[Last Updated Dec. 11, 2013]
ADMINISTRATIVE REVIEW BOARD DECISIONS
ARB REVIEW OF SETTLEMENT AGREEMENT; ARB RECONSIDERS DENIAL OF PARTIES' MOTION FOR VACATING OF ALJ'S DECISION AND REMOVAL OF THAT DECISION FROM ANY DOL WEBSITE OR DATABASE AS PREREQUISITE FOR THE SETTLEMENT, AND REMANDS TO THE ALJ FOR FURTHER PROCEEDINGS
In Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Nov. 4, 2013), the parties presented a settlement agreement while the case was pending on appeal at the ARB. The settlement included a provision obligating the Department to remove the ALJ's original decision from any website or database affiliated with the Department. The ARB initially approved the settlement, but not the provision about expunging the ALJ's decision. See < Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 27, 2013). The parties moved for reconsideration on the ground that the ARB changed the terms of the settlement in its approval order, and the modification was not acceptable to the parties. On reconsideration, the ARB noted the parties' representation that the presiding ALJ had told them in a conference call that he would vacate his Decision and Order if it would facilitate a settlement. In view of this representation by the parties, the ARB remanded the matter to the ALJ "for further proceedings to facilitate the settlement."
ARB REVIEW OF SETTLEMENT AGREEMENT; ARB DENIES PARTIES' MOTION FOR VACATING OF ALJ'S DECISION AND REMOVAL OF THAT DECISION FROM ANY DOL WEBSITE OR DATABASE AS PREREQUISITE FOR THE SETTLEMENT
In Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 27, 2013), the parties submitted a settlement agreement to the ARB for review and approval. The parties filed a motion requesting that the ARB to vacate the ALJ's Decision and Order as a prerequisite for the settlement, including removal of the ALJ's decision - from any website or database affiliated with the United State Department of Labor or record of published opinions. The ARB approved the settlement but denied the motion to vacate the ALJ's decision. The ARB stated: "The ALJ's order is precedent, however, it is not our practice to vacate an underlying ALJ decision in the context of reviewing a settlement agreement pursuant to 29 C.F.R. § 1980.111(d)(2)." USDOL/OALJ Reporter at 2.
SETTLEMENT; AUTHORITY OF ALJ AND ARB TO REVIEW FINAL ORDER OF OSHA APPROVING A SETTLEMENT UNDER THE "SPECIAL CIRCUMSTANCES" REGULATION AT 29 C.F.R. § 1980.115 WHERE THE VALIDITY OF THE OSHA REVIEW PROCESS WAS IN QUESTION
SETTLEMENT; QUESTION OF RESCINDING AGREEMENT BASED ON PURPORTED PRESSURE ON COMPLAINANT BY HER OWN ATTORNEYS IS GOVERNED BY MACKTAL RATHER THAN STATE LAW
ARB'S REVIEW AUTHORITY DOES NOT INCLUDE JURISDICTION TO RULE ON VALIDITY OF DULY PROMULGATED REGULATION
In Gonzales v. J.C. Penney Corp., Inc. , ARB No. 10-148, ALJ No. 2010-SOX-45 (ARB Sept. 28, 2012), the Complainant and the Respondent entitled into a settlement of the Complainant's SOX complaint, which had been approved by OSHA. The Complainant sought a hearing before an ALJ seeking to rescind the agreement. The ALJ granted summary decision in favor the Respondent. On appeal, the ARB determined that although OSHA's approval of the settlement had become the final order of the Secretary pursuant to 29 C.F.R. § 1980.111(e), OSHA had approved a version of the agreement with the monetary terms redacted, thereby raising concerns about OSHA's approval process "that could invalidate the finality of the Secretary's order." USDOL/OALJ Reporter at 8. The ARB noted that the SOX regulation at 29 C.F.R. § 1980.115 permits the ALJ and the ARB to waive any rules where special circumstances warrant, and that such special circumstances were warranted to permit the ALJ to review an otherwise final order approving a settlement agreement because of OSHA's purported errors in its approval process. The ARB, however, affirmed the ALJ's decision in favor of the Respondent.
First, although OSHA should not have approved an agreement that redacted the monetary terms, the ALJ reviewed the unredacted agreement and determined that the terms were fair, adequate and reasonable. Second, the ARB found that the facts that OSHA failed to contact her after she signed the agreement and that OSHA contacted her attorneys after she had instructed OSHA not to do so, were not grounds warranting withdrawal of the agency's approval of the settlement agreement. Third, the ARB declined to rule on the Complainant's argument that the Dodd-Frank Act precludes settlement of SOX complaints (because they would constitute a waiver of rights under the Act) because the SOX regulations expressly provide for settlement of SOX cases, and the delegation of authority to the ARB expressly provides that the ARB does not have jurisdiction to pass on the validity of duly promulgated regulations. Fourth, the ARB did not find convincing the Complainant's argument that approval of the settlement was in error because the settlement precluded her from being rehired. The ARB, however, agreed with the ALJ's finding that SOX does not require that a settlement include a provision for reinstatement or a provision for altering a personnel record to make the complainant eligible for rehire.
Finally, the ARB rejected the Complainant's argument that the settlement should be rescinded due to a dispute between her and her attorneys. Applying the reasoning of Macktal v. Brown & Root, Inc. , 923 F.2d 1150 (5th Cir. 1991), which places the risk of the complainant's attorney's alleged misconduct in relation to attorney-client relationship on the complainant rather than the respondent, the ARB found that the ALJ was well within in his discretion in refusing the Complainant's request to void the settlement agreement. The ARB agreed with the ALJ that the Complainant could have obtained new counsel or have sought advice from the state bar, and that the Complainant had seven weeks in which to obtain legal advice and in which any adverse effects from her attorneys' purported pressure tactics would have subsided.
In a footnote, the ARB rejected the ALJ's referral to state law in determining whether the settlement should be rescinded or voided, finding that the case is governed instead by the Macktal decision.
One member of the ARB concurred in the result, but wrote separately to voice concern about whether the ALJ or the ARB had the authority to review OSHA's final order approving the settlement agreement. Even if the ALJ had determined that OSHA had not actually approved the agreement because of the redactions, this member noted that the ALJ had reviewed the agreement and found it to be fair, adequate and reasonable, and therefore the ARB's authority would be limited on appeal to reviewing the ALJ's procedural decisions and would not include review of the substantive decision of whether the agreement was fair. The concurring member opined that neither the ALJ nor the ARB have the authority to act like a judicial court and consider whether the settlement contract could be rescinded through equity.
SETTLEMENT; MONETARY TERMS OF A SOX SETTLEMENT ARE A MATTER OF PUBLIC INTEREST; ERROR TO REVIEW REDACTED VERSION OF SETTLEMENT AGREEMENT
In Gonzales v. J.C. Penney Corp., Inc. , ARB No. 10-148, ALJ No. 2010-SOX-45 (ARB Sept. 28, 2012), the ARB indicated that OSHA erred when it approved the settlement agreement in a SOX case where the Respondent had redacted the monetary terms. The ARB wrote:
It is undisputed that OSHA reviewed a redacted copy of the Gonzales/J.C. Penney settlement agreement that excluded the payout amount that Gonzales agreed to in exchange for releasing her SOX rights pertaining to her pending complaint. OSHA erred in approving a settlement agreement that redacted the monetary settlement amount. See Fuchko v. Georgia Power Co. , Nos. 1989-ERA-009, 1989 ERA-010 (Sec'y June 13, 1994) (Secretary refuses to approve a redacted settlement agreement because exact amount of money paid is a "matter of public concern."). "The particular terms of the agreement, such as the amount of money to be received by the Complainant, affect not only the individual whistleblower but impact the public interest as well." Id. "Where such terms are not fair, adequate and reasonable, other employees may be discouraged from reporting safety violations." Id , quoting Plumlee v. Alyeska Pipeline Svc. Co. , No. 1992-TSC-007, slip op. at 5 (Sec'y Aug. 6, 1993).
USDOL/OALJ Reporter at 9 (footnote omitted).
SETTLEMENT; ARB TREATS SEPARATION AGREEMENT AND GENERAL RELEASE AS A SETTLEMENT AGREEMENT
In Anderson v. Schering Corp. , ARB No. 10-070, ALJ No. 2010-SOX-7 (ARB Jan. 31, 2011), after receiving a joint stipulation of dismissal with prejudice, the ARB issued an order directing the Complainant to state which of the grounds for terminating a case prior to final adjudication was applicable: withdrawal of objections to the findings or order; an adjudicatory settlement; or the bringing of an action in federal district court. The ARB directed that if a settlement was involved, a copy of the settlement agreement be submitted for the ARB's review.
The Respondent thereafter submitted a copy of a separation agreement and general release executed by the Complainant. The ARB treated the agreement and release as a settlement. The ARB determined that the agreement was a fair, adequate and reasonable resolution of the matter, approved the agreement, and dismissed the complaint with prejudice.
SETTLEMENTS IN SOX CASES; PROCEDURE WHERE IT IS UNCLEAR WHETHER A SETTLEMENT UNDERLIES A WITHDRAWAL
In Concone v. Capital One Financial Corp. , ARB No. 05-038, ALJ No. 2005-SOX-6 (ARB Apr. 25, 2005), the ALJ had found in favor of the Respondent. An appeal to the ARB followed. The Complainant's attorney wrote to the ARB stating that "the parties have settled" and will file a "joint stipulation of settlement." Subsequently the parties sent the ARB a "Joint Stipulation of Dismissal" and a proposed Order. The stipulation only stated that the parties "hereby stipulate and agree to dismiss this action, with prejudice, in its entirety, each party to bear its own costs and attorneys' fees." The parties' proposed Order states that the parties submitted a Joint Stipulation of Dismissal" and it appears to the ARB it is 'just and proper to do so' . . . with prejudice . . . " Neither document referred to a settlement.
The ARB, therefore, issued an "Order Requiring Clarification," pointing out that under 29 CFR § 1980.111(c) a case at the ARB can be terminated by (1) before findings or an order becomes final, by withdrawing objections or (2) by settling the case and obtaining ARB approval of the settlement which will be filed with the ARB, per § 1980.111(d)(2). The clarification order noted that the initial letter indicated that there was a settlement between the parties that was not submitted to the ARB. The ARB ordered that the settlement be submitted to it. However, the ARB also stated: "If, instead, Concone intended to withdraw his objections to the findings, then he must so notify the Board in writing."
Subsequently, the parties filed a Joint Motion to Withdraw Joint Stipulation of Dismissal, and the Complainant filed a Notice of Withdrawal of Objections. The ARB, without elaboration, approved the withdrawal of objections and dismissed the appeal. Concone v. Capital One Financial Corp. , ARB No. 05-038, ALJ No. 2005-SOX-6 (ARB May 13, 2005).
ADMINISTRATIVE LAW JUDGE DECISIONS
SETTLEMENT; FAILURE TO SUBMIT SETTLEMENT RESULTS IN ADJUDICATION ON MERITS BASED ON RECORD BEFORE THE ALJ (OR, WHERE COMPLAINANT "WITHDREW" OBJECTIONS TO OSHA FINDINGS, A FINDING THAT THE OSHA FINDINGS HAD BECOME THE FINAL FINDINGS OF THE SECRETARY)
In Di Giammarino v. Barclays Capital, Inc. , 2005-SOX-106 (ALJ July 7, 2006), the Complainant, who had dual U.S. and Italian citizenship, was employed by a U.K. company, but claimed that he was really an employee of a U.S. branch, and that the entity that employed was merely an "accounting vehicle." OSHA found no jurisdiction under SOX because the Complainant worked in the Respondent's London offices and was discharged in London. The ALJ ordered preliminary briefing on the jurisdiction issue. The parties filed briefs, but later presented the supplemental authority of the decision of the federal district court in Carnero v. Boston Scientific Corp. , 433 F.3d 1 (1st Cir. 2006), cert. denied No. 05-1397 (June 26, 2006). Later, the Complainant, through counsel, sought to withdraw the hearing request. Because it was unclear whether a settlement was involved, the ALJ had her legal technician contact the Complainant's counsel, who advised that a settlement in fact was involved. The ALJ then issued an order directing the parties to either submit the settlement for approval or show cause why the case should not be dismissed for lack of jurisdiction. Neither party responded. Since the parties did not submit the settlement, the ALJ found that upon the withdrawal of the objection to the OSHA findings, those findings became final. Moreover, the ALJ found that under Carnero, the finding of a lack of jurisdiction was correct. The Complainant worked exclusively in the U.K. for a division of an international company based in the U.K.