USDOL/OALJ Reporter: ARB Decision Caselist - June 2012

OALJ LACKS JURISDICTION TO CONDUCT A HEARING WHERE THE WAGE AND HOUR DIVISION (WHD) FINDS NO REASONABLE CAUSE TO CONDUCT AN INVESTIGATION BASED ON UNTIMELY FILING OF LCA COMPLAINT; COMPLAINANT MUST ADDRESS EQUITABLE TOLLING ARGUMENT TO WHD OR OTHER FORUM

In Gupta v. Headstrong, Inc. , ARB Nos. 11-008, 11-065, ALJ No. 2011-LCA-38 (ARB June 29, 2012), the Complainant's H-1B employment was terminated in November 2006, he accepted a severance payment in December 2006, DHS was notified of the termination in January 2007, the Respondent provided return airplane tickets in February 2007, and USCIS revoked the Complainant's non-immigrant visa in March 2007. The Complainant hired an attorney who attempted to settle claims for back wages and additional benefits. On or about May 28, 2008, the Complainant filed a complaint with the Wage and Hour Division alleging H-1B violations. In June 2008, WHD informed the Complainant that it had determined that there was no reasonable cause to conduct an investigation because the Complainant had not shown a violation within the 12 months preceding his complaint. The Complainant requested an ALJ hearing, and the ALJ issued an order to show cause why the matter should not be dismissed for lack of jurisdiction under 20 C.F.R. § 655.806(a)(2), which provides that no hearing or appeal is available where "the Administrator determines that an investigation on a complaint is not warranted." The Complainant argued that his hearing request was distinguishable because the decision not to investigate was based on timeliness rather than the substance of the complaint. The Complainant argued that he was entitled to equitable tolling of the limitations period. The ALJ found that she did not have jurisdiction because a WHD determination subsequent to an investigation is a prerequisite to a hearing request under 20 C.F.R. §§ 655.806(a)(2) and 655.820(b)(1).

On appeal, the ARB agreed with the ALJ that a WHD investigation and determination is a prerequisite for requesting an ALJ hearing under the regulations. The ARB also held that because the Complainant was not entitled to a hearing, the ARB had no jurisdiction to rule upon or discuss the Complainant's argument that the WHD should have found entitlement to equitable tolling. The ARB noted that limitations periods are customarily subject to equitable tolling, but held that "because no further hearing within the Department is permitted, this is a matter that complainants must take up while the matter is pending with the Administrator or in another forum if the Administrator refuses to investigate the complaint." USDOL/OALJ Reporter at n.14.

COMPLAINANT'S NOTICE OF INTENT TO FILE DE NOVO ACTION IN FEDERAL DISTRICT COURT ON ORIGINAL SOX COMPLAINT; ARB PROVIDES NOTICE OF ITS INTENT TO DISMISS APPEALS OF RELATED COMPLAINTS SO THAT THEY MAY BE CONSOLIDATED WITH THE DISTRICT COURT ACTION

In Jordan v. Sprint Nextel Corp. , ARB Nos. 10-113, 11-020, ALJ Nos. 2006-SOX-98, 2010-SOX-50 (ARB June 29, 2012), the ARB provided notice under the "special circumstances" regulation at 29 C.F.R. § 1980.115 of its intention to dismiss, 30 days hence, the Complainant's Second and Third SOX complaints. The Complainant had filed with the presiding ALJ a notice of intent to proceed de novo in federal district court on the Complainant's First SOX complaint, and the ALJ dismissed the First complaint on that basis. At the time of the ARB's notice a de novo action had not yet been filed in district court. The Second complaint alleged false statements about the Complainant made by named Respondents or their attorneys to OSHA, and the Third complaint alleged false statements about the Complainant made by named Respondents to the SEC. In response to an order to show cause issued by the ARB why the Second and Third complaints should not be dismissed so that they could be consolidated for adjudication before the district court, the Complainant argued that the Second and Third complaints did not involve questions of law or fact in common with the First complaint, and therefore they should not be consolidated. Moreover, the Complainant argued that under SOX and its implementing regulations, he had the right to determine whether and when to proceed in district court. The ARB, however, stated that it "cannot countenance Jordan's desire to proceed with his complaints in different forums, as it would endorse and encourage forum-shopping and piecemeal litigation of SOX complaints." USDOL/OALJ Reporter at 4. The ARB also noted that it retains complete discretion whether to accept the Complainant's petitions for review. The ARB also found that all three complaints, the first two of which had already been consolidated before the ALJ, derived from the same or overlapping facts.

The ARB summarily affirmed the ALJ's denial of relief from debarment under the Service Contract Act where there was overwhelming evidence supporting the ALJ's finding that the repetitive nature of the Employer's violations constituted culpable conduct, and where the Employer impeded a second investigation.

[STAA Whistleblower Digest IV F]
BLACKLISTING; COMPLAINANT IS NOT REQUIRED TO ESTABLISH DAMAGES OR LOSS OF EMPLOYMENT

In Beatty v. Inman Trucking Management, Inc. , ARB No. 11-021, ALJ Nos. 2008-STA-20 and 21 (ARB June 28, 2012), the Complainants alleged that the Respondent blacklisted them by putting negative statements about the Complainants in a DAC report. A DAC report is a consumer report on the employment history of truck drivers. The ARB found that the ALJ erred by requiring the Complainants to prove that the negative DAC report actually led to negative consequences for them. Rather, the ARB quoted Earwood v. Dart Container Corp. , 1993-STA-16, slip op. at 3 (Sec'y Dec.7, 1994), in which the Secretary stated that "effective enforcement of the Act requires a prophylactic rule prohibiting improper references to an employee's protected activity whether or not the employee has suffered damages or loss of employment opportunities as a result." 1993-STA-16, slip op. at 3. The ARB noted that the Respondent put on the DAC report statements such as "excessive complaints, company policy violation, personal contact requested and other" and "Eligible for rehire: No." The ARB found that these statements "were disseminated and are on their face damaging information that would affirmatively prevent and arguably did prevent [the Complainants] from finding employment. Whether the negative statements caused any damages to the [Complainants] is immaterial based on the case law above. " Beatty , ARB No. 11-021, USDOL/OALJ Reporter at 7.

[STAA Whistleblower Digest IV F]
BLACKLISTING; RESPONDENT'S MOTIVATION FOUND TO BE CRITICAL TO CONTRIBUTING FACTOR ANALYSIS -- BUT RETALIATORY ANIMUS IS NOT REQUIRED TO PROVE RETALIATION

In Beatty v. Inman Trucking Management, Inc. , ARB No. 11-021, ALJ Nos. 2008-STA-20 and 21 (ARB June 28, 2012), the Respondent put negative statements about the Complainants in a DAC report. A DAC report is a consumer report on the employment history of truck drivers. The ALJ indicated in his decision that he believed the Respondent's safety director's testimony that the DAC report had nothing to do with the Complainants' alleged safety complaint. However, because the ALJ had erroneously found that the DAC report was not shown to be adverse action, and because the ALJ had not reconciled some of the conflicting evidence of record, the ARB remanded for the ALJ to make sufficient findings of fact. The ARB wrote: "Because [the supervisor] made the DAC report entry on the day that the [Complainants'] employment was terminated and because the DAC report contained information on why [the supervisor] decided to terminate the [Complainants'] employment, the reasons behind the terminations and the entry of the DAC report are related. � Thus, [the supervisor's] motivations for both are critical to the analysis on this issue." USDOL/OALJ Reporter at 7.

The ARB, however, clarified that a showing of animus is not required for a finding of causation, writing: "Animus can be evidence of retaliation, but it is not required to prove retaliation. Causation is established, with or without evidence of retaliatory animus, if the protected activity contributed to the adverse action. " USDOL/OALJ Reporter at 7-8.

[STAA Whistleblower Digest II H 4 b]
ARB MAY AFFIRM ALJ DECISION DESPITE ALJ'S APPLICATION OF THE WRONG BURDEN OF PROOF WHERE THE RESULT WOULD BE THE SAME UNDER THE CORRECT BURDEN OF PROOF

In Canter v. Maverick Transportation, LLC , ARB No. 11-012, ALJ No. 2009-STA-54 (ARB June 27, 2012), the ARB affirmed the ALJ's determination that the Respondent retaliated against the Complainant in violation of the STAA where there was compelling testimony that the Complainant's refusal to drive was protected activity because to do so would have violated DOT regulations and because the Complainant had a reasonable apprehension that driving the truck could result in serious injury to himself and others in part because he knew there was a chaffing brake hose and a steering fluid leak. Although the ALJ analyzed the complaint under the burdens of proof applicable to complaints filed prior to the 2007 amendments to the STAA, the ARB found that the error was harmless because the 2007 STAA amendments introduced a lesser burden of proof for complainants ("contributing factor" rather than "discriminatory purpose" or "motivating factor") and a higher burden of proof for respondents ("clear and convincing" rather than "preponderance of the evidence"). The ARB wrote:

"In the review of judicial proceedings, the rule is settled that if the decision below is correct, it must be affirmed, although the lower court relied upon a wrong ground or gave a wrong reason." Helvering v. Gowan , 302 U.S. 238, 245 (1937). Since in this case the ALJ's findings of fact are supported by substantial evidence, and the 2007 STAA amendment employs a lesser burden of proof for complainants and a higher burden of proof for employers, the result would be no different even had the ALJ employed the correct legal standard. See Knight v. Mills , 836 F.2d 659, 661 n.3 (1st Cir. 1987) ("It is proper for an appellate court to affirm a correct decision of a lower court even when that decision is based on an inappropriate ground."); Sagebrush Rebellion, Inc. v. Hodel , 790 F.2d 760, 765 (9th Cir. 1986) (agency may rely on harmless error rule when its mistake does not affect the result).

USDOL/OALJ Reporter at n.5.

CAUSATION; COMPLAINANT'S USE OF PROFANITY AND RUDENESS TOWARD CO-WORKERS

In Zurcher v. Southern Air, Inc. , ARB No. 11-002, ALJ No. 2009-AIR-7 (ARB June 27, 2012), the Complainant failed to prove by a preponderance of the evidence that his protected activity was a contributing factor in his termination from employment where the record supported the ALJ's finding that the decision to terminate the Complainant was based on the Complainant's use of profanity and rudeness toward co-workers. The use of profanity was considered by the Respondent to be serious misconduct and was expressly forbidden; the Chief Operating Officer who terminated the Complainant witnessed the telephone exchange in which the profanity was used and, although he learned about the Complainant's probationary status from a Chief Pilot who knew about the Complainant's protected activity, the Chief Operating Officer did not himself know about the protected activity; although there was temporal proximity between the termination and some protected activity, there was even closer temporal proximity to the use of profanity.

PER SE APPLICATION OF "3/2 RULE" PROHIBITED WHERE IT RESULTS IN A DROP IN THE PREVAILING WAGE RATE, AND THE ADMINISTRATOR COULD READILY ASCERTAIN THAT OTHER DATA EXISTS

In Road Spinkler Fitters Local Union No. 669 , ARB No. 10-123 (ARB June 20, 2012), the ARB ruled that "...to the sufficiency of data, ... the regulations prohibit the Administrator from relying on a per se application of the 3/2 Rule where (1) a new wage calculation results in a drop in the prevailing wage rate, and (2) the Administrator knows or could readily ascertain that other data exists." USDOL/OALJ Reporter at 13. The 3/2 rule derives from a WHD manual that provides that if the survey response includes at least three workers from at least two contractors in a particular county, the Administrator considers this sufficient data for the county to set a prevailing wage rate. In the instant case, application of the 3/2 rule resulted in a drop of more than forty percent for the wage determination. Moreover, the ARB concluded that the Administrator should have determined whether data for all of the county in question, or even for tthe MSA containing that county, would have created a more reliable finding.

[Nuclear and Environmental Whistleblower Digest XI A 2 a]
CONTRIBUTING FACTOR; WHERE COMPLAINANT'S PROTECTED DISCLOSURES CAUSED THE RESPONDENTS TO OPEN AN INVESTIGATION THAT LED TO THE COMPLAINANT'S DISCHARGE, THE COMPLAINANT HAS ESTABLISHED THE CONTRIBUTING FACTOR ELEMENT OF AN ERA WHISTLEBLOWER COMPLAINT AND THE BURDEN SHIFTS TO THE EMPLOYER

In Smith v. Duke Energy Carolinas LLC , ARB No. 11-003, ALJ No. 2009-ERA-7 (ARB June 20, 2012), the Complainant was a night shift security guard for a company under contract with Duke Energy, performing fire watch surveillance at a nuclear power plant. Logs were to be signed after each visual inspection; however, on occasion the Complainant and his partner pre-signed the logs. In January 2008, a supervisor with Duke Energy met with all four fire watchers, informed them about an action the NRC had taken against a nuclear station due to falsified fire watch logs, and told them that he expected them to follow correct procedures. The next month, the Complainant observed a blank inspection log entry from the prior day shift. When the Complainant asked about it, one of the day shift fire watchers said that he was doing a favor for the other day shift fire watcher and was completing her rounds. The Complainant told that day shift fire watcher that the log needed to be corrected or he would need to report the discrepancy. The log, however, was not corrected.

The Complainant was later informed by a project coordinator and an HR official that the day shift fire watcher who had been covered for had filed a sexual harassment complaint against the Complainant. The Complainant denied the harassment charge, and told the managers about the falsified time sheets. Following an investigation, Duke Energy released all four fire watchers. One day shift watcher was released for failing to conduct the fire watch for which she signed. One day shift watcher was released for failing to correct the first watch log. The Complainant was released for failing to timely disclose the problem. The Complainant's partner was not implicated, but was nonetheless released "to get a fresh start with fire watchers" at the nuclear power plant. The contractor thereafter terminated the employment of the two day shift watchers and the Complainant due to lack of integrity and trustworthiness.

The ALJ found that the Complainant had engaged in protected activity, but that it was not a contributing factor in his termination. The ALJ found insufficient evidence showing that animosity or hostility motivated the company's decision to terminate the Complainant, and that instead the termination decision was motivated by the company's desire to ensure that employees are reliable and trustworthy, and that the Complainant's failure to immediately report the falsification incident demonstrated that he lacked these traits.

On appeal, the ARB found that the ALJ's contributing factor finding was not in accordance with the law governing the "contributing factor" element of an ERA whistleblower complaint. The ARB noted that it had adopted the interpretation of "contributing factor" as set out in Marano v. Dep't of Justice , 2 F.3d 1137, 1140 (Fed. Cir. 1993), in which "contributing factor" was interpreted to mean "any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision." Marano , 2 F.3d at 1140. The ARB found that the facts clearly showed that the Complainant's protected communications contributed to his termination: those disclosures precipitated the investigation into the falsification of the fire watch logs, and while the Complainant delayed for seven days informing managers, "it is undisputed that the only reason that managers learned about the practice was because [the Complainant] notified them." The ARB found that the Complainant's disclosures were "inextricably intertwined" with the investigations that resulted in his discharge, and the content of those disclosures gave the Respondents the reasons for their personnel actions against the Complainant.

The ARB remanded, noting that it was now the Respondents' burden to demonstrate by clear and convincing evidence that they would have taken the same personnel action absent the protected activity.

Denial of reconsideration.

The ARB affirmed the ALJ's dismissal of the complaint where the Complainant failed to justify her contumacious refusal to obey the ALJ's discovery orders.

The ARB affirmed the ALJ's conclusion that the Complainant failed to prove that his protected activity was a contributing factor in the Respondent's decision to terminate his employment.