USDOL/OALJ Reporter: ARB Decision Caselist -- April 2008

 

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[STAA Digest X A 3]
SETTLEMENT; ERROR TO APPROVE SETTLEMENT PRIOR TO COMPLETION OF ALL CONDITIONS PRECEDENT

In Craig v. City of Torrington, Wyoming , ARB No. 06-152, ALJ No. 2006-SDW-1 (ARB Apr. 30, 2008), the parties reached a settlement, a condition of which was that the parties would file a joint motion for dismissal with the ALJ after the Respondent took certain corrective actions. The Respondent never took some of the corrective actions, and the parties never submitted the joint motion for dismissal. The ALJ, however, issued a Decision and Order Approving Settlement Agreement, ordering the parties to carry out the terms of the agreement and dismissing the complaint. On review, the ARB found that the ALJ erred by entering an order of dismissal before he conditions precedent were fulfilled. The ARB vacated the ALJ's order and remanded the case for a hearing, completion by the parties of their settlement agreement, or other action consistent with the ARB's order.

 

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COVERED EMPLOYER; FINANCIAL ACTIVITIES WITH PUBLICLY TRADED BANK

The ARB in Kukucka v. Belfort Instrument Co. , ARB Nos. 06-104 and 120, ALJ Nos. 2006-SOX-57 and 81 (ARB Apr. 30, 2008), stated that the Complainant's initial burden under section 1514A(a) was to establish that the Respondent had either registered its securities under section 12 or had to file reports under section 15(d). Because he had not alleged such in response to the ALJ's show cause orders, the ARB found that the ALJ had properly dismissed the Complainant's SOX complaints. On appeal the Complainant argued that the Respondent's financial activities made the company directly reliant on a publicly-traded bank, SunTrust, and that the Respondent had "public debt" because it accepted public money to develop products. The ARB recognized that contractors, subcontractors, and agents of companies that are subject to the SOX registration and filing requirements are covered by the SOX whistleblower provision, but found that the Complainant had offered no evidence that the Respondent's "public debt" or its "reliance" on SunTrust was equivalent to being a contractor, subcontractor or agent of Sun Trust. Moreover, the ARB found that the Complainant had failed to offer evidence to demonstrate that SunTrust was subject to section 1514A's registration and filing requirements.

The Complainant also argued that the Respondent should be considered a subsidiary of SunTrust because its favorable extension of credit and debt burden kept the Respondent in business and thus SunTrust, a publicly traded company, controlled the Respondent. The ARB, however, found that the Complainant had offered no evidence to support his allegation that SunTrust's extension of credit amounted to control of the Respondent or that such control, if it existed, made the Respondent the bank's contractor, subcontractor, or agent.

DOL LACKS AUTHORITY TO ADJUDICATE CLAIMS UNDER 18 U.S.C. § 1513(e)

In Kukucka v. Belfort Instrument Co. , ARB Nos. 06-104 and 120, ALJ Nos. 2006-SOX-57 and 81 (ARB Apr. 30, 2008), the Complainant argued that because the Respondent sued him in civil court, it is covered under section 1107 of the SOX, which provides a criminal penalty for anyone who "with the intent to retaliate, takes any action harmful to any person" providing to a law enforcement officer information relating to the commission of a federal offense. 18 U.S.C.A. § 1513(e). The ARB, however, held that the Department of Labor does not have the authority to administer this SOX provision, citing Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51, slip op. at 3 (ARB May 30, 2007).

 

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TIMELINESS OF COMPLAINT; FOCUS IS NOT ON WHEN THE COMPLAINT CONSTITUTING THE ALLEGED PROTECTED ACTIVITY OCCURRED, BUT WHEN THE COMPLAINT ABOUT THE RETALIATION OCCURRED

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant had written a series of letters to government agencies making various complaints about the Respondent's behavior. After learning about SOX whistleblower protection, the Complainant wrote to the Secretary of Labor asking whether his previous letters had been considered to be SOX complaints. The ARB found that this letter, having been filed more than 90 days after the claim accrued, was not a timely SOX complaint.

Turning to the prior letters, the ARB found that complaints filed with government agencies about the Respondent's behavior, even assuming that they were SOX-related protected activity, do not present a cognizable SOX complaint where they occurred prior to the alleged retaliation taking place. In other words, to be cognizable, the Complainant must have filed a timely complaint after his discharge grounded in the allegation that his protected activity was a contributing factor in the adverse action taken by the Respondent.

PROTECTED ACTIVITY; GENERAL ALLEGATIONS OF QUESTIONABLE CORPORATE ACTIONS, PRACTICES, DECISIONS, OR EXPENDITURES IS NOT, STANDING ALONE, PROTECTED ACTIVITY

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant had written letters making general claims of poor business decision making by the Respondent and tolerance of racial discrimination, and raising concerns over workplace safety, but not specifically any of the categories of fraud and securities violations covered by the SOX. The ARB wrote:

�although a company that tolerates discriminatory practices or unsafe conditions may not be acting in the best interests of its shareholders, a SOX-protected activity must involve an alleged violation of a federal law directly related to fraud or securities violations. As we said in Harvey , "while Title VII protects individuals against discrimination, SOX protects shareholders from inaccurate reporting of a publicly held corporation's financial condition . . . . Providing information to management about questionable personnel actions, racially discriminatory practices, executive decisions or corporate expenditures with which the employee disagrees, or even possible violations of other federal laws . . . standing alone, is not protected conduct under the SOX." Harvey , slip op. at 14. To bring himself under the protection of the act, the information the employee provides must directly relate to the listed categories of fraud or securities violations. 18 U.S.C.A. § 1514A(a); 29 C.F.R. §§ 1980.104(b), 1980.109(a).

USDOL/OALJ Reporter at 10-11.

FILING OF COMPLAINT; EQUITABLE TOLLING; FAILURE OF CONGRESSMAN TO DIRECT COMPLAINANT TO SOX

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the ARB rejected the Complainant's contention that he was entitled to equitable tolling under SOX because he had written to Congressman Richard Gephardt, who had a duty to direct him to SOX. The ARB found that the failure of a Congressman to direct a complainant to SOX was not grounds for equitable tolling.

FILING OF COMPLAINT; EQUITABLE TOLLING; WRONG FORUM; FAILURE TO SPECIFY A SOX VIOLATION OR ALLEGE RETALIATION

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant argued that he was entitled to equitable tolling based the raising of the precise statutory claim in the wrong forum because he had written to the SEC about the Respondent's bad behavior and "arrogance" and stated that "[t]his is not accounting fraud, it is much worse." The Complainant's allegations, however, did not relate to mail fraud, bank fraud or securities fraud, or to violations of applicable SEC rules and regulations. Moreover, the letter was written prior to the date that the Complainant received notice of his termination. Thus, even if the letter was read to provide notice to the SEC of fraud or securities violations, it could not be read to state a claim for relief for an act of retaliation. The ARB therefore agreed with the ALJ that equitable tolling was not warranted.

ADVERSE ACTION; STATEMENTS OF COUNSEL DURING LITIGATION

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant filed a SOX complaint on the ground that the Respondent's counsel allegedly made false statements in a motion to dismiss an earlier complaint filed by the Complainant. The Complainant alleged that the statements were designed to "derail" his SOX complaint, and blacklist him. The ARB agreed with the ALJ that the statements of the Respondent's counsel were not evidence, and that false statements would go to the party's credibility and not to whether it established an element of its case. The ARB found therefore that the statements did not constitute a separately actionable adverse action.

ISSUE PRECLUSION; CLAIMS THAT WERE DERIVATIVE OF, OR DEPENDENT ON THEIR SUCCESS ON, THE RESULT IN AN EARLIER COMPLAINT

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant had filed a second SOX complaint, and the ALJ held that the Complainant was barred by issue preclusion from re-litigating whether he was a whistleblower in the previous case. The ARB found that preclusion doctrines did not apply to the extent that the second complaint raised issues not actually decided in the first proceeding (e.g., a blacklisting claim), but concurred that certain issues were derivative of those of the first complaint � either duplicative claims or dependent on their success on the result in the first complaint. Because it appeared from the record that the Complainant had never engaged in protected activity, the ARB held that claims of subsequent retaliation, whether repeated from the first complaint, or newly stated in the second complaint, were not actionable.

RECUSAL; DISTINCTION BETWEEN PERSONAL BIAS AND JUDICIAL BIAS

In Levi v. Anheuser Busch Companies, Inc. , ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant argued that the ALJ, who had been the presiding judge in an earlier proceeding involving the same parties, erred in failing to recuse himself. The ARB wrote:

Absent specific allegations of personal bias, prejudice, or interest, neither a judge's prior adverse rulings, nor his participation in a related or prior proceeding is sufficient to require recusal. Davis v. Fendler , 650 F.2d 1154, 1163 (9th Cir. 1981); 13A Charles Allen Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure § 3542 (West Supp. 2008). Federal courts have required personal bias rather than judicial bias to support recusal. Id. The ARB has held that previous unfavorable dispositions do not amount to personal bias. Eash v. Roadway Express, Inc. , ARB No. 00-061, ALJ No. 1998-STA-028, slip op. at 8 (ARB Dec. 31, 2002) (ALJ twice recommended dispositions contrary to Eash's interests, which fact was found insufficient to show personal bias); Roach v. National Transp. Safety Bd. , 804 F.2d 1147, 1160 (10th Cir. 1986). Consequently, the ALJ did not err in failing to recuse himself.

 

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PROTECTED ACTIVITY; REASONABLE BELIEF REQUIREMENT

In Reed v. MCI, Inc. , ARB No. 06-126, ALJ No. 2006-SOX-71 (ARB Apr. 30, 2008), the Complainant alleged that he was retaliated against in violation of the SOX when he refused to "commit felonies" � i.e., refused to use pirated software in his employment as a software engineer. The Complainant theorized that the Respondent's profits were based partly on its use of stolen software and thus the Respondent defrauded shareholders because such practice could expose it to fines and loss of good will. The Respondent filed a motion for summary decision on the ground that the Complainant had not engaged in protected activity. The ARB stated that "To defeat summary decision, Reed must produce evidence that he engaged in SOX-protected activity because he reasonably believed that using the stolen software defrauded shareholders. Speculation or a mere possibility that shareholders would be defrauded because he used the software, however, does not satisfy the reasonable belief requirement." The ARB found that the Complainant had not produced evidence of such a reasonable belief, and granted summary decision.

 

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ARB'S JURISDICTION TO CONSIDER CONSTITUTIONAL ISSUES

In Williams v. United Airlines , ARB No. 06-106, ALJ No. 2003-AIR-11 (ARB Apr. 30, 2008), the ARB held that it did not have jurisdiction to consider the Complainant's argument that he has a constitutional right to a hearing on his AIR21whistleblower complaint even though the Respondent had been discharged in bankruptcy.

 

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PROTECTED ACTIVITY; ALLEGATION OF SYSTEMIC RACIAL DISCRIMINATION AND THREAT TO FILE DISCRIMINATION CLAIM

In Smith v. Hewlett Packard , ARB No. 06-064, ALJ Nos. 2005-SOX-88 through 92 (ARB Apr. 29, 2008), the Complainant had complained to a supervisor that the Respondent was engaged in systemic racial discrimination through its employee performance rating system and, because the Respondent's response to the alleged discrimination was inadequate in his view, he would take his concerns to the appropriate federal agency. The ARB held that the complained of conduct did not even remotely relate to the SOX categories of mail fraud, wire, radio, TV fraud, or bank fraud. Moreover, applying the principles enunciated in Platone v. FLYi, Inc. , ARB No. 04-154, ALJ No. 2003-SOX-27 (ARB Sept. 29, 2006) and Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114, 115, ALJ Nos. 2004-SOX-20, 36 (ARB June 2, 2006), the ARB held that the Complainant's "allegation of systemic racial discrimination and threat to file a discrimination claim with the federal government do not directly implicate corporate fraud or a securities violation. Smith did not allege, as he must, that Hewlett Packard engaged in securities fraud by misrepresenting (or omitting) any material fact in connection with the purchase or sale of a security, that Hewlett Packard violated a SEC rule or regulation, or that Hewlett Packard violated any Federal law relating to fraud against shareholders. Platone , slip op. at 17, 21, 22; Harvey , slip op. at 14-15, 16. Therefore, Smith did not engage in protected activity in this instance."

The Complainant also alleged that he had been put on administrative leave and eventually fired because he had contacted the EEOC and made an appointment for later in the month. The ARB observed that the SOX does cover a complaint made to an outside agency � but that it must be a complaint about conduct covered under the SOX. The ARB found that the Complainant's complaints to the EEOC did not directly implicate securities fraud, a violation of a SEC rule or regulation, or a violation of any Federal law relating to fraud against shareholders, and were not protected activity under SOX.

 

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PROTECTED ACTIVITY; FAILURE TO PROVE ACTUAL VIOLATION UNDER REFUSAL TO DRIVE PROVISION; EMPLOYER CORRECTED CONDITION UNDER REASONABLE APPREHENSION PROVISION

In Carter v. Barclay, Inc. , ARB No. 06-154, ALJ No. 2006-STA-22 (ARB Apr. 28, 2008), the Complainant called the dispatcher to report that an airbag under the driver's seat was deflated, making it unsafe to drive. The dispatcher and the terminal manager both authorized the Complainant to use a different tractor for the return trip with a load of mail for the Postal Service. The Complainant bobtailed on the return trip and was fired for abandoning the mail. On appeal, the ARB held that the Complainant had not engaged in protected activity under the refusal to drive provision of the STAA because he had not proven that there would have been an actual violation of a regulation, standard or order had he driven with the deflated driver's seat. Nor had he engaged in protected activity under the "reasonable apprehension of serious injury" clause because the problem had been corrected when the use of the other tractor had been authorized.

 

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Approval of settlement.

 

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Approval of settlement.

 

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Order correcting Complainant's address.

 

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[Nuclear and Environment Digest IX D 3]
RECONSIDERATION; ARB'S EXERCISE OF DISCRETION TO REOPEN WHERE COMPLAINANT HAD NOT KNOWN ABOUT BRIEFING ORDER

In Coupar v. UNICOR (Federal Prison Industries) , ARB No. 05-108, ALJ No. 2005-WPC-2 (ARB Apr. 22, 2008), shortly after dismissing the Complainant's appeal for failure to file a brief, the Board received mail indicating that the Complainant, who was incarcerated, had been transferred to a different prison and had not known about the Board's briefing order. The Board exercised its discretion to reconsider, and issued a new briefing schedule.

 

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PROTECTED ACTIVITY; FAILURE TO ESTABLISH VIOLATION OF A COMMERCIAL MOTOR VEHICLE SAFETY REGULATION, STANDARD, OR ORDER

Summary decision was granted against the Complainant under the complaint clause of the definition of protected activity under the STAA in Worku v. Preflight Parking , ARB No. 07-028, ALJ No. 2006-STA-40 (ARB Apr. 22, 2008), where the Complainant failed to set forth specific facts showing that the operation of his assigned bus with a broken indicator constituted a violation of a commercial motor vehicle safety regulation, standard, or order. Summary decision was also granted under the "refusal to drive" clause where the Complianant had regularly driven the bus with the broken indicator, he had not noted a problem in his pre-trip inspection report, and did not indicate that the mechanical condition of the bus had changed while driving it on the day of his refusal to continue. Moreover, the Complainant indicated willingness to continue driving the bus after being told to clock out.

 

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Approval of settlement.

 

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ARB'S REVIEW IS LIMITED TO STATUTES ON WHICH THE SECRETARY DELEGATED AUTHORITY

In IBSA, Inc. , ARB No. 06-117 (ARB Apr. 9, 2008), the appeal was dismissed because the Complainant failed to respond to the ARB's order show cause why its petition for review should not be dismissed because the matter on which review was sought was not an appeal under the enumerated statutes in the Secretary's delegation of authority to the ARB.

 

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[STAA Digest IX C]
ATTORNEY FEE PETITION; ADEQUATE EXPLANATION; INCREASE IN RATE DURING LITIGATION

In Cefalu v. Roadway Express, Inc. , ARB Nos. 04-103 and 161, ALJ No. 2003-STA-55 (ARB Apr. 3, 2008), the ARB approved the Complainant's attorney's petition for fees for matters over which he had adequately explained and shown were reasonably expended. The ARB also approved the attorney's request for seven hours to be compensated at an increased rate of $275 per hour (a $25 increase) where the increase was not opposed and was supported by comparable market area data. The ARB disallowed several fee entries for telephone conferences with co-counsel where there was no explanation why they were necessary.

 

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[Nuclear and Environment Digest XI A 2 c]
EMPLOYER'S KNOWLEDGE OF PROTECTED ACTIVITY; COMPLAINANT CANNOT RELY ON MERE SPECULATION THAT HIS PERSONNEL FILE REVEALED HIS PROTECTED ACTIVITY

In Muino v. Florida Power & Light Co. , ARB Nos. 06-092 and 06-143, ALJ Nos. 2006-ERA-2 and 8 (ARB Apr. 2, 2008), the Complainant alleged that the Respondent violated the ERA when the Complainant applied for work with one of the Respondent's contractors, and the Respondent informed the contractor that the Complainant was not eligible for rehire, resulting in the Complainant's interview being cancelled. The ineligibility for rehire had been based on an HR employee's review of the Complainant's personnel file (the Complainant having worked for the Respondent 10 years earlier), which had been passed on to other of the Respondent's employees who had been asked by contractors about the Complainant's eligibility.

The ALJ had granted summary decision on the ground that the employees who reported on the Complainant's ineligibility had not been aware of the Complainant's whistleblowing activity. On appeal, the ARB agreed with the ALJ that the Complainant had provided only speculation that his personnel file must have disclosed his earlier whistleblower activities. The Board stated that "allegations, bare denials, or speculative theories do not create a genuine issue of material fact that would entitle the non-moving party to an evidentiary hearing. At summary decision, [the Complainant] must produce affidavits or other admissible evidence that he suffered employment discrimination because of his safety complaints." USDOL/OALJ Reporter at 9 (footnote omitted).

 

[Nuclear and Environment Digest XXI A]
COLLATERAL ESTOPPEL APPLIES IN ADMINISTRATIVE ADJUDICATION

Collateral estoppel applies in administrative adjudication. Thus, in Muino v. Florida Power & Light Co. , ARB Nos. 06-092 and 06-143, ALJ Nos. 2006-ERA-2 and 8 (ARB Apr. 2, 2008), the ARB found that collateral estoppel precluded the Complainant's second complaint (which he had filed based on information he alleged he first learned about during his deposition on the first complaint), where the issue of whether the Respondent had taken adverse action against the Complainant because of his safety complaints was the same in both complaints, and the issue had been fully and fairly litigated and decided both before the ALJ and the ARB in the first complaint.

 

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