USDOL/OALJ Reporter: ARB Decision Caselist -- May 2007

 

---

Summary :

PRETEXT NOT ESTABLISHED

In Carney v. Price Transport , ARB No. 04-157, ALJ No. 2003-STA-48 (ARB May 31, 2007), the ARB found that substantial evidence supported the ALJ's finding that the Complainant was fired for a legitimate, non-discriminatory reason � tampering with the Respondent's truck by clamping a turbo hose to increase power at the expense of possibly voiding the mechanical warranty on the truck or causing severe damage. The ALJ found the testimony of the Respondent's witnesses to be credible as to the likely damage and the fact that other employees had been repeatedly warned not to tamper with the turbo hose. The ALJ found not credible the Complainant's explanation that his apparent admission to clamping the hose was merely an attempt to get his job back. The ARB also noted that the Complainant made no showing that the Respondent did not believe that the Complainant had clamped the hose. Unconverted testimony also showed that the Respondent had fired another employee, who had not engaged in protected activity, for the same offense. Finally, the ALJ found no evidence of retaliatory animus and no evidence that the Complainant had ever been disciplined for complaints about hours of service.

 

---

 

---

Summary :

PRETEXT NOT ESTABLISHED

In Martin v. United Parcel Service , ARB No. 05-040, ALJ No. 2003-STA-9 (ARB May 31, 2007), the ARB found that substantial evidence supported the ALJ's finding that the Complainant was fired for a legitimate, non-discriminatory reason � repeated violation of the collective bargaining agreement by failing to record stops and taking more than one hour of meal period. The Complainant did not explain why he failed to adhere to the meal policy or properly log all of his stops, and did not dispute that he knew he was to log all stops on the Respondent's computer system. The ARB found substantial evidence to support the ALJ's finding that the log failures had not stemmed from safety concerns.

 

---

 

---

Summary :

Approval of settlement agreement.

 

---

 

---

Summary :

PROTECTED ACTIVITY; REASONABLE BELIEF TEST

In Welch v. Cardinal Bankshares Corp. , ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007), the Complainant � who was the Respondent's CFO - expressed concerns that the Respondent had overstated income in a quarterly SEC report because it had improperly treated $195,000 in loan recoveries as income when they should have been allocated to the "loan reserve" account. The Complainant argued that error improperly inflated the Respondent's income by 13.7%, and therefore could have materially misled investors. The ARB reversed the ALJ's finding that this was protected activity. The ARB wrote:

The "reasonable belief" standard requires Welch to prove both that he actually believed that the SEC report overstated income and that a person with his expertise and knowledge would have reasonably believed that as well. Furthermore, "[b]ecause the analysis for determining whether an employee reasonably believes a practice is unlawful is an objective one, the issue may be resolved as a matter of law."

USDOL/OALJ Reporter at 10 (footnotes omitted). The ARB found that an experienced CPA/CFO like the Complainant could not have reasonably believed that the quarterly SEC report presented a misleading picture of the Respondent's financial condition because whether reported as income or as a credit to expenses, the fact remained that the Respondent had $195,000 that it previously did not have.

PROTECTED ACTIVITY; VIOLATION OF GAAP AND FFIEC ACCOUNTING STANDARDS IS NOT IPSO FACTO A VIOLATION OF FEDERAL SECURITIES LAW

In Welch v. Cardinal Bankshares Corp. , ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007), the Complainant � who was the Respondent's CFO - expressed concerns that when the Respondent misclassified loan recoveries as income rather than crediting the loan loss account, it violated GAAP accounting standards and accounting rules that the Federal Financial Institutions Examination Council (FFIEC) developed for banks. The Complainant essentially argued that violation of those accounting standards constituted a violation the clear mandate of Sarbanes-Oxley, and therefore such errors were ipso facto violations of federal securities laws. The ARB found that this argument amounted to wholesale re-writing of SOX's section 1514A, and it would not accept such a contention in the absence of citation of legal authority.

PROTECTED ACTIVITY; CFO'S COMPLAINT OF INSUFFICIENT ACCESS TO AN OUTSIDE AUDITOR

In Welch v. Cardinal Bankshares Corp. , ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007), the Complainant � who was the Respondent's CFO � complained that he had been denied sufficient access to an outside auditor, who instead chose to communicate with the company's CEO. The ARB found that such complaints were not protected activity under SOX. The ARB wrote: "But Welch did not prove by a preponderance of evidence how his unhappiness about access to [the outside auditor] constituted a reasonable belief that Cardinal was violating or might violate the enumerated fraud statutes, any SEC rule or regulation, or any federal law relating to fraud against shareholders. To be protected, an employee's SOX complaint must definitively and specifically relate to the listed categories of fraud or securities violation." USDOL/OALJ Reporter at 13 (footnote omitted).

PROTECTED ACTIVITY; REJECTION OF CFO'S ADVICE ON ACCOUNTING MATTERS IS NOT INHERENTLY A VIOLATION OF FEDERAL SECURITIES LAW

In Welch v. Cardinal Bankshares Corp. , ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 31, 2007), the Complainant � who was the Respondent's CFO � complained that the Respondent had deficient internal accounting controls because persons without accounting expertise had unrestricted access to the general ledger. The Complainant argued that when he briefed Respondent's staff about the problem, and they disregarded his advice, such disregard became fraud because failure to follow the CFO's advice was reflective of an intent to leave things in a deceptive state. The ARB rejected this argument, finding that the Complainant had failed to cite any legal authority to support "the proposition that rejecting the CFO's advice on accounting matters violates or could reasonably be regarded as violating the federal securities laws." USDOL/OALJ Reporter at 14.

 

---

 

---

Summary :

SETTLEMENT UNDER BOTH STAA AND ENVIRONMENTAL STATUTES WHERE NO PARTY APPEALS; ARB REVIEW OF SETTLEMENT IS LIMITED TO THE STAA CLAIM

In Andrews v. Max Trans, LLC , ARB No. 07-065, ALJ No. 2006-STA-45 (ARB May 30, 2007), the parties settled a whistleblower case involving both the Surface Transportation Assistance Act, and the TSCA, SDWA, SWDA, WPCA, and CERCLA. The ARB reviewed and approved the settlement in regard to the STAA because it issues the final order in such cases. The ARB, however, did not review the settlement under the environmental laws because no party had filed an appeal.

 

---

 

---

Summary :

MOTION FOR RECONSIDERATION; AUTHORITY OF THE ARB TO RECONSIDER ITS DECISIONS UNDER THE SOX WHISTLEBLOWER PROVISION; SUCH A MOTION MUST BE FILED WITHIN A REASONABLE TIME TO BE TIMELY; SCREENING OF MOTIONS TO DETERMINE APPROPRIATENESS FOR RECONSIDERATION

In Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB May 30, 2007), the ARB ruled that it has the authority to reconsider a decision issued pursuant to the whistleblower provision of the Sarbanes-Oxley Act. The ARB stated that "unless some other standard applies to reconsideration of SOX decisions, or we or our predecessors have adopted a different standard for determining timeliness of reconsideration petitions, we must apply a 'reasonable time' standard when determining the timeliness of [such a] petition." USDOL/OALJ Reporter at 6. Reviewing the OALJ rules of practice and procedure, rules of procedure for federal district and circuit courts, and previous decisions of the ARB and its predecessors, the ARB found that it had not adopted a different standard, and therefore the "reasonable time" standard applied. In defining what constitutes a reasonable time, the ARB turned to a decision it had rendered in a Service Contract Act proceeding, Thomas & Sons Bldg. Contractors, Inc. , ARB No. 98-164, ALJ No. 1996-DBA-33 (ARB June 8, 2001). The ARB concluded that in Thomas & Sons , and other decisions of the ARB and its predecessors, a three-part approach had been delineated:

   In sum, the Board and its predecessors have presumed a petition timely when the petition was filed within a short time after the decision. The Board and its predecessors also have granted reconsideration where a petition, though filed after a longer period, raised Rule 60(b)-type grounds or showed "good cause" for the delay. Finally, the Board and its predecessors have rejected as untimely those petitions filed more than a short time after the decision, when such petitions have neither raised Rule 60(b)-type arguments nor shown good cause for delay.

USDOL/OALJ Reporter at 15. The Board then applied this test to the Complainant's motion for reconsideration. The Complainant's motion was filed on the 60th day after the ARB's decision. The ARB suggested that 14 to 30 days might be sufficiently short a time, but did not specifically so rule, holding only that 60 days was not a "short" time. The Board found that the Complainant's grounds for reconsideration presented rehearing-type arguments (which do not themselves justify a delay in filing a petition for reconsideration) rather than Rule 60(b)-type grounds. Finally, the Board held that the Complainant 's belief that he would not suffer penalty if he did not file within a short time, and his argument that the Respondent would not be prejudiced by a reconsideration, did not show good cause for the delay.

The ARB then stated even if the Complainant's motion had been timely, it would have been rejected as failing to demonstrate that the Board's decision should be reconsidered. The ARB observed that it is guided by federal court practice in applying standard screening hurtles in determining whether reconsideration is warranted. In the instant case, the Complainant's motion was based in part on portions of his deposition which were not in evidence. The ARB cited caselaw to the effect that "[a] party that has not presented known facts helpful to its cause when it had the opportunity cannot ordinarily avail itself of Rule 60(b) after it has received an adverse judgment." USDOL/OALJ Reporter at 20 (citations omitted). Finally, the ARB found that the Complainant's remaining arguments that it made errors in judgment in determining whether the ALJ's findings and credibility determinations were supported by substantial evidence were not supported by any demonstrations of materials errors of law, fact or process; or any changed circumstances warranting Rule 60(b) relief; or any other circumstance warranting reconsideration under ARB precedent.

 

---

 

---

Summary :

Approval of settlement agreement.

 

---

 

---

Summary :

VOLUNTARY DISMISSAL OF APPEAL; COMPLAINANT MUST SPECIFY WHETHER DISMISSAL IS SOUGHT (1) BECAUSE OF WITHDRAWAL OF OBJECTIONS TO THE ALJ'S ORDER, (2) BECAUSE OF A SETTLEMENT, OR (3) BECAUSE OF REMOVAL OF THE CASE TO FEDERAL DISTRICT COURT

In Vodicka v. Dobi Medical International, Inc. , ARB No. 06-037, ALJ No. 2005-SOX-111 (ARB May 30, 2007), a Sarbanes-Oxley Act whistleblower claim, the ALJ had granted summary judgment for the Respondent, and the Complainant petitioned for review by the ARB. The ARB granted the petition. Later, the ARB received a letter from the Complainant requesting dismissal of the whistleblower claim with prejudice. The ARB issued an Order requiring the Complainant to specify which of three options he wished to proceeding, noting:

The SOX implementing regulations provide three options for terminating a case pending at the Board prior to final adjudication. First, a party may withdraw his or her objections to the findings or order on appeal by filing a written withdrawal with the Board. In that case the findings or order becomes the final order of the Secretary. Second, the parties may enter into an adjudicatory settlement. If the parties enter into a settlement, the regulations require the parties to file a copy of the settlement with the Board for its review. Third, if the Board has not issued a final decision within 180 days of the filing of the complaint, the complainant may bring an action at law or equity for de novo review in the appropriate United States district court.

USDOL/OALJ Reporter at 2 (footnotes omitted). The Complainant's counsel responded that the Complainant was withdrawing his objections to the ALJ's recommended decision and order. The ARB then approved the motion to withdraw, dismissed the appeal, and noted that the ALJ's decision had become the DOL's final order in the case.

 

---

 

---

Summary :

[STAA Whistleblower Digest IV C 3]
PRETEXT; COMPLAINANT MUST SHOW THAT THE ARTICULATED, LEGTIMINATE NON-DISCRIMINATORY REASON FOR THE ADVERSE ACTION IS PHONY RATHER THAN JUST NOT WELL-GROUNDED

In Bettner v. Crete Carrier Corp. , ARB No. 06-013, ALJ No. 2004-STA-18 (ARB May 24, 2007), the Complainant had been recruited for the Respondent's dedicated fleet, which required pick-up and delivery of freight at specific times. He was assigned a dispatch, but failed to complete on-time deliveries due to DOT hours of service limitations. The Respondent determined that the failure was based on the Complainant's inability to properly plan and execute his dispatches, and thus decided to transfer the Complainant to the Respondent's national fleet, which did not demand time sensitive pick-up and delivery. In addition, the Complainant was informed that his next dedicated fleet dispatch had been assigned to a different driver. The Complainant then cleaned out his truck and left a message indicating that he had not quit, but had concluded that he had been fired. Negotiations for the Complainant's return to work were unfruitful, and the Complainant filed a STAA whistleblower complaint. The Complainant argued that there were significant differences in the working conditions between the dedicated and national fleets. The ALJ granted summary decision on several grounds. On appeal to the ARB, the focus was on the Complainant's failure to address whether the Respondent's articulated legitimate non-discriminatory reason for transferring the Complainant was pretextual. The ARB noted that the ALJ had granted summary decision because the Complainant had adduced no evidence to suggest that the reason for transfer was pretextual, and found that the Complainant arguments on appeal � trying to convince the ARB that the lack of timely deliveries and pick-ups were not his fault � failed to address the question of whether the transfer was grounded in protected activity rather than the Respondent's belief that that the untimely pick-ups and deliveries resulted from poor planning by the Complainant. Thus, the ARB affirmed the ALJ's grant of summary decision.

 

---

 

---

Summary :

[STAA Whistleblower Digest IV C 2 b]
PRETEXT; "LEEWAY FOR IMPULSIVE BEHAVIOR" STANDARD; INSUBORDINATE BEHAVIOR MUST BE INCIDENTIAL TO THE PROTECTED ACTIVITY

In Ridgley v. C.J. Dannemiller Co. , ARB No. 05-063, ALJ No. 2004-STA-53 (ARB May 24, 2007), the Complainant complained that his trip sheet showed more stops than usual and might take over 14 hours to complete. The Respondent accommodated the Complainant by assigning a different driver and allowing the Complainant to go home. Under the company's arrangement with drivers, they were guaranteed full-time paychecks even when there were not eight hours of work to be performed on a particular day. There was no indication in the record, therefore, that reassigning the trip was adverse to the Complainant. That evening, the Complainant's supervisor called the Complainant to determine whether he planned to come to work the next day. Because the Complainant did not answer, he left a phone message which noted that the route had taken the other driver 8 hours and 20 minutes to complete "[s]o it wasn't quite as bad as it appeared I guess this morning." The ARB agreed with the ALJ that this message, a recording of which was entered into evidence, was delivered in a calm and patient manner.

When the Complainant returned the supervisor's call, he asked whether any stops had been removed from the route. The supervisor answered that they had not, and the Complainant replied that this was hard to believe. The supervisor asked if the Complainant was calling him a liar. The Complainant indicated that he was, and it was at that point that the supervisor fired the Complainant.

On appeal, the ARB found that substantial evidence supported the ALJ's finding that, although the Complainant engaged in protected activity, he failed to prove by a preponderance of the evidence that the reason for termination was a pretext to discrimination. The ALJ found that when the supervisor called, he had no intention to fire or discipline the Complainant, and that in fact if was not in the Respondent's interest to do so during a busy holiday season. The Complainant argued on appeal that well established case law holds that when an employee engaged in impulsive behavior, such impulsive conduct does not remove the right to engage in protected activity or provide the employer with a legitimate, nondiscriminatory reason for adverse action. The ARB, however, observed that the impulsive behavior standard applies to impulsive conduct incidental to the protected activity . Moreover, the ARB agreed with the ALJ's finding of fact that the supervisor had not provoked the Complainant or otherwise unlawfully interfered with his protected activity. Rather, the ARB affirmed the ALJ's finding that the Complainant was fired for insubordination.

 

---

 

---

Summary :

WITHDRAWAL OF APPEAL RESULTS IN ALJ'S DECISION BECOMING THE FINAL DECISION OF THE SECRETARY OF LABOR

In Hagman v. Washington Mutual Bank, Inc. , 2005-SOX-73 (ALJ Dec. 19, 2006), the ALJ issued a recommended decision awarding front pay and reduced attorney fees. The Respondent filed a petition seeking review by the ARB. After the ARB issued a Notice of Appeal and Briefing Schedule, the parties were granted an extension of time for mediation. Subsequently, the Respondent requested that its petition for review be withdrawn and its appeal dismissed. In Hagman v. Washington Mutual Bank, Inc. , ARB No. 07-039, ALJ No. 2005-SOX-73 (ARB May 23, 2007), the ARB granted the request and dismissed the appeal, noting that the effect would be that the ALJ's decision becomes the final decision of the Secretary of Labor pursuant to 29 C.F.R. § 1980.109(c).

 

---

 

---

Summary :

MOTION FOR RECONSIDERATION OF ARB DECISION IS ANALOGOUS TO PETITION FOR PANEL REHEARING UNDER FRAP 40

In Ndiaye v. CVS Store No. 6081 , ARB No. 05-024, ALJ No. 2004-LCA-36 (ARB May 9, 2007), the ARB stated that it is authorized to reconsider its decisions. The ARB stated that such a motion for reconsideration is analogous to petitioning for panel rehearing under Rule 40 of the Federal Rules of Appellate Procedure, which expressly requires that any petition for rehearing "state with particularity each point of law or fact that the petitioner believes the court has overlooked or misapprehended . . . ." The Board stated that such a petition should not reargue unsuccessful positions or assert an inconsistent position that may prove more successful. The Board also stated that issues not presented in initial briefs or during oral argument are not appropriate subjects for rehearing. Raising new issues on rehearing, however, may be appropriate if supervening judicial decisions or legislation, not reasonably foreseen during initial argument, would alter the outcome. In Ndiaye , the Complainant partially based her motion for reconsideration on citation of an ARB decision that had been issued two months before the ARB issued the decision in Ndiaye's case but months after the briefing had been completed. The ARB found that the earlier decision demonstrated a material difference in law from that presented to the Board that the Complainant could not have been aware of through reasonable diligence. In making this finding, the ARB took into consideration that the Complainant was pro se. The ARB thus granted reconsideration; however, it found that the new ruling was inapplicable and affirmed its earlier decision.

EQUITABLE TOLLING; WRONG FORUM; MUST RAISE PRECISE STATUTORY CLAIM IN ISSUE

In Ndiaye v. CVS Store No. 6081 , ARB No. 05-024, ALJ No. 2004-LCA-36 (ARB May 9, 2007), the Complainant filed a motion for reconsideration of the ARB's ruling that she had filed an untimely complaint, arguing that her filing for state unemployment benefits constituted a "mistaken filing" of the correct statutory claim in an incorrect forum, thus providing a basis for equitable tolling. The ARB noted that it had addressed equitable tolling in its original decision, and indicated that the Complainant had not stated grounds compelling it to reconsider. Nonetheless, the ARB considered whether the unemployment filing was grounds for equitable tolling, and found that it was not because the relief sought was through a different statutory claim that provided for unemployment benefits and not relief under the Immigration and Nationality Act's H-1B provisions.

TIMELINESS OF COMPLAINT; LIMITATIONS PERIOD COMMENCES UPON FINAL AND DEFINITIVE NOTICE OF TERMINATION, AND NOT WHEN THAT TERMINATION BECOMES "BONA FIDE"

In Ndiaye v. CVS Store No. 6081 , ARB No. 05-024, ALJ No. 2004-LCA-36 (ARB May 9, 2007), the Complainant filed a motion for reconsideration of the ARB's ruling that she had filed an untimely complaint, arguing that the limitations period did not begin to run until the Respondent effected a "bona fide termination" as recently articulated by the ARB in Amtel Group v. Yongmahapakorn ("Rung") , ARB No. 04-087, ALJ No. 2004-LCA-6 (ARB Sept. 29, 2006). The ARB granted reconsideration, but nonetheless affirmed the denial of relief based on finding that the limitations period for an H-1B retaliation claim begins to run from when the Complainant had been given final and definitive notice of her termination, and not when the termination became "bona fide." The Board wrote: "A ' bona fide termination' date must be determined to assess the compensability of an H-1B employee's claim for damages under the INA. But, an employer can give an H-1B employee final and definitive notice of its intention to terminate such employee's employment without also informing the INA and offering the employee a return ticket. Such final and definitive notice constitutes an adverse action, regardless whether the employer also effects a ' bona fide termination.'" USDOL/OALJ Reporter at 7.

 

---