USDOL/OALJ Reporter: ARB Decision Caselist - July 2011

Dismissal of Complainant's appeal based on failure to file a timely brief in support of his petition for review and failure to demonstrate good cause for failing to file a timely brief.

[Nuclear and Environmental Digest VII C 1]
SUMMARY DECISION; WHERE THERE IS CONFLICTING EVIDENCE ON CAUSATION IN A FAILURE TO HIRE CASE, SUMMARY DECISION WITHOUT AN EVIDENTIARY HEARING IS IMPROPER

In Hasan v. Enercon Services, Inc. , ARB No. 10-061, ALJ Nos. 2004-ERA-22 and 27 (ARB July 28, 2011), the Complainant, an experienced structural engineer, had been found in 1999 by the NRC to have been discriminated against by American Electric Power Company because of previous whistleblowing activities. Between 2002 and 2004, the Complainant responded to several job advertisements posted by the Respondent, Enercon Services, Inc. During that time, Enercon hired at least 15 individuals, many of whom were civil/structural engineers. The Complainant was not hired. The Complainant filed a "failure to hire" ERA whistleblower complaint. The ALJ granted summary decision because he found that "there was no evidence of pretext or lying by Respondent so as to raise an inference of discrimination in the hiring process." The ALJ ruled that the reason Enercon did not hire the Complainant was because it "hired no engineers in 2003 and 2004 based upon ads for its Germantown office or temporary engineering positions." On appeal, the ARB found that the ALJ had viewed the complaint too narrowly and that there was conflicting evidence raising questions of material fact regarding causation, making disposition by summary decision improper. The ARB remanded for an evidentiary hearing, emphasizing that it had reached no conclusion regarding the merits of the complaint.

PROTECTED ACTIVITY; PILOT'S OBLIGATION TO DEEM HIMSELF UNFIT FOR FLIGHT BASED ON MEDICAL CONDITION; UNION REPRESENTATIVE'S ADVOCACY THAT RESPONDENT'S POLICIES CONTRAVENED THE FEDERAL AVIATION REGULATIONS

CLEAR AND CONVINCING EVIDENCE STANDARD; RESPONDENT COULD NOT MEET STANDARD WHERE IT FAILED TO ESTABLISH THAT IT HAD A PRE-EXISTING POLICY OF REQUIRING MEDICAL DOCUMENTATION TO SUPPORT A PILOT'S SICK LEAVE OR THAT THE PILOT HAD ADVANCE NOTICE OF SUCH A REQUIREMENT

In Furland v. v. American Airlines, Inc. , ARB Nos. 09-102, 10-130, ALJ No. 2008-AIR-11 (ARB July 27, 2011), the Complainant, a pilot, had been counseled about the Respondent's belief that his sick leave use was excessive. About six weeks later, on June 27, 2007, the Complainant took himself off a scheduled flight on sick leave due to gastrointestinal effects from airline food on a prior flight. The next day the Employer advised the Complainant that if he did not provide a doctor's note, he could be subjected to corrective action including reversal of his paid sick leave to unpaid. [The parties disagreed about whether the Complainant had been previously informed of the medical verification requirement; the ALJ found that the Complainant had not been so previously informed.] A union representative then, on July 9, 2007, sent a letter to the Respondent on the Complainant's behalf protesting the request for a medical note, and asserting that the request for documentation was harassment and constituted unlawful "pilot pushing," i.e., pressuring a pilot to fly when unfit in violation of the Federal Aviation Regulations (FARs). The letter further stated that the Respondent had not told the Complainant that he would be under observation or that he would be required to provide medical documentation for sick leave use.

Later the Complainant and his union representatives met with a company representative to discuss the sick leave use on June 27, 2007, and the Complainant's failure to provide medical documentation for that leave. The company representative stressed that the Complainant called in sick after the Respondent warned him against calling in sick, while the union representative argued that the Respondent's demand for medical documentation pressured the Complainant to fly when he was sick, in violation of his legal obligations under the FARs. After the meeting, the Respondent deducted the amount it had paid for the June 27th sick leave from a later paycheck. The Complainant filed an AIR21 complaint.

Protected Activity

The ARB found that substantial evidence supported the ALJ's finding that the Complainant engaged in protected activity when he complained through the July 9, 2007 union letter and at the August 27, 2008 meeting that the Respondent's actions pressuring him to fly even when sick contravened the FARs. The ARB also found that the Complainant's taking himself off the June 27, 2007 flight was protected activity. The ARB found that the Complainant reasonably exercised his authority under the FARs in deeming himself unfit for flight based on his medical condition.

Contributing Factor and Clear and Convincing Evidence

The ARB found it abundantly clear that the Complainant proved that his protected activities contributed to the decision to dock his pay. It also found that substantial evidence supported the ALJ's finding that the Respondent failed to prove by clear and convincing evidence that it would have deducted the paid sick leave amount from the Complainant's pay absent protected activity. The ALJ had noted that the Respondent failed to present evidence of a company-wide policy requiring pilots to present medical documentation to support requests for sick leave, and had found that the Complainant had not been informed in the earlier counseling session that his future sick leave requests would require medical documentation and prior approval. The ARB elaborated:

   We agree with the ALJ that employers have a compelling business interest in requiring proof that their employees' absences based on illness are legitimate�. However, without pilots having prior notice of such a requirement �whether through company policy requiring such proof or advance notice that such proof will be required 'such a requirement can prove retaliatory in violation of AIR 21. Indeed, had Furland had prior notice that medical documentation was required to support a request for sick leave, then the contributing factor behind the decision to dock his pay might have been a failure to supply medical documentation and the results in this case might be different. However, in light of the ALJ's findings that Furland had no such prior notice, we find that the ALJ's conclusion that American Airlines failed to prove by clear and convincing evidence that it would have docked Furland's pay notwithstanding his protected activity is fully supported by the substantial evidence of record and in accordance with applicable law.

USDOL/OALJ Reporter at 9-10.

WAIVER OF ISSUE BASED ON FAILURE TO RAISE AN EXCEPTION IN THE PETITION FOR ARB REVIEW; ARB CONSIDERED ISSUE NOT TO BE WAIVED WHERE COMPLAINANT HAD BEEN OTHERWISE DILIGENT IN RAISING THE ISSUE THROUGHOUT THE LITIGATION

In Furland v. v. American Airlines, Inc. , ARB Nos. 09-102, 10-130, ALJ No. 2008-AIR-11 (ARB July 27, 2011), the Respondent argued that the Complainant waived the issue of whether his initial decision to call in sick was protected activity under AIR21 because he had not raised it in his petition, but only in his responsive pleadings. The Respondent cited 29 C.F.R. § 1979.110(a), which provides that any exception not raised in a petition for review "ordinarily shall be deemed to have been waived by the parties."

The ARB rejected this argument, stating that "[t]he plain language of the regulations provides for exceptions to the general rule. Therefore because Furland prevailed before the ALJ and has been diligent in arguing that his refusal to fly by calling in sick was protected activity throughout this litigation, including in his initial complaint, his objections to OSHA's findings, his post-hearing brief to the ALJ, and his reply brief on appeal to the Board, we do not consider Furland to have waived the issue. Moreover, the Board is not bound by an ALJ's conclusions of law but reviews them de novo." USDOL/OALJ Reporter at 8 and n.5 (citations omitted).

ATTORNEY'S FEES; FACT THAT UNION FUNDED LITIGATION DOES NOT ALTER COMPLAINANT'S ENTITLEMENT TO RECOVER FEES (WHICH WOULD BE USED TO REIMBURSE THE UNION); FACT THAT FEE AWARD WAS SUBSTANTIALLY LARGER THAN THE AMOUNT OF DAMAGES AWARDED IS NOT GROUNDS FOR REDUCTION

In Furland v. v. American Airlines, Inc. , ARB Nos. 09-102, 10-130, ALJ No. 2008-AIR-11 (ARB July 27, 2011), the ALJ found that the Respondent had violated the whistleblower provision of AIR21 when it changed the Complainant's paid sick leave to unpaid sick leave and docked his pay. The ALJ awarded $915.64 plus interest, but denied the Complainant's request to have his personnel file expunged. In a subsequent decision the ALJ awarded $38,711.25 in fees and costs. On appeal, the Respondent argued that the fees should not have been awarded because the Complainant's union funded the action; that the fee award should be cut in half because the Complainant only won on half of his claims; and that the requested fee was disproportionate to the Complainant's success in the litigation. The ARB, however, agreed with the ALJ that the Respondent was liable for the fees reasonably incurred by the Complainant in prosecuting his AIR 21 complaint regardless of whether the Complainant or the union on his behalf funded the action. The ARB noted that this did not mean that the Complainant's counsel was entitled to double payment, and that the Complainant had represented that the award would be used to reimburse the union. The ARB agreed with the ALJ that the Complainant had substantially prevailed even though the ALJ had not ordered expungement of the personnel file. The ARB also noted its rulings in past cases that it has declined to reduce attorney's fee awards solely because the amount is larger than the damages recovered.

Petition for Review dismissed without prejudice because the Petitioner failed to establish that there had been a final decision from the Administrator on a request for the addition of two positions under the DBA wage determination conformance process, as required by 29 C.F.R. § 7.9.

[STAA Digest X A 3, X B AND X E]
INVESTIGATORY SETTLEMENTS BEFORE OSHA; ALJ'S ONLY ROLE IS TO DETERMINE WHETHER PARTIES HAD AGREED AND SIGNED THE SETTLEMENT AND WHETHER OSHA APPROVED THE SETTLEMENT; ALJ DOES NOT HAVE THE AUTHORITY TO CONSIDER REPUDIATION CLAIM OR TO DETERMINE WHETHER THERE WAS COMPLIANCE

INVESTIGATORY SETTLEMENT; ALJ DOES NOT HAVE THE AUTHORITY TO ADJUDICATE WHETHER PARTY WHO WAS NOT EXPRESSLY DISCUSSED IN THE SETTLEMENT WAS COVERED BY A RELEASE OF THE EMPLOYER'S "AGENTS"

[STAA Digest II D 1]
ALJ JURISDICTION; BLACKLISTING THAT OCCURRED AFTER EFFECTIVE DATE OF SETTLEMENT AGREEMENT

In Carter v. Marten Transport, Ltd. , ARB No. 09-117, ALJ No. 2009-STA-31 (ARB July 21, 2011), the Complainant was successful in establishing that his employer (Marten) had violated the STAA whistleblower provision; Marten was ordered to reinstate the Complainant, give him back pay and compensation for emotional distress, and amend his DAC report by deleting unfavorable information and showing only continuous employment. In 2008, the Complainant filed a second STAA complaint alleging that Marten and a commercial service that maintains DAC reports (USIS) blacklisted him by retaining negative information about him in his DAC report. While the matter was before OSHA, Marten and the Complainant entered into a settlement agreement. The agreement did not mention USIS. OSHA approved the settlement, dismissed the complaint against Marten based on the settlement, and dismissed the complaint against USIS based on a finding that it had not been proved that USIS engaged in adverse employment action.

The Complainant objected to the OSHA findings, asserting that Marten had breached the settlement agreement by not paying the monies owed and not correcting his DAC report. The Complainant specified two instances after the settlement was signed in which he lost employment opportunities because of information received about him.

The ALJ found that the settlement before OSHA resolved both the first and second complaints in regard to Marten, and that the settlement included USIS because the settlement expressly dismissed claims against Marten's agents. On appeal, the ARB affirmed in part, but remanded for further proceedings.

Investigatory Settlements

First, the ARB found that, in regard to the "investigatory settlement," the "ALJ's only option was to ascertain whether there had been a settlement approved and signed under § 1978.111(d)(1) and, if so, dismiss such claims [as included in the settlement]." USDOL/OALJ Reporter at 4. The ARB wrote:

With respect to Investigative Agreements, there is no regulatory requirement or authority for the ALJ or the ARB to delve into the validity or reasonableness of a settlement agreement. The ALJ has no legal authority to entertain a repudiation claim as was done in this case. The ALJ has no legal authority to determine whether the parties complied with the terms of a settlement agreement. Once the ALJ was satisfied that the Settlement was approved and signed by the parties, he was required to end the litigation as to the claims resolved by the Agreement. The ALJ should then have moved forward in the administrative process as to the claims against any parties that did not sign the settlement agreement.

USDOL/OALJ Reporter at 5 (footnote omitted).

Finding That USIS Was Marten's Agent

The ARB vacated and remanded the ALJ's dismissal of the complaint against USIS for three reasons. First, the ALJ had not provided a sufficient explanation for the legal and factual basis for the conclusion that USIS was acting as an "agent" within the meaning of the settlement. Second, the issue of agency is of mixed fact and law, and the facts on agency needed to be undisputed to render a summary decision. Third, the ARB found that an ALJ does not have the authority to adjudicate a pure contract dispute - in this case, whether the settlement's inclusion of "agent" applied to USIS. The ARB stated that "because USIS failed to sign the Settlement and because the settlement did not mention USIS, the ALJ must proceed to address Carter's claim against USIS, absent intervention by a court of law." USDOL/OALJ Reporter at 6. On remand, the ALJ was directed to determine whether USIS is a covered respondent under the STAA.

ALJ's Jurisdiction to Consider Potential New Claims Arising After Date of Investigatory Settlement

The ARB also found that the ALJ must determine on remand whether the Complainant's objections to the Secretary's Findings of March 10, 2009 asserted new claims. The Complainant had alluded in his objections to new information provided on March 27, 2009, that Marten was still providing deceptive employment history to prospective motor carrier employers. The ARB noted that the settlement only released Marten from liability for any conduct that occurred prior to the effective date of the settlement, and that new acts occurring after the effective date of the settlement could form the basis for a new complaint. The ARB found that OSHA's had implicitly - if not explicitly - rejected the Complainant's claims of continued false reporting by Marten and USIS when it dismissed the complaints. The ARB found, therefore, that the ALJ had the jurisdiction to decide whether the Complainant had asserted new claims of discrimination that arose subsequent to the settlement.

SUMMARY DECISION; FAILURE TO GENERATE A GENUINE ISSUE OF MATERIAL FACT SHOWING PROTECTED ACTIVITY UNDER SOX

In Reamer v. Ford Motor Co. , ARB No. 09-053, ALJ No. 2009-SOX-3 (ARB July 21, 2011), the Complainant was a CPA for Ford Credit. He claimed that his discharge was for SOX protected activity related to an FBI investigation of a dealership. The Complainant had been interviewed by the FBI, and in 2006 he made a series of communications with Ford Credit and the FBI about the investigation, which the Complainant believed was politically motivated. The ALJ granted summary decision based on a finding that the Complainant had not established a genuine issue of material fact showing that he had engaged in protected activity. The ARB wrote:

   We agree with the ALJ that Reamer has failed to generate a genuine issue of material fact that he engaged in protected activity under SOX Section 806. From March through July 2006, Reamer made several communications to supervisors at Ford and to the FBI. These communications can be summarized to show that Reamer: (1) felt he was coerced to report fraud, (2) complained of receiving a threatening phone call, (3) complained of waste of government resources concerning the FBI investigation, (4) requested Ford investigate "possible illegal acts" and loss of "internal controls," (5) requested the FBI internally investigate the investigation as a political maneuver, and (6) made various complaints about the individuals and motives of those conducting the investigation.

   Throughout his 2006 communications, Reamer clearly stated that he had no evidence of fraud. In fact, that Reamer did not make a complaint about fraud and the FBI's apparent disregard of that fact, were parts of his overall grievance. Reamer felt the investigation served ulterior motives and was a waste of government resources.

USDOL/OALJ Reporter at 5. The ARB observed that in an email, the Complainant had discounted a communication of fraud, and stated that he did not want to be accused of sending anyone on a wild goose chase. The ARB found, based on the record made before the ALJ, that the Complainant had not offered evidence sufficient to generate a genuine issue of material fact that he communicated a reasonable belief of a violation of the categories of protected activity enumerated under the SOX whistleblower provision.

[Nuclear and Environmental Whistleblower Digest VIII B 4]
STATUTORY PROVISION FOR SECRETARY TO ISSUE ORDER WITHIN 90 DAYS OF RECEIPT OF COMPLAINT IS DIRECTORY AND DOES NOT ENTITLE A COMPLAINANT TO SUMMARY RELIEF BASED ON THE SECRETARY'S FAILURE TO ISSUE AN ORDER WITHIN THAT TIMEFRAME

In Minthorne v. Commonwealth of Virginia , ARB No. 09-098, ALJ Nos. 2009-CAA-4 and 6 (ARB July 19, 2011), the Complainant argued that the Secretary's failure to issue an order within 90 days requires the entry of summary decision in his favor pursuant to 42 U.S.C. § 7622(b)(2)(A). The ARB rejected this argument, holding that "[a]s the CAA imposes no particular sanction or consequence if the Secretary fails to issue a timely decision, we view the time period prescribed by 42 U.S.C.A. §§ 7622(b)(2)(A) as directory only, and thus not a basis upon which [the Complainant] is entitled to summary relief."

[Nuclear and Environmental Whistleblower Digest XIV B 2]
EMPLOYER; PERSONAL LIABILITY OF STATE OFFICIALS UNDER THE CAA WHISTLEBLOWER PROVISION

In Minthorne v. Commonwealth of Virginia , ARB No. 09-098, ALJ Nos. 2009-CAA-4 and 6 (ARB July 19, 2011), the Complainant named several state officials as Respondents in his CAA whistleblower complaints on the theory that are liable in their personal capacities because they acted under the color of state law and had statutory or executive authority to affect the terms and conditions of his employment by the Commonwealth of Virginia. The ALJ dismissed the claims against the individuals finding that they were not subject to suit under the CAA. The ARB agreed, writing that "[a]lthough the term "employer" is not defined in the CAA, it would inordinately expand the plain meaning of that term to include co-workers and supervisors who are merely agents of a governmental entity or a legally distinct business entity such as a corporation."

[Nuclear and Environmental Whistleblower Digest XIV B 2]
EMPLOYER; LACK OF JURISDICTIONAL BASIS FOR PERSONAL LIABILITY OF STATE OFFICIALS PURSUANT TO 42 U.S.C. § 1983

In Minthorne v. Commonwealth of Virginia , ARB No. 09-098, ALJ Nos. 2009-CAA-4 and 6 (ARB July 19, 2011), the Complainant contended that the ALJ could assert jurisdiction over individual state officials in regard to the Complainant's CAA whistleblower complaints pursuant to 42 U.S.C. § 1983. The ARB affirmed the ALJ's finding that his jurisdiction was limited to the CAA statute and regulations, and that he had no jurisdiction over constitutional claims against named individuals arising under 42 U.S.C. § 1983.

[Nuclear and Environmental Whistleblower Digest XX E]
STATE SOVEREIGN IMMUNITY ABROGATED UNDER THE WHISTLEBLOWER PROVISION OF THE CAA

In Minthorne v. Commonwealth of Virginia , ARB No. 09-098, ALJ Nos. 2009-CAA-4 and 6 (ARB July 19, 2011), the ALJ dismissed the Complainant's CAA whistleblower complaints on sovereign immunity grounds pursuant to the ARB decisions in Thompson v. Univ. of Georgia , ARB No. 05-031, ALJ No. 2005-CAA-1 (ARB Jan. 31, 2006) and Powers v. Tennessee Dep't of Env't & Conservation , ARB Nos. 03-061, -125; ALJ Nos. 2003-CAA-8, -16 (ARB June 30, 2005) (reissued Aug. 16, 2005). On appeal, the ARB reversed. The ARB noted that Congress may abrogate a State's sovereign immunity if it makes its intention to abrogate unmistakably clear in the language of the statute and acts pursuant to a valid exercise of its constitutional authority.

The ARB stated that in May 2006, it had issued a decision in Erickson v. U.S. EPA , ARB Nos.03-002, -003, 04-64; ALJ Nos. 1999-CAA-2, 2001-CAA-8, -13, 2002-CAA-3, -18 (ARB May 31, 2006), taking note of a USDOJ Office of Legal Counsel Opinion, rendered in September 2005, addressing the issue of sovereign immunity waiver under the CAA and other environmental whistleblower acts. In Erickson , the ARB acknowledged that OLC opinions are binding on executive branch agencies. The OLC's opinion letter had explained that the proper focus for assessing whether Congress intended to abrogate sovereign immunity is on the enforcement and remedial provisions of the statute which under the CAA are found in section 7622(b). The ARB found that under that analysis, Congress unequivocally expressed its intent to abrogate the States' sovereign immunity under the CAA. The ARB found that as an administrative agency of the Federal government, it was obliged not to pass on the constitutionality of the CAA, and must presume a valid exercise of Congressional authority to abrogate.

Appeal dismissed because the Complainant failed to file a timely appellate brief, and provided no explanation for that failure. Although the Complainant was appearing pro se and may be extended a degree of latitude in complying with the Board's procedural requirements, the Board found that even if the Complainant's petition for review was construed as a brief, that petition failed to address the specific grounds on which the ALJ's based his decision -- that neither the City of Chicago, nor Cook County fall within SOX's coverage because they do not issue securities registered under section 12 and are not required to file reports under section 15(d) of the Securities Exchange Act.

ARB DID NOT HAVE JURISDICTION TO REVIEW AN ORAL OPINION OF THE ASSISTANT DISTRICT DIRECTOR THAT WAGE AND HOUR DID NOT HAVE THE AUTHORITY TO CONSIDER THE PETITIONER'S REQUEST FOR RECONSIDERATION OF A CALCULATION OF BACK WAGES

In Donald W. Murray , ARB No. 11-043 (ARB July 14, 2011), the Petitioner had filed a complaint with the Wage and Hour Division alleging that he had been misclassified and underpaid on a contract covered by the DBA. Wage and Hour determined that there had been underpayments to the Petitioner and other workers, and the subcontractor issued checks to the effected workers for the amount calculated by Wage and Hour. Subsequently, the Petitioner wrote to Wage and Hour seeking review and modification of the back wage calculations. The Assistant District Director responded by telephone, explaining that because the case was closed, the SCA contract completed, and checks issued to workers, Wage and Hour lacked authority to pursue his claim. The Petitioner appealed to the ARB. The Acting Administrator filed a motion to dismiss stating that Wage and Hour did not consider the statements made in the telephone conversation to constitute a final ruling, noting that the Assistant District Director had only provided his opinion and had not indicated that it was a final ruling, that he had not issued a written decision with a notice of appeal rights, and that the oral statements had not been made by the Acting Administrator. The Acting Administrator stated without a final decision, the ARB lacks jurisdiction. The ARB issued an Order to Show Cause. The Petitioner informed the ARB that he had requested reconsideration and asked that the ARB stay his appeal pending the response from the Acting Administrator. The ARB construed the Petitioner's response as a concession that a final decision had not yet been issued by Wage and Hour. The ARB denied the motion for a stay and dismissed the appeal without prejudice, noting the Petitioner could file a petition for review once the Acting Administrator issued a decision, should the Petitioner find it necessary to do so.

PROTECTED ACTIVITY; REPORT OF MAIL FRAUD BY THIRD PARTY

In Funke v. Federal Express Corp. , ARB No. 09-004, ALJ No. 2007-SOX-43 (ARB July 8, 2011), the ARB considered whether the Complainant, a FedEx courier, engaged in protected activity under SOX, 18 U.S.C.A. § 1514A, when she alerted dispatchers, customer service representatives, her manager and local law enforcement that a third party was using FedEx as a conduit for suspected mail fraud. The ARB found that the statute on its face does not limit its application to reported misconduct of the employer or any other particular perpetrator. The ARB also found that DOL caselaw and regulatory precedent has recognized coverage beyond discrimination against a current employee by a current employer, such as in refusal to hire cases. The ARB found that in drafting § 1514A, Congress expanded traditional employer-employee definitions by subjecting additional entities to liability for retaliation -- not only publicly traded companies -- but "any officer, employee, contractor, subcontractor, or agent of such company." The ARB thus held that reports of third-party conduct, which an employee reasonably believes constitutes a violation of the laws listed under § 1514A, constitutes SOX-protected activity.

PROTECTED ACTIVITY; REPORT TO NON-MANAGEMENT OFFICIALS
PROTECTED ACTIVITY; REPORT TO LOCAL RATHER THAN FEDERAL OFFICIALS

In Funke v. Federal Express Corp. , ARB No. 09-004, ALJ No. 2007-SOX-43 (ARB July 8, 2011), the ARB considered whether the Complainant, a FedEx courier, engaged in protected activity under SOX, 18 U.S.C.A. § 1514A, when she alerted dispatchers, customer service representatives, her manager and local law enforcement that a third party was using FedEx as a conduit for suspected mail fraud. The ARB held that reports of third-party conduct, which an employee reasonably believes constitutes a violation of the laws listed under § 1514A, constitutes SOX-protected activity.

The Respondent argued that the Complainant's disclosures to her dispatchers were not covered by the SOX whistleblower provision because the dispatchers had no supervisory authority over her. The ARB found, however, that the SOX whistleblower provision covers employees who report misconduct not only to supervisors but also to "such other person working for the employer who has the authority to investigate, discover, or terminate misconduct." 18 U.S.C.A. � 1514A(a)(1)(C). The ARB noted that the Complainant had argued that the Respondent's written policies directed a courier who encounters suspicious activity to "notify your manager or Dispatch" and "[y]our manager or Dispatch" will notify security officials.

The Respondent also argued that that the Complainant did not satisfy the notice requirement of § 1514A because she reported the third party's suspicious activity to a county sheriff's department rather than "federal law enforcement" as required by the statute. The ARB first found that the Complainant's prior awareness of an investigation of the third party in which local officials had brought in federal authorities gave her a reasonable belief that federal officials would become involved. The ARB also found that § 1514A protects reports of covered misconduct to local or state law enforcement, as well as federal law enforcement � because the statute was unclear as to whether it covered only federal authorities and because it was common sense that Congress intended to protect disclosures to "law enforcement" given the remedial nature of the statute.

PROTECTED ACTIVITY; COMPLAINANT NEED NOT WAIT UNTIL A LAW HAS ACTUALLY BEEN BROKEN

In Funke v. Federal Express Corp. , ARB No. 09-004, ALJ No. 2007-SOX-43 (ARB July 8, 2011), the ARB found that the ALJ erred in his conclusion that the complainant must believe the reported violation is ongoing. The ARB stated that, as it explained in Sylvester v. Paraxel Int'l , ARB No. 07-123, ALJ Nos. 2007-SOX-039, -042 (ARB May 25, 2011) (en banc), "disclosures concerning violations about to be committed (or underway) are covered as long as it is reasonable to believe that a violation is likely to happen. Such a belief must be grounded in facts known to an employee, but an employee need not wait until a law has actually been broken to register a concern." USDOL/OALJ Reporter at 11 (footnotes omitted).

WAIVER OF ARGUMENT NOT BRIEFED ON APPEAL; ARB IS NOT BOUND BY LEGAL THEORIES OF PARTIES

In Funke v. Federal Express Corp. , ARB No. 09-004, ALJ No. 2007-SOX-43 (ARB July 8, 2011), the ARB found that the Complainant did not waive on appeal a claim based on reporting third party fraud where the ALJ had assumed that reporting third party fraud could not be the subject of a SOX whistleblower complaint and had ignored this aspect of the claim in his decision, and the Complainant on appeal mainly briefed the ALJ's discussion of whether the Respondent had been complicit in the fraud, and barely mentioned the original claim of reporting third party fraud. The ARB found that the record did not indicate that the Complainant waived this claim. The ARB also ruled:

Nor would her claim have been waived even if she had completely abandoned her initial allegation that reports of third-party fraud to management and law enforcement were protected. As long as an issue is adequately litigated below and part of the record, we are not necessarily bound by the legal theory of any party in determining whether a violation has occurred. Because the third-party fraud claim was alleged before OSHA, reasserted in the Pretrial Statement to the ALJ, and fully litigated, there is no possibility of unfair surprise or lack of notice to FedEx. Indeed, FedEx's brief before this Board argued the issue head on: "SOX does not protect employees who merely report the fraudulent conduct of a third party against non-shareholders." Funke's claim, that reports to management and law enforcement of third-party fraud constituted protected activity, was fully litigated. FedEx knew exactly what conduct was at issue and had a full opportunity to present a defense; consequently, we find that Funke did not waive the claim before this Board.

USDOL/OALJ Reporter at 14 (footnotes omitted).