BNSF Ry., 2020 U.S. App. LEXIS 15218 (9th Cir. May 12, 2020)

Casenote(s):

PLEADING; FAILURE TO ASSERT PROTECTED ACTIVITY UNDER THE FRSA IN ADMINISTRATIVE COMPLAINT DOES NOT WARRANT SUMMARY DISMISSAL IN FEDERAL COURT ACTION, ESPECIALLY WHERE OSHA INVESTIGATED INJURY IN CONNECTION WITHER TERMINATION

SUMMARY DISMISSAL; EVIDENCE THAT DEFENDANT FOLLOWING ITS INTERNAL PROCEDURES AND SAFEGUARDS AGAINST RETALIATION INSUFFICIENT IN ITSELF FOR SUMMARY DISMISSAL BECAUSE IT IS PEOPLE, NOT THE PROCESS, WHO RETALIATE

In Rossich v. BNSF Ry. Co., No. 18-cv-5829 (W.D. Wash. Jan. 9, 2020) (2020 U.S. Dist. LEXIS 4502), BNSF moved for summary dismissal of Plaintiff’s claim that BNSF violated the FRSA when it dismissed him in retaliation for reporting a work-related injury. The court denied the motion. BNSF contended, inter alia, that the claim failed because Plaintiff had not asserted protected activity in the OSHA complaint. The court, however, noted Plaintiff’s argument that “the administrative process is not formal and as a result strict formalistic treatment of the allegations in his complaint are not appropriate,” (slip op. at 5) and that BNSF acknowledged that Plaintiff’s injury had been mentioned in the OSHA complaint and that OSHA had investigated the injury in connection with the termination. BNSF also contended that it established its affirmative defense that it would have terminated Plaintiff with or without the intervening injury. Defendant essentially contended that Plaintiff had been discharged after management officials concluded that Plaintiff had violated BNSF rules regarding a crew’s failure to secure unattended equipment properly, and in accordance with BNSF’s progressive discipline policy. The court was not convinced by BNSF’s notation that OSHA found for BNSF and that the Federal Railroad Administration found that Plaintiff violated the securement regulations. In sum, the court wrote:

As in a recent Montana case, “BNSF puts much stock in its internal procedures and safeguards designed to prevent discrimination while failing to recognize that these checks are only as effective as the people enforcing them. . . . [T]he people, not the process, treated him unfairly by retaliating against him after he filed his injury report.” Wooten v. BNSF Ry. Co., 387 F.Supp.3d 1078, 1094 (D. Montana 2019).”

Id. at 6-7.


Moving Ahead for Progress in the 21st Century Act

Barcomb v. General Motors LLC, Nos. 19-1350, 19-1870 (8th Cir. Oct. 15, 2020) (2020 WL 6072606) (Opinion)

Casenote(s):

PROTECTED ACTIVITY; EIGHTH CIRCUIT HOLDS THAT COMPLAINTS ABOUT THE QUALITY CONTROL PROCESS IN A MANUFACTURING PLANT ARE NOT INFORMATION RELATED TO A MOTOR VEHICLE DEFECT AND THUS NOT PROTECTED ACTIVITY UNDER MAP-21

In Barcomb v. General Motors LLC, Nos. 19-1350, 19-1870 (8th Cir. Oct. 15, 2020) (2020 WL 6072606), Barcomb filed a MAP-21, 49 U.S.C. § 30171 retaliation complaint against General Motors alleging that he was wrongfully fired because he reported safety issues with the inspection and repair portion of the manufacturing process at a Missouri plant. The district court had granted summary judgment on the ground that Barcomb had not engaged in protected activity under MAP-21, having only complained generally about the inspection process and the actions of one co-worker in falsing reporting that a defect had been repaired.

The Court of Appeals looked to the statutory text, and found that it concerns, in relevant part, “products, not processes ancillary to those products.” The court stated:

MAP-21’s text protects employees who report “information relating to any motor vehicle defect”—not those who report problems with a process for ensuring quality control along the assembly line. 49 U.S.C. § 30171(a)(1). The context of the phrase “relating to” as it is used in MAP-21 is not so broad as to capture any information about automobile manufacturing that could increase safety regardless of how far removed it is from a defective product.

    We hold that Barcomb’s complaints about the quality control processes in a manufacturing plant are not information related to a motor vehicle defect, and thus he did not engage in protected activity under MAP-21.

Slip op. at 7.

One Circuit Judge dissented, noting that “[t]he statutory language at issue requires that a whistleblower provide ‘information relating to any motor vehicle defect.’ 49 U.S.C. § 30171(a)(1),” Id. at 12 (emphasis as in original), and stating that:

    Even if we accept the majority’s definition of “motor vehicle defect,” we must still give full effect to the phrase “relating to” in the statutory text. This requires us to give a generally broad scope to MAP-21’s definition of protected activity. Given that broad scope, Barcomb did not need to provide information strictly “about” a motor vehicle defect or “about processes that created” a motor vehicle defect. Instead, to have engaged in protected activity, he needed to provide information “relating to any motor vehicle defect.” 49 U.S.C. § 30171(a)(1).

    Barcomb provided information about incomplete repairs and false reporting of repairs within the Wentzville factory. I view this as plainly falling within the scope of “providing information relating to any motor vehicle defect” because information about incomplete repairs necessarily stands in some relation to motor vehicle defects. ...

Id. at 12-13.


National Transit Systems Security Act

Bailey v. Metro. Council, No. 19-cv-1024 (D. Minn. Apr. 22, 2020) (2020 U.S. Dist. LEXIS 70950) (Order), adopting Magistrate’s Report and Recommendation Bailey v. Metro. Council, No. 19-cv-1024 (D. Minn. Feb. 19, 2020) (2020 U.S. Dist. LEXIS 71827; 2020 WL 3633132)

USDOL Case No.: 2018-NTS-00003

Casenote(s):

NTSSA COUNT DISMISSED WITHOUT PREJUDICE WHERE PLAINTIFFS FAILED TO ALLEGE PLAUSIBLE CLAIM FOR RELIEF

In Bailey v. Metro. Council, No. 19-cv-1024 (D. Minn. Apr. 22, 2020) (2020 U.S. Dist. LEXIS 70950), the District Court, after de novo review, adopted the Magistrate's Report and Recommendation Bailey v. Metro. Council, No. 19-cv-1024 (D. Minn. Feb. 19, 2020) (2020 U.S. Dist. LEXIS 71827; 2020 WL 3633132). In regard to the NTSSA count of the complaint, the court stated: "Plaintiffs' claim under the National Transit Systems Security Act ("NTSSA") be dismissed without prejudice because Plaintiffs failed to adequately plead facts that would establish a plausible claim for reliefߜnamely that Plaintiffs failed to identify specific rules or laws Defendants violated, any hazardous safety or security conditions or alleged fraudulent activity with particularity, or facts showing that Defendants Local 120 or Gustafson is a public transit agency, contractor, subcontractor, officer or employee of the agency . . . ."). Slip op., at 2.


Sarbanes-Oxley Act

Hughs v. Royal Energy Resources, Inc., No. 20-cv-01566 (D. S.C. Nov. 12, 2020) (2020 U.S. Dist. LEXIS 211569)

Casenote(s):

COUNTERSUIT FOR DEFAMATION; STATEMENTS MADE IN SOX COMPLAINT AS PRIVILEGED

In Hughs v. Royal Energy Resources, Inc., No. 20-cv-01566 (D. S.C. Nov. 12, 2020) (2020 U.S. Dist. LEXIS 211569), Plaintiff (Hughs) filed a complaint in district court that included a retaliation count under SOX, 18 U.S.C. § 1514A(a). Defendants (Royal Energy/Tuorto) filed an answer and counterclaims for defamation and theft. The court granted Plaintiff §s motion to dismiss the counterclaims. As pertinent to defamation counterclaim, the court applied South Carolina law, one element of which is “an unprivileged publication to a third party.” Defendant alleged that a certain statement by Plaintiff in the SOX complaint was defamatory. The court was not persuaded that the statement was defamatory, and went on to consider whether it was privileged:

   Even if the statements in the Sarbanes-Oxley complaint were defamatory, the court agrees with Hughs that any statements in the complaint are privileged. The statement was written in a complaint to OSHA related to workplace discrimination, which certainly “aris[es] out of [a] judicial proceeding” or has “any reasonable relation to it, including preliminary steps . . . .” See Crowell, 392 S.E.2d at 467. As such, the court finds that Tuorto has not stated a claim for defamation for any statement within Hughs § Sarbanes-Oxley complaint.

Slip op. at 8-9.


Williams v. Federal Express Corp., No. 20-cv-08190 (S.D. N.Y. Oct. 15, 2020) (2020 U.S. Dist. LEXIS 192182; 2020 WL 6131256) (Order to Amend)

USDOL Case Nos.: 2020-SOX-00006

Casenote(s):

FEDERAL PLEADING STANDARDS; SELF-REPRESENTED PLAINTIFF GRANTED LEAVE TO FILE AMENDED COMPLAINT WHERE COMPLAINT FAILED TO PROVIDE DETAILS ABOUT THE CLAIM; COURT PROVIDED SPECIFIC INSTRUCTIONS ON WHAT AMENDED COMPLAINT MUST CONTAIN

In Williams v. Federal Express Corp., No. 20-cv-08190 (S.D. N.Y. Oct. 15, 2020) (2020 U.S. Dist. LEXIS 192182; 2020 WL 6131256), Plaintiff, who was self-represented, filed a complaint in which the only allegations were: “I filed a complaint with the department of labor that my former employer violates the Sarbanes Oxley Act and would like to not [sic] withdraw my complaint to federal court.” The court found that the complaint did not comply with federal pleading rules. The court granted leave to Plaintiff to amend his complaint, and provided detailed instructions on what was required:

In the statement of claim, Plaintiff must provide a short and plain statement of the relevant facts supporting each claim against each defendant named in the amended complaint. Plaintiff is also directed to provide the addresses for any named defendants. To the greatest extent possible, Plaintiff’s amended complaint must:

a) give the names and titles of all relevant persons;
b) describe all relevant events, stating the facts that support Plaintiff’s case including what each defendant did or failed to do;
c) give the dates and times of each relevant event or, if not known, the approximate date and time of each relevant event;
d) give the location where each relevant event occurred;
e) describe how each defendant’s acts or omissions violated Plaintiff’s rights and describe the injuries Plaintiff suffered; and
f) state what relief Plaintiff seeks from the Court, such as money damages, injunctive relief, or declaratory relief.

   Essentially, the body of Plaintiff’s amended complaint must tell the Court: who violated his federally protected rights; what facts show that his federally protected rights were violated; when such violation occurred; where such violation occurred; and why Plaintiff is entitled to relief. Because Plaintiff’s amended complaint will completely replace, not supplement, the original complaint, any facts or claims that Plaintiff wishes to maintain must be included in the amended complaint.

Slip op. at 4-5.


Slawin v. Bank of Am. Merch. Servs., No. 19-cv-04129 (N.D. Ga. Sept. 30, 2020) (2020 U.S. Dist. LEXIS 180025; 2020 WL 5823155) (Order)

Casenote(s):

FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES AS TO PARTIES NOT NAMED OR OTHERWISE MENTIONED IN ADMINISTRATIVE COMPLAINT

In Slawin v. Bank of Am. Merch. Servs., No. 19-cv-04129 (N.D. Ga. Sept. 30, 2020) (2020 U.S. Dist. LEXIS 180025; 2020 WL 5823155), Plaintiff asserted that he raised with his supervisors at his former employer that it was failing to handle consumers’ Primary Account Number data in compliance with of Payment Card Industry standard, and was misleading it customers into believing that it was handing such data in compliance with the standard. Plaintiff asserted that he was fired in violation of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A, the Consumer Financial Protection Act of 2010, 12 U.S.C. § 5567 and the Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.S.C. § 78u-6. 

Plaintiff had exercised the “kick-out” provisions of the SOX and CFPA. Defendant asserted that Plaintiff failed to exhaust his administrative remedies under the SOX and CFPA against parties other than his direct employer because he had not named them in the caption of the administrative complaint. The caselaw on the subject was not in harmony across the circuits and the ARB. The court, however, did not find sufficient contrary persuasive authority to deviate from a decision in the same circuit, Smith v. Psychiatric Sols., Inc., No. 08-cv-3, 2009 WL 903624, at *8 (N.D. Fla. Mar. 31, 2009), in which the court found no exhaustion as to defendants who were not named “in the heading of [plaintiff’s] administrative complaint or indeed anywhere in her complaint,” even though the Eleventh Circuit’s affirmance of this ruling was arguably only dicta in a non-binding unpublished decision. 358 Fed. Appx. 76, 78 (11th Cir. 2009). The court did not find that Smith set a per se rule, but dismissed the SOX and CFPA counts against the non-employer parties, the parent company only having been mentioned in the administrative complaint to establish coverage of the employer, and the other entitles had not been accused of any retaliatory action.


Rollag v. Cowen Inc., No. 20-CV-5138 (S.D. N.Y. Aug. 24, 2020) (2020 WL 4937462; 2020 WL 4937462) (Memorandum Opinion and Order)

Casenote(s):

MOTION TO SEAL; PLAINTIFF FILED A FMLA/STATE LAW COMPLAINT IN FEDERAL DISTRICT COURT, AND INCLUDED IN THE COMPLAINT ALLEGATIONS RELATING TO A SOX COMPLAINT THAT PLAINTIFF HAD SIMULTANEOUSLY FILED WITH OSHA (WHICH PLAINTIFF ANNOUNCED THAT HE WOULD ADD TO THE FEDERAL COMPLAINT ONCE THE 180-DAY KICK OUT PERIOD EXPIRED); DEFENDANTS FILED A MOTION TO SEAL THE COMPLAINT, OR TO REQUIRE PLAINTIFF TO REPLACE THE COMPLAINT WITH ONE USING PSEUDONYMS, ON THE GROUND THAT THE SOX-RELATED FACTUAL ALLEGATIONS WERE BEYOND THE SCOPE OF THE FEDERAL COURT COMPLAINT, AND WERE IN VIOLATION OF NON-DISPARAGEMENT AGREEMENTS SIGNED BY PLAINTIFF; THE COURT DENIED THE MOTION BECAUSE (1) DEFENDANTS FAILED TO EXPLAIN WHY THEY WAITED NEARLY A MONTH AFTER THE FEDERAL COMPLAINT WAS FILED, AND (2) THERE HAD ALREADY BEEN MEDIA REPORTS PUBLISHED WITH THE ALLEGATIONS, AND THUS SEALING THE COMPLAINT WOULD BE A FUTILE ACTION

In Rollag v. Cowen Inc., No. 20-CV-5138 (S.D. N.Y. Aug. 24, 2020) (2020 WL 4937462; 2020 WL 4937462), Plaintiff filed an action in U.S. district court alleging unlawful discrimination and retaliation in violation of the Family and Medical Leave Act and several state and local laws. He contended that he also filed a SOX complaint with OSHA, and stated that he intends to amend the district court complaint to include a SOX claim once OSHA completed its investigation and/or the expiration of the 180-day investigation period. The federal complaint included factual allegations apparently related to the anticipated SOX claim “ —namely, that Defendants retaliated against him after he repeatedly expressed concerns regarding Defendants’ solicitation of investments from an entity tied to Vitaly Malkin, whom Plaintiff describes as ‘a Russian/Israeli oligarch banned from Canada for 19 years, and reputed to be engaged in money laundering and arms dealing (among other ventures).’” Slip op at 1-2 (quoting Plaintiff’s complaint). That same day, Law360 ran an article entitled, “Banker Says Cowen Fired Him For Objecting To Oligarch,” describing both the OSHA complaint and the federal lawsuit. A few days later, Plaintiff's counsel issued a press release discussing and linking the claims; the press release was published on a news website.

A few weeks later, Defendants filed a motion to compel arbitration to stay the action. The next day they filed a letter asking the court to seal the complaint, or to strike the complaint and to order Plaintiff to file a replacement complaint using pseudonyms for Defendant’s clients, employees and potential investors. In this regard, Defendants cited agreements it had entered into with Plaintiff that prohibited Plaintiff from disparaging and defaming the employer and its employees. Defendants contended that Plaintiff made disparaging allegations that had nothing to do with the counts of the district court complaint. Plaintiff responded, arguing that the cat was already out of the bag. Plaintiff contended that he had given Defendants advance notice of the OSHA and federal court complaints, and that he had informed Defendants’ outside counsel of an intent to file “in court” and in “a public forum” and that he might “hold some press thing.” Plaintiff noted that Defendants’ request to seal the complainant was made nearly a month after the complaint was filed. Defendants replied, arguing that if the court declined to issue an order sealing the complaint or directing Plaintiff to use pseudonyms, it would encourage the filing of complaints “‘with salacious, irrelevant allegations in matters that can only proceed in arbitration, and to do so for the in terrorem value in extracting a settlement.’” Id. at 4 (quoting Defendants’ reply). The court noted that Defendants provided no explanation for why they waited nearly a month before filing a motion to seal.

The court observed that a party seeking the sealing of a judicial document has the burden of overcoming a presumption of access by demonstrating a substantial probability of harm to a compelling interest. The court noted that failure to immediately request that publicly filed materials be sealed or redacted may be denied for that reason. The court also noted that courts in the circuit had found that the presumption of public disclosure cannot be defeated where the material sought to be sealed is already in the public domain due to media coverage. In the instant case, the court stated: “In light of the existing press coverage of the Complaint, the Court concludes that sealing would be futile at this stage.” Id. at 6. The court noted that Defendants were free to bring a suit against Plaintiff if they maintain that he breached confidentiality and non-disparagement contracts or engaged in unlawful defamation.


Jaludi v. Citigroup, No. 15-cv-02076 (M.D. Pa. Aug. 12, 2020) (2020 U.S. Dist. LEXIS 145740) (Report and Recommendation)

Casenote(s):

FAILURE TO FILE A TIMELY OSHA COMPLAINT IS NOT A JURISDICTIONAL DEFECT ON A SOX § 1514A COMPLAINT; RATHER, A MOTION TO DISMISS FOR SUCH A FAILURE IS DETERMINED UNDER THE STANDARD FOR A FRCP 12(b)(6) MOTION

MOTION TO DISMISS FOR FAILURE TO FILE A TIMELY OSHA COMPLAINT PRIOR TO FILING A CIVIL COMPLAINT IN FEDERAL DISTRICT COURT GRANTED UNDER FRCP 12(b)(6), WHERE THE CIVIL COMPLAINT DID NOT ALLEGE ANY RETALIATORY CONDUCT WITHIN 180 DAYS OF THE FILING OF THE COMPLAINT; LATER ADMINISTRATIVE COMPLAINT STILL PENDING BEFORE OSHA ALLEGING NEW RETALIATORY CONDUCT DID NOT RESCUE CIVIL COMPLAINT’S LACK OF TIMELINESS

MOTION FOR STAY OF CIVIL ACTION PENDING DETERMINATION OF OSHA ON NEW ADMINISTRATIVE COMPLAINT; MAGISTRATE RECOMMENDED DENIAL OF MOTION WHERE CIVIL ACTION WAS SUBJECT TO DISPOSITIVE DISMISSAL FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF COULD BE GRANTED AS TO THE LACK OF TIMELINESS

In Jaludi v. Citigroup, No. 15-cv-02076 (M.D. Pa. Aug. 12, 2020) (2020 U.S. Dist. LEXIS 145740) (Report and Recommendation), Plaintiff filed a civil complaint in district court alleging, inter alia, that his former employer, Citigroup, retaliated against him for reporting various ethical violations internally in violation of the employee protection provision of the Sarbanes-Oxley Act of 2002 (“SOX”), 18 U.S.C. § 1514A. Citigroup filed a FRCP 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted. The Magistrate recommended that the motion be granted.

Plaintiff, who was self-represented, had not filed a complaint with OSHA prior to filing the federal court complaint on October 27, 2015. He later did file a complaint with OSHA on or about February 23, 2018, covering the same facts as alleged in the 2015 federal court complaint, as well as new allegations of interference with his employment prospects.

The Magistrate initially noted that, although some courts have held that failure to file a timely OSHA complaint is a jurisdictional defect, the Third Circuit had ruled in a FRSA case that it was not. See Guerra v. Consol. Rail Corp., 936 F.3d 124, 131-35 (3d Cir. 2019). The Magistrate found that the operative language of the SOX was virtually identical to the FRSA language considered by the court in Guerra. The Magistrate thus found that the administrative exhaustion issue was non-jurisdictional, and that the legal standard of FRCP 12(b)(6) applied to Citigroup’s motion to dismiss.

The Magistrate noted that “a plaintiff seeking whistleblower protection under SOX must first file an administrative complaint with OSHA, see 29 C.F.R. § 1980.103(c), ‘not later than 180 days after the date on which the violation occurs, or after the date on which the employee became aware of the violation.’ 18 U.S.C. § 1514A(b)(2)(D); see also 29 C.F.R. § 1980.103(d); Coppinger-Martin, 627 F.3d at 749.” Slip op. at 8-9 (footnote omitted).

In the instant case, the civil complaint did not allege any retaliatory conduct occurring within 180 days preceding the filing of Plaintiff’s administrative complaint with OSHA in 2018. Rather, Plaintiff’s termination had occurred nearly five years earlier, and the most recent post-employment retaliatory conduct alleged, in which Plaintiff specified the timeframe, involved Plaintiff’s seeking of a consulting position with Citigroup in November 2014. Other alleged interference with job applications did not provide even approximate dates—but they all occurred prior to Plaintiff’s filing of the 2015 civil complaint, which was more than two years prior to the filing of the OSHA administrative complaint. The Magistrate thus held that: “Because Jaludi did not timely exhaust his administrative remedies with respect to the SOX retaliation claims asserted in his federal civil complaint, he is precluded from any recovery on those claims in this action.” Id. at 9 (citations omitted).

The Magistrate noted Plaintiff’s contention that Citigroup conceded the timeliness of his claims in the administrative proceedings before OSHA. The Magistrate, however, found that Citigroup had only conceded the timeliness of a new allegation that Plaintiff had spoken to a headhunter in December 2017, and that Citigroup had expressly argued that all of the prior allegations were time barred. The Magistrate further stated that “the timeliness of Jaludi’s administrative complaint with respect to this single, most recent incident of alleged retaliation does not rescue his claims concerning earlier events from untimeliness. ‘Under SOX, each retaliatory adverse employment decision constitutes a separate act, and an employee may complain only of discrete acts that occurred within the applicable time period.’ Miller, 812 F. Supp. 2d at 983….” Id. at 9-10 (additional citations omitted). The Magistrate was not persuaded by Plaintiff’s argument that Citigroup had waived timeliness or exhaustion arguments by not raising them in an earlier motion to compel arbitration. Nor was the Magistrate persuaded by Plaintiff’s argument, made only in passing, that equitable tolling should apply.

Plaintiff requested that the case be stayed pending a decision by OSHA on his February 2018 administrative complaint. The Magistrate noted the District Court’s broad discretion in this regard, but found a stay to be inappropriate “in light of the comprehensive and dispositive nature of the timeliness or exhaustion defense raised by the defendant . . . .” Id. at 14. The Magistrate recommended dismissal without leave to amend because any amendment would be futile.


Reilly v. GlaxoSmithKline, 820 Fed.Appx. 93 (3d Cir. July 16, 2020) (not precedential) (No. 19-2897) (2020 U.S. App. LEXIS 22101; 2020 WL 4013118) (Opinion)

Case below: D.C. Civil No. 2:17-cv-0204

USDOL Case Nos: ARB No. 17-028; ALJ No. 2017-SOX-00004

Casenote(s):

PROTECTED ACTIVITY UNDER SOX § 806; PLAINTIFF FAILED TO SHOW THAT HE HELD AN OBJECTIVELY REASONABLE BELIEF OF A SOX VIOLATION BASED WORKPLACE DISAGREEMENT ABOUT ROUTINE INFORMATION TECHNOLOGY ISSUES AND ACCESS PRIVILEGES WHERE (1) HIS SUPERVISOR ASSIGNED PLAINTIFF TO REMEDIATE THE ISSUES; (2) ALLEGED FAILURE TO REPORT SUCH INFORMATION TECHNOLOGY ISSUES TO THE SEC WAS NOT SHOWN TO RELATE IN AN UNDERSTANDABLE WAY TO § 806 AND (3) DEFENDANT HAD NOTED RISKS IN FORM 20-F FILINGS WITH THE SEC

In Reilly v. GlaxoSmithKline, 820 Fed.Appx. 93 (3d Cir. July 16, 2020) (not precedential) (No. 19-2897) (2020 U.S. App. LEXIS 22101; 2020 WL 4013118), Appellant Reilly filed a SOX claim alleging that he was discharged in retaliation for reporting concerns relating to computer stability and security in his former employer’s (GlaxoSmithKline; “GSK”) global manufacturing and financial computer servers. Reilly’s concerns included that “uncapping” the computer processors used in the computer operating system to allow one server to use capacity from another server resulted in server instability, bad performance and corrupted data.

After Reilly kicked out the case from the ARB, the district court granted summary judgment in favor of GSK, finding that Reilly had not established facts showing that his complaints about computer security were related to fraud. On appeal, the Third Circuit found that Reilly’s belief that GSK was committing one of section 806’s enumerated forms of fraud was not shown to be objectively reasonable. The court agreed with Reilly that disclosures can be protected even if they do not mention fraud, illegal activity, or anything that could reasonably be perceived to be a violation of the six enumerated categories in SOX – but that this was immaterial, as Reilly must have an objectively reasonable belief of a violation of one of the listed federal laws. The court explained:

   Reilly’s complaints about uncapped processors were nothing more than workplace disagreements about routine IT issues — ones that do not relate to illegal conduct or fraud. Indeed, in response to Reilly’s complaints about uncapping the processors, Taylor [Reilley’s supervisor] worked with Reilly to get IBM’s input and then made the decision to have all processors capped again. Taylor even assigned Reilly to the task of implementing the capping. The same scenario occurred regarding purported inappropriate access privileges: Taylor assigned Reilly to remediate and fix the issue. It is not objectively reasonable in these circumstances to believe that Taylor would assign Reilly to remediate those issues and, at the same time, was perpetuating a cover-up or fraud.

   Reilly believed that GSK had an obligation to disclose to the SEC “a recurring incident that is caused by a deficiency in internal controls”; for example, “[i]f [a computer] goes down for an hour and comes back up once a week for a year.” JA 125. In Reilly’s view, GSK failed to disclose “all significant deficiencies and material weaknesses” by omitting the intricacies of computer performance issues from its annual SEC reports. JA 125. Even assuming this is true, however, Reilly fails to explain how this is fraud. His assertions that “GSK’s computer instability and security and breakdown of internal controls . . . [and] [d]isclosures about deficient information security controls are protected under SOX” — without more — do not make it so. Reilly Br. 20. They fall short of showing that his complaints about internal controls “relate in an understandable way” to any of section 806’s enumerated forms of fraud. Weist I, 710 F.3d at 134. Reilly, therefore, fails to identify a prohibition within the scope of SOX.

   And, in any event, GSK did disclose the “[r]isk to the Group’s business activity if critical or sensitive computer systems or information are not available when needed, are accessed by those not authori[z]ed, or are deliberately changed or corrupted.” JA 355, 368. GSK also reported the risk to its business posed by “[f]ailure to adequately protect critical and sensitive systems and information . . . which could materially and adversely affect [GSK’s] financial results” and “the potential that malicious or careless actions [could] expose [GSK’s] computer systems or information to misuse or unauthori[z]ed disclosure.” JA 355, 369.

   Based on these facts, no reasonable person in Reilly’s place, with his training and experience, could have believed that GSK’s conduct violated SOX.

Slip op. at 8-9 (footnote omitted).


Neff v. KeyBank National Association, No.20-3410 (6th Cir. June 30, 2020) (2020 U.S. App. LEXIS 20440) (Order)

USDOL Case Nos.: ARB No. 2019-0035, ALJ No. 2018-SOX-00013

Casenote(s):

UNTIMELY PETITION FOR REVIEW OF ARB SOX DECISION; COURT OF APPEALS LACKS AUTHORITY TO EXTEND FILING PERIOD

In Neff v. KeyBank National Association, No.20-3410 (6th Cir. June 30, 2020) (2020 U.S. App. LEXIS 20440), the Sixth Circuit dismissed for lack of jurisdiction Petitioner’s petition for review of the ARB’s decision in Neff v. KeyBank National Association, ARB No. 2019-0035, ALJ No. 2018-SOX-00013 (ARB Feb. 5, 2020) (per curiam), in which the ARB affirmed the ALJs’ dismissal of the complaint on summary decision. The court noted that the petition was filed outside the sixty-day period for seeking judicial review. See 18 U.S.C. § 1514A(b)(2); 49 U.S.C. § 42121(b)(4)(A); 12 U.S.C. § 5567(c)(4)(E). The court further noted that it lacked authority to extend the period for filing the petition for review, citing FRAP 26(b)(2).


Moody v. Am. Nat'l Ins. Co., No. 19-cv-00206 (S.D. Tx. June 12, 2020) (2020 U.S. Dist. LEXIS 103169; 2020 WL 3128259) (Memorandum Opinion and Order)

USDOL Case No: ALJ No. 2019-SOX-00031

Casenote(s):

EMPLOYEE STATUS UNDER SOX WHISTLEBLOWER PROVISION AND SUPREME COURT DECISION IN LAWSON; PLAINTIFF FAILED TO ESTABLISH WITH SUPPORTING FACTS THAT HE HAD AN EMPLOYMENT RELATIONSHIP WITH DEFENDANT, EITHER AS ADVISORY DIRECTOR TO DEFENDANT’S BOARD, OR AS AN INSURANCE AGENT SELLING INSURANCE FOR AND ON BEHALF OF DEFENDANT

In Moody v. Am. Nat'l Ins. Co. , No. 19-cv-00206 (S.D. Tx. June 12, 2020) (2020 U.S. Dist. LEXIS 103169; 2020 WL 3128259), Plaintiff contended that Defendant violated the SOX whistleblower protection provision when, after he complained to the board and officers about alleged SEC violations, and after he brought a related shareholder derivative suit, Defendant removed him from his position as an advisory board member, canceled contracts with Plaintiff’s company, and announced termination of his company’s office-space lease. Plaintiff was an advisory director to Defendant’s board, and an insurance agent selling insurance for and on behalf of Defendant as a contractor.

In Lawson v. FMR LLC, 571 U.S. 429, 432 (2014), the Supreme Court determined that the class of protected employees under the SOX whistleblower provision includes not only those employed by the public company itself, but also employees of privately held contractors and subcontractors who perform work for the public company. The Court also determined, however, that SOX’s whistleblower protection is limited to employees suing their employers. Thus, the district court said that the question before it in the instant case was whether Plaintiff was an “employee” of Defendant, because if was not, he could not maintain a SOX-retaliation claim.

The court first determined that Plaintiff had provided no facts supporting an employment relationship between him and Defendant. Although Plaintiff asserted that he was acting as an employee, contractor and/or subcontractor of Defendant—and was the functional equivalent of an employee—the court found that without factual support, such assertions were not enough to satisfy Rule 8(a)(2). The court flatly rejected Plaintiff’s assertion that “ Lawson holds that SOX protects, as employees of the public company, the public company’s contractors and agents.” The court stated:

Under Lawson, one thing is clear—retaliation plaintiffs must be employees of the defendant they sue, whether that defendant-employer is the public company itself or one of its contractors. To agree that Moody is an eligible SOX-retaliation claimant would extend the statute’s protections beyond what Lawson allows. And, importantly, it would remove the employer-employee relationship as an essential element of the retaliation claim.

Slip op. at 8.

Plaintiff also asserted that his status as an advisory board member entitled him to SOX § 1514A protection. Plaintiff’s theory was that his advisory role amounted to that of an employee and/or consulting contractor. The court stated that it was hornbook law that a corporate director is not an employee solely by virtue of that position; conversely, a director is also not disqualified from becoming an employee of a corporation where the duties and incidents of his or her employment are separate and distinct from the director position. The court found, however, that Plaintiff “set forth no facts showing any ‘duties or incidents’ of employment ‘separate and distinct from those pertaining’ to his position as an advisory director. . . . Indeed, he describes his role as that of a consultant ‘providing advice.’” The court thus “decline[d] to expand the reach of § 1514A to cover board members, whether elected or advisory, who do not otherwise qualify as ‘employees.’” Id. (citation omitted).


Wutherich v. Rice Energy Inc., No. 18-200 (W.D. Pa. June 8, 2020) (Memorandum Order [adopting Magistrate’s recommendation]) (2020 U.S. Dist. LEXIS 99704; 2020 WL 3051681)

Casenote(s):

The district court, after de novo review, adopted the Magistrate Judges’ Report and Recommendation as the Opinion of the court.


Johnson v. United States DOL, 814 Fed.Appx. 490 (11th Cir. May 18, 2020) (unpublished) (No. 18-10038 ) (2020 U.S. App. LEXIS 15755; 2020 WL 2517049)

Prior decision: Johnson v. United States DOL, 2018 U.S. App. LEXIS 28114 (11th Cir. Oct. 3, 2018)

USDOL Case Nos.: ARB No. 16-020, ALJ No. 2010-SOX-38

Casenote(s):

MOTION FOR RECONSIDERATION OF ARB DECISION TOLLS THE 60-DAY FILING DEADLINE OF 49 U.S.C. § 42121(b)(4)(A) FOR FILING A PETITION FOR REVIEW WITH THE COURT OF APPEALS

In Johnson v. United States DOL, 814 Fed.Appx. 490 (11th Cir. May 18, 2020) (unpublished) (No. 18-10038 ) (2020 U.S. App. LEXIS 15755; 2020 WL 2517049), the SOX Respondent, WellPoint, argued that the Eleventh Circuit did not have jurisdiction to entertain Johnson’s appeal because she had not filed a petition for review within 60 days of the ARB’s Final Order affirming the ALJ’s decision denying the complaint. Rather, Johnson had filed a motion for reconsideration with the ARB and waited until after the ARB ruled on that motion to file the petition for court review. WellPoint argued that because there is no statutory provision for the ARB to reconsider its decisions, the motion for reconsideration had no effect on the finality of the ARB’s decision and Johnson’s petition was untimely. The court rejected this argument. First, the court determined that the 60-day deadline in 49 U.S.C. § 42121(b)(4)(A) is a claim-processing rule rather than one with jurisdictional consequences. Second, the court found that the ARB has the inherent and implied authority to hear motions for reconsideration, and therefore Johnson’s motion for reconsideration tolled the filing deadline for her appeal to the court of appeals. The court, however, after reviewing the record, found that substantial evidence supported the ALJ’s findings that Johnson did not engage in protected activity. The court thus affirmed the ARB’s determination affirming the ALJ’s decision.


Wutherich v. Rice Energy Inc., No. 18-cv-00200 (W.D. Pa. May 5, 2020) (2020 U.S. Dist. LEXIS 80333), adopted Wutherich v. Rice Energy Inc., No. 18-cv-00200 (W.D. Pa. June 8, 2020)

Prior Decision: Wutherich v. Rice Energy Inc., 2018 U.S. Dist. LEXIS 171113 (W.D. Pa., Oct. 2, 2018)

Casenote(s):

PROTECTED ACTIVITY; PROVIDING INFORMATION THAT IT WOULD BE WRONG TO USE A COMPANY FOR CERTAIN SERVICES WAS NOT PROTECTED ACTIVITY WHERE PLAINTIFF’S OPPOSITION WAS BASED ON A BELIEF THAT THERE WERE OTHER BETTER VENDORS AND NOT ON POSSIBILITY THAT DEFENDANT WOULD FAIL TO REPORT TO SHAREHOLDERS THAT PLAINTIFF’S SUPERVISOR HAD AN OWNERSHIP INTEREST IN THE SELECTED COMPANY

PROTECTED ACTIVITY; PLAINTIFF’S REPORTING TO SUPERVISOR OF POSSIBLE DATA THEFT BY CO-WORKER FOUND TO BE NEITHER SUBJECTIVELY NOR OBJECTIVELY REASONABLE; PLAINTIFF HAD NOT ATTEMPTED TO SHOW THAT SECURITIES LAW REQUIRES COMPANIES TO REPORT ALL POTENTIAL LITIGATION RISK OR THAT SOMEONE WITH PLAINTIFF’S LEVEL OF TRAINING AND EXPERIENCE WOULD BELIEVE THAT IT DID

KNOWLEDGE ELEMENT OF SOX CLAIM; MERELY REFERRING TO A KNOWN CONFLICT OF INTEREST DID NOT, UNDER THE FACTS OF CASE, PUT DEFENDANT ON NOTICE OF PLAINTIFF’S PURPORTED BELIEF THAT A SECURITIES VIOLATION OCCURRED

KNOWLEDGE ELEMENT OF SOX CLAIM; PLAINTIFF’S MERE SPEAKING OUT ABOUT A CONCERN THAT A CO-WORKER MAY HAVE ENGAGED IN DATA THEFT DID NOT SHOW THAT DEFENDANT KNEW OR SUSPECTED THAT PLAINTIFF WAS REPORTING A SECURITIES VIOLATION UNDER SECTION 806

In Wutherich v. Rice Energy Inc. , No. 18-cv-00200 (W.D. Pa. May 5, 2020) (2020 U.S. Dist. LEXIS 80333), adopted, Wutherich v. Rice Energy Inc. , No. 18-cv-00200 (W.D. Pa. June 8, 2020), the Magistrate Judge recommended a finding that Plaintiff had not engaged in SOX protected activity when communicating with the COO (Rice) and his supervisor (Ajayi) expressing disagreement with Defendant’s use of services from a company that the supervisor had a 25% ownership interest in. The Magistrate wrote:

   Although Wutherich argues that he “provided information” relevant to whether Ajayi’s relationship with Silver Creek needed to be disclosed, he does not proffer evidence that he reasonably believed he was reporting a securities violation under Section 806. Under Section 806, it is not sufficient to simply “provide information” relevant to making a Form 10-K disclosure. The “‘critical focus is on whether the employee reported conduct that he or she reasonably believes constituted a violation of federal law.’” Villanueva v. U.S. Dep’t of Labor, 743 F.3d 103, 109-10 (5th Cir. 2014) (quoting Sylvester v. Parexel Int’l, LLC, No. 07-123, 2011 WL 2517148, at *15 (Dep’t of Labor May 25, 2011)). While an employee “‘need not cite a code section he believes was violated in his communications to his employer . . . the employee’s communications must identify the specific conduct that the employee believes to be illegal.’” Id. (quoting Welch v. Chao, 536 F.3d 269, 276 (4th Cir. 2008)). Here, the “specific conduct” that Wutherich identified as “wrong” was Rice’s selection of Silver Creek to provide certain services—not the possibility that Rice would fail to report this transaction to shareholders. Wutherich testified that he never told anyone that Ajayi’s relationship needed to be disclosed in an SEC filing, and he proffers no evidence that he intended to convey such concerns here. ECF No. 79-1 at 111, 85:11-15.

   With respect to the “specific conduct” that he did report, Wutherich believed it was “wrong” to use Silver Creek for certain services, because there were other vendors that were better. ECF No. 79-1 at 129, 225:1-8, 228:10-22. He testified that he conveyed this belief, and that he insinuated with his body language that Silver Creek was chosen because of Ajayi’s relationship. Id. at 129-30 228:1-231:2. However, he testified that he did not believe this conduct was illegal. Id. at 128-129, 224:24-225:1. As such, there is no evidence that Wutherich reported specific conduct that he reasonably believed to be illegal, let alone conduct that violated one of the specifically enumerated provisions of Section 806. Therefore, the Court should find that Wutherich does not satisfy the first element of his prima facie case with respect to the Silver Creek communications.

Slip op. at 16-17.

The Magistrate also found that the record did not support a finding that Defendant knew or suspected that Plaintiff was engaging in protected activity relating in an understandable way to one of the provisions of Federal law enumerated in Section 806. Plaintiff had merely “insinuated” through body language that the vendor was chosen due to his supervisor’s relationship with the vendor. The Magistrate stated that a jury could not reasonably conclude that Defendant knew or suspected that Plaintiff engaged in Section 806 protected activity. The Magistrate noted that it was common knowledge that the supervisor had a conflict of interest, but that Defendant had concluded that it was not required to disclose it because the supervisor was not a Section 16 officer. The Magistrate stated: “Wutherich does not show that simply referring to a known conflict of interest would have placed Toby Rice on notice of his purported belief that a securities violation occurred.” Id. at 20-21.

Similarly, the Magistrate found that in the absence of protected activity or a showing that Defendant knew or suspected Plaintiff engaged in protected activity, Plaintiff could not raise an inference that protected activity was a contributing factor in the adverse action. The Magistrate found no legal support for Plaintiff’s theory that temporal proximity was created by a “continuous process” of intervening complaints or concerns raised by others about the supervisor’s ownership interest in the company contracted with for services

The Magistrate was similarly not persuaded by Plaintiff’s contention that he engaged in SOX protected activity when he reported to his supervisor an overheard conversation between two co-workers indicating that one of the co-workers had brought data with him from a prior employer. Plaintiff reported that this action might be illegal theft of trade secrets. Plaintiff could not recall the specific words he used to report this information, but cited Third Circuit caselaw that a SOX whistleblower is only required to show that the communications relate in an understandable way to one of the provisions under Section 806. The Magistrate noted that SOX is not a “general anti-retaliation statute” and that protected activity must relate to one of the six specified categories under Section 806. Section 806 does not extend protection to every employee complaint about possible improper or even illegal conduct. The Magistrate found no evidence that Plaintiff subjectively believed his allegation that the alleged data theft was a violation of law under Section 806, and that even if he had a subjective belief that the conduct was a litigation risk for Defendant, he did not establish that the belief was objectively reasonable. Plaintiff had not endeavored to show that the law required Defendant to disclose all litigation risks, or that a person with Plaintiff’s level of training and experience would reasonable believe that it did. The Magistrate found that Plaintiff “had no knowledge of the specific content, source, or permissions to use the data; he had no knowledge that Rice would, or did, utilize the data, or how; and no party had threatened litigation against Rice.” Id. at 27. The Magistrate further found that even if this was protected activity, there was no evidence Defendant knew or suspected that Plaintiff had engaged in protected activity in reporting the alleged misconduct. The Magistrate that that it is not sufficient for Defendant to know or suspect that Plaintiff was “speaking out about something wrong.” Here, Plaintiff had not identified any specific legal right to Defendant, and had not tied his communication in an understandable way to a securities violation under Section 806.


Brown v. United States DOL, 812 Fed.Appx. 940 (11th Cir. May 4, 2020) (per curiam) (unpublished) (No. 19-13120 ) (2020 U.S. App. LEXIS 14135; 2020 WL 2114275)

USDOL Case Nos.: ARB No. 2019-0007, ALJ No. 2015-SOX-00018

Casenote(s):

FRCP 60(d)(3) MOTION FILED AFTER PERIOD FOR DIRECT ARB REVIEW HAD EXPIRED ALLEGING FRAUD BY ALJ FAILED WHERE (1) IT WAS BASED MERELY ON PETITIONER’S CONCLUSORY ALLEGATIONS; (2) IT ALLEGED, AT MOST, A FACTUAL ERROR BY THE ALJ; AND (3) PETITIONER COULD NOT SHOW THAT ALLEGED FRAUD COULD NOT HAVE BEEN DISCOVERED THROUGH DUE DILIGENCE WHERE ALLEGATION WAS ABOUT WHAT ALJ HAD RULED ON SUMMARY DECISION CONCERNING PETITIONER’S OWN DEPOSITION TESTIMONY

In Brown v. United States DOL, 812 Fed.Appx. 940 (11th Cir. May 4, 2020) (per curiam) (unpublished) (No. 19-13120 ) (2020 U.S. App. LEXIS 14135; 2020 WL 2114275), Petitioner’s SOX complaint had been dismissed on summary decision by an ALJ who relied in part on Petitioner’s deposition testimony that he had been terminated from employment before he could report the fraud. Petitioner did not file a direct appeal of the ALJ’s decision, but instead attempted to file a FRCP 60(d)(3) motion arguing that the ALJ had intentionally omitted and misrepresented facts in favor Respondent Synovus. The ARB construed the motion as an untimely petition for review, and the Eleventh Circuit determined that the ARB did not err in its ruling. Petitioner then filed a “Rule 60(d)(1)(3) motion” with OALJ to set aside the first ALJ’s decision. A different ALJ was assigned to consider the motion. The newly assigned ALJ determined that the motion was an attempt to reargue the case and not a demonstration of any type of fraud. The ARB adopted the new ALJ’s decision. On appeal, the Eleventh Circuit agreed with DOL that the motion was properly considered under FRCP 60(d)(3), and declined to consider an argument made by Petitioner that was directed at a ground (collateral estoppel) that the ARB had not based its decision on, or arguments that were raised for the first time on appeal.

The Eleventh Circuit determined that Petitioner’s FRCP 60(d)(3) argument failed because (1) “the only evidence to support Brown’s allegation of judicial misconduct was his own conclusory allegations”; (2) Petitioner’s argument was that the ALJ misconstrued Petitioner’s deposition testimony, and this error would not amount to fraud — “[a]t most, the ALJ made factual error, which is not fraud under rule 60(d)(3)”; and (3) Petitioner did not show that the alleged fraud could not have been discovered by due diligence — Petitioner’s knowing “of the alleged fraud at the time of the ALJ’s decision. He knew what was in the ALJ’s order and what was in his deposition.”


Brooks v. United States Dep't of Labor, No. 19-71240 (9th Cir. Apr. 21, 2020) (2020 U.S. App. LEXIS 12838)

USDOL Case Nos.: ARB No. 2017-0033, ALJ No. 2016-SOX-00037

Casenote(s):

The Ninth Circuit dismissed Brooks’ petition for review of Brooks v. Agate Resources, LLC, ARB No. 2017-0033, ALJ No. 2016-SOX-00037 for failure to prosecute.


Seguin v. United States DOL, Nos. No. 17-1887 (L), No. 17-2259 (4th Cir. Apr. 21, 2020) (2020 U.S. App. LEXIS 12818)

Prior decision: Seguin v. United States Dep't of Labor, 789 Fed. Appx. 383, 2020 U.S. App. LEXIS 897 (4th Cir. Jan. 9, 2020)

USDOL Case Nos.: ARB Nos. 15-038, -040, and 16-014; ALJ No. 2012-SOX-37

Casenote(s):

The Fourth Circuit denied Seguin’s petition for rehearing and rehearing en banc.


Trapp v. Chrysalis Ctr., No. 19-cv-01372 (D. Conn. Apr. 13, 2020) (2020 U.S. Dist. LEXIS 64188) (Order Granting Unopposed Motion to Dismiss)

Appeal filed: (Apr. 22, 2020) (No. 20-1345)

Casenote(s):

The court had previously dismissed a SOX § 1514A claim as to all Defendants based on Plaintiff’s failure to timely exhaust his claim with the Department of Labor. Plaintiff filed an amended complaint adding three new individual defendants. Defendants filed a motion to dismiss. The court found that Defendants again established that Plaintiff failed to exhaust administrative remedies as to the SOX claim. Defendants’ motion to dismiss was also meritorious as to other claims, and the court directed the Clerk of Court to close the case.


Erhart v. Bofi Holding, Inc., Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Apr. 2, 2020) (2020 U.S. Dist. LEXIS 58243) (Order: (1) Granting in Part and Denying in Part Bofi Federal Bank’s Motion for Summary Judgment (ECF No. 127); and (2) Granting in Part and Denying in Part Charles Erhart’s Motion for Summary Judgment (ECF No. 137))

Casenote(s):

“PARTIAL” EXHAUSTION BASED ON CATEGORIES OF PROTECTED ACTIVITY FIRST SPECIFICALLY RAISED IN DISTRICT COURT; COURT ADOPTS STANDARD OF LIKE-OR-REASONABLY-RELATED-TO-ALLEGATIONS-IN-OSHA-COMPLAINT, OR ALLEGATIONS THAT COULD REASONABLY BE EXPECTED TO GROW OUT OF OSHA INVESTIGATION OF CHARGES; COURT ACCEPTS PROPOSITION THAT NOT EVERY POTENTIAL CLAIM THAT COULD BE DERIVED FROM DATA DUMP MEETS PLEADING REQUIREMENT FOR EXHAUSATION, BUT FINDS THAT IN INSTANT CASE PLAINTIFF HAD SUPPLIED MORE THAN RAW DATA

In Erhart v. Bofi Holding, Inc., Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Apr. 2, 2020) (2020 U.S. Dist. LEXIS 58243), Plaintiff had exercised a kick-out of his SOX complaint to Federal district court once 180 days had passed and OSHA had not rendered a decision on the administrative complaint. Defendant contended in a summary judgment motion that six categories of alleged protected activity first raised by Plaintiff before the district court should be dismissed on “partial exhaustion” grounds. The court noted that there was apparently no binding authority on this issue. It noted several approaches taken when a defendant argued that a lawsuit exceed the scope of the OSHA complaint, such as “fair notice,” or whether each distinct claim was pled before the agency, as opposed to each fact. The court, however, determined that the jurisprudence of the Fourth and Fifth Circuits, which looks to Title VII cases for guidance, was persuasive. Adopting that standard, the court determined that the permissible scope of Plaintiff’s lawsuit covered any charges of retaliation that are like or reasonably related to the allegations in the OSHA Complaint, or that fall within the OSHA investigation which can reasonably be expected to grow out of the charge of retaliation.

The court agreed with Defendant that merely submitting a thumb drive to OSHA would not satisfy the pleading requirement for exhaustion of every conceivable claim that might be premised on the contents of the drive. The court stated: “The agency cannot be expected to interpret a heap of e-mails and spreadsheets to determine what Erhart believed was wrong.” That said, the court found that Plaintiff had provided a factual timeline and summary of key issues, which were not mere raw data, and which sufficiently alleged almost all of the challenged allegations in district court. The court thus denied summary judgment as to five of the six categories. The court granted summary judgment as to an allegation relating to potentially altered financial statement, finding that the OSHA complaint had not mentioned this conduct and Plaintiff had not demonstrated that this conduct would flow from a reasonable investigation of the complaint.

PROTECTED ACTIVITY; CATEGORIES OF RULES THAT CAN SUPPORT A SOX § 1514A COMPLAINT INCLUDE; BOOKS AND RECORDS RULE; INTERNAL CONTROLS RULE; SHAREHOLDER FRAUD; FRAUD ON REGULATORS, HOWEVER, IS NOT SUCH A CATEGORY

In Erhart v. Bofi Holding, Inc., Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Apr. 2, 2020) (2020 U.S. Dist. LEXIS 58243), the court stated that, although Plaintiff did not have to cite a code section or rule when engaging in protected activity, he must demonstrate the jury could conclude he reasonably believed the conduct he reported violated a law that is covered by § 1514A; if he cannot, summary judgment in Defendant’s favor is appropriate. Plaintiff argued that the following rules fall under § 1514A’s scope — and fit Defendant’s alleged misconduct. The court summarized Plaintiff’s argument as follows, one of which — fraud on regulators—the court found was not supportable as within the scope of SOX § 1514A:

  • Books-and-Records Rule: This is a rule that “prohibits the falsification of a corporate record that is necessary to accurately and fairly reflect the transactions and dispositions of the assets of the company in reasonable detail. And this rule falls under § 1514A because it is a ‘rule or regulation of the [SEC].’ See 18 U.S.C. § 1514A; see also Wadler, 916 F.3d at 1185.”
  • Internal Controls Rule: This is a rule that “requires a regulated company to maintain a system that provides reasonable assurance regarding the reliability of financial reporting and the preparation of external financial statements. The system must include policies and procedures regarding certain items, including providing reasonable assurance that expenditures are made only in accordance with management’s authorization. The rule does not, however, broadly require compliance with all laws or corporate risk management objectives. And like the Books-and-Records Rule, the Internal Controls Rule falls under § 1514A because it is a ‘rule or regulation of the [SEC].’ See 18 U.S.C. § 1514A.”
  • Shareholder Fraud: The “shareholder fraud theory requires at least (1) a material misrepresentation or omission of fact and (2) an indication of an intent to defraud. See Van Asdale, 577 F.3d at 1001; see also In re ChinaCast Educ. Corp. Sec. Litig., 809 F.3d 471, 472, 474 (9th Cir. 2015) (noting ‘scienter or intent to defraud’ is ‘a bedrock requirement of Rule 10b—5’). Further, this item, of course, falls under § 1514A’s grasp. See 18 U.S.C. § 1514A; Van Asdale, 577 F.3d at 1000—02.”
  • Fraud on Regulators: This theory “is that the Bank was ‘defrauding’ its regulators, particularly the OCC—a bank regulator. . . . Yet Erhart does not identify an SEC rule that this purported conduct violated. Nor does he offer a meaningful explanation for why this conduct would fall under either the mail fraud, wire fraud, bank fraud, or securities fraud statutes ‘or any provision of Federal law relating to fraud against shareholders . . . .’ See 18 U.S.C. § 1514A. . . . As to Sarbanes—Oxley, however, Erhart does not demonstrate this theory falls within the grasp of § 1514A. Consequently, the Court does not apply this theory to Erhart’s § 1514A claim below.”

The court then went through applicable categories of Plaintiff’s complaint in a lengthy opinion. In brief, the court granted summary judgment in favor of Defendant as to allegations involving untimely 401(k) payments, improper strategic plan approval, undisclosed customer accounts, undisclosed subpoenas, miscalculated ALLL, incomplete FDPA audit, sanitized global cash card review, improprieties in CEO’s account, and improprieties in CEO’s brother’s account. The court denied summary judgment concerning two categories: misleading response to SEC subpoena and unauthorized risky loans. In regard to the subpoena response, although an attorney might have concluded that there was no wrongdoing in the light of the SEC subpoena’s scope, viewing the evidence in the light most favorable to the non-moving party, someone in Plaintiff’s circumstances could reasonably or mistakenly belief that Defendant that the bank’s response to the subpoena was misleading. This was a genuine issue of material fact sufficient to survive summary judgment. In regard to the risky loans, the court found that potential violations of the Bank Secrecy Act were beyond the scope of § 1514A. Plaintiff’s claim was based on the Internal Controls Rule which requires

policies and procedures that provide reasonable assurance (1) that “receipts and expenditures of the issuer are being made only in accordance with authorizations of management” and (2) “regarding [the] prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.” See 17 C.F.R. § 240.13a—15(a).

Here, Plaintiff stated “he believed tens of millions of dollars in loans were being made by the Bank to risky customers against management’s directive to not establish relationships with these customers.” The court determined that “[w]hen the evidence is construed in Erhart’s favor, a reasonable factfinder could conclude Erhart reasonably believed—or mistakenly believed—that this conduct amounted to a violation of the Internal Controls Rule.”


Erhart v. BofI Holding, Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Mar. 31, 2020) (2020 U.S. Dist. LEXIS 57137; 2020 WL 1550207) (Order: (1) Granting in Part and Denying in Part BofI Federal Bank’s Motion for Summary Judgment (ECF No. 127); and (2) Granting in Part and Denying in Part Charles Erhart’s Motion for Summary Judgment (ECF No. 137))

Casenote(s):

PERMISSIBLE SCOPE OF FEDERAL COURT SOX COMPLAINT IN RELATIONSHIP TO ADMINISTRATIVE EXHAUSTION REQUIREMENT; DISTRICT COURT ADOPTS TITLE VII APPROACH; CHARGES IN DISTRICT COURT COMPLAINT MUST FALL WITHIN SCOPE OF COMPLAINT FILED WITH OSHA OR A REASONABLE INVESTIGATION FLOWING FROM THAT COMPLAINT

In Erhart v. BofI Holding, Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Mar. 31, 2020) (2020 U.S. Dist. LEXIS 57137; 2020 WL 1550207), Plaintiff was an internal auditor for BofI Federal Bank who filed a whistleblower retaliation suit under state and federal law. BofI countersued. The court consolidated the suits. Before the court were cross motions for summary judgment. In regard to Plaintiff’s SOX retaliation claim, the court granted in part and denied in part BofI’s request for summary judgment. One of the matters on which summary judgment was granted was a finding that Plaintiff failed to exhaust administrative remedies on one allegation concerning altered financial statements. There was no dispute that Plaintiff commenced the SOX administrative process and then waited at least 180 days to file his district court complaint. See 18 U.S.C. § 1514A(b)(1)(B). Defendant’s claim was that Plaintiff’s Federal court complaint impermissibly exceeded the scope of the administrative filing by identifying “six new categories” of allegedly wrongful conduct.

The court first noted that the administrative SOX complaint filed with OSHA is not a formal pleading expected to meet the FRCP 12(b)(6) standards. The court noted, on the other hand, that “’an exhaustion requirement would be meaningless if the complainant were free to litigate claims bearing little or no connection to the preceding administrative complaint.’ Jones v. Southpeak Interactive Corp. of Del., 777 F.3d 658, 669 (4th Cir. 2015).” Slip op. at 13. The court looked at approaches courts had taken when a defendant argues the lawsuit exceeds the scope of the OSHA complaint, and was persuaded by those that had looked to Title VII cases for guidance. The court thus determined that the permissible scope of Plaintiff’s district court lawsuit would cover charges of retaliation that are like or reasonably related to the allegations made in the OSHA complaint, or that fell within the OSHA investigation which can reasonably be expected to grow out of the charge of retaliation. Id. at 14, citing the EEOC-related decision in Sommatino v. United States, 255 F.3d 704, 708 (9th Cir. 2001).

In the instant case, the complaint filed with OSHA was imprecise, supported in large part by a thumb drive containing documents related to Plaintiff’s allegations. The court agreed with Defendant that “‘no authority supports the proposition that merely submitting a thumb drive of raw documents and data to OSHA satisfies the exhaustion requirement’s pleading requirement such that a court has jurisdiction over every conceivable claim that might be premised on the contents of any and all documents on the drive.’” Slip op. at 17, quoting BofI’s reply brief. The court stated that “[t]he agency cannot be expected to interpret a heap of e-mails and spreadsheets to determine what Erhart believed was wrong.” Id. The court, however, found in the administrative complaint and attachments a factual timeline and summary of “key issues” that was not raw data, and which sufficiently aligned with almost of the challenged allegations in district court. The court found that the record did not establish that Plaintiff was attempting to circumvent the SOX exhaustion requirement, and cited Jones for the proposition that the “‘exhaustion requirement should not become a tripwire for hapless plaintiffs.’” Id. at 18, quoting Jones, 777 F.3d at 669. The court found, nonetheless, that Plaintiff’s allegations regarding potentially altered financial documents had not been mentioned in the OSHA complaint or his whistleblower discussion notes. The court determined that this conduct had not been demonstrated to fall within the scope of the OSHA complaint or a reasonable investigation flowing from the complaint.

SOX PROTECTED ACTIVITY CHALLENGE ON SUMMARY JUDGMENT; COURT CONSTRUCTS METHODOLOGY FOR EXAMINING SUCH A CHALLENGE; COURT FINDS AS A BROAD MATTER THAT RULES ON “BOOKS-AND-RECORDS” AND “INTERNAL CONTROLS” ARE SOX PROTECTED ACTIVITY, AS ARE COMPLAINTS ABOUT SHAREHOLDER FRAUD; COURT FINDS THAT “FRAUD ON REGULATORS” WAS NOT SHOWN TO BE SOX 1514A PROTECTED ACTIVITY; COURT NOT REQUIRED TO SIFT THROUGH SECURITIES LAWS AND REGULATIONS FOR PROVISIONS PLAINTIFF MAY HAVE BELIEVED WERE VIOLATED; AFTER DETERMINING BROAD CATEGORIES, COURT REVIEWED FACTS OF THE CASE TO DETERMINE WHETHER PLAINTIFF’S CONDUCT FIT 1514A AND WHETHER HIS BELIEF OF A VIOLATION WAS OBJECTIVELY REASONABLE

In Erhart v. BofI Holding, Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Mar. 31, 2020) (2020 U.S. Dist. LEXIS 57137; 2020 WL 1550207), Plaintiff was an internal auditor for BofI Federal Bank who filed a whistleblower retaliation suit under state and federal law. BofI countersued. The court consolidated the suits. Before the court were cross motions for summary judgment. In regard to Plaintiff’s SOX retaliation claim, the court granted in part and denied in part BofI’s request for summary judgment. The court examined BofI’s contention that 12 categories of conduct identified by Plaintiff did not constitute SOX protected activity as a matter of law. In order to address this challenge, the court established a framework: it first reviewed the reasonable belief standard for SOX retaliation claims; it explored how the claim would function before a jury; it reviewed the several rules Plaintiff relied on to explain why he believed BofI’s conduct was wrongful; and it assessed BofI’s discrete challenges. This portion of the decision is too lengthy to condense into a casenote and the following is only a brief summary. The court noted the reasonable belief standard, with its subjective and objective components, from Wadler v. Bio-Rad Labs., Inc., 916 F.3d 1176, 1186—87 (9th Cir. 2019) and other decisions. It also referred to Wadler and other decisions in regard to how the reasonable belief instruction would be addressed before a jury. The court stated that Plaintiff’s “beliefs must be tied to at least one segment of laws in § 1514A to support his Sarbanes—Oxley claim. The Court will have to tell the jury what the underlying law prohibits. Erhart therefore cannot broadly argue that he objectively believed there were violations of ’any rule or regulation of the [SEC]’ or ’any provision of Federal law relating to fraud against shareholders.’ See 18 U.S.C. § 1514A. This Court should not be expected to—and realistically cannot—’go fishing through securities law and regulation for provisions [Erhart] may have believed were violated.’” Slip op. at 22 (citations omitted).

The court then examined the rules that Plaintiff contended fall within § 1514A’s scope. Those fell into four categories.

Books-and-Records Rule. The court stated that “the Books-and-Records Rule prohibits the falsification of a corporate record that is necessary to accurately and fairly reflect the transactions and dispositions of the assets of the company in reasonable detail. And this rule falls under § 1514A because it is a ’rule or regulation of the [SEC].’ See 18 U.S.C. § 1514A; See also Wadler, 916 F.3d at 1185.”
Internal Controls Rule. The court stated that “the Internal Controls Rule requires a regulated company to maintain a system that provides reasonable assurance regarding the reliability of financial reporting and the preparation of external financial statements. The system must include policies and procedures regarding certain items, including providing reasonable assurance that expenditures are made only in accordance with management’s authorization. The rule does not, however, broadly require compliance with all laws or corporate risk management objectives. And like the Books-and-Records Rule, the Internal Controls Rule falls under § 1514A because it is a “rule or regulation of the [SEC].” Id. at 27.
Shareholder Fraud. The court found that shareholder his item falls within 1514A and that it requires at least (1) material misrepresentation or omission of fact and (2) an indication of an intent to defraud.
Fraud on Regulators. The court found that Plaintiff failed to show how a fraud-on-regulators theory falls within a SEC rule or the categories listed in 1514A.

The court then examined the categories of conduct challenged as protected activity by BofI, and whether Plaintiff demonstrated the conduct fits into one of the segments of laws included in § 1514A, and whether he produced sufficient evidence that a trier of fact could conclude that his belief of a violation was objectively reasonable. The court found that nine categories of challenged protected activity could be summarily adjudicated in favor of BofI, but not two of the challenged categories. In addition, the court noted that BofI’s motion had not challenged two other categories.

KNOWLEDGE ELEMENT; DEPOSITION TESTIMONY OF PLAINTIFF’S DIRECT SUPERVISOR THAT HE NEVER THOUGHT OF PLAINTIFF’S REPORTING TO HIM ON HIS AUDIT WORK AS WHISTLEBLOWER ACTIVITY; COURT FIND THAT SUCH TESTIMONY WAS INSUFFICIENT TO WARRANT A GRANT OF SUMMARY JUDGMENT ON KNOWLEDGE ELEMENT OF SOX CLAIM

In Erhart v. BofI Holding, Nos. 15-cv-02287, 15-cv-02353 (S.D. Cal. Mar. 31, 2020) (2020 U.S. Dist. LEXIS 57137; 2020 WL 1550207), Plaintiff was an internal auditor for BofI Federal Bank. He filed a whistleblower retaliation suit under state and federal law. BofI countersued. The court consolidated the suits. Before the court were cross motions for summary judgment. In regard to Plaintiff’s SOX retaliation claim, the court granted in part and denied in part BofI’s request for summary judgment. One of BofI’s summary judgment requests was on the knowledge element of the SOX claim, BofI contending that all of Plaintiff’s disclosures occurred within the confines of assigned audit work and that, for certain categories of suspected wrongdoing, no factfinder could reasonably conclude that the method and content of those activities put BofI on notice. BofI pointed to deposition testimony of Plaintiff’s direct supervisor that he never thought Plaintiff was acting as a “whistleblower” when reporting to him. The court, however, denied summary judgment, finding that — viewing the evidence in the light most favorable to Plaintiff — a reasonable factfinder could conclude Plaintiff’s reports to his supervisor and other personnel put BofI on actual or constructive notice of his protected activity under § 1514A.


Mohan v. UBS Fin. Servs., No. 19-cv-00663 (D. Conn. Mar. 17, 2020) (2020 U.S. Dist. LEXIS 45817; 2020 WL 1274602) (Order Granting Motion to Dismiss)

Related USDOL Case: ALJ No. 2018-SOX-00034

Casenote(s):

ADVERSE PERSONNEL ACTION; INFORMING EMPLOYEE OF IMPLICATIONS OF EXTENDED LEAVE

ADVERSE PERSONNEL ACTION; INFORMING CLIENTS OF FINANCIAL ADVISOR WHO WAS ON EXTENED LEAVE THAT HIS ACCOUNTS HAD BEEN REASSIGNED

ADVERSE PERSONNEL ACTION; FAILING TO INVESTIGATE PLAINTIFF’S COMPLAINT OF SECURITIES LAW VIOLATIONS; PLAINTIFF’S ALLEGATION OF RESULTANT DIVORCE FROM HIS WIFE

ADVERSE PERSONNEL ACTION; NOT PROVIDING INFORMATION TO PLAINTIFF’S COUNSEL TO ASSIST IN PLAINTIFF’S FORMULATION OF A SETTLEMENT DEMAND

ADVERSE PERSONNEL ACTION; CONSTRUCTIVE DISHARGE NOT PLAUSIBLY ALLEGED WHERE PLAINTIFF CONFUSED UNEMPLOYMENT WITH SELF-IMPOSED EXILE

In Mohan v. UBS Fin. Servs., No. 19-cv-00663 (D. Conn. Mar. 17, 2020) (2020 U.S. Dist. LEXIS 45817; 2020 WL 1274602), the court dismissed Plaintiff’s complaints for failure to allege facts that plausibly entitled him to relief. The dismissal was subject to reopening if Plaintiff filed an amended complaint sufficient to overcome the deficiencies.

The court detailed Plaintiffs allegations. In brief, Plaintiff was a financial advisor for UBS Financial Services, Inc. (UBSFS) since 2011. From 2015 to 2016 he submitted complaints alleging violations of securities laws to UBSFS’s compliance department and to the SEC. Plaintiff alleged that afterwards UBSFS began to interfere with Plaintiff’s business development activities, and̬while Plaintiff was on disability leave in December 2016—advised Plaintiff that he was at risk of termination. In January 2017, Plaintiff sent a letter to three management officials alleging violations of various securities statutes and regulations. In June 2017, Plaintiff and his counsel had a three-hour conference call with UBSFS’s executive director and senior counsel detailing serious financial harms incurred by Plaintiff’s clients owing to alleged SEC regulatory violations by UBSFS. Defendant’s in-house counsel launched an investigation but repeatedly did not communicate with Plaintiff’s counsel, including about that counsel’s request for short-term disability benefit base calculations for formulation of a settlement demand. In August 2017, Plaintiff emailed UBSFS’s senior counsel reminding her that he had not gotten a substantive response, and stating that he was considering informing clients of the violations. In the meantime, while on disability leave in April 2017, Plaintiff heard reports that his clients had received letters from UBSFS stating that he was no longer with the firm. In November 2017 Plaintiff’s wife enrolled him in her health care plan—but UBSFS failed to stop withdrawing insurance premiums from his checking account causing him to incur overdraft fees. In July 2017, Plaintiff filed complaints with the USDOL, the EEOC and a state agency alleging discrimination and retaliation. Plaintiff averred that during the USDOL hearing, he concluded that the ALJ would be setting an unreasonably high burden and had little knowledge of securities law, and he thus decided to seek de novo review in Federal district court. In an amended complaint, Plaintiff alleged, inter alia, violation of the Section 806 of the Sarbanes-Oxley Act (SOX).

In regard to the SOX claim, the court focused on whether Plaintiff suffered an unfavorable personnel action. Plaintiff alleged five actions taken against were in retaliation for securities related whistleblowing.

(1) Informing Plaintiff that he was “at risk of termination”

The court rejected Defendants’ contention that “threats to terminate employment are not actionable under section 806 unless they ripen into concrete action,” slip op. at 8 (citation omitted), but agreed with their argument that it was implausible that Plaintiff was threatened with termination because he had merely been provided a form letter advising him that he was approaching the end of his short-term disability leave allowance, that his position could not be held open indefinitely, and that UBSFS within the next six months may decide to terminate him after assessing his ability to return to work. Id. at 8-9, citing Pierre v. Napolitano, 958 F. Supp. 2d 461, 476 (S.D.N.Y. 2013) (informing employee of ‘implications of his extended leave of absence’ is not ‘threatening’).”

(2) Notifying Plaintiff’s clients that he was “no longer with the firm”

The court determined that “even if UBSFS informed Mohan’s clients while he was on medical leave that he was ‘no longer with the firm,’ that is not a plausible unfavorable personnel action.” Id. at 9. The court stated that this action was equally consistent with the innocent explanation that any notice Plaintiff’s clients received “would have been a stock notice that a new financial adviser was assigned to their accounts.” Id. The court stated that “even if there was some insidious motive behind the action, it is not clear how Mohan suffered from it in his employment. Had he returned to UBSFS and found he would be servicing fewer or less valuable accounts, he might have had a claim. But Mohan does not allege that; he was servicing the same number of accounts shortly before and after his clients were noticed: none at all. See McGrath v. Thomson Reuters, 2012 WL 2119112, at *12 (S.D.N.Y. 2012) (“Reassignment of the plaintiff’s clients while he was on medical leave . . . was not an adverse employment action”), report and recommendation adopted, 2012 WL 2122325 (S.D.N.Y. 2012), aff’d, 537 F. App’x 1 (2d Cir. 2013); Torres-Alman v. Verizon Wireless Puerto Rico, Inc., 522 F. Supp. 2d 367, 395-96 (D.P.R. 2007) (no reasonable jury could find retaliation where plaintiff’s clients were only reassigned when he was on disability leave).”

(3) Inadequately investigating Plaintiff’s allegations of securities laws violations

The court stated that “failing to investigate an employee’s complaint of misconduct is not actionable retaliation absent circumstances not present here. See Fincher v. Depository Tr. & Clearing Corp., 604 F.3d 712, 721-22 (2d Cir. 2010) (“An employee whose complaint is not investigated cannot be said to have thereby suffered a punishment for bringing that same complaint,” unless somehow “the failure [to investigate] is in retaliation for some separate, protected act by the plaintiff.”); see also Volpe v. Conn. Dep’t of Mental Health & Addiction Servs., 88 F. Supp. 3d 67, 75 (D. Conn. 2015) (collecting cases).” Id. at 9-10. The court also stated that Plaintiff had not shown that “he was entitled to the fruits of any internal investigation into his allegations by UBSFS.” Id. at 10 (citations omitted). The court also determined that even if Defendants’ failure to address his complaints led to Plaintiff’s divorce “it is not clear how that negative impact on his personal life affected him in his employment. Cf. Allovio v. Holder, 923 F. Supp. 2d 151, 158 (D.D.C. 2013) (‘While [plaintiff] . . . believes that the position changes contributed to his divorce, . . . such unfortunate circumstances do not rise to the level of a materially adverse employment action affecting the terms, conditions, or privileges of employment’).”

(4) Refusing to provide information to Plaintiff’s counsel so that he could formulate a settlement demand

The court determined that “it was well within the rights of UBSFS’s counsel to refuse to provide Mohan’s counsel his short-term disability benefit base in order to facilitate formulation of a settlement demand. Counsel took a ‘[r]easonable defensive measure[]’ in clear anticipation of litigation, and did so in a way that did not affect Mohan’s ‘work, working conditions, or compensation.’ United States v. N.Y.C. Transit Auth., 97 F.3d 672, 677 (2d Cir. 1996); see also Adams v. Northstar Location Servs., LLC, 2010 WL 3911415, at *3 n.2 (W.D.N.Y. 2010) (‘denial of plaintiff’s access to payroll records’ was not adverse employment action because it ‘did not effect a materially adverse change in the terms and conditions of plaintiff’s employment’).”

(5) Constructive discharge

Before discussing the individual retaliation claims, the court first addressed Plaintiff’s claim of constructive discharge even though his complaint alleged that he was still employed by Defendant. The court concluded that Plaintiff appeared to have confused “unemployment” with a self-imposed exile from work due to a number of factors. The court determined that he failed to plausibly allege that he was discharged, constructively or otherwise, citing Fox v. Costco Wholesale Corp., 918 F.3d 65, 72 (2d Cir. 2019) (“indefinite medical leave” is not a discharge).


Sturdivant v. Chem. Waste Mgmt., No. 19-cv-1129 (N.D. Ala. Mar. 4, 2020) (2020 U.S. Dist. LEXIS 38264; 2020 WL 1083212) (Memorandum Opinion and Order)

Casenote(s):

PROTECTED ACTIVITY; TO SURVIVE A MOTION FOR SUMMARY JUDGMENT, A SOX COMPLAINT ALLEGING SHAREHOLDER AND MAIL OR WIRE FRAUD MUST SHOW THAT COMPLAINANT WHEN REPORTING THE COMPLAINED OF CONDUCT HELD A REASONABLE BELIEF THAT THERE HAD BEEN A MATERIAL MISREPRESENTATION OR OMISSION WITH AN INTENT TO DECEIVE

In Sturdivant v. Chem. Waste Mgmt., No. 19-cv-1129 (N.D. Ala. Mar. 4, 2020) (2020 U.S. Dist. LEXIS 38264; 2020 WL 1083212), Plaintiff, an Operations Manager at one of Defendant’s hazardous waste facilities, filed a SOX complaint alleging that Defendant violated the retaliation provision of the Sarbanes-Oxley Act by failing to report environmental violations to state and federal authorities, as well as shareholders, which he contended was mail fraud, wire fraud and shareholder fraud.

Defendant filed a motion for summary judgment. The Magistrate Judge, viewing the complaint in the light most favorable to Plaintiff, found that its allegations were scant and conclusory, and asked the court to simply assume that Defendant’s “environmental violations and its failure to report those violations to regulatory authorities and its shareholders necessarily means that it committed mail fraud, wire fraud, or shareholder fraud.” Slip op. at 11. The Magistrate stated: “Where Sturdivant’s complaint falls short is in its failure to explain how, specifically, he reasonably believed one of these particular violations occurred. Without connecting these dots, Sturdivant’s allegations are properly characterized as a garden-variety ‘complaint about possible improper or even illegal conduct.’ Northrop Grumman, 927 F.3d at 229.” Id. The court elaborated on the need of the complaint to allege the Plaintiff held a reasonable belief when reporting the complained of conduct that there had been a material misrepresentation or omission with an intent to deceive, in order to make out a case of shareholder or mail or wire fraud.

    “Shareholder fraud involves false representations of material fact intended to deceive shareholders and reliance by shareholders on those false representations to their detriment.” Id. at 233. The elements of a claim for shareholder fraud are a material misrepresentation or omission with the specific intent to deceive; a connection to the purchase or sale of a security; and reliance, economic loss, and a causal connection between the misrepresentation and loss. Id. None of Sturdivant’s factual complaints include all or even most of these elements. Instead, he asks the court to read the elements of shareholder fraud into the conduct he actually complained of—violations of state and federal environmental laws and regulations.

    The same goes for mail or wire fraud. “Aside from the means by which a fraud is effectuated, the elements of mail fraud, 18 U.S.C. § 1341, and wire fraud, 18 U.S.C. § 1343, are identical.” United States v. Ward, 486 F.3d 1212, 1221 (11th Cir. 2007). Both “require that a person (1) intentionally participates in a scheme or artifice to defraud another of money or property, and (2) uses or causes the use of the mails or wires for the purpose of executing the scheme or artifice.” Id. at 1222 (internal quotation marks omitted). The first element “requires proof of a material misrepresentation, or the omission or concealment of a material fact calculated to deceive another out of money or property.” United States v. Maxwell, 579 F.3d 1282, 1299 (11th Cir. 2009). “A misrepresentation is material if it has a natural tendency to influence, or is capable of influencing, the decision maker to whom it is addressed.” Id. (internal quotation marks omitted). Again, none of Sturdivant’s allegations center on conduct that relates to the elements of wire and mail fraud. The court cannot assume that Sturdivant’s allegedly reasonable belief that CWM violated state and federal environmental laws and regulations necessarily results in a reasonable belief that CWM’s actions conformed with the statutory definition of mail or wire fraud. Indeed, while he may have earnestly believed that he was reporting some form of misconduct, there is nothing in the complaint to suggest that Sturdivant specifically believed CWM committed mail or wire fraud.

Rhinehimer, 787 F.3d at810. Rather, “[t]he well-established intent of Congress supports abroad reading of the statute’s protections.” Id. Accordingly, “an interpretation demanding a rigidly segmented factual showing justifying the employee’s suspicion undermines [Sarbanes-Oxley’s] purpose and conflicts with the statutory design, which turns on employees’ reasonable belief rather than requiring them to ultimately substantiate their allegations.” Id. Even so, Sturdivant must specifically allege that he had a reasonable belief that CWM was committing one of the six categories of fraud enumerated in Sarbanes-Oxley’s antiretaliation provision when he reported the misconduct o his supervisors.

Id. at 11-13 (footnote omitted). The Magistrate granted Defendant’s motion to dismiss without prejudice to amend the complaint to cure its deficiencies.


Jones v. Adams, No. 19-cv-979 (W.D. OK. Jan. 15, 2020) (2020 U.S. Dist. LEXIS 6867; 2020 WL 236740) (Opinion and Order)

Casenote(s):

SOX COMPLAINT SEEKING PROTECTIVE ORDER TO STOP ALLEGED CYBER BULLYING DISMISSED BY COURT SUA SPONTE WHERE THE COMPLAINT WAS FRIVOLOUS, SUCH RELIEF WAS NOT AVAILABLE UNDER SOX AND DODD-FRANK, AND PRO SE PLAINTIFF WAS ALREADY UNDER FILING RESTRICTIONS DUE TO HER LITIGATION HISTORY

In Jones v. Adams, No. 19-cv-979 (W.D. OK. Jan. 15, 2020) (2020 U.S. Dist. LEXIS 6867; 2020 WL 236740), the court dismissed, sua sponte, Plaintiff’s pro se SOX and Dodd-Frank claims as frivolous under FRCP 12(b)(6). Plaintiff sought a protective order under the SEC Whistleblower Protection Program to prevent Defendants (who the court noted were attorneys who had represented Plaintiff’s ex-husband in litigation against Defendant) from acting as “cyber bullies” and to require them to have no contact with her whatsoever. Plaintiff alleged that Defendants had begun posting online that they were selling cyber currency. Although Plaintiff had not specified the statutory authority for this this program, the court noted that whistleblowers who report violations of securities law are protected by the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The court noted, however, that the complaint’s factual allegations did not state circumstances protected by those laws—and that neither SOX nor Dodd-Frank provides for protective orders such as Plaintiff was seeking. Although Plaintiff’s complaint alleged that she had provided information to the SEC Whistleblower Program, she had not alleged information related to a securities law violation or that she had suffered employment retaliation for proving the information. The court also dismissed a False Claims Act count of the complaint.

The court noted Plaintiff’s pro se status, but determined that permitting amendment to the complaint would be futile. The court also noted that Plaintiff was already under filing restrictions due to her litigation history, and had been admonished that her history of meritless positions went beyond what might be excused based lack of training in the law.


Micallef v. United States Dep’t of Labor, 790 Fed. Appx. 72 (9th Cir. Jan. 13, 2020) (unpublished) (No. 18-72418) (2020 U.S. App. LEXIS 1306; 2020 WL 133436) (Memorandum)

USDOL Case: ARB No. 16-095, ALJ No. 2015-SOX-00025

Casenote(s):

The court dismissed Petitioner’s petition for review of an ARB decision. The court found that the ARB properly affirmed the dismissal of Petitioner’s SOX retaliation complaint because she failed to establish a prima facie case. The court also found that the ARB did not err by denying Petitioner’s request to admit new evidence because she failed to demonstrate that the evidence could not have been discovered with reasonable diligence before the record closed. See 29 C.F.R. § 18.90(b)(1).


Seguin v. United States Dep’t of Labor, 789 Fed. Appx. 383 (4th Cir. Jan. 9, 2020) (per curiam) (unpublished) (Nos. 17-1887, 17-2259) (2020 U.S. App. LEXIS 897; 2020 WL 109474) (Per Curiam Order)

Case below: ARB Nos. 15-038, 15-040, 16-014; ALJ No. 2012-SOX-37

Casenote(s):

COURT OF APPEALS REVIEW; PETITIONS FOR REVIEW CONCERNING DOL’S ORDERS ON SCOPE OF RELIEF AND ATTORNEY’S FEES AWARDED TO COMPLAINANT WERE MOOT WHERE COURT HAD, IN AN EARLIER DECISION, FOUND IN FAVOR OF RESPONDENT

In Seguin v. United States Dep’t of Labor, No. 17-1887, No. 17-2259 (4th Cir. Jan. 9, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 897), the Fourth Circuit denied Seguin’s motion to hold in abeyance her petitions for review of DOL orders relating to her SOX whistleblower protection action pending a petition for writ of certiorari she indicated she intended to file on the court’s related decision in Northrop Grumman Systems Corp. v. United States Department of Labor, 927 F.3d 226, 236 (4th Cir. 2019). The court denied the motion to hold the petitions in abeyance because the time for filing a cert petition on the earlier case had expired without Seguin filing such a petition. The court then dismissed Seguin’s petitions for review, which were about scope of relief and attorney’s fees, finding that these matters were moot in view of the court’s earlier decision in Northrop Grumman, remanding the case with instructions to the ALJ to dismiss the administrative complaint and enter judgment in favor of Northrop.


Seaman's Protection Act

West v. Am. River Transp. Co., No. 20-cv-00313 (E.D. Mo. Oct 5, 2020) (2020 U.S. Dist. LEXIS 184150; 2020 WL 589344) (Memorandum and Order)

USDOL Case No. ALJ No. 2019-SPA-00001

Casenote(s):

INTERNAL COMPLAINTS UNDER THE RETALIATION PROVISION OF THE SEAMAN'S PROTECTION ACT; REPORTING ATTEMPTED VIOLATIONS OF MARITIME LAW IS PROTECTED ACTIVITY

In West v. Am. River Transp. Co., No. 20-CV-00313 (E.D. Mo. Oct 5, 2020) (2020 U.S. Dist. LEXIS 184150; 2020 WL 589344), Defendants moved for dismissal of the Seaman's Protection Act ("SPA") count of Plaintiff’s complaint alleging discrimination and retaliation related to his discharge on the ground Plaintiff’s internal complaint regarding a co-worker’s attempt to unsafely detach a vessel. Defendants argued that this type of internal complaint does not constitute protected activity under the SPA.

The district court first noted that it appeared that no federal court had addressed whether internal complaints constitute protected activity in light of the 2010 amendments to the SPA, but also noted that the ARB had found in Meeks v. Genesis Marine, LLC, ARB No. 17-022, ALJ No. 2016-SPA-00003 (ARB July 9, 2018), that § 2114(a)(1)(C) includes internal complaints. The court also noted that OSHA had consistently interpreted the SPA to recognize at least some forms of internal complaints as protected activity. The court agreed with the Defendants that “a thorough analysis into any alleged internal complaint must be conducted in order to determine whether it satisfies the requirements of one of the categories of protected activity under the SPA.” Slip op. at 5 (quoting Defendant’s filing). The court, however, found that dismissal of the count was not warranted at that early stage of the litigation because, accepting Plaintiff’s factual allegations as true, it was plausible that he “was terminated because he internally complained regarding his co-worker’s failure to abide by maritime law (§ 2144(a)(1)(C)) or because he notified his employer of a work-related injury (§ 2144(a)(1)(D)).” Id.

Defendants argued that Plaintiff failed to make a plausible claim because he only alleged that his co-worker attempted to engage in unsafe activity but did not actually engage in unsafe activity. Defendants distinguished Meeks because in that case the plaintiff witnessed clear violations of maritime safety law. The court was not persuaded by this distinction:

   As discussed above, ambiguous text in whistleblower statutes should be construed broadly. Haley, 138 F.3d at 1250. According to the complaint’s factual allegations, which are accepted as true for purposes of this motion to dismiss, Plaintiff was terminated because he complained that a co-employee was attempting to engage in unsafe activity in violation of maritime law. Refusal to perform unsafe orders is a protected activity under 46 U.S.C. § 2144(a)(1)(B), and there is no associated requirement that the unsafe activity ultimately occurs. Defendants do not cite any precedent indicating that actual, as opposed to attempted, violations of maritime law are required for whistleblower protection. Interpreting the SPA to recognize reporting of attempted violations of maritime law as protected activity is entirely consistent with the purpose of the statute. Otherwise, whistleblowers would have the unenviable choice of either waiting for the unsafe activity to occur before complaining or not enjoying the SPA’s protections. Recognizing that the SPA protects whistleblowers who report attempted safety violations is “the best way to avoid a nonsensical result.” Id.

Id. at 6.


Surface Transportation Assistance Act

Buie v. Admin. Review Bd., USDOL, 823 Fed. Appx. 450 (8th Cir. Oct. 1, 2020) (per curiam) (No. 19-3763) (2020 U.S. App. LEXIS 31193; 2020 WL 5834893) (Order denying petition for review)

USDOL Case Nos.: ARB No. 2019-0015; ALJ No. 2014-STA-00037

Casenote(s):

The 8th Circuit denied Petitioner’s petition for review of the ARB’s decision affirming the ALJ’s denial of Petitioner’s STAA complaint.

Budri v. Admin. Review Bd., No. 20-60073 (5th Cir. Aug. 25, 2020) (per curiam) (2020 U.S. App. LEXIS 27188; 2020 WL 5049130) (Order denying petition for review)

USDOL Case No.: ARB No. 2020-0021; ALJ No. 2019-STA-00071

Casenote(s):

COMPLAINANT ADMONISHED FOR ABUSING ADJUDICATIVE PROCESS FOR FILING THIRD STAA COMPLAINT BASED ON SAME UNDERLYING FACTS AS ADJUDICATED IN PRIOR COMPLAINTS

In Budri v. Admin. Review Bd., No. 20-60073 (5th Cir. Aug. 25, 2020) (2020 U.S. App. LEXIS 27188; 2020 WL 5049130), the Petitioner (Budri) challenged the ARB’s affirmance of the ALJ’s dismissal of Budri’s third STAA complaint. The Fifth Circuit, however, agreed with the ALJ and the ARB that the third complaint was untimely, and that it contained “no new relevant facts, arguments, or claims that were not previously considered—and rejected—by an ALJ, the ARB, the district court, or this Court. Thus, the ARB’s decision, adopting the findings and analysis of the ALJ, rests on a correct application of the law and is not arbitrary or capricious.” The court noted Budri’s pro se status, but echoed admonitions by the ALJ that Budri’s third complaint was an abuse of the administrative adjudicative process, and by the N.D. of Texas that future litigation arising out the same facts will result in imposition of more severe sanctions.


Davis v. Airgas USA, LLC, No. 19-4921 (S.D. Tx. May 1, 2020)(2020 U.S. Dist. LEXIS 77637; 2020 WL 2113617) (Memorandum Opinion and Order)

USDOL Case No.: 2019-STA-00053

Casenote(s):

[STAA Digest II B 2 c iii]
[STAA Digest II Y]
FEDERAL COURT JURISDICTION OVER STAA “KICK-OUT” COMPLAINT; IMPACT OF OSHA’S SERVICE OF SECRETARY’S FINDINGS BY EMAIL WITHOUT COMPLAINANT’S CONSENT TO RECEIVE SERVICE BY EMAIL; MAILBOX RULE, IF APPLICABLE TO EMAILS, REBUTTED BY AFFIDAVIT OF NON-RECEIPT

In Davis v. Airgas USA, LLC, No. 19-4921 (S.D. Tx. May 1, 2020)(2020 U.S. Dist. LEXIS 77637; 2020 WL 2113617), OSHA issued the Secretary’s Findings in Davis’ STAA whistleblower complaint via email. The complainant denied receipt of the email and denied that he had consented to service by email. He did not file a request for an ALJ hearing until he learned of the OSHA findings months later.

The ALJ’s Order of Dismissal indicates that the respondent moved to dismiss before the ALJ, and before the ALJ ruled on the motion, the complainant “kicked out” to federal district court. See Davis v. Airgas Merchant Gases, LLC, 2019-STA-00053 (ALJ Dec. 31, 2019).

The respondent then moved to dismiss the federal court complaint on the ground that the OSHA findings had become final, which deprived the court of jurisdiction under the kick out provision. The court denied the motion.

The STAA regulations require that the “findings and, where appropriate, the preliminary order will be sent by certified mail, return receipt requested, to all parties of record. § 1978.105(b).” The court noted that the date of finality is determined based on the date of “receipt” of the Secretary’s Findings. The court thus determined that “under the Secretary’s regulations, if the complainant never ‘received’ the findings, or if he or she objected within 30 days of receipt, then they did not become final.”

The court found that the STAA regulations incorporate OALJ’s Part 18’s service rules in regard to OSHA’s issuance of the Secretary’s Findings, and therefore 29 C.F.R. § 18.30(a)(2)(ii) applies. That regulation “is similar to Federal Rule of Civil Procedure 5, and it requires consent for service by electronic means.” The court held: “If Davis did not consent to electronic service, then the date the findings were emailed is not the operative date. Instead, the date the document was mailed to Davis’s last known address is the date that is of import. See 29 C.F.R. § 18.30(a)(2)(ii)(c) (indicating service is proper if mailed ‘to the person’s last known address – in which event service is complete upon mailing’).”

The court considered whether a form of the “mailbox” rule applies to emails, but did not find authority on that point in the Fifth Circuit. The court determined that, assuming there was a presumption of receipt of the email, the complainant’s affidavit that he did not receive it rebutted the presumption.

Thus, because the email was not compliant with the DOL’s rules for service, and evidence supported non-receipt, the court turned to when the complainant received traditionally mailed Findings. DOL did not have evidence of sending the Finding other than by email, and the court accepted Complainant’s memory that he received them after calling the OSHA investigator. The court found this evidence sufficient to support the district court’s exercise of jurisdiction under the kick out provision.

[Editor’s note: The USDOL Chief ALJ came to a similar conclusion regarding the effectiveness of email to serve Secretary’s Findings in Van v. J.B. Hunt Transport, 2019-STA-00043 (ALJ Jan. 2, 2020) (Order Denying Motion to Dismiss).]

Carter v. CPC Logistics, 800 Fed. Appx. 196 (4th Cir. Apr. 7, 2020) (per curiam) (unpublished) (No. 19-2135) (2020 U.S. App. LEXIS 10885) (Denial of petition for review

Related USDOL Case: ARB No. 2018-0078, ALJ No. 2012-STA-00061

Casenote(s):

The Fourth Circuit denied Carter’s petition for review of the ARB’s Final Decision and Order affirming the ALJ’s Decision and Order on Remand denying Carter’s STAA complaint of retaliatory discharge. The court found that the ALJ properly considered the deficiencies in his initial decision that were highlighted in a prior opinion by the Fourth Circuit in Carter v. CPC Logistics, Inc., 706 F. App’x 794 (4th Cir. 2017) (No. 17-1095). The court found that substantial evidence supported the finding that Carter’s protected activity was not a causal factor in his discharge; that Carter’s delays were not due to reported fatigue breaks; and that Carter was discharged due to several factors, none of which involved a protected activity.


Jacobs v. United States Dept. of Labor, 806 Fed. Appx. 832 (11th Cir. Mar. 24, 2020) (per curiam) (unpublished) (No. 19-11832) (2020 U.S. App. LEXIS 9123; 2020 WL 1487825) (Denial of Petition for Review)

Related USDOL Case: ARB No. 2017-0080, ALJ No. 2016-STA-00007

Casenote(s):

[STAA Digest II H 5 a]
BRIEFING BY PRO SE PARTY; ARGUMENTS BASED ENTIRELY ON CONCLUSORY STATEMENTS ARE DEEMED ABANDONED; IF APPELLANT URGES ON APPEAL THAT A FINDING OR CONCLUSION IS UNSUPPORTED BY THE EVIDENCE OR CONTRARY TO THE EVIDENCE, APPELLANT MUST INCLUDE IN THE RECORD A TRANSCRIPT OF ALL RELEVANT EVIDENCE

[STAA Digest VI B 1]
ADVERSE EMPLOYMENT ACTION; FINDING THAT APPELLANT VOLUNTARILY RESIGNED SUPPORTED BY SUBSTANTIAL EVIDENCE IN THE FORM OF AN EMAIL SENT TO HIS EMPLOYER, AND EVIDENCE THAT APPELLANT HAD THE CHOICE TO CONTINUE DISCUSSIONS WITH EMPLOYER OR TO RESIGN VOLUNTARILY

[STAA Digest VI A]
ADVERSE EMPLOYMENT ACTION; MERE ALLEGATIONS THAT EMPLOYER FAILED TO PAY FOR CERTAIN FREIGHT SERVICES, IGNORED APPELLANT’S EMAILS, AND THAT TRUCK LEASE VIOLATED FEDERAL LAW, DID NOT ESTABLISH A MATERIALLY ADVERSE ACTION THAT WOULD DISSUADE APPELLANT FROM MAKING A WHISTLEBLOWER COMPLAINT

In Jacobs v. United States Dept. of Labor, No. 19-11832 (11th Cir. Mar. 24, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 9123; 2020 WL 1487825), the Fourth Circuit found that Jacobs, proceeding pro se on appeal of the ARB’s summary affirmance of the ALJ’s decision and order denying his STAA claim, “abandoned his arguments regarding the ALJ’s finding that he voluntarily resigned, because he fails to support his argument with anything beyond conclusory statements in his briefs. See Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008) (stating issues not briefed on appeal by a pro se litigant are deemed abandoned).” In addition, Jacobs “failed to include a complete transcript of his hearing before the ALJ. See Fed. R. App. P. 10(b)(2) (providing ’[i]f the appellant intends to urge on appeal that a finding or conclusion is unsupported by the evidence or is contrary to the evidence, the appellant must include in the record a transcript of all evidence relevant to that finding or conclusion’).”

Moreover, the court found that substantial evidence supported the ALJ’s finding of a voluntary resignation. Appellant had sent an email to his employer stating that he “rescinded” all agreements with the employer, requesting to be paid for all services up to that time, stating that he would return his truck for final inspection, and stating that a meeting would no longer be necessary. The court stated:

Thus, he had the choice to continue his discussions with Liberty about his grievances or terminate his employment. See Hargray v. City of Hallandale, 57 F.3d 1560, 1568 (11th Cir. 1995) (stating a resignation is voluntary as long as the employee had a choice, even if the alternatives are unpleasant). Jacobs chose to voluntarily resign, which shows he was not constructively discharged or subject to a materially adverse employment action. See id. Accordingly, because Jacobs voluntarily resigned, we deny the petition as to this issue.

The court also found that Appellant abandoned argument supported only by conclusory statements that his employer failed to pay him, that the employer ignored his emails, and that his truck lease violated federal law. The court declined to consider arguments about his employer’s failure to pay him a signing bonus because that issue was raised for the first time on appeal. The court ruled that even if he had not abandoned his arguments, Appellant did not show that his employer subjected him to a materially adverse action. The court stated: “He did not offer evidence showing that Liberty failed to pay him for 3,081 miles of freight services or explain how such a failure would dissuade a reasonable worker from making or supporting a charge of discrimination. Further, the record was clear that Liberty replied to his emails, and he also failed to show how ignoring emails would equate to a materially adverse action. Lastly, although Jacobs repeatedly states that his truck lease violated federal law, he does not show how the lease violated federal law or how such a violation would be a materially adverse action that would dissuade him from making a whistleblower complaint.” Id. at 4-5 (citations omitted).