USDOL/OALJ Reporter: ARB Decision Caselist - January 2017

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EARLIER SETTLEMENT OF LCA CLAIM WHICH INCLUDED A RELEASE OF ALL CLAIMS AGAINST THE RESPONDENT EXTINGUISHED ANY NEW CLAIM RELATED TO THE H-1B EMPLOYMENT THAT WAS THE SUBJECT OF THE SETTLEMENT; COLLATERAL ATTACKS ON SETTLEMENT AS INEFFECTIVE, VOID, FRAUDULENT OR RESCINDED ARE BEYOND THE ARB’S AUTHORITY TO ADJUDICATE

In Gupta v. Headstrong, Inc. , ARB Nos. 15-032, -033, ALJ No. 2014-LCA-8 (ARB Jan. 26, 2017), the ALJ dismissed the Complainant’s LCA case based on the parties’ 2008 settlement agreement, the ALJ finding that the settlement included a release of all claims and that the parties’ execution of it “fully extinguished” any claim the Complainant may have had related to his employment with the Respondent. The ALJ rejected the Complainant’s arguments that the settlement was ineffective, void, fraudulent, or had been rescinded by the Complainant. On appeal, the ARB affirmed the dismissal, writing:

   Upon review, the Board finds that the extensive evidentiary record amply supports the ALJ’s factual findings, including her determination that the parties’ settlement and release of claims extinguished all claims against Headstrong. Gupta attacks the settlement as ineffective, void, and fraudulent, and claims that he rescinded it. However, Gupta has evoked no statute, regulation, or precedent authorizing the Board to adjudicate collateral attacks on a facially valid contract. The Board is an administrative body with only the authority emanating from statutes, implementing regulations, and delegations of authority. The ARB has, however, affirmed an ALJ’s dismissal based on the parties’ settlement in an INA case involving this same complainant. Gupta v. Compunnel Software Grp. , ARB No. 16-056, ALJ No. 2011-LCA-045 (ARB Apr. 29, 2016). In that case, as well as this, the settlement included a release of all claims related to Gupta’s employment. Gupta’s claims that this settlement is ineffective, void, fraudulent, or has been rescinded by him, are collateral issues that we do not address in this instance. Because the ALJ’s conclusion that the settlement extinguished all claims is consistent with ARB precedent, we uphold it. We, therefore, affirm the ALJ’s dismissal of this case.

USDOL/OALJ Reporter at 3 (footnotes omitted). In a footnote, the ARB indicated that it the Administrator’s amicus brief may have been correct that that the Complainant did not have a right to pursue his LCA claims by seeking a formal hearing because he effectively waived his right to do so in the settlement agreement. The ARB indicated that, by extension, it appeared that the ARB did not have authority to review the settlement agreement.

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In White v. Action Expediting, Inc. , ARB No. 16-024, ALJ No. 2011-STA-11 (ARB Jan. 26, 2017), the ARB summarily affirmed the ALJ’s Decision and Order, finding that substantial evidence of record supported the ALJ’s factual findings that Complainant failed to establish that his STAA-protected activity was a contributing factor in his employment termination, the ALJ having thoroughly examined all of the Complainant’s evidence and having explained why he did not credit the Complainant’s version of the events.

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[Nuclear & Environmental Digest XI]
CONTRIBUTING FACTOR CAUSATION; EVIDENCE THAT COMPLAINANT ENAGED IN TAMPERING OF RESPONDENT’S SURVEILLANCE CAMERA

[Nuclear & Environmental Digest XI D 3 d]
CLEAR AND CONVINCING EVIDENCE THAT ADVERSE ACTION WOULD HAVE BEEN TAKEN IN ABSENCE OF PROTECTED ACTIVITY; EVIDENCE THAT COMPLAINANT ENAGED IN TAMPERING OF RESPONDENT’S SURVEILLANCE CAMERA

In Beaumont v. Sam’s East, Inc. , ARB No. 15-025, ALJ No. 2014-SWD-1 (ARB Jan. 12, 2017), the ARB summarily affirmed the ALJ’’s dismissal of the Complainant’s Solid Waste Disposal Act (SWDA) whistleblower complaint where substantial evidence supported the ALJ’s conclusion that temporal proximity and procedural irregularity were insufficient to demonstrate that any of the Complainant’s protected activity motivated his discharge, and the ALJ’s ’alternative determination that the Respondent would have fired the Complainant in the absence of his protected activity because the sole reason it fired him was that he damaged company property. The ALJ relied on the credibility of the Respondent’s witnesses and physical evidence of camera tampering. The ALJ also found that the record did not support the Complainant’s belief that he had been targeted for surveillance because of his protected activity. The ALJ found that the Respondent’s use of cameras was wide-spread and consistent throughout the Complainant’s employment and discharge.

[Nuclear and Environmental Digest XI A 2 b ii]
CAUSATION; INTERVENING EVENT DOES NOT NECESSARILY BREAK CAUSAL CONNECTION

In Beaumont v. Sam’s East, Inc. , ARB No. 15-025, ALJ No. 2014-SWD-1 (ARB Jan. 12, 2017), USDOL/OALJ Reporter at 2 n.3, the ARB noted:

”An intervening event … does not necessarily break a causal connection between protected activity and adverse action simply because it occurred after the protected activity.” Franchini v. Argonne Nat’l Lab. , ARB No. 13-081, ALJ No. 2009-ERA-014, slip op at 18 (ARB Sept. 28, 2015). See Rudolph v. Nat’l RR Passenger Corp. , ARB No. 11-037, ALJ No. 2009-FRS-015, slip op. at 18 (ARB Mar. 29, 2013) (intervening events do not automatically negate a finding that protected activity was a contributing factor in the adverse action).

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FAIR LABOR STANDARDS ACT; PETITION BY DISABLED EMPLOYEES FOR DOL REVIEW OF SPECIAL MINIMUM WAGE RATE; BURDEN IS ON EMPLOYER TO SHOW CAUSAL LINK BETWEEN EMPLOYEES’ DISABILITY AND LOWERED WORK PRODUCTIVITY

PORTAL TO PORTAL ACT STATUTE OF LIMITATIONS DOES NOT APPLY TO ADMINISTRATIVE PROCEEDINGS BUT ONLY TO COURT PROCEEDINGS

PORTAL TO PORTAL ACT DISCRETION TO REDUCE OR DISALLOW LIQUIDATED DAMAGES IS GIVEN TO COURTS AND NOT TO AN ALJ OR THE ARB

FLSA GIVES AUTHORITY TO AWARD ATTORNEY FEES AND COSTS TO COURTS BUT NOT TO AN ALJ OR THE ARB

In Magers v. Seneca Re-Ad-Industries, Inc. , ARB Nos. 16-038, -054, ALJ No. 2016-FLS-3 (ARB Jan. 12, 2017), the ARB reviewed an ALJ’s decision under the Disabled Workers Exception provision of the Fair Labor Standards Act. The FLSA’s minimum-wage requirement contains a narrow exception which permits an employer to pay a disabled worker less than the minimum wage, but only if the employer can establish, according to the implementing regulations, that the worker’s disability impairs the worker’s “earning or productive capacity . . . for the work to be performed .” Three disabled Employees of Seneca Re-Ad Industries, Inc. (Seneca Re-Ad) petitioned the Secretary of Labor challenging Seneca Re-Ad’s legal right to pay them less than the minimum wage under the exception. The ARB noted that it appears that the petition process had only been used twice in the past three decades. Thus, much of the ARB’s decision was a matter of first impression.

Employer failed to establish the applicability of the FLSA minimum wage exception

The presiding ALJ found that Seneca Re-Ad failed to establish that the Employees were impaired “ for the work [they] performed ” and that Seneca Re-Ad thus violated the FLSA by not paying them at least the minimum wage. The Employees had various disabilities: one was legally blind; one was blind in one eye and had an intellectual disability; and the third had Asperger’s Syndrome. The ARB noted, however, that having a disability was not sufficient to establish that the Disabled Workers Exception applies; an individual can have a disability for some work but not for other work. The ARB held:

   To pay an employee less than the minimum wage, Seneca Re-Ad must show a causal connection between an individual’s condition (i.e., the “physical or mental disability” as diagnosed by an appropriate medical professional) and a lower “earning or productive capacity . . . for the work to be performed.”

***

   Key is that before an employer is permitted to pay a disabled individual less than the minimum wage under the Disabled Workers Exception Provision, an employer must show that that specific individual’s disability is the cause of that individual’s impaired earning or productive capacity in the particular job that that individual is to perform. If an employer cannot demonstrate that, it simply may not pay the employee less than the minimum wage under the Disabled Workers Exception Provision and the Department’s implementing regulations.

USDOL/OALJ Reporter at 12-13.

In the instant case, the Employer attempted to meet its burden with (1) observational evidence by its own staff and a consultant (who was a former investigator for the WHD), and (2) “work measurements” (or “time studies”) showing that the Employees were slower at particular job tasks than a worker without a disability. The ARB found the observational evidence unpersuasive because the observers did not have “medical expertise about a disabled individual’s condition/specific symptoms and any particular task impairments accompanying that condition….” The ARB also noted the potential bias of the two observers who were on the Employer’s staff (and found that actual bias was not the issue). The ARB found that the fact that the third observer was a paid consultant did not necessarily render his opinion suspect, but noted that the consultant in this case did not have the requisite medical expertise.

The ARB also found that evidence that a disabled employee performs a task at a slower rate than someone without a disability is, in itself, insufficient to establish a causal link, especially where the work would not inherently favor production rates by a non-disabled person. In response to the Employer’s query about else could be used to objectively document productivity, the ARB responded:

   The core problem with Seneca Re-Ad’s argument is that measuring performance of a disabled individual and comparing it with a person without disabilities may tell us that the disabled individual is less productive than a person without disabilities, but it doesn’t tell us why the disabled individual is less productive; it doesn’t tell us that the disabled individual’s disability is the reason for the lower productivity, and the regulations are crystal clear throughout that this is a condition precedent to paying someone less than the minimum wage for any given job. Employees in virtually every workplace vary in how productive they are at workplace tasks: some employees are better than others at various tasks, whether because of differences in ability, effort, or something else. Just because a disabled person is less productive at a task does not necessarily mean that that person is “impaired . . . for the work to be performed.”

Id . at 15 (emphasis as in original)(footnote omitted). The ARB conceded that there may be circumstances where it is obvious why a particular condition reduces an individual’s productive capacity, but agreed with the ALJ that in the instant case there was nothing inherent in the assigned work that would make persons with the kinds of disabilities of the petitioning Employees less productive. The ARB found that the Employer’s possession of a Subminimum Wage Disability Certificate from the Department of Labor did not, in itself, establish the applicability of the Disabled Workers Exception provision of the FLSA for the tasks at issue. The ARB conceded that further compliance guidance from the WHD appeared to be needed for employers trying to comply in good faith, but still found that this need was not material to the question before the ARB for determination of whether in this case the Employer met the statutory and regulatory requirements for the exception to payment of the federal minimum wage.

No statute of limitations as to damages in administrative proceedings

On appeal, the WHD Administrator supported the Employer’s contention that the Portal to Portal Act’s statute of limitation applies to the proceeding. The ARB disagreed, finding that the relevant portion of that Act refers to a statute of limitations for an “action,” which refers only to judicial and not to administrative proceedings. The ARB noted that this may seem anomalous, but found that “Congress purposely established a completely separate administrative process for challenges to the subminimum wage for disabled workers and did so without imposing a statute of limitations.” Id . at 22.

Liquidated damages on back wages may not be reduced or disallowed in administrative proceedings

The ARB found that Section 16(b) of the FLSA specifically applies to make the Employer liable in the amount of unpaid minimum wages plus an additional equal amount as liquidated damages. The ARB was unpersuaded by the Employer contention that because it had a Subminimum Wage Disability Certificate because the Employer had not established that it was entitled to an exemption from the obligation to pay the federal minimum wage. The ARB also found that Section 11 of the Portal to Portal Act’s permitting reduction of, or disallowing of liquidated damages applies only to court actions and not to administrative proceedings.

Federal, and not state, minimum wage is sole question

The ALJ erred in assuming that Ohio minimum wage applied. Even though Ohio’s minimum wage law may have been violated, the ALJ’s authority limited to awarding damages under the federal minimum wage.

Attorney’s fees and costs may not be awarded in administrative proceedings

The ARB reversed the ALJ’s award to the Employee’s attorneys of $276,111.72 in attorneys’ fees and costs because the ARB found that the ALJ did not have the authority to award such fees or costs. Again, the ARB interpreted the FLSA’s damages provision as making it clear that only a court, and not an ALJ in an administrative proceeding, has authority to award attorney fees.

Note regarding nature of ARB review under 29 C.F.R. Part 525

The regulations governing the type of petition filed here make the nature of the ARB’s review unclear. Specifically, 29 C.F.R. § 525.22(g) states that“[w]here [a] request for review [of the ALJ’s decision] is granted … the Secretary shall review the record and shall either adopt the decision of the ALJ or issue exceptions. The decision of the ALJ, together with any exceptions issued by the Secretary, shall be deemed to be a final agency action.” In the ARB’s decision in the instant case, the ARB said that because of this provision it was not formally “adopting” the ALJ’s decision, but instead indicating where it agreed with his conclusions and reasoning for some aspects of the decision, and taking “exceptions” where it did not agree.

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The ARB denied the Complainant's motion for reconsideration where it failed to argue any legally sufficient grounds to support such a motion.

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CLEAR AND CONVINCING EVIDENCE STANDARD IN STAA CASE; APPLICABILITY OF FEDERAL CIRCUIT COURT AUTHORITY INTERPRETING THE WHISTLEBLOWER PROTECTION ACT

ALJ CREDIBILITY DETERMINATION; ARB PANEL MAJORITY FINDS THAT ALJ ERRED IN RELYING ON FACT THAT TWO OF RESPONDENT’S SUPERVISOR’S CORROBORATED EACH OTHER’S TESTIMONY

RESPONDENT’S FAILURE TO PRESENT EVIDENCE OF SANCTIONING OF SIMILARLY SITUATED EMPLOYEES MAY MAKE IT DIFFICULT TO MEET ITS AFFIRMANCE DEFENSE BURDEN

In Pattenaude v. Tri-Am Transport, LLC , ARB No. 15-007, ALJ No. 2013-STA-37 (ARB Jan. 12, 2017), the Complainant filed a STAA complaint alleging that the Respondent fired him in retaliation for refusing to drive a truck-tanker loaded with pulverized coal because one of the tires had low air pressure. After a hearing, the ALJ determined that the Respondent had carried its burden of proving by clear and convincing evidence that it would have terminated the Complainant’s employment absent his protected activity. Specifically, the ALJ found that it was undisputed that the Complainant had been found sleeping during the loading of the coal in violation of company policy and federal regulations. The ALJ rejected the Complainant’s arguments that the policy against sleeping had been applied discriminatorily and was mere pretext. The ARB found that substantial evidence did not support the ALJs’ findings. The ARB found that the ALJ’s credibility findings were questionable; that there was conflicting evidence regarding the loading process on the morning in question within the meaning of the company policy; that circumstantial evidence suggested a retaliatory motive for the firing; and that there was a lack of evidence of similar personnel actions against similarly situated non-whistleblower employees. The ARB thus found in favor of the Complainant and remanded for the ALJ to determine and award damages.

Clear and convincing evidence standard; application of Whistleblower Protection Act caselaw for guidance

The ARB noted that the clear and convincing evidence standard was a heightened burden of proof for respondents under the STAA, and looked to Federal Circuit court authority interpreting the Whistleblower Protection Act (WPA) for guidance ( See Speegle v. Stone & Webster Constr., Inc. , ARB No. 13-074, ALJ No. 2005-ERA-6, slip op. at 11 (ARB Apr. 25, 2014) , and Carr v. Soc. Security Admin. , 185 F.3d 1318, 1323 (Fed. Cir. 1999); Whitmore v. Dep’t of Labor , 680 F.3d 1353, 1370-1375 (Fed. Cir. 2012)). The ARB wrote that the STAA requires that the employer establish that it would have taken the same unfavorable personnel action in the absence of the protected activity and that:

It is not enough to show that the employee’s conduct violated company policy or otherwise constituted a legitimate independent reason justifying the adverse personnel action, or that the respondent could have taken the personnel action in the absence of the protected activity. Consistent with Federal Circuit case authority interpreting the WPA, the ARB has explained that in determining whether a respondent has met its burden of proving that it would have taken the same unfavorable personnel action in the absence of protected activity, consideration is required of the combined effect of at least three elements applied flexibly on a case-by-case basis: (1) the independent significance of the non-protected activity cited by the respondent in justification of the personnel action; (2) the facts that would change in the absence of the complainant’s protected activity; and (3) “the evidence that proves or disproves whether the employer would have taken the same adverse actions [in the absence of protected activity].” Moreover, the respondent is “required to demonstrate through factors extrinsic to [complainant’s] protected activity that the discipline to which [complainant] was subjected was applied consistently, within clearly-established company policy, and in a non-disparate manner consistent with discipline taken against employees who committed the same or similar violations.”

USDOL/OALJ Reporter at 16-17 (emphasis as in original) (footnotes omitted). The ARB found that the ALJ’s determination did not meet these standards and factors.

ARB majority discounts credibility determination based on fact that two employer witnesses corroborated each other’s testimony

The ARB rejected the ALJ’s credibility determination, which had been based not on demeanor, but on the fact that the two employer witnesses corroborated each other’s testimony while the Complainant’s testimony was uncorroborated. The ARB stated:

Just because the employer can produce two supervisors to testify similarly does not necessarily mean that the testimony is more credible than a complainant’s uncorroborated testimony. The ALJ below failed to recognize that employers have the evidentiary advantage—they can draft the documents supporting their actions; they employ the witnesses who participated in an adverse action; and they possess the records that could document whether similar adverse actions have been taken in other cases. For employees, on the other hand, supportive witness testimony is much harder to come by. Complainant-employees can of course subpoena employee witnesses, but those employees may be reluctant to testify against their employer or fear retaliation themselves. Credibility findings based on corroborated supervisor testimony do not always amount to error. But the ALJ’s findings below are particularly suspect because he relied so heavily on the simplistic notion that the corroborated testimony of two supervisors is more indicative of truth than the uncorroborated evidence of the complainant without addressing any other factors or evidence that might reflect on credibility.

Id . at 18 (footnote omitted). As noted below, one member of the ARB disagreed with this analysis of the ALJ’s credibility determination.

ARB weighs evidence and finds that Respondent failed to meet burden

The ARB acknowledged that the Complainant admitted that he fell asleep and that this may have violated federal safety regulations regarding transportation of hazardous materials. The ARB also acknowledged that there was undisputed evidence that the Respondent had a policy that leaving a trailer unsupervised during off-load and/or loading is grounds for immediate termination. The ARB acknowledged that this evidence was sufficient to prove that the Respondent had a legitimate business reason to terminate the Complainant. Nonetheless, the ARB found that additional material facts found by the ALJ to support the conclusion that the Respondent carried its burden were based on dubious credibility findings. Specifically, the ARB found that there was a serious question about whether the Complainant’s having fallen asleep during loading on the morning in question was actually in violation of the company policy and federal regulations. The ARB noted that on the morning in question, the Respondent had invoked its “slipping seats” operation, where because of the immediate need to supply coal to its customer, supervisors personally assume responsibility for loading and unloading of coal, and that company policy and the applicable federal regulations only require that a “qualified person” or “qualified representative” attend to the vehicle. The ARB also found that the ALJ had not explicitly addressed whether the Respondent’s motive had been retaliatory—the ALJ having only focused on the protected activity as having reported an unsafe tire—and having failed to take into account that the Complainant’s refusal to drive took a truck from service on a day when the Respondent was understaffed and in danger of angering its only customer if coal was not delivered timely. The ARB noted circumstantial evidence that the customer had, in the immediate aftermath of the incident, warned the Respondent that continued low production would not be tolerated, and that the Complainant had been suspended indefinitely without pay immediately following that warning. The ARB doubted the Respondent’s claim of zero-tolerance for sleeping during loading/unloading as it had allowed the Complainant to continue driving until after the meeting with the customer. The ARB found that the Respondent’s continuing the delivery of coal to the customer was obviously more important to it than the Complainant’s violation of a safety regulation. The ARB noted evidence of record that several of the Complainant’s alleged safety complaints implicated supervisors, or at least reflected on them as managers.

Lack of evidence of sanctioning of similarly situated employees

Finally, the ARB noted that the Respondent had not presented evidence that similarly situated employees had been sanctioned. The ARB acknowledged that failure to prove that it had taken similar action against similarly situated non-whistleblowers did not mean a respondent cannot prevail on the affirmative defense, but observed that failure to do so is at a respondent’s peril, and that the absence of such evidence might cause a respondent to fail to prove its affirmative defense case. In the instant case, the ARB noted that although the Respondent’s supervisors testified that sleeping during loading/unloading would likely result in termination, neither supervisor had been able to recall a similar situation relating in termination.

Concurring opinion; ARB should not engage in factfinding; ALJ’s credibility determination was sufficient; lack of evidence of similarly situated employees could be explained by fact that policy was new

One member of the Board concurred in the decision to remand the case, but would have permitted the ALJ to reconsider the merits. This member stated that he would not have “resolve[d] the merits of this case because it depends on factual disputes that are within the ALJ’s province to decide.” Id . at 24. This member questioned whether temporal proximity alone was sufficient in this case to meet the Complainant’s burden on contributing factor causation, and would have had the ALJ reconsider this factor, given that it was not clear whether the ultimate decisionmaker knew anything about the protected activity, among other factors. The concurring member also disagreed with the majority’s decision to reject the ALJ’s credibility determinations, noting that the ALJ had relied on more than the fact that the two supervisors’ corroborated each other and rather had taken into account documentary evidence supporting the supervisors’ testimony. The concurring member also found that the ALJ had not, as found by the majority, applied the credibility determination in a simplistic manner or in a manner that made two-supervisor corroboration crucial to the ultimate factual determination. Moreover, the concurring member found that two-supervisor corroboration could support a credibility determination. And finally, even if the ALJ erred in relying too heavily on two-supervisor corroboration, the concurring member said that the ARB should not make the credibility determination itself, but remand for the ALJ to do so. The concurring member stated that the crux of his disagreement with the majority was able ARB’s role in making factual determinations. The concurring member acknowledged that the majority had laid out a plausible story for what happened, but stated that this was problematic because it was dependent on the Complainant’s testimony, which the ALJ had found on the whole not to be as credible as the supervisors’ testimony. The concurring member noted that the no-tolerance-for-sleeping policy had been issued just the month before, and therefore it was not necessarily suspicious that the Complainant was the first one to have violated the new policy. Whether it was suspicious, the concurring member wrote, was a decision for the ALJ to make and not the ARB.

ALJ DECISION SHOULD INCLUDE A SECTION EXPLICITLY IDENTIFYING MATERIAL FINDINGS OF FACT; MERE SUMMARIZATION OF TESTIMONY DOES NOT AID APPELLATE REVIEW

In Pattenaude v. Tri-Am Transport, LLC , ARB No. 15-007, ALJ No. 2013-STA-37 (ARB Jan. 12, 2017), the ARB noted that the ALJ had made very few, if any, express findings of fact, but found that because the evidence discussed in the ALJ’s summary of the uncontroverted testimony was not in dispute, the ARB was able to rely upon this evidence in conducting its review. USDOL/OALJ Reporter at 2, n.2. The ARB, however, stated:

[I]t is difficult for the ARB as an appellate body to review decisions with few express findings of fact. We urge ALJs to include a section explicitly identifying material findings of fact that lay out their view of what happened, rather than simply repeating the testimony of witnesses

Id . at 10, n.68 (citing 5. U.S.C.A. § 557(c); 29 C.F.R. § 18.57(b)).

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TIMELINESS OF PETITION FOR ARB REVIEW; RESPONSE TO ARB’S ORDER TO SHOW CAUSE WHY AN UNTIMELY APPEAL SHOULD NOT BE DISMISSED IS INADEQUATE WHERE IT MERELY ALLEGED THAT THE COMPLAINANT DID NOT TIMELY RECEIVE THE ALJ’S DECISION AND FAILED TO ADDRESS WHEN THE COMPLAINANT’S COUNSEL RECEIVED THE DECISION

In Ramirez v. Norfolk Southern Railway Co. , ARB No. 17-003, ALJ No. 2016-FRS-22 (ARB Jan. 12, 2017), the Complainant electronically filed his appeal of the ALJ’s Order Granting Respondent’s Motion to Enforce and Approve the Settlement Agreement more 14 days after the date the ALJ issued the decision. The ARB issued an order to show cause why the petition for review should not be dismissed as untimely. The Complainant sought equitable tolling on the ground that the Complainant did not receive the ALJ’s decision until after the 14 days had passed. The ARB found that, even accepting that the Complainant had not received his copy of the ALJ’s decision until after 14 day period had already elapsed, the Complainant’s response to the order to show cause was inadequate because it failed to address when the Complainant’s attorney received his copy of the ALJ’s decision. The ARB stated: “Ramirez bears the burden of establishing his entitlement to equitable tolling. Whether his counsel’s affirmation was simply perfunctory or carefully crafted with an intent to obfuscate, it is insufficient to carry his burden. Accordingly, because Ramirez failed to file a timely petition for review or establish his entitlement to equitable tolling, his appeal is DISMISSED .” Slip op. at 4 (emphasis as in original).

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The ARB dismissed the Complainant’s petition for review of the ALJ’s Decision and Order Denying Request for Hearing Due to Lack of Jurisdiction based on the Complainant’s filing of a voluntary notice of dismissal with prejudice. The case arose under the H-1B provisions.

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CONTRIBUTING FACTOR CAUSATION; ALJ MAY PROPERLY CONSIDER RESPONDENT’S EVIDENCE ON ITS NON-RETALIATORY REASON FOR ITS EMPLOYMENT ACTION; ALJ PROPERLY CONSIDERED EVIDENCE THAT ONLY REASON FOR FIRING WAS ITS REASONABLE BELIEF THAT THE COMPLAINANT HAD BEEN DISHONEST

In Powers v. Union Pacific Railroad Co. , ARB No. 13-034, ALJ No. 2010-FRS-30 (ARB Jan. 6, 2017), the ARB, applying Palmer v. Canadian Nat’l Ry. , ARB No. 16-035, ALJ No. 2014-FRS-154, slip op. at 16, 37 (ARB Sept. 30, 2016; reissued Jan. 4. 2017) (en banc), affirmed the ALJ’s determination that the Complainant failed to prove that his protected activity was a contributing factor in the adverse action he suffered as supported by substantial evidence. The ARB stated: “In making that determination, the ALJ properly considered Union Pacific’s evidence supporting its claims about why it fired Powers. In particular, the ALJ properly considered the evidence supporting Union Pacific’s nonretaliatory reason for its action, that the only reason it fired Powers was its officials’ reasonable belief that Powers had been dishonest.” Slip op. at 18-20. One member of the Board dissented, stating that “the strength of Union Pacific's evidence of Powers’ alleged dishonesty—or proof that Powers was dishonest—is relevant to a determination of causation but proof that Union Pacific believed him to be dishonest is not.” Slip op. at 22. The dissenting member also stated that the ALJ seemed to have improperly required that the Complainant prove pretext in order to prevail.

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Erratum to ARB’s Jan. 4, 2017 reissued Decision and Order showing additional attorneys of record.

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ARB ISSUES FINAL VERSION OF EN BANC DECISION PROVIDING THE STATE OF THE LAW ON THE TWO-STEP BURDEN OF PROOF IN CASE TYPES THAT EMPLOY THE AIR21 STANDARD ( i.e. , ACA, AIR21, CFP, CPS, ERA, FDA, FRSA, MAP21, NTS, PSI, SPA, SOX, AND STAA)

• ARB PLURALITY REJECTS FORDHAM/POWERS LIMITATIONS ON WHAT EVIDENCE ALJ MAY CONSIDER ON CONTRIBUTING FACTOR ELEMENT

• LEAD OPINION SUGGESTS THAT CONFUSION CAN BE LESSENED IF STEPS ARE VIEWED AS FOLLOWS: STEP ONE IS THE COMPLAINANT’S BURDEN TO PROVE BY A PREPONDERANCE OF THE EVIDENCE THAT PROTECTED ACTIVITY PLAYED SOME ROLE IN THE ADVERSE PERSONNEL ACTION. STEP TWO IS THE RESPONDENT’S “ SAME-ACTION DEFENSE ”

In Palmer v. Canadian National Railway , ARB No. 16-035, ALJ No. 2014-FRS-154 (ARB Sept. 30, 2016) (en banc), reissued with full separate opinions (Jan. 4, 2017), erratum with caption correction (Jan. 4, 2017), the ARB considered, en banc, how to interpret the FRSA’s burden-of-proof provision. The FRSA incorporates by reference the AIR21 standard of proof. The four-judge opinion was a plurality decision, with a two-judge lead opinion, and three separate opinions.

Lead opinion of Judges Desai and Igasaki

—Rejection of Fordham and Powers

The ARB rejected the interpretation set forth in Fordham v. Fannie Mae , ARB No. 12-061, ALJ No. 2010-SOX-51 (ARB Oct. 9, 2014) and Powers v. Union Pacific Railroad Co. , ARB No. 13-034, ALJ No. 2010-FRS-30, slip op. at 24 (ARB Mar. 20, 2015) (en banc), reissued with full dissent (Apr. 21, 2015), and vacated (May 23, 2016), in the panels concluded that the factfinder was precluded from considering evidence of an employer’s non-retaliatory reasons for its adverse action in determining the contributing-factor question. In Palmer , the ARB held that:

nothing in the statute precludes the factfinder from considering evidence of an employer’s nonretaliatory reasons for its adverse action in determining the contributing-factor question. Indeed, the statute contains no limitations on the evidence the factfinder may consider at all. Where the employer’s theory of the case is that protected activity played no role whatsoever in the adverse action, the ALJ must consider the employer’s evidence of its nonretaliatory reasons in order to determine whether protected activity was a contributing factor in the adverse action.

USDOL/OALJ Reporter at 15.

— Palmer applies to 13 DOL-administered whistleblower provisions

The Palmer decision interprets the language of the AIR-21 burden-of-proof provision, which is found in at least twelve other DOL-administered whistleblower provisions, either incorporated though a cross-referencing incorporation, or directly through the same linguistic formulation. The ARB’s interpretation in Palmer , therefore applies equally to the following thirteen “whistleblower” statutes within the jurisdiction of OALJ and the ARB:

AIR21:

(1) (AIR21) - Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, 49 U.S.C. § 20109(d)(2)(A)(i)

ERA:

(2) (ERA) - Energy Reorganization Act of 1974, as amended by the Energy Policy Act of 1992, 42 U.S.C. § 5851(b)

Statutes incorporating AIR21 by cross-reference:

(3) (SOX) - Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, § 806(a), 116 Stat. 745, 802 (2002) (codified at 18 U.S.C. § 1514A(b)(2)(C))
(4) (FRSA) - Federal Rail Safety Act, as amended by the Implementing Recommendations of the 9/11 Commission Act of 2007, Pub. L. No. 110-53, § 1521, 121 Stat. 266, 444 (2007) (codified as amended at 49 U.S.C. § 20109(d)(2)(A)(i))
(5) (STAA) - Surface Transportation Assistance Act, as amended by the Implementing Recommendations of the 9/11 Commission Act of 2007, Pub. L. No. 110-53, § 1536, 121 Stat. 266, 464 (2007) (codified as amended at 49 U.S.C. § 31105(b)(1))

Statutes using the same linguistic formulation as the AIR-21:

(6) (PSI) - Pipeline Safety Improvement Act of 2002, Pub. L. No. 107–355, § 6, 116 Stat 2985, 2989 (2002) (codified at 49 U.S.C. § 60129(b)(2)(B))
(7) (NTS) - National Transit Systems Security Act of 2007, Title XIV of the Implementing Recommendations of the 9/11 Commission Act of 2007, Pub. L. No. 110-53, § 1413, 121 Stat. 266, 414 (2007) (codified at 6 U.S.C. § 1142(c)(2)(B))
(8) (CPS/CPSIA) - Consumer Product Safety Act, as amended by Consumer Product Safety Improvement Act of 2008, Pub. L. No. 110-314, § 219(a), 122 Stat. 3016, 3062, 3063-64 (2008) (codified at 15 U.S.C. § 2087(b)(2)(B))
(9) (CFP) - Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111-203, § 1057(c)(3)(C), 124 Stat. 1376, 2031 (2010) (codified at 12 U.S.C. § 5567(c)(3)(C))
(10) (FDA) FDA Food Safety Modernization Act, Pub. L. No. 111-353, § 402, 124 Stat. 3885, 3968, 3969 (2011) (codified at 21 U.S.C. § 399d(b)(2)(C))
(11) (MAP21) Moving Ahead for Progress in the 21st Century Act, Pub. L. No. 112-141, 126 Stat. 405, 765, 767 (2012) (codified at 49 U.S.C. § 30171(b)(2)(B))

Statutes cross-referencing another provision with similar language:

(12) (ACA) - Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 1558, 124 Stat 119, 261 (2010) (codified as amended at 29 U.S.C.A. § 218c(b)(1)) (incorporating by reference the burdens of proof in the CPSIA)
(13) (SPA) - Seaman’s Protection Act, as amended by the Coast Guard Authorization Act of 2010, Pub. L. No. 111-281, § 611(a), 124 Stat. 2905, 2969-70 (2010) (codified as amended at 46 U.S.C. § 2114(b)) (incorporating by reference the burdens of proof in the STAA)

— Textual analysis supported by statutory framework; best to think of step two as the “same-action defense,” and not as the “clear and convincing” defense

In rejecting the Fordham/Powers interpretation, the ARB lead opinion in Palmer focused on the text of the AIR21 two-step burden-of-proof framework. The ARB found that “the text of [§ 42121(b)(2)(B)(iii)]—‘the complainant demonstrates that [protected activity] was a contributing factor in the unfavorable personnel action’—is best interpreted to require a complainant to prove by a preponderance of the evidence that protected activity played some role in the adverse personnel action and to permit the factfinder to consider any admissible, relevant evidence in making that determination.” USDOL/OALJ Reporter at 18. The ARB also found support for this interpretation in the structure of the AIR21 framework. The ARB noted that “[t]he phrase ‘contributing factor’ describes the substantive factual issue to be decided while the phrase ‘clear and convincing’ only describes the standard of proof, not the factual issue to be decided. The two are thus not analogous monikers [and thus] … it may thus help cement this crucial aspect of the two-step test to refer to step two as the ‘same-action defense,’ not as the ‘clear and convincing’ defense.” Id . at 22 (footnotes omitted).

— Support in the legislative history of the ERA whistleblower provision

The ARB found that the legislative history demonstrated that the AIR21 two-step burden-of-proof derived from the burden-of-proof provision in the 1992 amendments to the ERA’s whistleblower provision, which in turn derived the test first announced by the United States Supreme Court in Mt. Healthy City School District Board of Education v. Doyle , 429 U.S. 274 (1977). The ARB noted that the Fordham panel interpreted the legislative history of the Whistleblower Protection Act’s (WPA) burden-of-proof provision as supporting its interpretation of the ERA and AIR21. The ARB explained in an extended discussion why the Fordham panel’s reliance on the WPA’s legislative history was error. Finally, the ARB noted that its interpretation in Palmer was supported by at least two decades of consistent jurisprudence in the ARB and the federal courts of appeal.

— How the AIR burden of proof provision is applied

The ARB next summarized how the AIR-21 burden-of-proof provision is applied. The ARB wrote:

    The obvious reason an ALJ must consider both sides in deciding “c The AIR-21 burden-of-proof provision requires the factfinder—here, the ALJ—to make two determinations. The first involves answering a question about what happened: did the employee’s protected activity play a role, any role, in the adverse action? On that question, the complainant has the burden of proof, and the standard of proof is by a preponderance.[215] For the ALJ to rule for the employee at step one, the ALJ must be persuaded, based on a review of all the relevant, admissible evidence, that it is more likely than not that the employee’s protected activity was a contributing factor in the employer’s adverse action.

   The second determination involves a hypothetical question about what would have happened if the employee had not engaged in the protected activity: in the absence of the protected activity, would the employer nonetheless have taken the same adverse action anyway? On that question, the employer has the burden of proof, and the standard of proof is by clear and convincing evidence. For the ALJ to rule for the employer at step two, the ALJ must be persuaded, based on a review of all the relevant, admissible evidence, that it is highly probable that the employer would have taken the same adverse action in the absence of the protected activity.

_____

[215] The complainant must also of course prove that he engaged in protected activity and that the respondent took an adverse action against him. …

USDOL/OALJ Reporter at 52-53.

The ARB elaborated:

A. The ALJ must determine whether it is more likely than not that protected activity was a contributing factor in the adverse personnel action, and to do so, the ALJ must consider all relevant, admissible evidence.

   We have said it many a time before, but we cannot say it enough: “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.’” We want to reemphasize how low the standard is for the employee to meet, how “broad and forgiving” it is. “Any” factor really means any factor. It need not be “significant, motivating, substantial or predominant”—it just needs to be a factor. The protected activity need only play some role, and even an “[in]significant” or “[in]substantial” role suffices.

   Importantly, if the ALJ believes that the protected activity and the employer’s nonretaliatory reasons both played a role, the analysis is over and the employee prevails on the contributing-factor question. Thus, consideration of the employer’s nonretaliatory reasons at step one will effectively be premised on the employer pressing the factual theory that nonretaliatory reasons were the only reasons for its adverse action. Since the employee need only show that the retaliation played some role, the employee necessarily prevails at step one if there was more than one reason and one of those reasons was the protected activity.

   This is why we have often said that the employee does not need to disprove the employer’s stated reasons or show that those reasons were pretext. Showing that an employer’s reasons are pretext can of course be enough for the employee to show protected activity was a “contributing factor” in the adverse personnel action. Indeed, at times, the factfinder’s belief that an employer’s claimed reasons are false can be precisely what makes the factfinder believe that protected activity was the real reason. That is why a categorical rule prohibiting consideration of the evidence of the employer’s nonretaliatory reasons for its adverse action might actually in some circumstances undermine a complainant’s ability to establish that protected activity was a contributing factor.

    Fordham appears to have expressed the worry that permitting consideration of the employer’s nonretaliatory reasons at step one would amount to requiring the employee to disprove the employer’s nonretaliatory reasons. But because “unlawful retaliatory reasons [can] co-exist with lawful reasons,” and because, in such cases, protected activity would be deemed a contributing factor, consideration of evidence of the employer’s nonretaliatory reasons when determining the contributing factor issue does not require the employee to disprove the employer’s reasons.

   That is also why the term “weigh” when describing the ALJ’s task may well have added to the confusion. Since the “contributing factor” standard requires only that the protected activity play some role in the adverse action, the employer’s nonretaliatory reasons are not “weighed against” the employee’s protected activity to determine which reasons might be weightier. In other words, the ALJ should not engage in any comparison of the relative importance of the protected activity and the employer’s nonretaliatory reasons. As long as the employee’s protected activity played some role, that is enough. But the evidence of the employer’s nonretaliatory reasons must be considered alongside the employee’s evidence in making that determination; for if the employer claims that its nonretaliatory reasons were the only reasons for the adverse action (as is usually the case), the ALJ must usually decide whether that is correct. But, the ALJ never needs to compare the employer’s nonretaliatory reasons with the employee’s protected activity to determine which is more important in the adverse action.

   Moreover, as we have repeatedly emphasized, an employee may meet her burden with circumstantial evidence. One reason circumstantial evidence is so important is that, in general, employees are likely to be at a severe disadvantage in access to relevant evidence. When determining whether protected activity was a contributing factor in an adverse personnel action, the ALJ should thus be aware of this differential access to evidence. Key, though, is that the ALJ must make a factual determination and must be persuaded—in other words, must believe—that it is more likely than not that the employee’s protected activity played some role in the adverse action. So, for example, even though we reject any notion of a per se knowledge/timing rule, an ALJ could believe, based on evidence that the relevant decisionmaker knew of the protected activity and that the timing was sufficiently proximate to the adverse action, that the protected activity was a contributing factor in the adverse personnel action. The ALJ is thus permitted to infer a causal connection from decisionmaker knowledge of the protected activity and reasonable temporal proximity. But, before the ALJ can conclude that the employee prevails at step one, the ALJ must believe that it is more likely than not that protected activity was a contributing factor in the adverse personnel action and must make that determination after having considered all the relevant, admissible evidence.

   We cannot emphasize enough the importance of the ALJ’s role here: it is to find facts. The ALJ must consider all the relevant, admissible evidence and make a factual determination, under the preponderance of the evidence standard of proof, about what happened: is it more likely than not that the employee’s protected activity played a role, any role whatsoever, in the adverse personnel action? If yes, the employee prevails at step one; if no, the employer prevails at step one. If there is a factual dispute on this question, as is usually the case, the ALJ must sift through the evidence and make a factual determination. This requires the ALJ to articulate clearly what facts he or she found and the specific evidence in the record that persuaded the ALJ of those facts.

B. The ALJ must determine whether the employer has proven, by clear and convincing evidence, that, in the absence of any protected activity, the employer would have taken the same adverse action.

   If the complainant proves that protected activity was a contributing factor in the adverse personnel action, the ALJ must then turn to the hypothetical question, the employer’s same-action defense: the ALJ must determine whether the employer has proven, by clear and convincing evidence, that, “in the absence of” the protected activity, it would have taken the same adverse action. It is not enough for the employer to show that it could have taken the same action; it must show that it would have.

   The standard of proof that the ALJ must use, “clear and convincing,” is usually thought of as the intermediate standard between “a preponderance” and “beyond a reasonable doubt”; it requires that the ALJ believe that it is “highly probable” that the employer would have taken the same adverse action in the absence of the protected activity. “Quantified, the probabilities might be in the order of above 70% . . . .”

   Again, as when making a determination at step one, the ALJ must consider all relevant, admissible evidence when determining whether the employer has proven that it would have otherwise taken the same adverse action; and again, it is crucial that the ALJ find facts and clearly articulate those facts and the specific evidence in the record that persuaded the ALJ of those facts.

USDOL/OALJ Reporter at 53-57 (emphasis as in original) (footnotes omitted).

Concurring opinion of Judge Corchado

— Expansion on lead opinion; notation that causation question inherently involves delving into the respondent’s “metaphysical mental process”

Judge Corchado wrote a separate concurring opinion that reiterated and expanded on the lead opinion’s analysis. He also noted that the causation issue necessarily involves assessing the respondent’s “metaphysical mental process”:

    The obvious reason an ALJ must consider both sides in deciding “causation” is because the employer’s decision-making is a metaphysical mental process and neither the complainant nor the employer can show the ALJ the actual mental processes that occurred. The invisible influences on the decision-maker’s thoughts cannot be displayed on a movie screen or downloaded as computer data onto a computer monitor. Instead, at the evidentiary hearing, the ALJ faces a complainant trying to prove he was the victim of unlawful mental processes and the employer who denies that protected activity influenced any part of the mental process that led to the employment action in question. The complainant might rely on temporal proximity, inconsistent employer policies, disparate treatment, e-mails, and witness testimony, among other evidence, to prove circumstantially that protected activity contributed. The employer will do the same to prove that protected activity did not contribute. It is this evidence battle that the ALJ must evaluate together to decide as best as possible what the truth is. But whether the causation evidence consists of memoranda, documents, depositions, hearing testimony, etc., all causation evidence presented to the ALJ will be about the influences that did or did not factor into the employer’s mental processes that led to the ultimate decision against an employee.

USDOL/OALJ Reporter at 67.

Concurring and dissenting opinion of Judge Royce

— Disputes that WPA legislative history was not applicable; Fordham was intended to prevent inaccurate analysis

Judge Royce wrote a concurring and dissenting opinion. She disputed the majority’s conclusion that the statutory text was clear and that the WPA legislative history was not applicable. This member conceded that “[i]n an effort to properly effectuate the remedial purposes of the statute, and avoid too narrowly construing the statute, Fordham may have overstated what the statutory language dictates” but maintained that “[n]evertheless Fordham ’s categorical formula for applying the statute to the facts is ultimately the surest method for factfinders to accurately analyze both parties’ evidence consonant with the overall goal of whistleblower provisions to protect employees who risk careers to speak up concerning violations of law.’ USDOL/OALJ Reporter at 81 (footnotes omitted).

Concurring opinion of Judge Desai

— If ALJ determines that protected activity was one of the reasons for the adverse action, the ALJ must not weigh that reason against the employer’s nonretaliatory reasons to determine how important the retaliatory reason was

Finally, although Judge Desai signed the lead opinion, he also wrote separately to specify the points on which the ARB panel members agreed and on which he explained his understanding of the principal disagreements. He summarized: “if the ALJ determines that the protected activity was one of the reasons for the adverse action, the ALJ must not weigh that reason against the employer’s nonretaliatory reasons to determine how important the retaliatory reason was: the whole point of Congress lowering the causation standard from ‘substantial’ to ‘contributing’ in step one was to say that if a retaliatory reason is a factor at all, the employee prevails at step one.”