Administrative Review Board Decisions - April 2023

Administrative Review Board Decisions

The following case summaries were created by the Administrative Review Board staff. 

Smith v. Akal Express, Inc., ARB No. 2022-0041, ALJ No. 2021-STA-00028 (ARB Apr. 21, 2023) (Decision and Order Affirming in Part, and Vacating and Remanding in Part) (Erratum issued May 4, 2023)

THE ALJ DID NOT ABUSE HIS DISCRETION WHEN HE DEFAULTED RESPONDENTS; ALJS HAVE THE AUTHORITY TO ENFORCE PREHEARING ORDERS AND ISSUE SANCTIONS 

In Smith v. Akal Express, Inc., ARB No. 2022-0041, ALJ No. 2021-STA-00028 (ARB Apr. 21, 2023), the ARB affirmed the ALJ's Default D. & O. and affirmed in part, and vacated in part, the ALJ's Order Awarding Damages. Complainant worked as a driver for Respondent Akal Express between May 2019 and September 2020. On November 12, 2020, Complainant filed a complaint with OSHA alleging that Respondents violated the STAA. OSHA dismissed the complaint and Complainant requested a hearing with OALJ. On April 5, 2021, an ALJ issued and served on the parties a Notice of Assignment and Preliminary Order (Preliminary Order) setting relevant proceeding dates and advising the parties of the consequences of non-appearance. After Respondents failed to respond to an Order to Show Cause, the ALJ issued a Default D. & O.

The Default D. & O. instructed Complainant to file a proof of damages within thirty days and required Respondents to respond to Complainant's filing within thirty days. Complainant filed a Proof of Damages on December 14, 2021. Respondents did not respond to Complainant's Proof of Damages. Complainant filed a Supplemental Proof of Damages on April 19, 2022. On May 5, 2022, the ALJ issued the Order Awarding Damages.

Respondents argued that the ALJ's issuance of a default judgment was improper because their failure to respond to the ALJ's orders was not willful, in bad faith, or their fault, "but properly attributable to misunderstanding and mistake, compounded by circumstances beyond [their] control caused by [COVID-19]." In essence, Respondents argued not that they did not know about the ALJ's orders but instead that they should avoid default because they did not understand that they were required to participate in the proceedings and Akal's owner's travel out of the country, compounded by COVID-19.

In affirming the ALJ, the ARB determined that Respondents failed to comply with the ALJ's orders and were on notice to the potential sanctions for failure to comply with the orders. First, the ARB noted the OALJ's Rules of Practice and Procedure, which apply to STAA proceedings. The OALJ's Rules of Practice and Procedure permit an ALJ to issue sanctions against parties for failing to comply with a judge's discovery order. The Rules of Practice and Procedure specially provide that an ALJ may "[r]ender[] a default decision and order against the disobedient party."

Second, the ARB concluded that Respondents received the Preliminary Order, as evidenced by the fact that they untimely filed a response to the "Pleading Complaint" on May 20, 2021. The Preliminary Order instructed Respondents to file a response within fourteen days of receipt of the Pleading Complaint. Within the terms of the Preliminary Order, the ALJ warned the parties about the potential consequences of noncompliance, including default judgment.

Third, the ARB observed that the Preliminary Order was served on Akal Express' general manager and a named respondent in the case, five days before Akal's owner traveled out of the county. The record also reflected that while the owner was traveling, she was intermittently in contact with the general manager regarding the OALJ proceedings. Thus, Respondents should have been aware of the OALJ proceedings before Akal's owner left the country and were on notice of the potential sanctions for failure to comply with the Preliminary Order.

Fourth, Respondents did not comply with the ALJ's orders. The Preliminary Order directed the parties to participate in discovery immediately, complete discovery within 140 days, and file a Joint Prehearing Statement twenty-one days after the conclusion of discovery. The record reflected that Respondents made no effort to participate in the proceedings since May 20, 2021. Additionally, the ALJ ordered Respondents to show cause within ten days as to why a default order should not be issued against them. Again, Respondents did not respond. The ARB concluded that Respondents did not comply with the ALJ's discovery instructions, file a pre-hearing statement, or respond to the ALJ's Show Cause Order—all of which were independently sufficient grounds for the issuance of sanctions, including default judgment. Thus, the ALJ did not abuse his discretion in defaulting Respondents.

THE ALJ DID NOT ERR BY ISSUING THE ORDER AWARDING DAMAGES; THE ALJ'S AWARDS FOR ATTORNEY'S FEES AND COSTS, BACK PAY, AND ADDITIONAL COMPENSATORY DAMAGES WERE SUPPORTED BY SUBSTANTIAL EVIDENCE  

Respondents averred that the ALJ erred by issuing the Order Awarding Damages. Respondents also contended that Complainant's counsel's billing rate was excessive and block-billed and contained numerous hours that were excessive, redundant, or otherwise unnecessary, and that Complainant was not entitled to back pay, compensatory damages, or punitive damages.

The ARB found Respondents arguments unpersuasive. First, the ARB affirmed the ALJ's Default D. & O. The STAA provides that a prevailing complainant is entitled to compensatory damages (backpay with interest and compensation for any special damages sustained as a result of the retaliation, including any litigation costs, expert witness fees, and reasonable attorney fees which the complainant may have incurred) and punitive damages up to $250,000.00. Thus, the ARB concluded that the ALJ did not err in issuing an Order Awarding Damages.

Second, the ARB noted that Respondents' arguments were raised for the first time and that it does not consider arguments raised for the first time on appeal. Although the ARB opted to not consider Respondents' new arguments, it examined whether substantial evidence supported the ALJ's awards.

Third, the ARB found that substantial evidence supported the ALJ's awards for attorney's fees and costs, back pay, and additional compensation. The ALJ relied upon Complainant's Proof of Damages, which contained the following: a declaration from Complainant's attorney; a detailed narrative of Complainant's attorney's professional qualifications; the median and mean rates for attorneys in Kansas City; itemized billing statements; a declaration from Complainant; and a post-Akal employment pay history. Therefore, the ARB affirmed in part the ALJ's Order Awarding Damages, and ordered Respondents to pay Complainant: (1) back pay in the amount of $49,750.00, pre-judgment interest in the amount of $2,063.00, and post-judgment interest on the foregoing sums; (2) compensatory damages in the amount of $50,000.00; and (3) attorney's fees in the amount of $26,720.00 and costs in the amount of $252.32.

THE ALJ ERRED IN AWARDING PUNITIVE DAMAGES BY ACCEPTING AND CONSIDERING A LATE FILING  

The ALJ concluded that $25,000.00 in punitive damages was appropriate based on Complainant's Proof of Damages and Supplement to Proof of Damages. While the ARB found that substantial evidence supported the ALJ's awards for attorney's fees and costs, back pay, and additional compensation, it determined that the ALJ erred in awarding punitive damages.

The Default D. & O. directed Complainant to file proof of damages within thirty days. The ARB acknowledged that Complainant timely filed the Proof of Damages but untimely filed a Supplement to Proof of Damages more than three months after the Default D. & O.'s filing deadlines. The ARB relied upon the OALJ's Rules of Practice and Procedure, which require a party to file a motion to reopen the record promptly after additional evidence is discovered. Complainant did not file a motion to reopen the record or argue that the new exhibits within the Supplement to Proof of Damages were not discoverable with reasonable diligence before the Default D. & O.'s filing deadlines. Thus, the ARB concluded that the ALJ should not have accepted and considered the Supplement to Proof of Damages after the Default D. & O.'s filing deadlines. The ARB instructed the ALJ to reassess his punitive damages award by considering only arguments and evidence from Complainants initial Proof of Damages.

Tyler v. USA Debusk, LLC, ARB No. 2021-0016, ALJ No. 2018-SWD-00002 (ARB Apr. 17, 2023) (Decision and Order)

In Tyler v. USA Debusk, LLC, ARB No. 2021-0016, ALJ No. 2018-SWD-00002(ARB Apr. 17, 2023), Complainant filed a whistleblower complaint against Respondent for alleged retaliation. An ALJ issued a D. & O. denying the claim based on the ALJ's finding that Complainant failed to establish that his protected activity was a motivating factor to the adverse personnel action he suffered. The ARB affirmed the ALJ's decision.

PROTECTED ACTIVITY; COMPLAINANT ENGAGED IN PROTECTED ACTIVITY

The ALJ found that Complainant engaged in protected activity and Respondent was aware of it. On appeal to the ARB, neither party challenged the ALJ's findings that Complainant engaged in protected activity or that Respondent was aware of Complainant's protected activity. The ARB concluded that these findings were substantially supported by the record.

ADVERSE ACTION; COMPLAINANT SUFFERED AN ADVERSE ACTION

The ALJ found that Complainant suffered an adverse employment action when Respondent terminated his employment. Neither party challenged the ALJ's finding. The ARB concluded that the record substantially supported the ALJ's determination.

MOTIVATING FACTOR; COMPLAINANT'S SWDA-PROTECTED ACTIVITY WAS NOT A MOTIVATING FACTOR TO HIS EMPLOYMENT TERMINATION

The ALJ found that Complainant's protected activity was not a motivating factor in his unfavorable personnel action. Rather, the ALJ concluded that Complainant's employment was terminated because of "significant and repeated incidents of employee misconduct" and poor job performance.

Complainant argued that his protected activity was a contributing factor to his employment termination based on the temporal proximity between when he engaged in protected activity and when his employment was terminated. The ARB concluded that the correct standard is the motivating factor standard, not the contributing factor standard. Although Complainant engaged in protected activity eight days before Respondent decided to terminate his employment, complaints against him made by fellow employees constituted an intervening event.

Next, Complainant argued that Respondent deviated from company policy in terminating his employment. The ARB concluded that the record substantially supported the ALJ's finding that Respondent's actions were reasonable and that the events that ultimately led to the decision to terminate his employment occurred quickly.

Lastly, Complainant contended that there was no evidence on record to establish that he threatened fellow employees, interfered with other employees' work, refused to perform his work, or directly increased Respondent's costs. The ARB concluded that the ALJ's findings that there were "significant and repeated incidents" that demonstrated Complainant's "unprofessional conduct and unsatisfactory performance" as well as his inability to cooperate with other employees and his penchant for making comments to other employees that they reasonably perceived as threats were well-documented in the record.

Thus, the ARB concluded that the record substantially supported the ALJ's findings that the complaints from other employees and Complainant's poor job performance were the motivating factors behind Respondent's decision to terminate his employment.

SAME-ACTION DEFENSE; RESPONDENT WOULD HAVE TERMINATED COMPLAINANT'S EMPLOYMENT EVEN IF HE HAD NOT ENGAGED IN SWDA-PROTECTED ACTIVITY

Complainant argued that he would still be employed by Respondent if he had not reported his concerns to his superior. Complainant asserted that, prior to his discharge, he was given high remarks on his performance and was told that Respondent wanted to promote him.

The ARB determined that Complainant engaged in protected activity from March 2015 through February 2016 and suffered no adverse action because of his activity, which the ARB determined undercut Complainant's argument that he would still be employed by Respondent if he had not engaged in protected activity. The ARB further determined that the record substantially supported the ALJ's finding that Respondent terminated Complainant's employment based on repeated complaints about Complainant's conduct, Complainant's failure to satisfactorily accomplish job objectives, and actions taken by Complainant that other employees perceived as threatening. Thus, the ARB affirmed the ALJ's finding that Respondent would have taken the same action in absence of Complainant's protected activity.

EVIDENTIARY RULINGS; THE ALJ DID NOT ABUSE HIS DISCRETION OR COMMIT ERRORS OF LAW IN MAKING EVIDENTIARY RULINGS

Complainant argued that the ALJ abused his discretion in evidentiary rulings and impermissibly relied on evidence that was based on hearsay. The ARB reviews an ALJ's determinations on evidentiary rulings under an abuse of discretion standard. The ALJ applied the formal rules of evidence found in Subpart B to the Office of Administrative Law Judges Rules of Practice and Procedure.

The ARB concluded that the ALJ issued a thorough and well-reasoned decision and order in which the ALJ made and relied upon specific credibility determinations for each witness as well as the parties' exhibits. The ARB also found that the ALJ's credibility determinations were consistent with the record and well within the ALJ's discretion to make. Thus, the ARB held that the ALJ did not abuse his discretion in her evidentiary rulings.

JUDICIAL BIAS; THE ALJ WAS UNBIASED AND APPROPRIATELY ASSISTED COMPLAINANT AS A PRO SE LITIGANT

Complainant argued that the ALJ was biased against him as demonstrated by requiring him to produce a list of questions before the hearing, purportedly restricting his ability to cross-examine witnesses, and denying his request for an extension.

The ARB concluded that the ALJ appropriately accommodated Complainant in his role as a pro se litigant and was circumspect about informing Complainant about his rights and how to question and cross-examine witnesses. To the contrary, the ARB determined that the ALJ gave Complainant broad latitude regarding his line of questioning and the relevance and materiality of his questioning. The ARB further noted that the ALJ explained to Complainant that he could take his time cross-examining witnesses. Finally, the ARB noted that the ALJ advised Complainant that he would take measures to assist Complainant in clarifying his line of questioning. The Board concluded that Complainant failed to establish that the ALJ was biased against him.

Fagan v. Department of the Navy, ARB No. 2023-0006, ALJ No. 2021-CER-00001 (ARB Apr. 6, 2023) (Order Granting Interlocutory Review)

INTERLOCUTORY APPEAL; ARB GRANTED PETITION TO REVIEW INTERLOCUTORY APPEAL CERTIFIED BY THE ALJ CONCERNING THE ALJ'S AUTHORITY TO ISSUE SUBPOENAS UNDER CERCLA AND SDWA

In Fagan v. Department of the Navy, ARB No. 2023-0006, ALJ No. 2021-CER-00001 (ARB Apr. 6, 2023), the ARB granted Complainant's petition for interlocutory review to analyze whether an ALJ may issue subpoenas in cases arising under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) and the Safe Drinking Water Act (SDWA). The ARB also invited briefing by amicus curiae.

Before the ALJ, Complainant filed a motion to subpoena hearing testimony for certain third-party witnesses. The ALJ ruled that he did not have authority to issue subpoenas under the CERCLA or SDWA and denied Complainant's motion.

Complainant moved for interlocutory review certification of the relevant question. The ALJ certified for interlocutory appeal "the question of ALJ subpoena authority in whistleblower and other proceedings with trial-type hearings, but no express statutory authorization" pursuant to 28 U.S.C. §1292(b) and stayed the proceedings. On October 30, 2022, Complainant filed a petition for interlocutory review with the ARB.

When determining whether to entertain an interlocutory appeal before the ALJ's entry of a final judgment, the ARB looks to the procedures provided in 28 U.S.C. § 1292(b). Section 1292(b) interlocutory review rests on two required actions. The trial level court must first certify that the interlocutory order "involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." Second, the reviewing court may then, "in its discretion, permit an appeal to be taken from such order."

Section 1292(b) permits a tribunal to certify an interlocutory order to an appellate body for immediate review when: (1) the order involves a controlling question of law; (2) there is a substantial ground for difference of opinion in resolving the issues presented by the order; and (3) an immediate appeal may materially advance the litigation's ultimate termination.

The ARB determined that, in a well-reasoned opinion, the ALJ analyzed all three issues, finding all three to be established in this case. The ARB concluded that the ALJ's certification order sufficiently supported the ARB's consideration of whether, in its discretion, it should permit the interlocutory appeal to proceed.

First, the ARB determined that there was a controlling question of law. To satisfy this prong, a controlling question of law must be one of law, not of fact, and its resolution must materially affect the outcome of litigation. The ARB determined that, whether a Department of Labor ALJ has subpoena authority in "whistleblower and other proceedings with trial-type hearings, but not express statutory authorization" is a pure question of law. The ARB also determined that resolution of this legal issue could materially affect the outcome of the litigation. Whether an ALJ may compel witnesses to testify will affect which witnesses testify at the hearing, which could affect the development of the record and outcome of the decision.

Second, the ARB determined that there are substantial grounds for difference of opinion. In Childers v. Carolina Power & Light Co., ARB No. 1997-0077, ALJ No. 1997-ERA-00032, slip op. at 4-15 (ARB Dec. 29, 2000), the ARB found an implied authority to issue subpoenas under the Energy Reorganization Act (ERA), a statute which also lacks express ALJ subpoena authority but has trial-like hearing procedures. Both before and after Childers, the courts in Bobreski v. U.S. E.P.A., 284 F. Supp. 2d 67, 76-77 (D.D.C. 2003) and Immanuel v. U.S. Dep't of Lab., 139 F.3d 889 (4th Cir. 1998) found no authority for ALJ-issued subpoenas under environmental statutes which, like the ERA, lack such express authority. Both Immanuel and Bobreski pre-date the Board's reaffirmation of Childers in a case involving the Immigration and Nationality Act. Given these facts, the ARB determined that this issue involves a question over which reasonable judges might differ and the uncertainty provides a credible basis for a difference of opinion.

Third, the ARB found that an immediate appeal may materially advance the litigation's ultimate termination by preventing serial hearings and resulting appeals in this case. The ARB further found that resolution of the certified question will promote uniformity by reducing future conflicting decisions relying on Childers, which will in turn promote efficient and equitable judicial administration.

The ARB concluded that, while its jurisdiction in this matter flows from the ALJ's Order Granting Motion to Certify Interlocutory Appeal and Stay Proceedings as certified to the ARB, it is not tied to the particular question formulated by the ALJ but may instead exercise its discretion to specify the question(s) it will consider. The ARB further stated that it does not intend to consider whether every federal whistleblower or other statute "with trial-type hearings" contains statutory direction regarding the authority of an ALJ to issue subpoenas as such an inquiry that is far too vast in scope and lacking in connection to the ALJ's order in this case. Instead, the ARB stated that it expects to focus on the issue of whether Childers and its progeny mandate an outcome different than that ordered by the ALJ below.

Thus, the ARB granted Complainant's Petition for Interlocutory Review and issued a briefing schedule. Given the identification and importance of the issue accepted for review, the ARB also invited briefing by amicus curiae as set forth in the attached Order Allowing Filing of Amicus Curiae Briefs.