USDOL/OALJ Reporter: ARB Decision Caselist - January 2012

ALJ DECISION; FACT THAT ALJ ERRONEOUSLY COMMENCED DECISION WITH DISCUSSION OF PRIMA FACIE CASE DOES NOT RENDER THE DECISION UNREVIEWABLE WHERE THE ALJ APPLIED THE CORRECT PROOF STANDARDS IN THE REMAINDER OF THE DECISION

In Luder v. Continental Airlines, Inc. , ARB No. 10-026, ALJ No. 2008-AIR-9 (ARB Jan. 31, 2012), the Respondent argued on appeal that the ALJ committed reversible error by holding the Complainant responsible for producing only prima facie evidence of retaliation, rather than proving such retaliation by a preponderance of the evidence. The ARB found that the ALJ had commenced his legal analysis under AIR 21 with an erroneous statement of the respective burdens of proof, but used the proper proof standards in the remainder of the decision. "Thus, unlike the situation in Clemmons v. Ameristar Airways [, ARB No. 05-048, ALJ No. 2004-AIR-11 (ARB June 29, 2007)] cited by Continental, the ALJ's initial misstatement of the burdens of proof standard in this case does not present a situation where the ARB is unable to ascertain whether the ALJ properly applied AIR 21's burden of proof requirements."

PROTECTED ACTIVITY; LOGBOOK ENTRY IS PROTECTED ACTIVITY WHERE COMPLAINANT ALSO DEMANDED A MECHANICAL INSPECTION BEFORE HE WOULD PILOT THE PLANE

The ARB in Luder v. Continental Airlines, Inc. , ARB No. 10-026, ALJ No. 2008-AIR-9 (ARB Jan. 31, 2012), found that the ALJ properly found that the Complainant engaged in protected activity when he wrote up in the aircraft logbook an incident of severe turbulence based on information received from the prior flight crew, and demanded inspection of the aircraft before he would pilot the plane. The ARB stated that although the logbook entry in and of itself may not have constituted protected activity, the Complainant's actions forced the required mechanical inspection following a situation involving severe turbulence. Thus, his actions were thus distinguishable from Fabre v. Werner Enters. , ARB No. 09-026, 2008-STA-010 (ARB Dec. 22, 2009), cited by the Respondent in which the ARB held that action taken as "an integral part of compliance with the regulations," without more, does not constitute protected activity. The Respondent had argued that the logbook entry was simply an integral part of compliance with the regulations.

ADVERSE ACTION; MATERIALLY ADVERSE STANDARD; WARNING LETTER

In Luder v. Continental Airlines, Inc. , ARB No. 10-026, ALJ No. 2008-AIR-9 (ARB Jan. 31, 2012), the ARB found that the ALJ correctly determined that the Respondent's four-day suspension of the Complainant (a pilot) from flying, which deprived him of about $3,000.00 in pay, and 18-month termination warning letter, constituted adverse action under the "materially adverse" standard. The ARB stated that loss of wages was obviously an adverse personnel action. In regard to the warning letter, the ARB noted that while it has held that a corrective "warning letter" in and of itself may not constitute adverse action, in the instant case substantial evidence supported the ALJ's finding that the warning letter affected the terms, conditions, and privileges of the Complainant's employment because the Respondent had a policy that an employee with an active warning letter in his file is ineligible for voluntary transfer to another position within the company. The ARB found even more important the ALJ's finding that the warning letter imposed on the Complainant the threat of additional disciplinary action, up to and including termination of employment, and consequently the Complainant "'would be extremely reluctant to question airline safety' because engaging in 'similar unacceptable behavior' could result in his being fired." USDOL/OALJ Reporter at 9 (quoting ALJ decision).

COMPENSATORY DAMAGES FOR LOST EMPLOYMENT DUE TO EMOTIONAL DISTRESS; ARB CLARIFIES WHEN MEDICAL EVIDENCE MAY BE NECESSARY TO PROVE CAUSATION

EXPERTS; DAUBERT APPLIES, BUT ALJ DOES NOT PERFORM THE ROLE OF GATEKEEPER

In Luder v. Continental Airlines, Inc. , ARB No. 10-026, ALJ No. 2008-AIR-9 (ARB Jan. 31, 2012), the ALJ had awarded lost wages for the Complainant, a pilot, up until the time he had sufficiently recovered from disabling mental conditions to permit him to continue flying or to perform other suitable alternative employment. On appeal, the parties did not dispute that the Complainant was medically unfit to fly, but the question arose whether the Employer's retaliatory actions caused the Complainant's long term disability. The ARB indicated that it would attempt to clarify the law with respect to establishing when medical evidence may be necessary to prove causation in the range of emotional distress cases (some of which stem from specific medical conditions), arising under AIR 21.

The ARB noted that the Complainant has the burden to prove damages and entitlement to the remedies he seeks, and that damages must be causally related to the unlawful conduct and cannot be presumed. The ARB also noted that reinstatement is the express and presumptive statutory remedy; front pay may be used as a substitute when reinstatement is not possible. The ARB wrote:

    Within the context of determining a complainant's entitlement to compensatory damages based on the complainant's mental suffering or emotional distress, the ARB has held that the complainant "must show by a preponderance of the evidence that the unfavorable personnel action caused the harm." Moreover, a respondent may be held liable for compensatory damages where the complainant proves that the respondent's unlawful conduct aggravated a preexisting psychiatric condition. A complainant's burden of proof is no different when the claim is for lost wages based on the complainant's medical or psychological condition. Thus, the circumstances of the case and lay testimony about physical or mental consequences of retaliatory action may support such awards. The ARB has held that while the testimony of medical or psychiatric experts "can strengthen the case for entitlement to compensatory damages, it is not required." The ARB has affirmed compensatory damage awards for emotional distress, even absent medical evidence, where the lay witness statements are "credible" and "unrefuted.

    However, in other cases, such as Gutierrez [ v. Regents of the Univ. of Cal. , ARB No. 99-116, ALJ No. 1998-ERA-19, slip op. at 11 (ARB Nov. 13, 2002)] for example, where the claim for an award of damages for emotional stress is based solely on the complainant's testimony that he suffered a specific and diagnosable medical condition, the ARB has reasonably required "medical or other competent evidence" showing that the complainant suffered from the medical condition and that it "was causally related to the unfavorable personnel actions" the respondent took. Absent such evidence, the ARB held in Gutierrez that complainant "failed to meet his burden of proving a causally-related condition, even under the generous evidentiary standards of 29 C.F.R. § 24.6(e)."

USDOL/OALJ Reporter at 16-17 (footnotes omitted). The ARB found that in the instant case, because the Complainant's condition involved a medical diagnosis that included possible PTSD and/or depression reliance on a qualified medical expert's opinion in determining causation may nevertheless prove critical. In this regard, the Board noted:

    In other ARB decisions discussing expert evidence, we have referred to the principles announced in Daubert v. Merrill Dow Pharms., Inc., 509 U.S. 579 (1993) and Kumho Tires, Inc. v. Carmichael , 526 U.S. 137 (1999). See, e.g., Stauffer v. Wal-Mart Stores, Inc., ARB No. 00-062, ALJ No. 1999-STA-021 (ARB July 31, 2001). However, we do not suggest that hearings under the AIR 21 whistleblower statute require the ALJ to engage in the "gatekeeper" role required under Rule 702 of the Federal Rules of Evidence. Under that rule, it may be error for a federal court to admit testimony without ensuring that expert testimony is based on "sufficient facts or data" and "reliable principles and methods." Rule 18.702 in the OALJ's rules of evidence does not contain the same gatekeeper requirements. Moreover, the administrative process is deliberately less formal than federal court litigation, making the "gatekeeper" requirements of the Federal Rules of Procedure unduly onerous for administrative hearings.

USDOL/OALJ Reporter at n.69. In the instant case, the ARB remanded the case to the ALJ for further proceeding because the ALJ's original decision had not adequately explained his findings. The ARB noted that two doctors who the parties had implicitly accepted as qualified psychiatric experts had rendered medical reports supporting the ALJ's finding that the Complainant suffered from major depression, but which did not express any conclusion on the question of causation.

One member of the Board wrote a concurring opinion stating her view that the majority decision does not necessarily impose a requirement that medical evidence proffered by the Complainant demonstrate that other possibilities for his depression are excluded. Rather, for the Complainant "to succeed in establishing causation in addition to the ample evidence already in the record, he need only solidify his assertion with medical evidence (either verbal or documentary evidence from an individual 'qualified as an expert by knowledge, skill, experience, training, or education,' 29 C.F.R. 18.702) that the retaliation he suffered caused his subsequent depression that precluded him from being reinstated to his piloting duties." USDOL/OALJ Reporter at 24.

FRONT PAY AND REINSTATEMENT; EVEN IF COMPLAINANT IS MEDICALLY UNFIT TO PERFORM HIS OLD JOB, ALJ MUST CONSIDER WHETHER THERE ARE ANY SUITABLE, ALTERNATIVE JOBS AVAILABLE WITH THE RESPONDENT

FRONT PAY MUST BE AWARDED FOR A SET AMOUNT OF TIME

FRONT PAY; WHERE COMPLAINANT SEEKS FRONT PAY RATHER THAN REINSTATEMENT THE ALJ MUST SET PARAMETERS PROVEN BY THE COMPLAINANT AS REASONABLE

In Luder v. Continental Airlines, Inc. , ARB No. 10-026, ALJ No. 2008-AIR-9 (ARB Jan. 31, 2012), the ALJ had awarded lost wages for the Complainant, a pilot, up until the time he had sufficiently recovered from disabling mental conditions to permit him to continue flying or to perform other suitable alternative employment. The ARB stated that, on the assumption that this award was an award of salary into the future in lieu of reinstatement � i.e., front pay, "it is not clear from the record that before making this award the ALJ first determined not only that [the Complainant] was unable to return to his former position as a pilot because of a causally related medical condition or conditions, but also that his condition prevented him from returning to a comparable position with Continental." USDOL/OALJ Reporter at 20. The Board wrote:

    As the ARB has previously held "front pay is used as a substitute when reinstatement is not possible for some reason." To bypass the presumptive remedy of reinstatement, the ALJ must provide reasons and bases justifying his decision. We understand that, at the time of the hearing, [the Complainant] was medically unfit to pilot Continental planes. But it is unclear whether there was any other suitable, alternative job available at Continental.

    Moreover, should front pay be a proper remedy, it must be awarded "for a set amount of time" and must be based on factors that the complainant proves are reasonable, e.g., "the amount of the proposed award, the length of time the complainant expects to work, and the applicable discount rate." To the extent that [the Complainant] requests and proves entitlement to "front pay" rather than reinstatement on remand, the ALJ must set parameters that [the Complainant] proves as reasonable.

USDOL/OALJ Reporter at 20-21 (footnotes omitted).

WAIVER OF OPTION TO FILE SOX COMPLAINT IN FEDERAL DISTRICT COURT; ARB DENIES INTERLOCUTORY REVIEW OF IMPACT OF DODD-FRANK AMENDMENTS TO SOX AND OF COMPLAINANT'S CONTENTION OF LACK OF FULL UNDERSTANDING OF WAIVER MADE BY HER ATTORNEY

In Mara v. Sempra Energy Trading, LLC , ARB No. 12-021, ALJ No. 2009-SOX-18 (ARB Jan. 31, 2012), the ALJ found that the Complainant had waived the option to file her SOX complaint in federal district court, and later dismissed the complaint. The Complainant filed a complaint in federal district court, and then moved to amend that complaint to include the SOX claim. The district court found that there had been a clear waiver and recommended that the Complainant return to Department of Labor to see if it would allow her to pursue the complaint there. The Complainant then filed a late petition for review with the ARB. The ARB accepted the petition and remanded the case to the ALJ for additional proceedings. On remand, the Complainant moved the ALJ to nullify the waiver. The ALJ denied the motion and the Complainant moved for reconsideration. Following briefing, the ALJ ruled on reconsideration that Dodd-Frank amendments to the SOX did not apply retroactively to effectively invalidate the waiver and authorize the Complainant to proceed to a jury trial in district court. The ALJ, however, granted the Complainant's motion to certify three questions for interlocutory appeal to the ARB: (1) whether the Dodd-Frank amendment to the SOX affording a right to a jury trial applies retroactively; (2) whether the waiver was valid when made knowingly by the Complainant's counsel but without full understanding of the Complainant herself; and (3) whether a Dodd-Frank amendment to SOX proscribing waivers of SOX protections applies to agreements with the court, and if so, does it apply retroactively. The ALJ, however, denied a stay of the proceedings.

The ARB declined to exercise its discretion to engage in interlocutory review, finding that it was not persuaded that resolution of the issues would "materially advance the ultimate termination of the litigation." The ARB noted that it was undisputed that the Complainant had sought relief in district court, and that the district court judge stated at the hearing that he would not review the Complainant's SOX claim because of her waiver. The ARB also denied the Complainant's petition for interlocutory review of various issues that she raised related to her waiver under the collateral order doctrine.

The ARB found that substantial evidence supported the ALJ's decision that the Respondent proved, by clear and convincing evidence, it would have terminated the Complainant's employment even if he had not engaged in protected activity.

SUMMARY DECISION; FAILURE OF COMPLAINANT TO IDENTIFY THE ADVERSE ACTION THAT FORMED THE BASIS OF THE COMPLAINT

Noting that "[a]n 'adverse action' under the SOX Section 806 whistleblower provision refers to any unfavorable employment action that is more than trivial, either as a single event or in combination with other deliberate employer actions," the Board in Lewis v. Walt Disney World , ARB No. 10-106, ALJ No. 2010-SOX-27 (ARB Jan. 27, 2012), affirmed the summary dismissal of the Complainant's SOX complaint on the ground that the Complainant failed to identify the adverse action that formed the basis of his claim. The ARB stated that proving an adverse action is an essential element of a SOX whistleblower claim. In Lewis , the record contained a vague reference to the fact that the Complainant "stopped working" sometime in 2007, but it was unclear whether he resigned or whether he was discharged or even constructively discharged. The ARB stated that it was the Complainant's burden to assert and ultimately prove the adverse action taken by the Respondent.

TIMELINESS OF COMPLAINT; DODD-FRANK AMENDMENT TO SOX SECTION 806 LENGTHENING LIMITATIONS PERIOD DOES NOT LENGTHEN LIMITATIONS PERIOD ON CLAIM ARISING PRIOR TO THAT AMENDMENT

In Lewis v. Walt Disney World , ARB No. 10-106, ALJ No. 2010-SOX-27 (ARB Jan. 27, 2012), the ARB noted that Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act of 2002, 18 U.S.C.A § 1514A, and its implementing regulations at 29 C.F.R. Part 1980 had been amended since the Complainant filed his complaints to expand the limitations period from 90 to 180 days. See Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203, 124 Stat. 1376 (July 21, 2010); 76 Fed. Reg. 68084-97 (Nov. 3, 2011). The ARB held that the Complainant's complaints were time-barred under the SOX when filed in 2008, and that the amended SOX limitations period did not revive the complaints. See Berman v. Blount Parrish & Co., Inc., 525 F.3d 1057 (11th Cir. 2008)(amended limitations period does not revive SOX securities claims on which the previous statute of limitations had run).

Approval of settlement agreement.

FINAL APPELLABLE DECISION ON SCA INVESTIGATION; ADMONISHMENT BY THE ARB TO THE WAGE AND HOUR DIVISION TO DO A BETTER JOB OF INFORMING PARTIES OF WHEN A DECISION IS FINAL AND APPEALLABLE

In International Association of Machinists and Aerospace Workers , ARB No. 11-073 (ARB Jan. 25, 2012). the ARB dismissed the appeal where under the facts presented, the Wage and Hour Division (WHD) Administrator or his or her authorized representative had not yet issued a final decision on the Petitioner's petition for an investigation under the Service Contract Act into Lockheed Martin's payment of wages to Flight Service Specialists in several locations. The Chief of the WHD Branch of Government Contracts Enforcement, Division of Enforcement Policy and Procedures had written to the Petitioner that, after an investigation, he had determined that Lockheed Martin had complied with SCA requirements, and stated that if he could be of any further assistance, the Petitioner should not hestitate to contact him. The Petitioner filed an appeal with the ARB. The WHD moved to dismiss the appeal on the ground that the Chief's letter was not a final decision of the Administrator and did not include any language indicating that it was a final decision or informing the Petitioner of appeal rights. In response to an Order to Show Cause, the WHD distinguished two ARB decisions admonishing the WHD over its failure to clearly set forth the finality or non-finality of its decisions. In re Diversified Collection Servs., Inc. , ARB No. 98-062 (May 8, 1998) and In re Hanford Atomic Metal Trades Council , ARB No. 98-138 (Sept. 23, 1998). The ARB deferred to the Administrator's interpretation of the SCA and noted that it obviously could not perform its authorized review without a final decision of the Administrator to review. The ARB noted that, although the WHD Deputy Administrator had contended that the WHD was mindful of its obligation to specify whether particular decisions are or are not final, this was the third recent appeal in which the WHD had requested dismissal because petitioners had not yet obtained final orders. The ARB urged the WHD "to redouble its efforts to fully inform the parties before it of the status of its determinations and the proper procedures for obtaining appellable final orders."

Summary affirmance of unopposed decision of the ALJ on attorney's fees.

The ARB remanded the case to the ALJ for further proceedings where the ALJ had failed to apply the STAA burdens of proof in effect as of August 3, 2007, the date Congress amended the STAA, 41 U.S.C. � 31105, to incorporate the burdens of proof contained in AIR21, 49 U.S.C. � 42121, to a complaint that was based on a discharge of the Complainant on Novembver 20, 2007.

The ARB dismissed the SOX complaint pursuant to 29 C.F.R. § 1980.114 upon the Complainant's filing of a pro se action for de novo review of the case in the United States District Court for the Southern District of Texas.

The Respondent was granted an extension of time to file a petition for review. The ARB closed the case after the Respondent failed to file a petition for review under the extended time period, and failed to respond the ARB's order to show cause why the matter should not be closed.