“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

Am. Airlines, Inc. v. Mawhinney, No. 19-55566 (9th Cir. June 5, 2020) (unpublished) (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) (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.


Energy Reorganization Act

Madison v. Dominion Energy, Inc., 18-cv-00036 (W.D. Va. June 1, 2020) (2020 U.S. Dist. LEXIS 96097) (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), 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

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

Wooten v. BNSF Ry., No. 19-35431 (9th Cir. June 22, 2020) (unpublished)

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) (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), 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) (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), 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., No. 19-60524 (5th Cir. Apr. 28, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 13870)

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., No. 19-60524 (5th Cir. Apr. 28, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 13870), 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) (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), 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.


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) (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) (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) (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, No. 19-1259 (4th Cir. Mar. 25, 2020) (per curiam) (unpublished) (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) (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), 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) (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, No. 19-604426 (5th Cir. Feb. 27, 2020) (per curiam) (unpublished) (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, No. 19-604426 (5th Cir. Feb. 27, 2020) (per curiam) (unpublished), 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) (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) (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., No. 18-2858-cv (2d Cir. Jan. 14, 2020) (unpublished) (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) (Order Denying Summary Judgment)

USDOL Case: 2018-FRS-00045

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.


Sarbanes-Oxley Act

Wutherich v. Rice Energy Inc., No. 18-200 (W.D. Pa. June 8, 2020) (Memorandum Order [adopting Magistrate’s recommendation])

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, No. 18-10038 (11th Cir. May 18, 2020) (unpublished) (2020 U.S. App. LEXIS 15755)

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, No. 18-10038 (11th Cir. May 18, 2020) (unpublished) (2020 U.S. App. LEXIS 15755), 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, No. 19-13120 (11th Cir. May 4, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 14135)

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, No. 19-13120 (11th Cir. May 4, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 14135), 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)

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) (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), 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), 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), 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) (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), 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, No. 18-72418 (9th Cir. Jan. 13, 2020) (unpublished) (2020 U.S. App. LEXIS 1306) (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, No. 17-1887, No. 17-2259 (4th Cir. Jan. 9, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 897) (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.


Surface Transportation Assistance Act

Davis v. Airgas USA, LLC, No. 19-4921 (S.D. Tx. May 1, 2020)(2020 U.S. Dist. LEXIS 77637) (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), 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, No. 19-2135 (4th Cir. Apr. 7, 2020) (per curiam) (unpublished) (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, No. 19-11832 (11th Cir. Mar. 24, 2020) (per curiam) (unpublished) (2020 U.S. App. LEXIS 9123) (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), 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).