USDOL/OALJ Reporter: ARB Decision Caselist -- June 2006

USDOL/OALJ Reporter
Decisions of the Administrative Review Board
June 2006

Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006)

• Title : Final Decision and Order
• Link : PDF | HTML
• Case type : Immigration: labor condition application
• Summary :

  WAGE AND HOUR INVESTIGATORY AUTHORITY DOES NOT HINGE ON RECEIPT OF A COMPLAINT FROM A WORKER

  In Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006), the Wage and Hour Division had found that the Respondent violated the INA when it did not properly pay two nonimmigrant alien workers. The Wage and Hour investigation was initiated based on a complaint received from one of the workers. On appeal the Respondent argued that Wage and Hour did not have the authority to investigate payment of the worker who did not file a complaint. The ARB rejected the Respondent's argument, finding that Wage and Hour has the authority to investigate alleged INA violations even in the absence of a complaint.

  JURISDICTION TO PROSECUTE LCA VIOLATION OUTSIDE STATUTORY TIME LIMITS; LCA STATUTORY AND REGULATORY PROVISIONS ON TIME LIMITATIONS ARE NOT JURISDICTIONAL; EXCESSIVE DELAY MAY CREATE PRESUMPTION OF PREJUDICE, BUT ACTUAL PREJUDICE MUST BE SHOWN TO WARRANT DISMISSAL OF CASE

  In Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006), the ARB held that the rationale of Brock v. Pierce County , 476 U.S. 253 (1986) � holding in a CETA case that the word "shall" when setting deadlines for agency actions is not, standing alone, jurisdictional and does not remove the Secretary of Labor's power to act after the deadline has expired � applies to LCA time limits found in 8 U.S.C.A. § 1182(n)(2)(B) and 20 C.F.R. §§ 655.806(a)(3) and 655.835(c). Thus, the Administrator's and OALJ's failure to act within those time frames did not remove the Administrator's jurisdiction to prosecute the case. The ARB noted that some prior authority had mischaracterized the Pierce County holding as requiring a statute to specify a consequence for to comply with a deadline. The ARB clarified that this was not a holding in that case. The Respondent also contended that the Administrator's delays prejudiced its opportunity to depose some employees. The ARB acknowledged that excessive delay prior to a hearing may create a presumption of prejudice, but held that a respondent must demonstrate actual prejudice to warrant dismissal of a case. In the instant case, actual prejudice had not been shown.

  NO-BENCHING PROVISIONS

  In Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006), the ARB affirmed the ALJ's finding that two nonimmigrant alien workers were available to work continuously for the Respondent and never took a legitimate leave of absence during the relevant period. The Board described the "no-benching" requirement of an LCA as follows:

     Under its "no benching" provisions, the INA requires that an employer pay the required wage specified in the LCA even if the H-1B nonimmigrant employee is in a nonproductive status (i.e., not performing work) because of lack of assigned work or some other employment-related reason. 8 U.S.C.A. § 1182(n)(2)(C)(vii)(I); 20 C.F.R. § 655.731(c)(6)(ii), (7)(i); Administrator v. Kutty , ARB No. 03-022, ALJ Nos. 01-LCA-010 through 01-LCA-025, slip op. at 7 (ARB May 31, 2005); Rajan v. International Bus. Solutions, Ltd. , ARB No. 03-104, ALJ No. 03-LCA-12, slip op. at 7 (ARB Aug. 31, 2004). But an employer need not pay wages to H-1B nonimmigrants that are in nonproductive status due to conditions that remove the nonimmigrants from their duties at their "voluntary request and convenience" or which render them unable to work, such as a requested leave of absence. 20 C.F.R. § 655.731(c)(7)(ii).

  USDOL/OALJ Reporter at 9. It did not matter, therefore, whether the workers actually reported to the office while they were in a nonproductive status because of lack of assigned work; the Respondent was nonetheless required to pay them wages due under the LCA.

  ADVANCE LOAN NOT CONSIDERED PART OF WAGES WHERE THEY WERE NOT SHOWN ON THE PAYROLL RECORD AND WERE NOT REPORTED TO THE IRS AS EMPLOYEE EARNINGS

  In Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006), two nonimmigrant H-1B workers had received as an "advance loan" of $1,500. During their employment, the Respondent had deducted $1,000 from the workers� wages as repayment. In calculating a back pay award, the ALJ deducted $500 to account for the remaining portion of the loan. The ARB held that this deduction was in error because the advance payments did not qualify as wages paid under 20 C.F.R. § 655.731(c)(2)(i)-(ii), because they were not shown in the payroll record and because the record contained no evidence that they were reported to the IRS as employee earnings.

  IMMIGRATION STATUS OF EMPLOYEE NOT RELEVANT IN CASE SEEKING UNPAID WAGES FOR WORK ALREADY PERFORMED

  In Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006), the ARB found that that the ALJ did not err in refusing to permit the Respondent to inquire into the post-termination immigration status of two workers it had engaged under an LCA. The Board found that FLSA caselaw holding that an employee's immigration status is not relevant to a case in which unpaid wages are being sought for work already performed was properly cited by the ALJ and was consistent with the ARB's holding in Administrator v. Ken Tech, Inc. , ARB NO. 03-140, ALJ No. 2003-LCA-15 (ARB Sept. 30, 2004).

  CIVIL MONEY PENALTY; WILFUL VIOLATION; RESPONDENT�S CREATION OF FALSE RECORDS

  In Administrator, Wage and Hour Division, ESA, USDOL v. Synergy Systems, Inc. , ARB No. 04-076, ALJ No. 2003-LCA-22 (ARB June 30, 2006), the ARB affirmed the ALJ's finding that the Respondent's no-benching violation was willful where it had generated and retained written records falsely suggesting that the H-1B workers were on leave of absence when they were in fact working in the Respondent's office.

Thompson v. BAA Indianapolis, LLC , ARB No. 06-061, ALJ No. 2005-AIR-32 (ARB June 30, 2006)

• Title : Final Decision and Order Denying Interlocutory Appeal
• Link : PDF | HTML
• Case type : AIR21 Whistleblower
• Summary :

  INTERLOCUTORY REVIEW; ISSUE OF COVERAGE UNDER WHISTLEBLOWER STATUTE IS FULLY REVIEWABLE ON APPEAL SHOULD THE COMPLAINANT PREVAIL, AND THEREFORE DOES NOT QUALIFY FOR THE COLLATERAL ORDER EXCEPTION

  In Thompson v. BAA Indianapolis, LLC , ARB No. 06-061, ALJ No. 2005-AIR-32 (ARB June 30, 2006), the ALJ denied the Respondent's motion for summary decision seeking dismissal on the ground that an airport is not subject to AIR21's whistleblower provision. The ALJ certified the issue for an interlocutory appeal. The ARB denied interlocutory review on the grounds that (1) the issue presented was one of coverage rather than subject matter jurisdiction, and (2) should the Complainant prevail before the ALJ, the issue of whether the Respondent is a covered Employer will be fully reviewable on appeal. Thus, the request for interlocutory review did not meet the collateral order exception.

Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006)

• Title : Final Decision and Order
• Link : PDF | HTML
• Case type : Sarbanes-Oxley Whistleblower
• Summary :

  PROTECTED ACTIVITY; CONCERNS THAT ARE NEVER EXPRESSED ARE NOT PROTECTED ACTIVITY

  In Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), the ARB observed that "[a] would-be whistleblower must actually express his concerns in order for his activity to be considered protected." Slip op. at 11 (citation omitted).

  CREDIBILITY DETERMINATIONS; DEMEANOR BASED CREDIBILITY DETERMINATIONS AFFORDED GREAT DEFERENCE, BUT NON-DEMEANOR BASED DETERMINATIONS ARE REVIEWED UNDER SUBSTANTIAL EVIDENCE STANDARD

  ALJ credibility determinations that rest explicitly on demeanor are given great deference; but where the ALJ does not explicitly state that his credibility determination is based on witness demeanor the ARB does not accord the determination such great deference. In such a case, the ARB treats the determination as an ordinary finding of fact and reviews it under the substantial evidence standard. Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006).

  PROTECTED ACTIVITY; SOX REQUIRES THAT A COMPLAINANT "PROVIDE INFORMATION" ABOUT A POTENTIAL SOX VIOLATION; MERE REFUSAL TO DO AN ACT WITHOUT AN EXPLANATION WHY IS NOT PROTECTED ACTIVITY

  In order to establish protected activity under the SOX, a complainant must prove that he "provided information" about conduct that he reasonably believed constituted one of the six violation types enumerated under SOX (potential fraud or other SOX violation). Thus, in Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), the ALJ did not err in not making a finding that the Complainant's alleged refusal to approve write offs of certain inventory was protected activity where, other than his own testimony, the record contained no evidence that the Complainant had actually "refused" to write off the inventory as opposed to failing to perform a task. Even if he had refused, there was no showing that the Complainant told his superior why he was refusing. The ARB found, therefore, that even if the refusal occurred, it was not protected activity because the Complainant did not "provide information" to his supervisor about a potential SOX violation.

  PROTECTED ACTIVITY; COMPLAINANT MUST HAVE EXPRESSED HIS CONCERN; MERE FACT THAT SUPERVISORS SHARED CONCERN IS INSUFFICIENT PROOF TO SHOW AWARENESS OF PROTECTED ACTIVITY

  In Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), the ARB found that the Complainant's alleged refusal to approve write offs of certain inventory was not protected activity because, even if it occurred, there was no proof that the Complainant informed his superior why he was refusing. The Complainant then appeared to argue that proof that the Respondent's executives were aware of inventory accounting issues proved that they were aware of the Complainant's protected activity. The ARB observed that, for activity to be protected under the SOX whistleblower provision, a complainant must demonstrate that the activity included an expression of concern � that he actually blew the whistle. The ARB therefore held that "[p]roof that Ecolab supervisors shared Henrich's concern does not necessarily prove that any supervisor learned about the concern from Henrich, and thus does not prove that Henrich expressed concern." Slip op. at 15.

  BURDEN OF PROOF; MERELY PRESENTING A PRIMA FACIE CASE DOES NOT ENTITLE A COMPLAINANT TO PREVAIL

  Merely presenting a prima facie case does not entitle a complainant to prevail, but merely forces a respondent to articulate its reason or reasons for an unfavorable personnel action. Once a respondent has done so, and a full hearing has been held, the prima facie case analysis is no longer relevant. Moreover, "whether or not the respondent has articulated a reason, the complainant in order to obtain relief must prove each element of his case by a preponderance of evidence. � Only if the complainant so proves must the ALJ apply a mixed motive analysis and determine whether the complainant's employment would have been terminated anyway." Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), slip op. at 16 (ALJ did not err in declining to engage in a mixed motive analysis where the Complainant failed to prove that protected activity was a contributing factor in his termination).

  CAUSATION; CONTRIBUTING FACTOR; LEGALITY OF RESPONDENT�S ACCOUNTING PRACTICES AS EVIDENTIARY FACTOR ON MOTIVE

  In Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), the ALJ had found that, because the Complainant's concerns about certain accounting practices did not result in the exposure of illegal conduct, the decision to terminate the Complainant's employment could not be explained as a hostile reaction to such exposure. The Complainant argued on appeal that it was error to use the legality of the accounting practices as a basis for concluding that protected activity did not contribute the termination decision because such a standard would eviscerate the reasonable belief standard � i.e., requiring the Complainant to show actual illegality. The ARB held that the ALJ had not created such a rule, but had merely repeated the parties� assumption that the accounting practices were not illegal. The ARB found that the ALJ had properly focused on whether the Complainant had a reasonable belief that the practice was a violation of SOX-listed law or regulation and whether expression of that belief contributed to the termination decision.

  ARB STANDARD OF REVIEW; NOT ENOUGH TO SHOW THAT SUBSTANTIAL EVIDENCE SUPPORTS APPELLANT�S VIEW OF THE CASE; MUST SHOW THAT SUBSTANTIAL EVIDENCE DID NOT SUPPORT THE ALJ�S FINDINGS

  "[A] party cannot prevail on appeal simply by demonstrating that substantial evidence supports his view. Rather, in order to convince us not to adopt an ALJ's recommendation a party must demonstrate that substantial evidence did not support the findings necessary to that recommendation." Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), slip op. at 17-18.

  CAUSATION; TEMPORAL PROXIMITY; PROBATIVE VALUE DECREASES AS TIME GAP LENGTHENS, PARTICULARLY WHEN SUBSEQUENT PRECIPATING EVENTS EXIST

  "The probative value of temporal proximity decreases as the time gap lengthens, particularly when other precipitating events have occurred closer to the time of the unfavorable personnel action." Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), slip op. at 18 (citation omitted).

  CAUSATION; "FACTS" AS THEY APPEARED TO DECISIONMAKER AT TIME OF ADVERSE ACTION ARE WHAT IS RELEVANT � NOT WHETHER THE FACTS WERE WELL-GROUNDED; IMPUTED ANIMUS OF SUBORDINATE OFFICIAL MUST BE GROUNDED IN COMPLAINANT�S PROTECTED ACTIVITY RATHER THAN GENERAL ENMITY

  In Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), a resigning production line supervisor made a series of allegations in an exit interview reciting misconduct by the Complainant. The Respondent argued that executives of the Respondent terminated the Complainant because they believed the allegations. On appeal, the Complainant argued that the ALJ failed to consider evidence that the allegations were false. The ARB held that whether the allegations themselves were false was not relevant. The ARB wrote:

  Even if Henrich were correct about the falsity of Kelso's allegations � a matter on which we express no opinion � the ALJ did not need to determine the truth or falsity of Kelso's allegations in order to determine that the Ecolab executives relied upon them in deciding to terminate Henrich's employment. Accord EEOC v. BCI Coca-Cola Bottling Co. of Los Angeles d/b/a Phoenix Coca-Cola Bottling Co., __ F.3d __, 2006 WL 145501 (10th Cir. 2006), slip op. at 13, 21 (except where plaintiff has proven that "subordinate bias" caused higher-level decision to terminate, courts generally should determine whether employer had discriminatory intent by evaluating "facts as they appear[ed] to the person making the decision to terminate").

  Slip op. at 20. The ARB acknowledged that the Respondent might still be liable if the Complainant was able to prove that the Complainant's supervisor had retaliatory animus and influenced the decisionmakers (i.e., imputing retaliatory animus of a subordinate official to the decisionmakers). The ARB held that any alleged retaliatory animus of the subordinate official "must arise from and be based upon protected activity." Slip op. at 21. Thus, even if the subordinate official was antagonistic toward the Complainant, the Complainant must have shown that the enmity existed because of protected activity. In the instant case, the evidence the Complainant presented was too attenuated and speculative to establish such animus.

Husen v. Wide Open Trucking, Inc. , ARB Nos. 05-115, 05-130, ALJ No. 2005-STA-8 (ARB June 29, 2006)

• Title : Final Decision and Order
• Link : PDF | HTML
• Case type : STAA Whistleblower
• Summary : Complaint dismissed based on bankruptcy of Respondent

Rooks v. Planet Airways, Inc. , ARB No. 04-092, ALJ No. 2003-AIR-35 (ARB June 29, 2006)

• Title : Final Decision and Order
• Link : PDF | HTML
• Case type : AIR21 Whistleblower
• Summary :

  PROTECTED ACTIVITY; COMPLAINANT'S REASONABLE BELIEF THAT FLYING WITH A FATIGUED CREW WOULD VIOLATE A FEDERAL AVIATION REGULATION

  In Rooks v. Planet Airways, Inc. , ARB No. 04-092, ALJ No. 2003-AIR-35 (ARB June 28, 2006), the ARB affirmed the ALJ's finding that the Complainant engaged in protected activity when he refused to complete a delayed flight because the flight crew was fatigued, and the Complainant believed that flying with a fatigued crew was a hazard covered by the federal aviation regulation ("FAR") at 14 C.F.R. § 121.553. The ARB noted that the Complainant did not have to prove that flying with fatigued crew members actually violated the FARs, as long as his belief that it did was reasonable.

  REINSTATEMENT; WHERE ALJ DID NOT ORDER REINSTATEMENT BASED ON COMPLAINANT'S STATEMENT THAT HE DID NOT WANT HIS JOB BACK, AND NO PARTY APPEALED THIS POINT, THE ARB FOUND THAT REINSTATEMENT AS A REMEDY WAS WAIVED ON APPEAL

  In Rooks v. Planet Airways, Inc. , ARB No. 04-092, ALJ No. 2003-AIR-35 (ARB June 28, 2006), the Complainant testified that he did not want his job back and the ALJ did not order reinstatement upon finding that the complaint was meritorious. On review, the ARB recited caselaw holding that the preference of a prevailing complainant is not determinative on whether reinstatement or an alternative remedy such as front pay was available. The ARB stated that reinstatement would have been an appropriate remedy, but -- because neither party raised an issue on appeal concerning reinstatement -- it "deem[ed] the issue of reinstatement waived and accept[ed] the ALJ's recommended remedy of back pay."

Welch v. Cardinal Bankshares Corp. , ARB No. 06-062, ALJ No. 2003-SOX-15 (ARB June 9, 2006)

• Title : Order Denying Stay
• Link : PDF
• Case type : Sarbanes-Oxley Whistleblower
• Summary :

  PRELIMINARY ORDER OF REINSTATEMENT; ALJ IS NOT REQUIRED TO ISSUE A PRELIMINARY ORDER SEPARATE AND DISTINCT FROM DECISION AND ORDER

  In Welch v. Cardinal Bankshares Corp. , ARB No. 06-062, ALJ No. 2003-SOX-15 (ARB June 9, 2006), the ARB rejected the Respondent's contention that a preliminary order of reinstatement is effective only if the ALJ issues a separately designated and explicit preliminary order.

  PRELIMINARY ORDER OF REINSTATEMENT; STANDARD FOR MOTION FOR STAY MIRRORS TEST FOR DETERMINING WHEN AGENCY ACTION AY BE STAYED; ECONOMIC REINSTATEMENT MAY BE AN APPROPRIATE SUBSTITUTE; ALLEGED IRREPARABLE HARM MUST BE ACTUAL AND NOT THEORETICAL

  In Welch v. Cardinal Bankshares Corp. , ARB No. 06-062, ALJ No. 2003-SOX-15 (ARB June 9, 2006), the ARB applied the four-part test the Board uses to determine when agency action may be stayed to a motion for stay of an ALJ's preliminary order of reinstatement in a SOX case. In regard to the first element, the Board declined to find that it would be likely that the Respondent would prevail on the merits where (1) there had been a full evidentiary hearing, full development of the evidentiary record, and the ALJ had found that the Complainant had been fired for engaging in protected activity, and (2) the ALJ's reasoning, while subject to further review, appeared sound on its face. The Employer also presented "after acquired evidence" that purportedly established other legitimate reasons for terminating the Complainant; however, this evidence had not been presented before the ALJ and the Respondent had not made a showing that it was not readily available prior to the closing of the record before the ALJ. The ARB also noted that, even if after acquired evidence made reinstatement inappropriate, other remedies such as front pay can be an appropriate substitute.

  In regard to the second element, the ARB rejected the Respondent's assertions of irreparable injury because a lack of confidence in the Complainant reinstated as CFO could place the Board of Directors as risk for personal liability and because it would have to remove its current CFO. The ARB found that any alleged irreparable harm must be actual and not theoretical, and certain to occur. The Board also noted that the Complainant need not be reinstated as CFO; rather the Respondent could use his skills while the case is being litigated "by a variety of other means. Alternatively, front pay or economic reinstatement could be a substitute for reinstatement.

  In regard to the third element, the ARB found that the Complainant would be harmed if a stay was granted because he had already waited more than three and one-half years to have his pay and benefits restored. The ARB rejected the Respondent's contention that the Complainant could not claim harm because he did not timely seek reinstatement. Rather, the ALJ's preliminary order made it unnecessary for the Complainant to seek enforcement.

  In regard to the forth element, the ARB found that the public interest militated against a stay.

Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006)

• Title : Order of Consolidation & Final Decision & Order
• Link : PDF
• Case type : Sarbanes-Oxley Whistleblower
• Summary :

  CONSOLIDATION OF APPEALS ON REVIEW BEFORE ARB; COMMON LEGAL ISSUES AND EVIDENCE

  In Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the ARB consolidated two appeals of the same Complainant against the same Respondent in view of the substantial identity of the legal issues and the commonality of much of the evidence, and in the interest of judicial and administrative economy.

  TIMELINESS OF COMPLAINT; ALJ HAS THE DISCRETION TO USE AN ORDER TO SHOW CAUSE TO RESOLVE THE ISSUE

  An ALJ has the discretion to use an Order to Show Cause procedure to resolve the issue of whether the Complainant had filed a timely complaint. See Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006).

  EFFECTIVE DATE OF SOX; COVERAGE MAY BE ESTABLISHED EVEN THOUGH PROTECTED ACTIVITY OCCURRED BEFORE SOX WAS EFFECTIVE IF ADVERSE ACTION OCCURRED AFTER EFFECTIVE DATE

  In Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant's protected activity occurred prior to the effective date of the SOX whistleblower provision. The ARB noted, however, that it had implicitly recognized in prior cases that SOX whistleblower protection may apply so long as the complainant proves that the protected activity was a contributing factor and the adverse action occurred after the effective date of the SOX.

  FILING OF SOX COMPLAINT; FILING DIRECTLY WITH SECRETARY RATHER THAN OSHA

  Even though the regulations specify that SOX whistleblower complaints should be filed with the OSHA Area Director responsible for enforcement activitities in the geographical area where the complainant employee resides or was employed, or with any OSHA officer or employee, 29 C.F.R. § 1980.103(c), a complaint filed directly with the Secretary of Labor satisfies the filing requirements under the SOX. Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006).

  PROTECTED ACTIVITY; FAILURE TO ALLEGE ACTIVITY PROTECTED UNDER SOX CONSTITUTES A FAILURE TO STATE OF CLAIM FOR RELIEF UNDER SOX; MERE POSSIBILITY THAT CHALLENGED PRACTICES IGHT AFFECT THE FINANCIAL CONDITION OF THE COMPANY IS NOT SUFFICIENT

  In determining whether the Complainant's letters to the Secretary of Labor, the Assistant Secretary for ESA, and Wage and Hour Administrator constituted a timely complaint under the SOX whistleblower provision, the ARB in Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), looked to whether the letters demonstrated that the Complainant engaged in SOX-protected activity prior to his discharge. In respect to a letter written to the Secretary in which the Complainant had complained about alleged constitutional, civil rights and FMLA violations he had voiced to the Respondent's Board of Director and Executives, the Board wrote:

  [The Complainant's] letters to the Board of Directors and Executives must have provided information regarding Home Depot's conduct that [the Complainant] reasonably believed constituted mail, wire, radio, TV, bank, or securities fraud, or violated any rule or regulation of the SEC, or any provision of Federal law relating to fraud against shareholders. 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 such as the Fair Labor Standards Act or Family Medical Leave Act, standing alone, is not protected conduct under the SOX. To bring himself under the protection of the act, an employee's complaint must be directly related 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). See Getman , slip op. at 9-10 (requiring that the employee articulate the nature of her concern). A mere possibility that a challenged practice could adversely affect the financial condition of a corporation, and that the effect on the financial condition could in turn be intentionally withheld from investors, is not enough.

  USDOL/OALJ Reporter at 14. Because the Complainant's letter to the Secretary did not express his reasonable belief that Home Depot was defrauding shareholders or violating security regulations, the ARB affirmed the ALJ's determination that the letter was not a timely claim for relief under the SOX. Similarly, the Complainant's letters claiming overtime and FMLA violations by the Respondent were not protected activity under the SOX because they did not involve the listed categories of fraud or securities violations. Even reading all the letters collectively failed to state a SOX whistleblower violation because the Complainant had not alleged that he raised specific concerns about corporate fraud or securities violations with the Respondent or that those concerns were a contributing factor in his termination.

  EQUITABLE TOLLING; PRECISE CLAIM IN WRONG FORUM

  In Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant did not timely file a SOX complaint with the Department of Labor, so the ARB considered whether the Complainant was entitled to equitable tolling based on letters he wrote to the Deputy Attorney General and to the SEC. For equitable tolling to apply, the Complainant must have shown that he filed the precise statutory claim in issue (a SOX whistleblower claim) but merely did so in the wrong forum. The letter to the Deputy Attorney General at the Justice Department alleged corporate malfeasance and bad and negligent corporate governance -- specifically violations of the Complainant's constitutional, civil, first amendment and Title VII rights allegedly condoned by the Board of Directors. The ARB found that such allegations were not SOX-protected activity because they did not relate, for example, to instances of misrepresentation of the Respondent's financial condition or fraud against its shareholders. The letters to the SEC were similar in content. The ARB wrote that although the Complainant made general, conclusive accusations of "corporate malfeasance" and "bad and negligent corporate governance," the specific context he provided for his accusations related only to unprotected allegations, and thus he did not state a cause of action under the SOX. Accordingly, the Complainant had not filed the precise statutory claim in the wrong forum and was not entitled to equitable tolling.

  ADVERSE EMPLOYMENT ACTION; ALLEGED HARASSMENT OF FORMER EMPLOYEE MUST HAVE IMPACTED ON THE TERMS OR CONDITIONS OF EMPLOYMENT WITH RESPONDENT OR HAVE BEEN BLACKLISTING AFFECTING TERMS OR CONDITIONS WITH SUBSEQUENT EMPLOYER TO BE ACTIONABLE

  In Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant had been fired. He subsequently filed grievances with a state bar association against a Home Depot attorney. In a response to the state bar, that attorney asserted that the Complainant's grievances were part of a campaign by the Complainant to harass Home Depot and its employees. The Complainant then filed a SOX whistleblower complaint with OSHA alleging that the attorney's response was in violation of the SOX. The ALJ dismissed the complaint because (1) the Complainant was not an employee of Home Depot at the time it allegedly harassed him, and the alleged harassment was not an adverse employment action that impacted on the terms and conditions of his employment with Home Depot, and (2) the Complainant had not presented any evidence of blacklisting resulting from the alleged harassment that adversely affected the terms or conditions of the Complainant's subsequent employment. The ALJ therefore concluded that the required element of a SOX complaint of an unfavorable personnel action was not met, and thus the complaint failed to state a cause of action under SOX. The ARB agreed with the ALJ's determination, and affirmed the dismissal of the complaint.

  NEW EVIDENCE ON APPEAL; ARB RELIES ON OALJ RULES OF PRACTICE AND PROCEDURE FOR GUIDANCE

  When considering whether to consider new evidence, the ARB ordinarily relies upon the standard found in the OALJ Rules of Practice and Procedure, which provides that "[o]nce the record is closed, no additional evidence shall be accepted into the record except upon a showing that new and material evidence has become available which was not readily available prior to the closing of the record." 29 C.F.R. § 18.34(c). Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006).

  ALLEGATION OF ALJ'S FAILURE TO SERVE ORDER TO SHOW CAUSE; IN ABSENCE OF EVIDENCE TO THE CONTRARY, ALJ'S CERTIFICATE OF SERVICE SHOWING CORRECT ADDRESS IS SUFFICIENT TO REJECT ALLEGATION

  In Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant contended on appeal that the ALJ failed to serve an Order to Show Cause on him, thereby prejudicing his ability to adequately respond to the question of whether his complaint stated a cause of action under SOX. The ARB rejected this contention because the ALJ's Order to Show Cause had a certificate of service attached attesting that a copy had been sent to the Complainant and showing the Complainant's correct address as of that date, and because there was no evidence to the contrary in the record.