USDOL/OALJ Reporter: ARB Decision Caselist -- February 2009

 

---

Summary :

[STAA Whistleblower Digest XI B 2]
DISMISSAL; FAILURE TO COMPLY WITH ALJ'S DISCOVERY ORDERS AND OTHER LACK OF COOPERATION

In Anderson v. Grayhound Trash Removal Inc. , ARB No. 07-115, ALJ No. 2007-STA-24 (ARB Feb. 27, 2009), the ARB found that ALJ did not abuse her discretion in denying the complaint where she had afforded the Complainant adequate opportunity to comply with discovery orders and warned him about the consequences of failing to respond, the Complainant did not explain to the ALJ why he needed almost six months to obtain representation, the Complainant did not offer an excuse for failing to appear at a scheduled deposition, and the Complainant did not respond to the ALJ's show cause order.

 

---

 

---

Summary :

[STAA Whistleblower Digest XI B 4]
DEFAULT DECISION; RESPONDENT'S FAILURE TO ATTEND HEARING; ALJ MAY TAKE TESTIMONY OF COMPLAINANT AND RENDER A DECISION ON THE COMPLAINT FOLLOWING POSTHEARING ORDER TO SHOW CAUSE

In Barnum v. J.D.C. Logistics, Inc. , ARB No. 08-030, ALJ No. 2008-STA-6 (ARB Feb. 27, 2009), the ARB noted that in a STAA case, the regulations at 29 C.F.R. 18.39(b) and 18.5(b) have been interpreted as meaning that "when a respondent fails to appear at the hearing without good cause, the ALJ may take the allegations in the complainant's complaint as admitted and render a decision an order with findings and appropriate conclusions." USDOL/OALJ Reporter at 5 (footnote omitted). In Barnum , the ALJ convened a hearing, and although the Respondent failed to appear, took testimony from the Complainant. After the hearing, the ALJ issued an order to show cause why judgment should not be entered pursuant section 18.5(b). When the Respondent did not respond, the ALJ issued a recommended decision in which he reviewed the evidence, found the Complainant to be credible, and found that the Complainant had made out a prima facie case of retaliation. The ALJ found that because the Respondent had defaulted, it failed to rebut that prima facie case by articulating a legitimate, nondiscriminatory reason for its employment decision. The ALJ therefore recommended that the Complainant be reinstated and awarded back pay with interest and compensatory damages. The ARB found that the procedures followed by the ALJ satisfied the requirements of the regulations, and affirmed the ALJ's recommended decision.

[STAA Digest IX B 1]
COMPENSATORY DAMAGES; AWARD FOR STRESS BASED SOLELY ON COMPLAINANT'S TESTIMONY

In Barnum v. J.D.C. Logistics, Inc. , ARB No. 08-030, ALJ No. 2008-STA-6 (ARB Feb. 27, 2009), the ARB affirmed the ALJ's award of $5000 based on the Complainant's testimony that he suffered stress from the loss of insurance and other fringe benefits as result of the Respondent's wrongful adverse action.

 

---

 

---

Summary :

Approval of settlement agreement.

 

---

 

---

Summary :

[STAA Digest V B 2 c]
PROTECTED ACTIVITY; FAULTY AIR CONDITIONING

In Carter v. GDS Transport, Ltd. , ARB No. 08-053, ALJ No. 2008-STA-9 (ARB Feb. 27, 2009), the Complainant was a shuttle bus driver whose duty was to transport employees to and from public transportation terminals and the employees' worksites. He refused to drive a bus that had faulty air conditioning. The ARB found that the ALJ had properly found that voicing complaints about a faulty air conditioning system during a five- to ten-minute bus ride was not a safety concern classified as protected activity under the STAA. The ARB agreed that this was not protected activity because it was not based on a reasonable belief that driving the bus would violate a federal regulation, standard, or order related to commercial motor vehicle safety or health, or on a "reasonable apprehension of serious injury to the employee or the public because of the vehicle's unsafe condition." The ARB also affirmed the ALJ's finding that, although the Complainant had engaged in protected activity when he complained about problems with the horn, brakes, tires, and door on the assigned bus, the Employer's articulated ground for terminating the Complaint � abandonment of his job � was not shown to be pretext.

 

---

 

---

Summary :

Withdrawn complaint.

 

---

 

---

Summary :

[STAA Digest II L]
BANKRUPTCY STAY; CASE REMAINS ON ALJ'S DOCKET UNTIL BANKRUPTCY CASE IS RESOLVED OR STAY LIFTED, EVEN THOUGH NEITHER PARTY RESPONDS TO ALJ'S ORDER REQUESTING STATUS UPDATE

In Haubold v. KTL Trucking Co. , ARB No. 08-025, ALJ No. 2000-STA-35 (ARB Feb. 27, 2009), the ARB had remanded a STAA matter that had been stayed under Section 362 of the Bankruptcy Code. The Board's remand order instructed that the case "will remain on the [ALJ's'] docket until the bankruptcy case is closed, dismissed, or discharge is granted or denied or until the bankruptcy court lifts the stay and the ALJ may then continue the proceedings to resolve the matter before him." Approximately seven years later, the ALJ issued an Order to Show Cause Why Case Should Not Be Dismissed" requiring the parties to address whether any of the eventualities specified in the ARB's remand order had occurred. Neither party responded, and the ALJ thereafter issued a Recommended Order of Dismissal. The case was forwarded for automatic review by the ARB. Neither party responded to the ARB's docketing order; however, because the Bankruptcy Court's docket sheet indicated that the bankruptcy matter was still pending, the ARB again remanded the case to remain on the ALJ's docket until the bankruptcy case was resolved or the stay lifted.

 

---

 

---

Summary :

LIABILITY OF TURNAROUND AND CORPORATE RESTRUCTURING COMPANY

In Kalkunte v. DVI Financial Services, Inc. , ARB Nos. 05-139, 05-140, ALJ No. 2004-SOX-56 (ARB Feb. 27, 2009), DVI Financial Services, Inc. ("DVI"), hired a law firm to assist it in restructuring or going into bankruptcy, and about the same time hired AP Services, LLC ("APS"), to negotiate for operating funds. The next month, APS sent one of its principals, who was a specialist in turnaround operations and corporate restructuring, to work at DVI. APS also supplied workers for general management services. Later, after DVI filed for bankruptcy, the APS principal became CEO of DVI, and another APS official became DVI's chief administrative officer The Complainant was a contract attorney working for DVI, who later filed a SOX whistleblower complaint against DVI and APS.

On appeal to the ARB it was not disputed that the Complainant was an employee and that DVI was an employer under the provisions of the Act. The ARB, however, reviewed more closely whether APS was liable under the SOX, 18 U.S.C.A. § 1514A(a), and its implementing regulations at 29 C.F.R. § 1801.101 and § 1801.102. The ARB agreed with the ALJ that under the statutory and regulatory definitions, the Complainant was "an employee" whose employment could be (and was) affected by APS, and that APS was a "company representative" of DVI, because it was its "contractor, subcontractor, or agent."

As CEO, the DVI principal had authority to hire and fire DVI employees, and supervised the APS employees who were under contract with DVI. He was the decision maker in eliminating more than ninety DVI employee positions, and it was he who determined that the Complainant's services were no longer needed. It was the APS official working as DVI's chief administrative officer who notified the Complainant of her discharge.

The ARB noted that the DVI principal who was also CEO of DVI and thereby an "officer" under the Act and regulations, could have been held personally liable, but found that the issue of his personal liability was not before it because the ALJ had held that the Complainant waited too long to seek to add that person as a party respondent.

PROTECTED ACTIVITY; INQUIRY INTO STATUS OF INVESTIGATION OF ALLEGED IMPROPRIETIES

In Kalkunte v. DVI Financial Services, Inc. , ARB Nos. 05-139, 05-140, ALJ No. 2004-SOX-56 (ARB Feb. 27, 2009), the Complainant's inquiry into the status of an outside law firm's investigation into his employer's alleged financial improprieties, which had been initiated based on information supplied by the Complainant, was found to be protected activity under the SOX. Although there was some dispute about the Complainant's conclusion that a turnaround specialist serving as the employer's CEO after the employer's bankruptcy filing was delaying the outside law firm's investigation, the ARB found that the Complainant's belief was reasonable because she had not been made aware of the role of the bankruptcy court in the delay.

CONTRIBUTING CAUSE; EVIDENCE OF TEMPORAL PROXIMITY, PRETEXT AND RETALIATORY ANIMUS, FOUND TO BE SUBSTANTIAL EVIDENCE SUPPORTING ALJ'S FINDING THAT PROTECTED ACTIVITY WAS A CONTRIBUTING FACTOR IN COMPLAINANT'S DISCHARGE

In Kalkunte v. DVI Financial Services, Inc. , ARB Nos. 05-139, 05-140, ALJ No. 2004-SOX-56 (ARB Feb. 27, 2009), the Complainant, a contract attorney, had reported allegations of financial improprieties to the board of directors, the audit committee and other officials. Later, she made inquiries about the status of the investigation by an outside law firm, which had been delayed because a bankruptcy court declined to authorize payment for the outside investigation. After being discharged, the Complainant filed a SOX whistleblower complaint. The ARB found that substantial evidence supported the ALJ's finding that the Complainant proved by a preponderance of the evidence that her protected activity was a "contributing factor" in her discharge. First, there was temporal proximity between the protected activity and her discharge. Second, there was evidence of pretext and retaliatory animus. Within hours of receipt of an e-mail in which the Complainant asked to discuss the status of the outside law firm's investigation into her SEC violations report, the turnaround specialist acting as CEO began looking into the Complainant's tasks and responsibilities but not those of other in-house attorneys. At a meeting, the CEO suggested that the Complainant worked for him and not the audit committee and that her interest in following up on the investigation was outside her assigned duties and a source of irritation to him. The CEO admitted that the meeting made him focus on the Complainant's role in the organization "hastening our inevitable decision to terminate her." The acting chief administrative officer consulted some, but not other outside counsel about the Complainant's duties and responsibilities, and in making the termination decision, never met with the Complainant about those duties and responsibilities. The ARB found that the "surrounding circumstances clearly suggest pretext; that, notwithstanding legal work for her to do, [the Complainant] had become a thorn in [the CEO's] side, and he was devising a way to eliminate her." A reduction in force was given as as the reason for the Complainant's discharge. At the hearing, this was explained as being so that the Complainant could collect unemployment and get another job. At the hearing the Respondent also alleged that the Complainant was also discharged for performance issues. The ARB, however, observed that the only other position eliminated during the same month that the Complainant was discharged was an administrative assistant who had requested to be laid off for personal reasons. Moreover, although the Complainant was told her position was no longer necessary, another lawyer was transferred in to take over her work. Finally, the ARB found evidence of animus in that the Complainant was the only discharged employee to be immediately escorted out of the building. The ARB emphasized that the Complainant did not need to show that her protected activity was the only factor in her discharge, but just that it was a "contributing factor."

One member of the ARB dissented, finding that the majority had applied too narrow a canvassing of the record, and that examination of the whole record revealed overwhelming evidence that supported findings contrary to the ALJ's.

CLEAR AND CONVINCING EVIDENCE; COMPLAINANT NEED NOT PROVE THAT REASONS GIVEN FOR DISCHARGE WERE FALSE

In Kalkunte v. DVI Financial Services, Inc. , ARB Nos. 05-139, 05-140, ALJ No. 2004-SOX-56 (ARB Feb. 27, 2009), the Complainant, a contract attorney, had reported allegations of financial improprieties to the board of directors, the audit committee and other officials, and later made inquiries about the status of the investigation by an outside law firm. After being discharged, the Complainant filed a SOX whistleblower complaint. The ARB affirmed the ALJ's finding that this protected activity was a contributing factor in the Complainant's discharge. Thus, the Respondents could only avoid liability case by proving by "clear and convincing evidence" that they would have discharged the Complainant when they did, even if she had not engaged in protected activity. The ARB noted that much the same evidence reviewed in regard to the contributing factor element was relevant to the clear and convincing evidence element of the SOX whistleblower analysis.

The Complainant's employer was in financial trouble when it hired outside turnaround and restructuring specialists. Although the employer eliminated more than ninety employee positions on August 2003, the Complainant and four other in-house lawyers were not among them. After a bankruptcy filing, the Complainant had added responsibilities. Only one other employee besides the Complainant was discharged in September 2003, and that employee had requested to be laid off. None of the other in-house lawyers lost their jobs during the same time frame, and it was only after the Complainant started pressing the turnaround specialist/acting CEO for answers about the progress of the outside investigation into her report of financial irregularities that he began to question the Complainant's value to the organization. The ARB, however, stated that "what to [the CEO] was an irritant the law regards as protected activity." The ARB observed that all of the other in-house lawyers remained at least through April 2004, with the last leaving that October, and that the Complainant was alone among all of the employees subjected to a reduction in force to be unceremoniously escorted out of the building immediately after her discharge.

The ARB stated that the Complainant did not need to show that the reasons the CEO gave for the discharge were false, and observed that there may have been some truth to the need to downsize in view of the pending dissolution of the company, and that the Complainant may not have been a strong performer on the legal team. The ARB found that the record did not contain evidence of performance-related issues until the Complainant began her whistle blowing activity. In sum, the Respondents failed to prove by clear and convincing evidence that they would have discharged the Complainant when they did had she not engaged in protected activity.

One member of the ARB dissented, finding that the majority had applied too narrow a canvassing of the record, and that examination of the whole record revealed overwhelming evidence that supported findings contrary to the ALJ's.

BACK PAY; DISSOLUTION OF COMPANY CUTS OFF ENTITLEMENT TO BACK OR FRONT PAY; UNCERTAINTIES RESOLVED AGAINST DISCRIMINATING PARTY

In Kalkunte v. DVI Financial Services, Inc. , ARB Nos. 05-139, 05-140, ALJ No. 2004-SOX-56 (ARB Feb. 27, 2009), the ALJ found that reinstatement was impossible because the Employer was no longer in business, and awarded back and front pay for a period of time past when the Employer had gone out of business. The ARB found that dissolution of the company was a superseding intervening cause that cut off the Complainant's entitlement to back or front pay. The Complainant was a contract attorney for the Employer. The legal department closed its doors in October 2004, but the last employee was not terminated until December 2004. The ARB set December 2004 as the terminal point for the back pay award based on the principle that "uncertainties in establishing the amount of back pay to be awarded are to be resolved against the discriminating party." McCafferty v. Centerior Energy , 1996-ERA-6, slip op. at 26-27 (Sec'y Sept 24, 1997).

DAMAGES FOR PAIN, SUFFERING, MENTAL ANGUISH AND HUMILIATION

In Kalkunte v. DVI Financial Services, Inc. , ARB Nos. 05-139, 05-140, ALJ No. 2004-SOX-56 (ARB Feb. 27, 2009), the ARB affirmed the ALJ's award of $22,000 for "pain, suffering, mental anguish, the effect on her credit [because of her loss of employment] and the humiliation that she suffered." The ARB noted that although damage to credit may not be legally compensable, the balance of the award was supported by the evidence and was within the ALJ's discretion.

 

 

---

 

---

Summary :

Withdrawn complaint.

 

---

 

---

Summary :

[STAA Digest XI A 1]
WITHDRAWAL OF COMPLAINT

Withdrawn complaint.

 

---

 

---

Summary :

Withdrawn complaint.

 

---

 

---

Summary :

[Nuclear and Environmental Digest XVI E 4 b]
ATTORNEY'S FEES; POST DECISION HOURS MAY BE AWARDED BY THE ARB EVEN THOUGH THEY COULD HAVE BEEN INCLUDED IN FEE PETITON BEFORE THE ALJ

In Pierce v. United States Enrichment Corp. , ARB Nos. 06-055, 06-058, 06-119, ALJ No. 2004-ERA-1 (ARB Feb. 27, 2009), the Respondent objected to an award of attorney's fees by the ARB for hours expended after the ALJ issued the recommended decision and before the date set by the ALJ for submission of an attorney fee petition. The Employer argued that such fees should have been included with the petition filed with the ALJ. The ARB, however, found no reason to deny such fees as long as they were reasonably incurred.

[Nuclear and Environmental Digest XVI E 2]
ATTORNEY'S FEES; TAX ISSUES

In Pierce v. United States Enrichment Corp. , ARB Nos. 06-055, 06-058, 06-119, ALJ No. 2004-ERA-1 (ARB Feb. 27, 2009), the ARB disallowed attorney's fees for time spent by the Complainant's attorney on tax issues associated with the damages award.

[Nuclear and Environmental Digest XVI E 2]
ATTORNEY'S FEES; COMPLAINANT'S UNSUCCESSFUL CROSS APPEAL

In Pierce v. United States Enrichment Corp. , ARB Nos. 06-055, 06-058, 06-119, ALJ No. 2004-ERA-1 (ARB Feb. 27, 2009), the ARB disallowed attorneys' fees incurred in support of a cross appeal on which the Complainant failed to prevail before the ARB.

 

---

 

---

Summary :

ARB found that substantial evidence supported the ALJ's finding that the Complainant was fired for failure to disclose a traffic citation in his annual Motor Vehicle Driver's Certification form, and not for protected activity.

 

---

 

---

Summary :

[STAA Digest V A 4 c iii]
PROTECTED ACTIVITY; REQUEST TO DISCUSS ASSIGNMENT IS NOT THE EQUIVALENT OF VOICING A SAFETY CONCERN

In Johnson v. Econo Steel, LLC , ARB No. 07-111, ALJ No. 2007-STA-12 (ARB Feb. 23, 2009), the Complainant contended that he engaged in protected activity when he told the plant manager that he wanted to speak to the Respondent's owner about a 860 mile dispatch, and when he told the same thing to owner the next day just before he was fired. The ALJ had not been persuaded that the Complainant raised any concerns about the hours of service regulations under the Federal Motor Carrier Safety Act or the legality of the run with either the plant manger or the owner, but found it more probable that the Complainant told them he needed to leave in time so that he would not have to drive over the weekend. The ARB found that substantial evidence supported the ALJ's findings. Moreover, in regard to the Complainant's argument that the ALJ committed legal error in not finding protected activity, the ARB stated that "an employee who simply tells a manager that he wants to discuss his assignment is not the same as voicing a concern about a potential violation of the regulations."

 

---

 

---

Summary :

Withdrawal/Abandonment

 

---

 

---

Summary :

Dismissal for failure to participate in hearing process

 

---

 

---

Summary :

Dismissal based on abandonment

 

---

 

---

Summary :

ADVERSE EMPLOYMENT ACTION; FILING OF CIVIL SUIT AGAINST COMPLAINANT FOR TORTIOUS INTERFERENCE

In Farnham v. International Manufacturing Solutions , ARB No. 07-095, ALJ No. 2006-SOX-111 (ARB Feb. 6, 2009), the ARB agreed with the ALJ that the Respondent's filing of a civil suit against the Complainant alleging tortious interference with the Respondents' loan transactions, slander, and intentionally infliction of emotional distress, was not proved to be adverse employment action under the SOX. The ARB wrote: "The SOX defines adverse action as discharging, demoting, suspending, threatening, harassing, or in any other manner discriminating against an employee in the terms and conditions of his or her employment. [The Complainant'] has failed to establish how [the] filing [of the] civil suit against [him]... injured him in any way in relation to 'the terms and condition of his employment.'" USDOL/OALJ Reporter at 10 (footnote omitted).

TIMELINESS OF COMPLAINT; EQUITABLE TOLLING BASED ON FEAR OF RETALIATION; COMPLAINANT MUST ESTABLISH THAT ALLEGED FEAR WAS REASONABLE

In Farnham v. International Manufacturing Solutions , ARB No. 07-095, ALJ No. 2006-SOX-111 (ARB Feb. 6, 2009), the Complainant contended that he had not timely filed his SOX complaint because he feared retaliation from the Respondents if he filed a SOX complaint. The ARB, assuming arguendo that fear of retaliation would constitute an extraordinary event precluding timely filing for which equitable tolling should apply, agreed with the ALJ the Complainant failed to carry his burden of establishing that his alleged fear was reasonable.

The ARB stated that "[t]o establish duress sufficient to toll the running of the limitations period, Farnham must do more than simply allege a subjective fear that the Respondents might retaliate against him. Instead, he must show some act or threat by the Respondents that precluded him from exercising his free will and judgment and prevented him from exercising his legal rights." USDOL/OALJ Reporter at 11 (footnotes omitted). The ARB noted that the Complainant had not alleged that the Respondents made any specific threats against him either before or after he was constructively discharged. Moreover, the Respondent that the Complainant allegedly feared because of drug cartel associations and a criminal background, had not physically threatened the Complainant when he concluded that the Complainant had interfered with the Respondents' loan transactions and slandered that Respondent, but had simply filed a lawsuit to seek redress through the courts. The ARB also agreed with the ALJ that the Complainant's actions following the termination of his employment demonstrated that the Respondents did not deprive him of his free will and judgment or prevent him from seeking his legal rights. The Complainant had instigated an FBI investigation of the Respondents' business activities, discussed his plans to pursue the Respondents with former co-workers, filed a counter suit in response to the Respondents' lawsuit, and complained to a Congressman about the Respondents' business dealings.

 

---