USDOL/OALJ Reporter: ARB Decision Caselist - March 2015

[Nuclear & Environmental Digest XVI E 3 a]
ATTORNEY'S FEES; ALJ DOES NOT ABUSE HIS DISCRETION WHERE HE CONSIDERED ALL RELEVANT EVIDENCE, INCLUDING TAKING JUDICIAL NOTICE OF SURVEY OF LAW FIRM ECONOMICS

[Nuclear & Environmental Whistleblower Digest XVI E 3 e ii]
ATTORNEY'S FEES; FEE ENHANCEMENT; PASSAGE OF TIME AND SUPERIOR WORK FOUND NOT, IN ITSELF, TO BE SO EXCEPTIONAL AS TO WARRANT FEE ENHANCEMENT

In Abdur-Rahman v. Dekalb County , ARB Nos. 13-080, -085, ALJ Nos. 2006-WPC-2 and 3 (ARB Mar. 30, 2015), both the Complainants and the Respondent appealed the ALJ's order awarding attorney's fees and costs on the Complainants' FWPCA complaint. The ALJ awarded lower hourly rates for legal fees than those requested for work done prior to 2010, but granted the requested $400 hourly rate for work performed after 2010. The ALJ also denied compensation for significant amounts of requested time. On appeal, the ARB reviewed the ALJ's award under an abuse of discretion standard. The ARB noted that it has endorsed the lodestar method to assess the reasonableness of requested attorney's fees, and that that burden of proof is on a complainant to demonstrate the reasonableness of the attorney's hourly fee "by producing evidence that the requested rate is in line with legal fees prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." USDOL/OALJ Reporter at 4 (footnote omitted).

No abuse of discretion by ALJ where he considered all relevant evidence, including the Survey of Law Firm Economics

On appeal, the Respondent claimed that the fee rates awarded were not supported by the evidence submitted by the Complainants' counsel, and that the ALJ had failed to hold counsel to their burden of proof, but rather determined rates by judicial notice. Complainants' counsel argued that substantial evidence supported the rate set by the ALJ regardless of whether the ALJ took judicial notice of a survey or the rate awarded by a court in another case. The ALJ had taken into consideration the documentation counsel provided regarding fees prevailing in Georgia for similar services by lawyers of reasonably comparable skill, experience, and reputation, and Respondent's challenges to this evidence. The ALJ found "persuasive, yet not conclusive" the rate that a magistrate had found reasonable for counsels' work in a state proceeding. And the ALJ had taken judicial notice of the 2005 and 2007 Survey of Law Firm Economics . In reviewing the ALJ's decision, the ARB found that the ALJ considered "all the relevant evidence in setting the applicable hourly rates, including but not limited to the evidence submitted and the surveys" and that the ALJ had not abused his discretion in making the hourly rate determinations. Id . at 7.

The Respondent recognized that the ALJ had already made significant reductions to the compensated attorney time sought by the Complainants, but sought further reductions by the ARB on appeal. The ARB, however, found that the ALJ provided a thorough discussion of all relevant evidence and an exhaustive analysis of the law as applied to the facts of the case. The Complainants sought reversal of the ALJ's reductions, disallowance and related rates. But the ARB again found that the ALJ had not abused his discretion.

Fee enhancement request for exceptional delay; passage of time and superior work product found not so exceptional in itself as to warrant a fee enhancement

The Complainants also sought an across-the-board 20% fee enhancement under Perdue v. Kenny A. , 559 U.S. 542, 542 (2010), as consideration for exceptional delay in payment of fee. But the ARB found no basis for overturning the ALJ's rejection of the fee enhancement request. The ALJ had acknowledged that the case had been pending for over six years, but found that the matter was not such an exceptional case to warrant a fee enhancement. The ARB agreed with the ALJ's observation that that "other than asserting six years has passed since the case was filed, reminding the Court of its superior work product, and citing distinguishable cases that preceded the Purdue [sic] Court's decision, Counsel has done nothing to justify the enhancement." USDOL/OALJ Reporter at 9, quoting ALJ decision, slip op. at 5-6 (citations omitted).

RESPONDENT'S ADMISSION THAT IT SEQUESTERED FUNDS FOR PAYMENT OF SCA-REQUIRED HEALTH AND WELFARE BENEFITS FOUND TO BE EVIDENCE OF SCA VIOLATIONS

IN SEEKING EXEMPTION FROM SCA DEBARMENT, RESPONDENT BEARS BURDEN OF PROVING NO PRIOR VIOLATION AND NOT MERELY THAT PRIOR VIOLATION WAS TECHNICAL IN NATURE

MEMBER OF BOARD OF DIRECTORS' VOTE TO END PARTICIPATION IN THIRD PARTY PLAN FOR PROVISION OF SCA-REQUIRED HEALTH AND WELFARE BENEFITS WAS NOT IN ITSELF SUFFICIENT TO ESTABLISH THAT THIS MEMBER WAS A "PARTY RESPONSIBLE" SUBJECT TO SCA DEBARMENT FOR FAILURE TO TIMELY PAY THE BENEFITS

In E&S Diversified Services, Inc. , ARB No. 13-019, ALJ Nos. 2011-SCA-8 and 9 (ARB Mar. 20, 2015), the ARB affirmed the ALJ's finding that the Respondent failed to timely pay health and welfare benefits required by the SCA to their contract employees, and that the Respondent had failed to establish that "unusual circumstances" merited relief from debarment. The ARB noted that the Respondent had admitted to holding funds it would have paid to service contract employees and sequestering those funds in its payroll and general accounts. The ARB found that the Respondent therefore admitted affirmative conduct violative of the SCA's health and welfare provisions. The Respondent argued that the ALJ erred in relying on the district director's testimony about prior violations where that witness also testified that the violations were technical in nature. The ARB found that this argument ignored the fact that 29 C.F.R. § 4.188(b)(1) places the burden on the contractor of showing no evidence of prior violations.

The ARB, however, vacated the ALJ's determination that a member of the Respondent's Board of Directors who had joined in a unanimous vote to end the Respondent's participation in a third-party administered plan for meeting health and welfare obligations, was a "party responsible" subject to SCA debarment. The ARB found that whether or not the Respondent participated in a plan is not evidence of culpably negligent conduct, and that for the Board of Directors member at issue to be subject to debarment, the ALJ had to have found that he "'exercise[d] control, supervision, or management over the performance of the contract, including the labor policy or employment conditions regarding the employees engaged in contract performance.' 29 C.F.R. § 4.187(e)(4)." USDOL/OALJ Reporter at 8 (case citations omitted).

ADVERSE ACTION; SENDING COMPLAINANT HOME WITHOUT PAY UNTIL HE COULD OBTAIN A MEDICAL RELEASE WHERE RESPONDENT WAS UNABLE TO ACCOMMODATE COMPLAINANT'S REQUEST TO WORK IN AN AREA THAT WAS NOT SMOKY AND WAS ODOR FREE FOUND TO BE ADVERSE EMPLOYMENT ACTION

In Jackson v. Union Pacific Railroad Co. , ARB No. 13-042, ALJ No. 2012-FRS-17 (ARB Mar. 20, 2015), the Complainant engaged in protected activity when he reported a foul, smoky odor to the manager of yard operations (which had resulted from marsh fires outside New Orleans). Because of possible health concerns, the Complainant requested to be assigned to an area free from the smoke and smell. Unable to accommodate him, the Complainant's supervisor directed the Complainant to go home and to return to work only after obtaining a medical release. The ALJ found that sending the Complainant home without pay until he returned with medical clearance was an adverse action. The ALJ characterized this as "constructive discharge." On appeal, the Respondent argued that the ALJ erred in finding a constructive discharge. The ARB found that substantial evidence nevertheless supported the ALJ's finding of adverse employment action.

WAIVER OF ISSUE NOT RAISED IN PETITION FOR ARB REVIEW

Where the Respondent argued in its appellate brief that the Complainant had not engaged in protected activity because he had not acted in good faith in reporting smoky conditions, but the Respondent had not raised this issue in its petition for ARB review, the ARB deemed the Respondent to have waived the issue. Jackson v. Union Pacific Railroad Co. , ARB No. 13-042, ALJ No. 2012-FRS-17 (ARB Mar. 20, 2015).

COMPENSATORY DAMAGES; BEING SENT HOME FOR EXPRESSING SAFETY AND HEALTH CONCERNS SUFFICIENT TO SUPPORT NOMINAL AWARD OF $500 FOR EMOTIONAL DISTRESS

In Jackson v. Union Pacific Railroad Co. , ARB No. 13-042, ALJ No. 2012-FRS-17 (ARB Mar. 20, 2015), the Complainant engaged in protected activity when he reported a foul, smoky odor to the manager of yard operations (which had resulted from marsh fires outside New Orleans). Because of possible health concerns, the Complainant requested to be assigned to an area free from the smoke and smell. Unable to accommodate him, the Complainant's supervisor directed the Complainant to go home and to return to work only after obtaining a medical release. The ARB affirmed the ALJ's finding that sending the Complainant home without pay until he returned with medical clearance was an adverse action. The Complainant was later paid for three days of missed work. The ALJ, however, awarded a nominal compensatory damages award of $500.00 for only minimal evidence showing that the Complainant suffered emotional distress due to the temporary suspension. On appeal the Respondent argued that the award was incongruous with the ALJ's finding of minimal evidence of emotional distress. The ARB, however, found that substantial evidence supported the nominal award based on the ALJ's finding that being sent home in the face of his peers for expressing health and safety concerns was stressful enough to support the $500.00 award.

PUNITIVE DAMAGES; ALJ'S AWARD OF $1,000 IN PUNITIVE DAMAGES FOR SUPERVISOR'S EXAGGERATED RESPONSE TO COMPLAINANT'S RAISING OF CONCERNS ABOUT A SMOKY ODOR OF SENDING COMPLAINANT HOME WITHOUT PAY AND REQUIRING MEDICAL RELEASE FOR RETURN TO WORK REVERSED AND VACATED BY THE ARB WHERE COMPLAINANT DID NOT ESTABLISH THAT THE SUPERVISOR'S RESPONSE SHOWED A RECKLESS OR CALLOUS INDIFFERENCE

In Jackson v. Union Pacific Railroad Co. , ARB No. 13-042, ALJ No. 2012-FRS-17 (ARB Mar. 20, 2015), the Complainant engaged in protected activity when he reported a foul, smoky odor to the manager of yard operations (which had resulted from marsh fires outside New Orleans). Because of possible health concerns, the Complainant requested to be assigned to an area free from the smoke and smell. Unable to accommodate him, the Complainant's supervisor sent the Complainant home without pay and directed him to return to work only after obtaining a medical release. The ALJ awarded $1,000 in punitive damages for the "exaggerated" response to the Complainant's smoke concerns. The ARB found that substantial evidence did not support the punitive damages award, finding that the record did not indicate any reckless or callous indifference to the Complainant's legal rights. The ARB found that the Complainant's supervisor had consistently testified that the Complainant was reporting a personal health issue and that he wanted a doctor to determine why the Complainant had a problem while no one else at the yard did. The ARB acknowledged that the ALJ had implicitly disregarded this testimony in favor of the Complainant's testimony about his safety concerns, but nonetheless found that the Complainant had provided no evidence of how the supervisor's conduct showed reckless or callous indifference toward the Complainant. The ARB thus reversed and vacated the punitive damages award. One member of the Board dissented on this issue, finding that the majority had not discussed the ALJ's findings that the request for a medical clearance was a ruse.

Order approving settlement agreement.

CONTRIBUTORY FACTOR ELEMENT; ALJ MAY CONSIDER RELEVANT EVIDENCE AT EACH STAGE OF ANALYSIS; COMPLAINANT CANNOT REST ON TEMPORAL PROXIMITY ALONE WHERE RESPONDENT PRESENTED RELEVANT, OBJECTIVE EVIDENCE REBUTTING CONTRIBUTORY FACTOR CAUSATION; EVIDENCE OF LACK OF RETALIATORY MOTIVE DOES NOT REBUT COMPLAINANT'S EVIDENCE OF CONTRIBUTORY FACTOR; RESPONDENT BEARS THE RISK THAT THE INFLUENCE OF LEGAL AND ILLEGAL MOTIVES CANNOT BE SEPARATED

In Powers v. Union Pacific Railroad Co. , ARB No. 13-034, ALJ No. 2010-FRS-30, (ARB Mar. 20, 2015) (en banc), the ARB revisited en banc the "contributory factor" evidentiary analysis enunciated in Fordham v. Fannie Mae , ARB No. 12-96, ALJ No. 2010-SOX-51 (ARB Oct. 9, 2014). In Fordham , a split panel of the ARB had ruled, inter alia, that a respondent's evidence of a legitimate, non-retaliatory reason for an adverse action may not be weighed by the ALJ when determining whether the complainant met his or her burden of proving contributing factor causation by a preponderance of the evidence. The panel reasoned that that permitting the employer to put on such evidence at the contributory factor stage would render the statutorily prescribed affirmative "clear and convincing" evidence defense meaningless.

In Powers , the ARB en banc panel stated that it was affirming, but clarifying the Fordham decision:

[T]he ARB in Fordham held that legitimate, non-retaliatory reasons for employer action (which must be proven by clear and convincing evidence) may not be weighed against a complainant's showing of contribution (which must be proven by a preponderance of the evidence). Fordham , ARB No. 12-061, slip op. at. 20-37. That holding as set forth in Fordham is fully adopted herein. Our decision in this case, considered en banc, reaffirms Fordham 's holding upon revisiting the question of what specific evidence can be weighed by the trier of fact, i.e. , the ALJ, in determining whether a complainant has proven that protected activity was a contributing factor in the adverse personnel action at issue and, more pointedly, the extent to which the respondent can disprove a complainant's proof of causation by advancing specific evidence that could also support the respondent's statutorily-prescribed affirmative defense for the adverse action taken. Yet, while the decision in Fordham may seem to foreclose consideration of specific evidence that may otherwise support a respondent's affirmative defense, the Fordham decision should not be read so narrowly. This decision clarifies Fordham on that point.

USDOL/OALJ Reporter at 14. The ARB's clarification is essentially that the employer's evidence must be relevant to the issue presented at the contributory factor stage of the analysis, and that proof of the respondent's statutory defense of proving by clear and convincing evidence that it would have taken the personnel action at issue absent the protected activity is legally distinguishable from the complainant's burden to show contributing factor causation. Specifically, the ARB stated:

   Contrary to the dissent's assertion in Fordham that the majority's holding in that case precluded consideration by an ALJ of all relevant evidence in deciding the question of contributing factor causation (see Fordham , slip op. at 37), the majority in Fordham only addressed the question of what evidence could properly be weighed under the "preponderance of the evidence" standard in analyzing complainant's proof of contributing factor causation. Fordham specifically addressed the question as to evidence that may be weighed to demonstrate the contributing factor element under the preponderance of evidence standard. The majority decision in Fordham stated that its ruling "does not preclude an ALJ's consideration, under the preponderance of the evidence test, of respondent's evidence directed at three of the four basic elements required to be proven by a whistleblower in order to prevail," explaining that "[i]t is only with regard to the fourth element, of whether the complainant's protected activity was a contributing factor in the unfavorable action, that the statutory distinction is drawn." Fordham , ARB No. 12-061, slip op. at 35, n.84. The distinction should not, however, be interpreted to foreclose the employer from advancing evidence that is relevant to the employee's showing of contribution. It merely recognizes that the relevancy of evidence to a complainant's proof of contribution is legally distinguishable from a respondent's evidence in support of the statutory defense that it would have taken the personnel action at issue absent the protected activity, which must be proven by clear and convincing evidence. Certainly, analyzing specific evidence in the context of the AIR 21 burden shifting framework "requires a 'fact-intensive' analysis." Franchini v. Argonne Nat'l Lab , ARB No. 11-006, ALJ No. 2009-ERA-014), slip op. at 10 (ARB Sept. 26, 2012).

   While, as Fordham explains, the legal arguments advanced by a respondent in support of proving the statutory affirmative defense are different from defending against a complainant's proof of contributing factor causation, there is no inherent limitation on specific admissible evidence that can be evaluated for determining contributing factor causation as long as the evidence is relevant to that element of proof . 29 C.F.R. § 18.401. Thus, the Fordham majority properly acknowledged that "an ALJ may consider an employer's evidence challenging whether the complainant's actions were protected or whether the employer's action constituted an adverse action, as well the credibility of the complainant's causation evidence." Fordham , slip op at 23.

Id . at 22 (footnote omitted).

The ARB noted that "while temporal proximity alone may at times be sufficient to satisfy the contributing factor element, ARB precedent has declined to find 'contributing factor' based on temporal proximity alone where relevant, objective evidence disproves that element of complainant's case." Id . at 23 (footnotes omitted) (emphasis as in original).

The ARB further noted that where the protected activity and unfavorable personnel action are "inextricably intertwined," the respondent bears the risk that the influence of legal and illegal motives cannot be separated. Id . at 23-24.

Because proof of contributing factor does not require evidence of retaliatory motive, evidence of non-retaliatory motive, such as "self-serving testimony of Company managers" does not rebut a complainant's evidence of contribution. Rather such evidence is more relevant to a respondent's affirmative defense, i.e., at the clear and convincing stage of the analysis. Id . at 26-28.

Dissenting Judge Corchado, joined by Chief Judge Igasaki, stated that contrary to the Board majority's assertion that it is "fully" adopting the Fordham evidentiary rule, the majority actually rejects it, citing to its language that '"there is no inherent limitation on specific admissible evidence that can be evaluated for determining contributing factor as long as the evidence is relevant to that element of proof ."' Id . at 33-34, citing to Decision and Order, slip op. at 21 (italics in original) [USDOL/OALJ Reporter at 22]. The Dissent stressed the Majority's reaffirmance of an ALJ's authority to determine relevance questions. Id . at 34.

SECTION 1 EXEMPTION UNDER THE FEDERAL ARBITRATION ACT REGARDING ENFORCEMENT OF ARBITRATION AGREEMENTS APPLIES TO EMPLOYEES ENGAGED IN INTERSTATE AIR TRANSPORTATION OF PASSENGERS

In Willbanks v. Atlas Air Worldwide Holdings Inc. , ARB No. 14-050, ALJ No. 2014-AIR-10 (ARB Mar. 18, 2015), the ALJ granted the Respondent's motion to stay the AIR21 hearing and to order the Complainant to arbitrate her AIR21 claim in accordance with a pre-employment arbitration agreement. The Complainant petitioned the ARB for interlocutory review. The ARB granted the petition, vacated the ALJ's order, and remanded for resumption of the AIR21 hearing.

The ARB stated that "The Federal Arbitration Act (FAA) provides that arbitration agreements 'shall be valid, irrevocable, and enforceable' unless grounds 'exist at law or in equity for the revocation of any contract.' 9 U.S.C.A. � 2. The FAA nevertheless exempts from coverage all 'contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.' 9 U.S.C.A. � 1." USDOL/OALJ Reporter at 4. The ARB recognized U.S. Supreme Court authority to the effect that the Section 1 exclusion regarding arbitration agreements is to be narrowly construed, but nonetheless found that airline employees engaged in interstate commerce are not precluded from coverage under the exemption. The ALJ had interpreted the law as holding that the FAA's arbitration exemption is limited to "transportation workers . . . actually engaged in the movement of goods in interstate commerce." Id . at 4-5, citing ALJ Order at 2 (quoting Circuit City , 532 U.S. at 112). The ARB, however, reviewed the caselaw and legislative background, and held: "Employees engaged in the interstate air transportation of passengers, such as [the Complainant], are to be afforded the same rights as are afforded railroad employees under the FAA, and thus entitled to the same exclusion from arbitration pursuant to 9 U.S.C.A. � 1." Id . at 8.