USDOL/OALJ Reporter: ARB Decision Caselist - April 2012

TIMELINESS OF REQUEST FOR HEARING; INACTION IN PURSUING CLAIM SHOWS A FAILURE TO EXERCISE DUE DILIGENCE

In Lubary v. El Floridita d/b/a Buenos Ayres Bar & Grill , ARB No. 10-137, ALJ No. 2010-LCA-20 (ARB Apr. 30, 2012), the Complainant failed to establish equitable grounds for failing to timely request a hearing before an ALJ on the WHD Administrator's findings under the H-1B regulations where the Complainant admitted that he had received the findings, those findings provided clear instructions on the procedure for requesting a hearing, the Complainant was capable of creating and filing documents in English, the Complainant had accepted and cashed a check from the Respondent paying the back wages that the WHD found were owed to to the Complainant, and the Complainant took no action in pursuit of his claim for over a year. The ARB found that the Complainant's inactivity showed a failure to exercise due diligence in preserving his legal rights.

The ARB found that substantial evidence supported the ALJ's findings that the Complainant failed to show that he suffered an adverse action, or was subjected to a hostile work environment, because of his protected activity.

RELEVANT LEGAL MARKET FOR DETERMINING REASONABLE HOURLY BILLING RATE

In Clemmons v. Ameristar Airways, Inc. , ARB No. 11-061, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the Complainant retained attorneys from Washington, DC to litigate a case in which the relevant legal market for purposes of determining a reasonable hourly billing rate was the Dallas-Fort Worth area. The ALJ determined that the Complainant had not proved that non-local rates should be awarded by showing a lack of local attorneys equally willing and able to handle the claim. The ALJ therefore decided to award hourly rates based on the prevailing rates in the local area. The Respondent argued that its own attorney's rate of $255.00 an hour was the best evidence of local rates. The ALJ, however, cited a recent federal district court case that awarded $355.00 an hour as the customary billing rate for attorneys in the Dallas division, and found that the Complainant's attorneys' "impressive presentation at trial, demonstrated litigation skills, the number and complexity of the issues, and the sheer length of the litigation" warranted the attorneys' hourly rates originally requested. The ARB found that the ALJ's determination was reasonable as to the rates awarded ($390.00 for one partner; $280.00 for a second partner; $225.00 for one associate; $185.00 for two other associates; and $110 for a paralegal).

ATTORNEY'S FEES; TEAM APPROACH, ESPECIALLY AT TRIAL, AS A COST-EFFECTIVE WAY OF PROVIDING LEGAL SERVICES

In Clemmons v. Ameristar Airways, Inc. , ARB No. 11-061, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the Respondent challenged the Complainant's attorney fee request, arguing that one attorney's work had benefitted another client. The ALJ found this argument speculative, found no proof of double billing, noted that the argument had been refuted in an affidavit, and found that the disputed time-and-task entries reasonably completed the lead attorney's work and were an "efficient delivery of legal services." The ALJ observed that "courts will permit partner/associate, first/second chair staffing, particularly at trial, and that the ARB has approved a team approach to litigation, using partners and associates, as a cost-effective way of providing legal services." The ARB affirmed.

ATTORNEY'S FEES; BLOCK BILLING DISFAVORED, BUT NO REDUCTION WHEN, IN CONTEXT, THERE WAS SUFFICIENT SPECIFICITY TO DETERMINE THAT THE SERVICES WERE COMPENSABLE

In Clemmons v. Ameristar Airways, Inc. , ARB No. 11-061, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the ARB reiterated past rulings that it "requires that an attorney's time-and-task entries be sufficiently detailed to demonstrate their reasonableness. Thus, we disfavor the use of block billing (the practice of grouping multiple tasks into a single time entry), and may make a percentage reduction of the requested fees in lieu of attempting to excise surgically those that are not properly billed." In Clemmons , the Respondent challenged entries showing that two attorneys shared certain tasks. The ARB agreed with the ALJ that the time charges requested were reasonably necessary to produce the documents in question, and that when read in the context of the billing statement as a whole and in combination with the timeline of the litigation, the entries had provided enough specificity to determine that the services rendered were compensable and in furtherance of the complaint. The ARB therefore declined to make an across-the-board reduction in the overall fee award.

ATTORNEY'S FEE; FEE AWARD IS NOT REDUCED SOLELY BECAUSE THE AMOUNT REQUESTED IS LARGER THAN THE DAMAGES RECOVERED

In Clemmons v. Ameristar Airways, Inc. , ARB No. 11-061, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the Respondent argued that the Complainant's attorney fee request of $230,085.69 was "wildly disproportionate" to the amount of damages awarded of $37,995.09 plus interest. The Respondent requested that the fee and costs be cut to no more than $100,000.00. The ALJ rejected the argument, finding that the Complainant had only requested back pay (voluntarily mitigated by accepting other employment); did not seek compensatory damages; and was successful on every issue raised. The ALJ also noted that the Respondent's "aggressive litigation strategy" undoubtedly increased costs for both sides. The ARB affirmed the ALJ denial of the request to cut the fees , noting that it "has routinely declined to reduce attorney's fee awards solely because the amount requested is larger than the damages recovered."

COPYING COSTS, COMPUTER RESEARCH FEES, AND MAILING, FACSIMILE, AND DELIVERY CHARGES ARE REIMBURSABLE WHERE THE LAW FIRM DOCUMENTS THAT SUCH COSTS WERE BILLED DIRECTLY TO THE COMPLAINANT

In Clemmons v. Ameristar Airways, Inc. , ARB No. 11-061, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the Respondent objected to the Complainant's request for reimbursement for copying costs, computer research fees, and mailing, facsimile, and delivery charges because these are appropriately considered as part of a law firm's overhead. The ALJ awarded such costs because the law firm submitted documentation showing that under the terms of its retainer agreement with the Complainant, such costs were billed directly to the Complainant. The ARB affirmed.

COSTS; TRAVEL COSTS FOR OUT-OF-TOWN ATTORNEYS DEDUCTED WHERE COMPLAINANT DID NOT ESTABLISH A LACK OF QUALIFIED LOCAL ATTORNEYS

In Clemmons v. Ameristar Airways, Inc. , ARB No. 11-061, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the Respondent objected to the Complainant's request for reimbursement for his Washington, DC attorneys' travel costs because the Complainant could have obtained a local attorney in Dallas-Forth Worth. The ALJ deducted the travel costs because the Complainant did not establish a lack of qualified attorneys in the Dallas area. The ARB affirmed.

AFTER ACQUIRED EVIDENCE IN AIR21 WHISTLEBLOWER CASES AS A LIMIT ON A BACK PAY AWARD

In Clemmons v. Ameristar Airways, Inc. , ARB No. 08-067, ALJ No. 2004-AIR-11 (ARB Apr. 27, 2012), the Fifth Circuit Court of Appeals had affirmed the ARB's decision on the merits and award of back pay, but remanded for a determination of whether the back pay award should have ended on the date that managers learned of an insubordinate and offensive email that the Complainant had sent to other pilots prior to his discharge. In this regard, the Fifth Circuit cited McKennon v. Nashville Banner Publ'g Co ., 513 U.S. 352, 362 (1995), for the proposition that "where there is after-acquired evidence of wrongdoing that would have led to termination on legitimate grounds had the employer known about it," back pay should be limited to the period "from the date of the unlawful discharge to the date the new information was discovered."

Prior to remanding to the ALJ for further factfinding, the ARB first considered whether McKennon applies to AIR21's whistleblower provision, and concluded that it did. The ARB, however, found it an open question whether the proper burden of proof on this issue is a "preponderance of the evidence," or "clear and convincing evidence." The ARB noted that it would be strange to impose a lesser burden on a respondent in determining the extent of damages in view of after-acquired evidence than the burden imposed on a respondent in the liability phase of a mixed-motive case, but left the issue for briefing before the ALJ on remand. The ARB directed the ALJ on remand to determine whether the email at issue was of such severity that the Respondent would have fired the Complainant on those grounds alone.

REVISION OF WAGE DETERMINATION BASED ON FINDING THAT WAGE SURVEY RESPONSES NOT PREVIOUSLY CONSIDERED HAD BEEN TIMELY SUBMITTED; PRESUMPTION OF DELIVERY; ADMINISTRATOR'S DISCRETION TO REVISE DETERMINATION

In International Union of Bricklayers & Allied Craft Workers, Local Union No. 1 - MD, VA and DC , ARB No. 11-007 (ARB Apr. 27, 2012), the Wage and Hour Division (WHD) Administrator revised a DBA wage determination to create a new and separate job classification of "Pointer, Caulker, Cleaner" that provided for a lower hourly wage rate than the "Marble & Stone Mason" job classification originally set for pointing, caulking and cleaning of all types of masonry, brick, stone and cement structures on the project. The Administrator made this change based on information and documentation provided by the attorney representing the contractor indicating that the original wage determination had not included consideration of documentation timely provided to the WHD. The Bricklayers union sought an explanation of the decision to create the new job classification, and dissatisfied with the response, appealed to the ARB. The ARB found that proof in the record indicated that wage survey response forms were timely sent to the WHD, sufficient to establish a presumption that they were delivered to, and received by, the WHD. The ARB therefore affirmed the Administrator's determination to accept the responses as a reasonable exercise of her discretion.

BANKRUPTCY; WHERE PROOF OF CLAIM FILED WITH BANKRUPTCY COURT BY COMPLAINANT'S SOLELY OWNED COMPANY INCLUDED THE BASIS FOR THE SOX WHISTLEBLOWER COMPLAINT, BANKRUPTCY DISCHARGE OF THE COMPANY'S CLAIM ALSO BARRED COMPLAINANT'S SOX CLAIM AS AN INDIVIDUAL

In Mothershead v. Delphi Corp. , ARB No. 10-120, ALJ No. 2007-SOX-84 (ARB Apr. 26, 2012), the ARB noted that

Under Section 1141(d)(1)(A) of Title 11, the Bankruptcy Code, the effect of confirmation of a Chapter 11 reorganization plan "discharges the debtor from any debt that arose before the date of such confirmation." See also 11 U.S.C. 944(b)(1) ("[T]he debtor is discharged from all debts as of the time when . . . the plan is confirmed."). The discharge "operates as an injunction against the commencement or continuation of an action." 11 U.S.C. § 524(a)(2).

The ARB found that the ALJ properly dismissed the Complainant's SOX whistleblower proceeding against the Respondent under the terms of the bankruptcy court's Order that expressly disallowed and expunged the Complainant's solely-owned company's claims with prejudice, and the Confirmed Plan and subsequent Modified Plan that discharged the Respondent's debtors and enjoined any person from "commencing or continuing any action" that was otherwise discharged.

The Complainant contended that his whistleblower complaint was not discharged under the terms of the bankruptcy proceeding because his SOX claim, which he brought as an individual, was distinctly different from the claims discharged in bankruptcy, which were against his company of which he is sole owner. The ARB noted that it had rejected a similar contention raised in Hafer v. United Airlines , ARB No. 06-132, ALJ No. 2006-CAA-6 (ARB Aug. 29, 2008), and found that the facts of the instant case did not warrant a different result. The Complainant's SOX claim was filed prior to the bankruptcy action, and stemmed from a project that the Respondent retained the Complainant's company to perform. The Complainant was the sole owner of his company and was named in the Proof of Claim filed with the bankruptcy court. The Proof of Claim listed as part of the basis for the claim that the Respondent used inadequate internal controls that could possibly violate SOX.

The ARB also rejected the Complainant's argument that his claims fall within the government exception under the Bankruptcy Code. The ARB noted that the automatic stay provision in the Bankruptcy Code contains an exception for the �continuation of an action or proceeding by a governmental unit� to �enforce such governmental unit's or organization's police and regulatory power.� The ARB stated that this exception, however, does not apply where a complainant has brought a case as an individual, and that that in the instant SOX proceeding, the Department of Labor was "acting in a quasi-judicial capacity, seeking to adjudicate private rights". The ARB likewise rejected the Complainant's argument that the exception set out at 11 U.S.C. § 523(a)(19) that excludes debts associated with "violation of any of the Federal securities laws."

The ARB granted the Complainant an enlargement of time to file a petition for review. When she failed to file a petition, the ARB ordered her to show cause why the appeal should not be dismissed. The Complainant notified the Board that she did not intend to file a petition for review, and the ARB closed the case noting that the ALJ's decision therefore constitutes the final agency decision on the complaint.