Wendell H. Ford Aviation Investment and Reform Act for the 21st Century


Kossen v. Asian Pac. Airlines, 2023 U.S. App. LEXIS 9417, 2023 WL 3017948 (9th Cir., Apr. 20, 2023) PDF

In Kossen v. Asian Pac. Airlines, the issues before the Court were: (1) whether the ARB employed the wrong standard of review; (2) whether the ARB erred in finding that the ALJ did not abuse his discretion in excluding certain exhibits; (3) whether the ARB’s finding that Kossen failed to prove by a preponderance of the evidence that he faced an adverse action is supported by substantial evidence; and (4) whether the ARB legally erred in concluding that Kossen failed to prove causation by a preponderance of the evidence.

The Court stated that it does not review the ALJ’s factual findings de novo but rather for substantial evidence and determined that the ARB did not employ the wrong standard of review. 

Kossen next argued that the ALJ erred in excluding key emails. The Court held that the ARB correctly concluded that the ALJ did not abuse his discretion in excluding certain (email) evidence. Kossen had failed to comply with the ALJ’s Pre-Hearing Order and the ALJ afforded him the opportunity to admit evidence. Yet, Kossen still did not include these documents in his exhibit list or present them for admission on the first day of the hearing. The Court determined that the ALJ acted well within his discretion in proceeding rather than continuing the hearing to allow Kossen to cure his procedural errors. The ALJ reasonably decided that a continuance would be prohibitively expensive because of the distances the participants had traveled and would unfairly burden the other parties when Kossen had ample time to prepare.

The Court determined that the ARB's determination that Kossen failed to prove by a preponderance of the evidence that he faced an adverse action, whether by being (1) denied a promotion to captain, (2) blacklisted, or (3) terminated, is supported by “substantial evidence.”


Federal Railroad Safety Act

Chambers v. United States DOL, 2023 U.S. App. LEXIS 25368, 2023 WL 6232479 (10 Cir., September 26, 2023). PDF

In Chambers v. United States DOL, the Tenth Circuit determined that substantial record evidence supports the ARB’s holding that BNSF proved its affirmative defense and that the ALJ did not abuse his discretion in deciding to exclude irrelevant evidence that Chambers sought to introduce.

Chambers worked for BNSF and reported an injury in 2016. While investigating the report, BNSF learned that Chambers had falsely reported that he had neither suffered injuries causing him to miss work for an extended period nor filed an injury-related suit against an employer on his pre-employment medical questionnaire. BNSF notified Chambers that it planned to hold an investigative hearing concerning the alleged dishonesty. After the investigation, BNSF concluded that Chambers was dishonest in his employment application and recommended his dismissal. BNSF’s Vice President of the Southern Region agreed. BNSF then dismissed Chambers for dishonesty in his pre-employment medical questionnaire in violation of BNSF's rules prohibiting dishonest conduct.

Chambers filed a FRSA complaint with OSHA. OSHA dismissed the complaint. Chambers then sought review of OSHA's decision before an ALJ. During the hearing, Chambers attempted to introduce testimony in another matter from Derrick Cargill, BNSF's then-Director of Labor Relations, in which Cargill testified that BNSF rules do not apply to applications for employment. The ALJ excluded Cargill's testimony, agreeing with BNSF that it was irrelevant because it involved the application of “a different rule in a different case [with] a different fact scenario.”
The ALJ concluded that Chambers’s report of the injury “played absolutely no part in the decision to terminate” him. Although the ALJ found this sufficient to defeat Chambers's prima facie case, the ALJ went on to determine that BNSF had proved its affirmative defense by clear and convincing evidence and that it would have dismissed Chambers even in the absence of the injury report.

The ARB affirmed, finding that substantial evidence and the ALJ's credibility determinations supported the ALJ's findings with respect to BNSF's defense, and that the ALJ did not abuse his discretion in excluding Cargill's testimony.

The Court determined that the ARB did not abuse its discretion by affirming the ALJ's finding that BNSF proved, by clear and convincing evidence, that it would have taken the same adverse action absent protected activity. The ALJ rendered twelve findings of fact in concluding that BNSF provided its affirmative defense and emphasized the credibility of the decision-makers' testimony. The Court stated that a “reasonable mind” would accept the findings “as adequate to support a conclusion” that BNSF would have fired Chambers absent receiving a second injury report.
The Court noted that Chambers’s best argument was that his dismissal was caused by his second injury report, not by the discovery of his dishonest answers. And argued that no temporal proximity existed between the discovery of the dishonest answers and his dismissal, while temporal proximity did exist between his second injury report and the adverse action. But the Court determined that this argument fails because the ALJ found the exact opposite conclusion, which was supported by substantial evidence.

Chambers also argued that BNSF officials knew about his initial injury report. As a result, Chambers reasoned that because BNSF did not fire him while knowing about his initial injury report, the real reason he was dismissed was due to his second injury report. But the Court determined that the substantial evidence that the ALJ relied on suggested against finding an inference that the second injury report acted as a catalyst for Chambers' termination.

Lastly, the ALJ excluded Cargill's irrelevant testimony because it involved violations of a different workplace policy. The Court held that evidence showing an employer applied a rule in a certain manner in one circumstance is not necessarily relevant to how that employer applies a different rule in a dissimilar circumstance. The Court also stated that the testimony's exclusion did not implicate any substantial right of Chambers's. The Court found no "prejudicial error" because it could not reasonably conclude that there would have been a contrary result had Cargill testified about the irrelevant policy. The Court noted that given the "considerable deference" we give to the ALJ this reasonable, nonarbitrary conclusion was not an abuse of discretion.


Nay v. BNSF Ry. Co., 2023 U.S. App. LEXIS 23647, 2023 WL 5740244 (9th Cir. Wash., Sept. 6, 2023) PDF

In Nay v. BNSF Ry. Co., an Amtrak passenger train crashed into Torres's car when she drove onto a private railroad crossing. Torres was killed, and her son, a passenger, was also injured. Torres's estate and son sued Amtrak, two Amtrak employees, and BNSF Railway Company, the operator of the railroad. Plaintiffs alleged that Defendants were negligent in failing to: (1) timely sound a horn before the train reached the crossing, (2) install adequate signage and warning devices, and (3) clear the foliage that obstructed motorists' sightlines.

The district court granted summary judgment to Defendants, concluding that the claims were preempted by the FRSA; that Defendants did not breach any duty to Plaintiffs as a matter of law; and that Torres's motorist behavior was the sole proximate cause of the collision.
The Court explained that for the FRSA to preempt a plaintiff's state-law claim, the federal law or a regulation promulgated under it must "cover" the same subject matter as the state law and "not merely touch upon or relate to that subject matter." The Court stated that normal State negligence standards apply when there is no Federal action covering the subject matter.

The Court determined that the FRSA does not preempt Plaintiffs' claim that Defendants acted negligently by failing to sound a horn. Federal regulations expressly allow states to require the use of a horn at a private crossing.

The Court determined that the FRSA also does not preempt Plaintiffs' claim that Defendants were negligent in failing to install adequate warning devices. The Court stated that the FRSA only preempts warning-device claims if the warning system was paid for in part with federal funding and is fully installed and working. Here it was uncontested that federal funds were not used in the installation of any warning devices at the relevant crossing.

The court determined that the FRSA does preempt Plaintiffs' visual-obstruction claim to the extent it is based on allegations about vegetation on railroad property that was "on or immediately adjacent to [the] roadbed." But noted that Plaintiffs' claim was not preempted insofar as it concerned vegetation that was not on or immediately adjacent to the roadbed.

The Court held that the FRSA does preempt Plaintiffs' visual-obstruction claim to the extent it is based on allegations about vegetation on railroad property that was on or immediately adjacent to the roadbed. But stated that Plaintiffs' claim is not preempted insofar as it concerns vegetation that was not "on or immediately adjacent to [the] roadbed."

The Court held, viewing the evidence in the light most favorable to Plaintiffs, Plaintiffs have presented evidence that could support a reasonable jury's finding that the warnings here were inadequate for the circumstances. The Amtrak engineer did not sound the horn until he saw the car, between one and three seconds before the collision. And the crossing only had passive warnings. The Court determined that there were triable issues of fact about whether the allegedly dangerous circumstances warranted the earlier sounding of a horn or installation of additional warning devices. The Court reversed the district court's grant of summary judgment to Defendants.


Yelder v. United States DOL, Admin. Review Bd., 2023 U.S. App. LEXIS 20578 (6th Cir., Aug. 8, 2023) PDF

The Court determined that the ARB’s decision was supported by substantial evidence and denied Yelder’s petition for review.

On April 21, 2017, Yelder and a co-worker had just completed an assignment and got into a taxi contracted by their employer Norfolk Southern to take them to their hotel. During the drive, Yelder, who was in the front passenger seat, believed that the driver was driving in the wrong direction and became concerned when he asked three times if the driver was taking them to their hotel and the driver did not respond. Yelder and the driver then physically struggled with one another as Yelder attempted to grab the taxi's two-way radio and steering wheel and remove the key from the ignition. During the struggle, Yelder admittedly shoved the driver in the chest. The driver then stopped the taxi. Once stopped, Yelder reached over and turned the taxi's ignition off. Yelder and the co-worker then exited the taxi and were taken to their hotel by a new driver.

Yelder reported the incident to the trainmaster at the time and to the local police. After an investigation and hearing, Norfolk Southern terminated Yelder's employment for violating Norfolk Southern Safety Rule 900, which prohibits employees from engaging in conduct that would be considered offensive or inappropriate by co-workers, customers, or the public.

Yelder then filed a complaint with the OSHA under the whistleblower protection provision of the FRSA. He asserted that Norfolk Southern terminated his employment because he reported the driver's conduct, which was a hazardous safety or security condition. He later asserted during the investigatory hearing that he was terminated because he had reported a psychological injury arising out of the incident. Norfolk Southern claimed that it terminated Yelder's employment because he had violated a safety rule by striking the driver. After an investigation, OSHA found no reasonable cause to believe that Norfolk Southern violated the FRSA. A hearing was then held before the ALJ at Yelder's request. The ALJ found that Yelder did not give a good-faith notice or attempted notice of his psychological injury to Norfolk Southern, that Yelder did not show that his protected activity of reporting the driver's behavior was a contributing factor in his termination, and that Norfolk Southern would have terminated Yelder in the absence of his protected activity of reporting the driver's behavior. The ARB affirmed, concluding that substantial evidence supported the ALJ's findings that Yelder's report of his psychological injury was not protected activity and that his protected activity of reporting the driver's behavior was not a contributing factor in the termination of his employment.

No Protected Activity:

The Court held that Yelder's claim that Norfolk Southern terminated him because he reported a psychological injury resulting from his encounter with the driver fails to meet the first and second elements of a retaliation claim because he did not show that he engaged in a protected activity, which requires an employee to report a work-related injury in good faith. Substantial evidence supported the ARB's conclusion that Yelder did not show that he reported his alleged psychological injury to Norfolk Southern so as to render that reporting a protected activity.

Protected activity was not shown to be a contributing factor:

The Court held that substantial evidence supported the ARB's conclusion that Yelder did not show that his protected activity of reporting the driver's behavior was a contributing factor in his termination.

The ALJ found witnesses credible and determined that Norfolk Southern's investigation was reasonable, and concluded that, based on all of the testimony and documentary evidence concerning the incident and investigation, "Yelder's protected activity played no part in [Norfolk Southern]'s decision to take adverse employment actions against him."

The Court held that substantial evidence supported the ALJ's findings that Yelder's protected activity played "no part" in his termination and instead that Norfolk Southern terminated Yelder because he engaged in a physical altercation that violated company policies.

The Court did not address whether Norfolk Southern proved by clear and convincing evidence that it would have terminated Yelder in the absence of his protected activity.


Thorstenson v. United States DOL, 2023 U.S. App. LEXIS 6142, 2023 WL 2523831 (9th Cir., Mar. 15, 2023) PDF

In the initial appeal, the Court reversed and remanded the ARB's affirmance of the ALJ’s decision, explaining that the ARB had improperly rejected the contention that "BNSF's enforcement of its timely injury reporting policy was so unreasonable and unduly burdensome that it constituted retaliation when enforced on these facts." The Court held that "because it was virtually impossible for Thorstenson to comply with the injury reporting rule, he was effectively disciplined for the protected activity of reporting a workplace injury."

On remand, the ARB took issue with the Court’s analysis of the record, determined that the disposition did not implicate BNSF's affirmative defense, and affirmed once more the ALJ's finding that BNSF had proven its affirmative defense.

The Court held that “The ARB erred in its interpretation of our prior decision, which foreclosed its determination on remand that BNSF established its affirmative defense by clear and convincing evidence.” In the alternative, the Court held that substantial evidence does not support the ALJ's conclusion that BNSF proved by clear and convincing evidence that it would have disciplined Thorstenson in the absence of his protected activity.

The Could concluded that “it is clear from the administrative record that Thorstenson is entitled to damages for his termination.” And concluded that a remand for further proceedings on the merits would serve no useful purpose. The Court granted the petition, reversed the decision of the ARB, and remanded with instructions to remand to the ALJ for the limited purpose of determining compensatory damages based on the existing record, to be supplemented only as to post-hearing damages.


Johnson v. Admin. Review Bd., 2023 U.S. App. LEXIS 255, 2023 WL 117835 (5th Cir. 2023). PDF 

While working as a railroad trackman for Union Pacific Railroad Company during 2015 Johnson was severely injured. He sought recovery under the Federal Employers’ Liability Act and a jury awarded him $1,227,739 in damages, a large part of which was for future lost earnings and fringe benefits. Johnson was never officially terminated from employment. In 2017, Johnson sought to return to work for Union Pacific. A Union Pacific medical exam stated that Johnson could return to work without restriction. Johnson submitted his request to work in 2018. Union Pacific denied his request stating that he was "estopped from returning to service" based on the evidence he presented at the FELA trial. Complainant filed under the FRSA alleging retaliation. Johnson argued that his request to return to work was a protected activity under 49 U.S.C. § 20109(c)(2) and Union Pacific's refusal of his request amounted to an unlawful termination. An ALJ found that Johnson was effectively terminated and thereby faced discipline, but rejected his contention that his request was a protected activity. The ALJ dismissed his complaint. The ARB affirmed. Johnson v. Union Pac. R.R. Co., ARB No. 2021-0041, ALJ No. 2019-FRS-00005 (ARB Jan. 25, 2022).

The Fifth Circuit stated that a contributing factor is any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision. The Cort stated that “[e]ven such a broad interpretation, though, has its limits” and this case illustrates the limits perfectly. The court stated that Johnson's request to return to work played no part in Union Pacific's refusal to allow him to return to work. Union Pacific's decision was based on the fact that it already paid Johnson almost a million dollars for a purportedly permanent disability. As the ARB noted: "The parties stipulated that Johnson was not allowed to return to work because he was estopped from doing so based on his representation of permanent disability at the FELA trial." Johnson has produced no evidence to suggest any other factor, like animus or anything else, played any role in Union Pacific's decision. So we cannot say the ARB's decision is not supported by substantial evidence.


Sarbanes-Oxley Act


Seybold v. Charter Commc'ns, Inc., 2023 U.S. App. LEXIS 29791 (5th Cir. Nov. 7, 2023). PDF

Seybold worked for Charter Communications, Inc. as a sales manager for eight years before his termination. Charter's stated reason for terminating Seybold was his unprofessional conduct and communication. Seybold argues that Charter's reasoning was pretextual and that he was in fact fired for reporting Charter's unlawful or unethical corporate behavior.

Seybold reported four allegations against Charter. The first involved a policy of retagging circuits to make old Ethernet customers appear new. The second involved a policy change whereby senior homes were counted as both commercial and residential accounts, resulting in overreporting. The third involved an inflated sales funnel that Seybold believed set an unattainable standard for sales personnel. The fourth involved an error in the calculation of commissions, such that sales personnel like Seybold were underpaid.

Seybold alleged that, through each of the actions contained in his reports, Charter engaged in securities fraud and shareholder fraud. Seybold asserted that he detailed his findings in the four categories above to his supervisor, the regional vice president, and the group vice president at Charter via email.

After Charter fired Seybold, he filed a Sarbanes-Oxley complaint with the OSHA. OSHA dismissed his complaint, and Seybold filed suit against Charter for violations of the whistleblower protections contained in the SOX Act and for breach of contract relating to the unpaid commissions.

Charter filed a Rule 12(c) motion for judgment on the pleadings. The district court noted several deficiencies in Seybold's pleadings regarding the first, second, and fourth elements of his prima facie case. In particular, the court directed Seybold's attention to the complaint's lack of detail regarding what Seybold knew to be unlawful at the time he made the four reports and what those reports actually contained. The district court granted Seybold leave to amend his complaint to address these failings.

Seybold filed an amended complaint. Shortly thereafter, Charter filed a Rule 12(b)(6) motion to dismiss, arguing that Seybold failed to cure the deficiencies previously highlighted by the district court. The district court agreed with Charter and dismissed Seybold's SOX claim with prejudice. The district court found that the first amended complaint "provide[d] zero new, meaningful detail" to cure the pleading deficiencies. By "simply add[ing] words without adding meaning," Seybold failed to provide "specificity regarding the report's contents, Seybold's state of mind, and the causal link between the . . . report and Seybold's termination." The district court found that "Seybold's amended complaint added a host of details surrounding what Charter did wrong, but it failed to sufficiently allege what Seybold actually reported." Because the court also found that Seybold failed to follow prior instructions regarding the errors identified in his complaint, the district court denied Seybold leave to file a second amended complaint.

Seybold timely appealed the dismissal of the SOX claim.

Seybold raised arguments on appeal. Of relevance here, Seybold argued that the district court improperly dismissed Seybold's SOX claim under Rule 12(b)(6) and the district court abused its discretion by denying Seybold leave to file a second amended complaint under Rule 15(a).

The district court identified errors with several aspects of this "protected activity": whether Seybold knew he was engaging in protected activity at the time he sent the emails; whether Charter knew Seybold was engaging in protected activity at the relevant time; and whether Seybold pled with sufficient particularity the content of the reports, so as to determine whether they constituted protected activity at all. As Charter explained it, Seybold "failed to allege the substance of what he actually said to Charter," and "he did not allege that—at the time of his reports—he believed Charter's policy violated [the relevant] laws." The district court found that Seybold's first amended complaint failed to cure these errors, and the Fifth Circuit agreed.

Failure to state a SOX claim:

The Court stated that the fatal flaw in Seybold's pleadings was the lack of any concrete detail regarding what Seybold reported to his supervisors and whether he thought the reported conduct was illegal at the time. Seybold attempted to explain why he could not provide the court with physical copies of his emails (in which he allegedly reported the unlawful conduct), but this misses the point: Seybold needed to describe, with particularity, what was contained therein so as to demonstrate that he was engaging in protected activity under SOX at the time the reports were filed. So while providing the emails themselves would perhaps be beneficial, Seybold could have provided the detail requested by the district court without them—he simply did not do so. Instead, he summarized his actions as "reporting," "opposing," and "disputing" certain Charter policies. But this does not show that Seybold held a "reasonable belief that conduct violates" securities laws; if anything, it expresses mere disagreement with company policy. With respect to the fourth report regarding unpaid commissions, Seybold was able to provide actual copies of relevant emails, but the emails did not evince any allegation of wrongdoing at all. Instead, Seybold's email highlighted a "misapplication" of the Commission Plan that Charter should "re-calculate." Rather than showing that he affirmatively communicated potentially illegal actions, the email reflects, at most, a disagreement with a paycheck. Thus, Seybold's vague allegations fall short of our pleading requirements and do not bring his dispute within the scope of SOX's whistleblower protections.

The Court held that “In sum, Seybold did not demonstrate that he actually blew the whistle. Seybold's allegations paint a picture of an employee criticizing internal company policies, not of an employee highlighting potential illegal conduct by his employer. Other than asserting that he complained about four areas of Charter's business, Seybold's pleadings fail to show that he alerted Charter of his belief that its actions were unlawful—not merely "improper" or subject to "opposition" from an employee, but actually unlawful. Because Seybold did not demonstrate that he engaged in protected activity, or that Charter believed Seybold was engaging in the same, his SOX claim fails as a matter of law.

Denial of Leave to File Second Amended Complaint:

Seybold argued that the district court abused its discretion in denying his request to file a second amended complaint to cure the deficiencies identified in his first amended complaint. The district court found that, although it had explicitly pointed out each discrete issue with the original complaint, Seybold failed to cure any of his pleading deficiencies and ultimately ignored the district court's clear instructions. The district court believed that after the showing made in the first amended complaint, giving Seybold a second chance to amend would be futile. The Court agreed and held that the district court did not abuse its discretion in denying Seybold leave to amend his complaint a second time where such an amendment likely would not have cured the fatal problems in Seybold's case.


Ronnie v. Off. Depot, LLC, 81 F.4th 1345 (11th Cir. Sept. 25, 2023). PDF

Ronnie was employed as a senior financial analyst for Office Depot. One of his responsibilities was ensuring data integrity. One of Ronnie's principal duties was to calculate and report a metric called "Sales Lift." Sales Lift is a metric designed to quantify the cost-reduction benefit of closing redundant retail stores. A higher Sales Lift justifies Office Depot’s store-closure strategy.
Ronnie identified two potential accounting errors that he believed signaled securities fraud related to the Sales Lift. First, he alleged that Office Depot pulled from the wrong data set to establish projected sales, which overinflated Sales Lift and consequently overinflated revenue retention after store closures. Second, Ronnie identified that Office Depot calculated Sales Lift incorrectly by using two different base pre-closure sales data sets.

Ronnie reported both issues to his superiors the week he discovered them – on February 25, 2016. For the first issue, he was able to correct the model. For the second issue, Ronnie recommended that the supervisors correct the Sales Lift error by only using the APT pre-closure data in the future for both the projected sales calculation and the ultimate Sales Lift calculation. The supervisors appeared to appreciate the gravity of the Sales Lift error, as they memorialized in writing that Ronnie had found "a significant difference in APT sales and GSC sales."

Ronnie expected that his team would implement his suggested change immediately; however, they claimed they first needed to understand the discrepancy before they could correct the error. Ronnie's supervisors thus assigned him the task of investigating the root cause of the discrepancy. Ronnie was also told multiple times not to make any changes to the calculation until the team understood the reason for the differences. And Ronnie's supervisors indicated that they looked forward to Ronnie's report on his research into the discrepancy.

Ronnie alleges that after he reported the issue, his relationship with his boss became strained. According to Ronnie, he stopped receiving invitations to the weekly all-hands meeting and instead was asked to do clerical work. Ronnie began to fear he was being retaliated against and he emailed Human Resources to ask for protection from retaliation for reporting the inaccuracies.

By April 7, 2016, Ronnie still had not figured out the discrepancy, and his supervisor issued a Performance Correction Document with a "final warning" stating that he had failed to timely complete the task of determining the cause of the discrepancy. On April 19, 2016, Ronnie was terminated for failing to perform the task of identifying the cause of the data discrepancy.

Ronnie timely filed a pro se complaint with the OSHA, claiming Office Depot violated 18 U.S.C. § 1514A. OSHA dismissed his complaint. Ronnie appealed, requesting a hearing before an ALJ. Following discovery, Office Depot moved for summary decision, arguing that Ronnie had neither shown either he was engaged in protected activity or that any alleged protected activity caused his termination and that the undisputed facts showed Ronnie was discharged due to his poor work performance and unprofessionalism. The ALJ granted Office Depot's motion for summary decision, finding "there was no genuine issue of material fact as to an essential element of Complainant's claim—whether complainant engaged in protected activity." The ALJ concluded that Ronnie failed to establish an objectively reasonable belief that fraud had occurred.
Ronnie appealed the ALJ's ruling to the Administrative Review Board (ARB). The ARB affirmed. Christian Ronnie v. Office Depot, Inc., ARB No. 2019-0020, 2020 DOL Ad. Rev. Bd. LEXIS 303, 2020 WL 6117919 (ARB Sept. 29, 2020) PDF.

Ronnie timely petitioned for review of the ARB's decision. The Eleventh Circuit issued the following question to the parties: "What evidence must a Sarbanes-Oxley whistleblower plaintiff present to establish that he 'reasonably believe[d]' that the conduct he reported violated one of the statutes or rules identified in 18 U.S.C. § 1514A(a)(1)?"

The Court explained to prevail on a SOX claim, an employee must prove by a preponderance of the evidence that (1) he engaged in protected activity, (2) the employer knew or suspected that the employee engaged in a protected activity, (3) the employee suffered an adverse action, and (4) an inference could be made that the protected activity was a contributing factor in the unfavorable action. The court stated that SOX statutory language articulates that in order to establish "protected activity," the complainant must show that he "reasonably believes" that the conduct complained of constitutes a violation of the laws listed at Section 1514A. As a threshold matter, the complainant must report conduct that falls into one of six categories enumerated by Congress in 18 U.S.C. § 1514A(a)(1): mail fraud, wire fraud, bank fraud, securities fraud, any SEC rule or regulation, or any federal law relating to fraud against shareholders.

The Court explained in order to satisfy the objective requirement, the complainant must present evidence to establish his reasonable belief of the alleged violation. The key inquiry, then, becomes what evidence is required to establish reasonableness. Our consideration of this issue attempts to articulate a balance between protecting employees from retaliation and protecting employers from baseless allegations. To find this balance, we look to other circuits who have addressed this same question. The Third and Sixth Circuits found Sylvester to provide the best guidance and do not require plaintiffs to put forth "information sufficient to form an objectively reasonable belief" of fraud. By contrast, the Second and Fourth Circuits employ a totality of the circumstances test where the petitioner does not have to identify the SOX provision at issue, but must make some showing of scienter, materiality, reliance, or loss in order to enjoy SOX protection.

The Court stated, to make a showing of protected activity, the complainant must put forth sufficient information about the alleged wrongful conduct to show that a reasonable person in his position would believe the wrongdoing amounted to a SOX violation. To be clear, this does not require the complainant to articulate the specific provision of § 1514A he alleges his employer's conduct violates. While doing so may strengthen his proposition, a complainant will not be penalized for failing to identify the specific SOX provision at issue.

Adopting a totality of the circumstances test:

In determining what information sufficiently paints a picture of reasonable belief, we employ a totality of the circumstances test based on knowledge available to a reasonable person in the same factual circumstances—and with the same training and experience — as the complainant. Relevant to the totality of the circumstances is whether the employer acted with the requisite scienter, whether the misstatement was material, whether the misstatement was relied upon, and whether it yielded economic loss. In adopting a totality of the circumstances test, we also note that while the employee need not "definitively and specifically" prove each element of fraud, he must make more than a conclusory allegation. Mere speculation or suspicion is insufficient to establish a genuine issue of material fact as to reasonable belief.

The Court found that the ARB applied the correct legal standard to assess whether Ronnie engaged in protected activity. The ARB explained that the complainant must have "an objectively reasonable belief" and must "complain about conduct that he or she believes would reasonably fall under one of the enumerated categories."

The Court held after reviewing the totality of the circumstances, Ronnie did not set forth sufficient evidence to support an inference that a reasonable person in his position would find Office Depot's conduct to be violative of SOX.

The Court stated that Ronnie asserted that Office Depot intentionally manipulated sales data in order to mislead or deceive but did not support his conclusion. Ronnie did not allege any scienter on the part of Office Depot, nor did he identify the materiality of the data error. He merely claimed that the error was important and that his management tried to "cover it up" by requesting—openly and repeatedly—that he complete the difficult task of identifying the cause of the error. The Court noted that it was unclear how managers insisting on finding the cause of a data inconsistency comports with an allegation that they sought to cover it up. The Court found that Ronnie's assertions that Office Depot intentionally manipulated sales data and that his assigned task of investigating the discrepancy was a stalling tactic were mere speculation, which alone is not enough to create a genuine issue of fact as to the objective reasonableness of Ronnie's belief.
The Court determined that Ronnie failed to allege sufficient facts to establish that a reasonable person with his training and experience would believe the conduct constituted a SOX violation. The ARB's decision was not arbitrary or capricious, an abuse of discretion, or otherwise not in accordance with law.


Jaludi v. Citigroup & Co., 57 F.4th 148 (3rd Cir. 2023). PDF

Jaludi worked at Citigroup. After he reported company wrongdoing, he was demoted, transferred, and terminated. He also claimed that Citigroup blacklisted him from the whole financial industry. In 2015, Jaludi brought two claims, including one under the Sarbanes-Oxley Act. The District Court sent the claims to arbitration.

Jaludi appealed the arbitration order. In early 2018, while that appeal was pending, he filed an administrative complaint with the Secretary of Labor. That complaint rehashed the allegations and added one more:  In late 2017, a headhunter had stopped returning his calls. Citigroup, he suspected, was behind this silent treatment. The Court decided his appeal, holding that he need not arbitrate his Sarbanes-Oxley claims, and remanded to let them proceed in court.
Jaludi's victory was short-lived. On remand, the District Court dismissed for failure to state a claim because his administrative complaint was untimely. Though Sarbanes-Oxley required an administrative complaint within 180 days of the retaliatory conduct, he had waited more than two years after the last incident.

On appeal, Jaludi argues the court should have granted him leave to amend because the 2017 allegation that he added in his administrative complaint happened fewer than 180 days before that complaint, making it timely. Citigroup says that Jaludi failed to exhaust his administrative remedies before suing, so the court should have dismissed for lack of jurisdiction. Citigroup argues that Jaludi failed to exhaust his administrative remedies before suing, so the court should have dismissed for lack of jurisdiction.

Under Sarbanes-Oxley, Neither Timeliness nor Exhaustion Is Jurisdictional:

The Court stated that Congress can limit jurisdiction by imposing procedural requirements. But not all procedural requirements are jurisdictional. Some speak only to the parties' duties, not our power. They prescribe the route that parties must take to the courthouse doors but do not lock those doors. To be sure, violations of a nonjurisdictional procedural requirement often end in dismissal. But because they do not deprive the court of jurisdiction, we can sometimes overlook or excuse them. By contrast, violating a jurisdictional procedural requirement locks the courthouse doors. "Jurisdictional requirements cannot be waived or forfeited, must be raised by courts sua sponte, and . . . do not allow for equitable exceptions." Id. Because these consequences are severe, Congress must state clearly that a procedural requirement is jurisdictional. Id. It need not use magic words. Instead, "traditional tools of statutory construction must plainly show that Congress imbued a procedural bar with jurisdictional consequences."
The Court stated that one such traditional tool is statutory context. The Supreme Court "has often explained that Congress's separation of a [procedural bar] from a jurisdictional grant indicates that the ... bar is not jurisdictional." But it is not enough to put a procedural bar and a jurisdictional grant in the same provision, or even in the same sentence. Rather, there must be "a clear tie between" the two.

The Court stated that Jaludi made two procedural mistakes. First, he waited more than 180 days to file an administrative complaint and thus exceeded Sarbanes-Oxley's statute of limitations. Second, he did not file that complaint until after he sued in federal court, violating the exhaustion requirement. As the District Court rightly held, neither requirement is jurisdictional.

Sarbanes-Oxley's statute of limitations is not jurisdictional:

The Act's statute of limitations is not jurisdictional. That provision specifies that an administrative complaint must be filed "not later than 180 days after the date on which the violation occurs, or after the date on which the employee became aware of the violation." It does not "speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts." It is tucked under a paragraph labeled "Procedure" and is structurally separate from any provision mentioning jurisdiction. The Act gives no hint, let alone a "clear" one, that this time limit is jurisdictional. As the District Court held, Jaludi's delay past the statute of limitations did not defeat jurisdiction. 

Sarbanes-Oxley's exhaustion requirement is not jurisdictional:

The Court stated that the exhaustion requirement is not clearly jurisdictional. True, several factors plausibly support reading it as jurisdictional. But a plausible or even preferable reading is not enough to make a statement clear. Though structurally the exhaustion requirement sits in a separate paragraph from the one titled "Procedure," that paragraph's heading does not mention jurisdiction. And though it is in a single sentence that also mentions jurisdiction at the end, we must parse that sentence to discern which parts are jurisdictional. Most of the sentence addresses litigants, as nonjurisdictional provisions typically do. Only the relative clause at the end—"which shall have jurisdiction over such an action"—speaks to courts and their power. The Court stated that this jurisdictional clause is not tied clearly enough to the exhaustion requirement. Under the canon of the last antecedent, a referent usually refers only as far back as "the nearest reasonable" antecedent. "Such an action" naturally refers to "an action at law or equity"—not the earlier exhaustion requirement. What is more, letting "such an action" import everything that comes before would also import an exception for a "showing that such delay is due to the bad faith of the claimant." Jurisdictional rules tend to be clear, yet bad faith is murky and requires factfinding. Though Congress could make good faith a jurisdictional requirement, it rarely if ever does. We doubt that it did so here; it certainly did not do so clearly. Thus, the jurisdictional clause does not incorporate the earlier exhaustion requirement.

The Court noted that other statutes more clearly tie jurisdiction to procedural requirements, "accentuat[ing] the lack of comparable clarity" here. The Ocurt found no such language expressly conditioning jurisdiction on exhaustion in Sarbanes-Oxley.

The Court stated that its precedent confirms its reasoning. The Court stated that its “holding today rejects the Second Circuit's contrary approach.” The Court stated that neither the Act's time limit nor its exhaustion requirement clearly states that it is jurisdictional.
Complaint was late, and amendment would be futile:

The Court stated that Jaludi had to file an administrative complaint within 180 days of suffering or discovering retaliation against him. But after learning of the alleged misconduct, he waited years to do so. So this suit is time-barred. Plus, the District Court rightly held that amending would be futile. Jaludi seeks to rescue his late complaint by adding a timely allegation. He says that in late 2017, he submitted a résumé to a headhunter who had reached out to him about a job opening, but he never heard back. He blames this silence on "his blacklisting at Citigroup." But there is no reason to think that Citigroup had anything to do with this silence, let alone that Jaludi's whistleblowing was a "contributing factor" to the headhunter's unresponsiveness. This proposed allegation is implausible. Because the complaint, even as amended, would fail to state a claim, the court properly denied leave to amend. Because the administrative complaint was untimely, the Court affirmed the District Court's dismissal with prejudice.



Surface Transportation Assistance Act


Greatwide Dedicated Transp. II, LLC v. United States Dep't of Lab., 72 F.4th 544, 553-54 (4th Cir. 2023). PDF

Haung worked as a truck driver for Greatwide. Haung observed that certain drivers received driving assignments in violation of the maximum driving for property-carrying vehicles. Haung collected evidence of the violations and submitted anonymous letters to management. Soon after Haung informed Greatwide that he was the author of the letters. The following month Haung was terminated allegedly for an infraction involving a double trailer. Haung filed a whistleblower complaint with OSHA in 2012 alleging retaliation under the STAA.

Three years later, in 2016, OSHA dismissed Haung’s complaint finding that his protected activity was not a contributing factor to his termination. Haung requested a hearing before the OALJ. In 2019, the ALJ issued their Decision and Order. The ALJ found that (1) Huang engaged in protected activity when he wrote anonymous letters to Scott and Price, removed and copied documents from the lockbox, and recorded a management conversation to support his allegations; (2) the temporal proximity between Huang's protected activity and termination was sufficient to establish that Huang's protected activity was a contributing factor in his termination; and (3) Greatwide had not established by clear and convincing evidence that it would have terminated Huang absent his protected activity. The ALJ ordering Greatwide to pay $107,940.07 in backpay and $5,000 in emotional distress damages.

The ARB affirmed the ALJ's decision. The ARB held that Greatwide was not prejudiced by the ALJ's delay in issuing their D&O and that the delay was "not unreasonable." The ARB explained that Greatwide failed to demonstrate that it was prejudiced by any delay. The ARB agreed with the ALJ that Huang's failure to file initial disclosures was harmless given that he was not represented by counsel when they were due and that Greatwide had ample time to conduct discovery following his late submission. The ARB affirmed the ALJ's finding that Huang engaged in protected activity which contributed to his termination, and that Greatwide could not show by clear and convincing evidence that it would have terminated Huang absent his protected conduct. The ARB also sua sponte held that substantial evidence supported the ALJ's finding that the parties had not entered a settlement agreement.

On appeal to the Fourth Circuit, Greatwide argued: (1) the ARB improperly held that substantial evidence supports that Huang could prevail on his 49 U.S.C. § 31105 claim; (2) the ARB improperly concluded that Greatwide was not prejudiced by the Secretary's or Huang's delays; and (3) the DOL erred in failing to find and enforce what the company argues to be a valid settlement agreement between the parties.

Protected Activity:

Recorded meeting:

To capture discussions concerning the alleged safety violations, Huang duct-taped a digital voice recorder to a cubicle's outer wall in the distribution center's "bullpen" area and recorded the dispatcher's daily review and assignment of drivers' routes and hours.

The Court determined that Haung did not violate Maryland wiretap laws because there was not reasonable expectation of privacy in the intercepted oral communication. The court noted that the managers held the recorded meeting in an open area with little to no privacy. The Court stated that the lawful taping of conversations to obtain information about safety-related conversations is protected activity. Huang's recording of the dispatchers' conversation was protected activity.

Removing documents from lockbox:

On the same day as Haung recorded the meeting, Huang also removed paperwork from the center's lockbox belonging to one of the drivers who was driving in violation of the maximum number of hours. Huang alleged that he easily slipped his hand through the lockbox's opening, removed the paperwork that showed the driver was driving more than permissible from the lockbox, took the paperwork home, made copies, and returned it two hours later. The court was unpersuaded by Greatwide’s position that the log was confidential. It noted that Huang's sole intent in collecting and copying the driver's log was to support his safety violation allegations. Thus, his actions rise to the level of protected activity. Huang's borrowing and photocopying the driver's log constitutes protected activity.

Contributing Factor:

The Court stated that the temporal proximity between Huang's protected activity and his termination is a vital part of this analysis. The Court noted that in addition to temporal proximity, the ARB took into consideration additional facts demonstrating that Huang's protected activity contributed to his firing - most notably, that Greatwide admitted that it fired Huang in part because he removed and copied documents and recorded employee conversations. Huang's protected activity was a contributing factor to his termination.

Affirmative defense:

Regarding the lock box, Greatwide alleged it would have fired Haung for damaged he caused when he removed the driver’s log. The Court stated that given the broad range of possible disciplinary grounds, and Greatwide's failure to demonstrate that the destruction of comparable company property typically leads to termination, the company had not met the clear and convincing evidence standard that this specific "serious policy violation" would have resulted in Huang's termination.

Regarding the double trailer incident, the Court noted a lack of clarity around the details of the alleged incident. And that the testimony on the issue was inconsistent. The Cort also noted that the record does not include - nor discuss - a separate addendum or specific company policy related to double trailers for which drivers were put on notice. The Court determined that Greatwide had not adduced clear and convincing evidence that Huang committed the acts involving the double trailer, and even if he had, that the company would have fired Huang absent his protected activity.

The court also stated that Greatwide's failure to provide Huang with a consistent termination explanation undermines Greatwide's capacity to overcome this step.

Prejudice due to DOL’s delay:

The Court determined that the DOL’s delays were not prejudicial to Greatwide. The Court stated that although the delay was substantial, Greatwide should have taken appropriate steps to preserve relevant evidence, such as witness testimonies and statements, the moment Huang timely filed his whistleblower complaint. The Court stated that Greatwide cannot argue that they were prejudiced by their failure to act. The Court stated even though statutory time limits for agency action are usually deemed directory, and not mandatory, we urge the agency to seek courses of action to avoid similarly prolonged delays in the future and to mitigate concerns regarding the amount of time involved in STAA actions.

The court held that Greatwide failed to preserve the settlement agreement claim and declined to address its validity and enforcement. The Court concluded that Huang prevailed under his STAA claim. Substantial evidence supported the ARB's conclusion that Huang engaged in protected activity, that his activity was a contributing factor in his termination, and that Greatwide failed to prove by clear and convincing evidence that Huang would have been terminated absent his protected conduct.

The Court Affirmed the ARB’s decision and order.


Weatherford U.S., L.P. v. United States DOL, 68 F.4th 1030 (6th Cir. 2023). PDF

An ALJ concluded that Weatherford violated the STAA when it retaliated against him for refusing to drive in violation of regulations and awarded back pay, damages for emotional harm, and punitive damages. Ayres passed away in March of 2016. The ALJ issued his final decision in 2017. The Board affirmed the ALJ's decision except for the award of punitive damages. The Board reversed the punitive damages award, reasoning that "penal claims, including the right to recover punitive damages, abate upon the death of the injured party."

The Sixth Circuit explained that penal claims abate even when the deceased party is the complainant: "The typical rule under the federal common law is that an action for a penalty does not survive the death of the plaintiff." The Court stated that it saw nothing in the STAA to suggest that Congress intended to depart from the common law consensus when it added the punitive damages remedy to the STAA. The Court assumed that because Congress did not speak to survivability, it added punitive damages to the STAA with the understanding that they would abate upon a plaintiff's death.

The Court agreed with the Board that Ayres's claims for punitive damages abated upon his death.


Taxpayer First Act


Tindall v. United States DOL Admin. Review Bd., 2023 U.S. App. LEXIS 7643, 2023 WL 2733480 (11th Cir. Mar. 31, 2023). PDF

Tindall argued that the ARB acted arbitrarily and capriciously when it adopted the ALJ's factual summary as it contained incorrect definitions from the dismissal of his claims by the OSHA and as it incorrectly limited his complaint to between himself and the United States Department of the Treasury. Tindall further argues that the ARB erred by recognizing the existence of federal sovereign immunity and, alternatively, by finding that it was not waived by the Taxpayer First Act (“TFA”); the "ultra vires" exception; the Administrative Procedures Act ("APA"), 5 U.S.C. § 702; or the Constitution.

The anti-retaliation provision of the TFA protects employees who have provided information or taken certain other actions relating to an alleged underpayment of tax, tax fraud, or any violation of the internal revenue laws. Under the law, an employer cannot retaliate against such an "employee" for engaging in lawful activity protected by the TFA. The TFA also allows an employee who alleges discharge or other reprisal in violation of the foregoing to file an administrative complaint with the Secretary of Labor. 26 U.S.C. 7623(d)(1), (2).

OSHA is responsible for receiving and investigating anti-retaliation complaints under the TFA. The ARB, in turn, is responsible for issuing final agency decisions in cases arising under the anti-retaliation provisions of TFA. Following an OSHA determination, an aggrieved complainant may request a hearing before an ALJ. The ALJ may hear the case or decide the case on a dispositive motion if appropriate. Any party who desires review of an ALJ decision, including judicial review, must appeal the ALJ's decision administratively to the ARB, and once the ARB's decision becomes final, it may file a petition for review to a United States appellate court.
The ALJ correctly found that Tindall had brought his administrative complaint against the Treasury. While Tindall identified, in his administrative complaint, two employees of the Treasury, he did so in the context of explicitly stating that he sought assistance in investigating the "threats of retaliation by the US Department of the Treasury and the National Advocate's Office for the ongoing willful refusal by the IRS Whistleblower Office to comply with their obligations under § 7623(a)." The Court concluded that the ALJ acted reasonably by determining that Tindall's suit was brought against the Treasury alone, and the ARB did not act arbitrarily or capriciously in accepting the facts laid out within the ALJ's opinion.

"Sovereign immunity is jurisdictional," and absent a waiver of the immunity, the court lacks "jurisdiction to entertain the suit." A waiver of sovereign immunity must be "unequivocally expressed," and an expressed waiver will be strictly construed. "Any ambiguities in the statutory language are to be construed in favor of immunity, so that the Government's consent to be sued is never enlarged beyond what a fair reading of the text requires. . . . Ambiguity exists if there is a plausible interpretation of the statute that would not authorize money damages against the Government."

The TFA does not define the terms "employer" or "person." However, 26 U.S.C. § 7701(a)(1) states that, "where not otherwise distinctly expressed or manifestly incompatible with the intent thereof," a "person" is defined for the purpose of Title 26 as "an individual, a trust, estate, partnership, association, company, or corporation." Additionally, there is a well established presumption that the term "person" does not include the sovereign unless there is an "affirmative showing of statutory intent to the contrary."

The Court concluded that Tindall's argument that the doctrine of sovereign immunity is inapplicable to the federal government and its agencies is meritless. The ARB correctly found that Congress did not unequivocally waive sovereign immunity through the passage of the TFA. First, the TFA does not define the term "employer," making it unclear whether Congress intended for the substantive provision of the TFA to apply to federal agencies such as the Treasury. However, assuming arguendo, as the ALJ did below, that the Treasury was an "employer" under the TFA, the statute still does not unequivocally waive sovereign immunity as the enforcement provision allows complaints only against a "person." It is well-established that the term "person" does not include the sovereign unless there is an "affirmative showing of statutory intent." Congress did not choose to define the term for the purposes of the TFA, the general definition of "person" for Title 26 applies, which does not include the federal government or its agencies. The Court concluded that Congress did not unequivocally waive sovereign immunity through the TFA and denied Tindall's petition in this respect as well.

Under the "ultra vires" exception, a suit for specific relief may be brought against an officer of the United States acting outside of the scope of his authority or in ways forbidden by the sovereign. However, an alleged mistake in the exercise of a delegated power is insufficient; rather, relief is proper only where the officer lacked delegated power. As such, an aggrieved individual must set out in his complaint the statutory limitation on which he relies. Additionally, the "ultra vires" exception does not apply where a suit would "expend itself on the public treasury" or compel the government to act. The Court concluded that the ARB correctly found that the "ultra vires" exception was inapplicable to Tindall's administrative complaint.

Section 702 of the APA provides a limited waiver of sovereign immunity allowing for "judicial review" of administrative actions in "a court of the United States" where the relief sought is non-monetary. Because neither the ALJ nor the ARB is a "court of the United States," the ARB correctly found that the APA's waiver of sovereign immunity did not apply to Tindall's administrative proceedings.