USDOL/OALJ Reporter: ARB Decision Caselist - October 2012

CLEAR AND CONVINCING EVIDENCE; COMPLAINANT'S LACK OF PROFESSIONAL CONDUCT; TAPE RECORDINGS AND DATA DOWNLOADS IN VIOLATION OF COMPANY POLICY

In Galinsky v. Bank of America, Corp. , ARB No. 11-057, ALJ No. 2011-SOX-10 (ARB Oct. 31, 2012), the ALJ found that the Complainant's protected activity contributed to a series of adverse actions, but that the Respondent demonstrated by clear and convincing evidence that it would have taken the same adverse action absent the protected activity. On appeal, the ARB focused on the narrow issue of whether the Respondent met its "clear and convincing evidence" burden, finding that substantial evidence supported the ALJ's finding that it had. The ALJ found that the Respondent demonstrated that the Complainant suffered from poor communication skills, rude behavior, and poor judgment (such as recording co-workers without their knowledge and downloading sensitive corporate information for his personal use in violation of corporate policy), all despite efforts by managers to assist the Complainant in improving his performance. The ARB also found that substantial evidence supported the ALJ's finding that the Complainant's job code and banding were reviewed as part of a division-wide effort not targeted at the Complainant. In regard to the Complainant's tape-recording and data download, the ARB distinguished its remand order in Vannoy v. Celanese Corp. , ARB No. 09-118, ALJ No. 2008-SOX-64 (ARB Sept. 28, 2011), in which the complainant appeared to have procured company data to facilitate his IRS whistleblower complaint, and the ALJ was directed on remand to consider whether such was protected activity under SOX. In the instant case, there was no evidence that the recordings or data download were done to facilitate a complain under the IRS or SEC Bounty program; rather most of the recordings involved the Complainant's discussions with colleagues concerning his employment status. Moreover, the Complainant had not expressly contended to the ALJ that the recordings were protected activity; and the Complainant admitted that his conduct of tape-recording co-workers and supervisors without their knowledge violated company policy.

SUMMARY DECISION ON CAUSATION; ALJ MUST ANALYZE EACH ELEMENT OF FRSA CLAIM, MUST APPLY PROPER "CONTRIBUTING CAUSE" ANALYSIS AND OTHER BURDENS OF PROOF, MUST NOT DECIDE ISSUES OF FACT, AND MUST VIEW EVIDENCE IN LIGHT MOST FAVORABLE TO NONMOVING PARTY

In Henderson v. Wheeling & Lake Erie Railway , ARB No. 11-013, ALJ No. 2010-FRS-12 (ARB Oct. 26, 2012), the ALJ granted summary decision on the ground that the Complainant had not raised a genuine issue of material fact as to whether he violated the Respondent's rules requiring prompt reporting of personal injuries. The ARB found that the ALJ made a series of errors.

1. ALJ must analyze each element of FRSA claim in order to reach causation issue

First, although the ALJ correctly cited the elements of a FRSA whistleblower case, and the Respondent had not expressly challenged the elements of protected activity and adverse action, the ALJ "needed to expressly identify the alleged protected activity and adverse action to analyze whether a genuine issue of material fact existed on the issue of causation. Without identifying the protected activity and adverse action the ALJ cannot determine if the facts and evidence in the record support the claim that protected activity was a contributing factor in the adverse action." The ARB, however, found that in this particular case, the record demonstrated that both parties acknowledged the Complainant reported or attempted to report an injury from an air bag discharge, and from a back injury. These circumstances were sufficient for the ARB, for purposes of the appeal, to assume that this was protected activity. Moreover, the ARB presumed adverse action based on the Respondent termination of the Complainant's employment.

2. ALJ erred in apparently applying "legitimate business reason" analysis rather than "contributing cause" analysis

Second, the ALJ failed to analyze whether the alleged protected activity contributed to the termination of employment. The ALJ addressed the Complainant's pretext and disparate treatment claims; but these were not elements the Complainant needed to address to survive summary decision on the issue of causation. The ALJ appeared to base summary decision solely on a finding that the Complainant had committed a dismissible offense, similar to the "legitimate business reason" burden of proof analysis not applicable to FRSA complaints. Rather, the correct analysis in FRSA cases is"contributing factor" analysis. The ARB pointed to two exhibits submitted by the Respondent which themselves raised issues of material fact on the question of causation; to evidentiary proffers by the Complainant providing substantial evidence that protected activity may have contributed to the termination; and to inferences that could be drawn from temporal proximity and the inextricable intertwining of the protected activity and the adverse action.

-- presumption that protected activity contributed to adverse action

The ARB also noted similarities between this case and its recent decision in DeFrancesco v. Union R.R. Co. , ARB No. 10-114, ALJ No. 2009-FRS-9 (ARB Feb. 29, 2012). In the instant case, if the Complainant had not reported his back injury, he would not have been investigated and ultimately fired for failing to fill out a timely injury report. And if the Complainant had not claimed that the pain was work-related, he would not have been investigated and ultimately fired for failing to exercise occupational safety in connection with the injury. The ARB stated that in these circumstances the inference of causation may be presumed automatically, but as a presumptive inference. The presumption was sufficient to defeat the Respondent's summary decision motion.

3. Affirmative defense: ALJ apparently misplaced burden on Complainant to prove pretext

The ARB noted that the ALJ's opinion suggested that she considered the Respondent's affirmative defense when deciding the motion for summary decision. The ARB stated that it was not sufficient to confirm the rational basis of the Respondent's employment policies and decisions; rather, those reasons must be "so powerful and clear that termination would have occurred apart from the protected activity."

The ALJ erred in apparently imposing the burden on the Complainant of proving that he was not fired for the reason offered by the Respondent. Since the Complainant had established causation sufficient to withstand summary decision, the burden shifted to the Respondent to establish its affirmative defense by clear and convincing evidence. The ARB wrote: "Even where a respondent asserts legitimate, non-discriminatory reasons as part of its affirmative defense, a complainant can create a genuine issue of fact by pointing to specific facts or evidence that, if believed, could discredit the respondent's reasons, making them less convincing on summary decision."

4. ALJ improperly decided questions of fact at summary decision stage, and failed to view evidence in the light most favorable to the Complainant

The ARB found that the ALJ improperly decided questions of fact at the summary decision stage, and failed to view evidence in the light most favorable to the Complainant. The ARB also found that the ALJ should have taken into consideration certain undisputed facts that have been used successfully in other whistleblower cases to establish circumstantial evidence of discriminatory motive, such as evidence that the Complainant had been considered a good worker, and such as selective enforcement.

TIMELINESS OF COMPLAINT; NO EQUITABLE TOLLING UNDER THE FACTS OF THE CASE BASED ON ALLEGED MISHANDLING OF CASE BY FORMER ATTORNEY OR ALLEGED MANIPULATION BY RESPONDENT'S COUNSEL DURING SETTLEMENT NEGOTIATIONS

In DeFazio v. Sheraton Steamboat Resorts & Villas , ARB No. 11-063, ALJ No. 2011-SOX-35 (ARB Oct. 23, 2012), the ARB affirmed the ALJ's dismissal of the Complainant's SOX complaint as untimely and as not entitled to equitable relief from the limitations period. The Complainant argued that his former attorney mishandled the case, and that the attorney representing the Respondent manipulated the Complainant's rights by proposing to provide a response to the Complainant's counsel's demand letter by the same date that the SOX limitations period would end. The ARB found that the record supported the ALJ's finding, however, that there had been no active misleading of the Complainant by the Respondent or its counsel during settlement negotiations with regard to the filing of the SOX complaint.

OFCCP COMPLIANCE REVIEW OF HOSPITAL PROVIDING SERVICES TO TRICARE PATIENTS IS BARRED BY SECTION 715 OF THE NATIONAL DEFENSE AUTHORIZATION ACT OF 2012

In OFCCP v. Florida Hospital of Orlando , ARB No. 11-011, ALJ No. 2009-OFC-2 (ARB Oct. 19, 2012) (en banc), the ARB held en banc that OFCCP did not have authority to engage in a compliance review of Florida Hospital under E.O. 11246, Section 503 of the Rehabilitation Act and Section 402 of the Vietnam Era Veterans Readjustment Assistance Act, because Section 715 of the National Defense Authorization Act (NDAA) for Fiscal Year 2012 precludes such a review.

TRICARE is the Defense Department's world-wide health care program for active-duty and retired military and their families. TRICARE contracts for managed care support. Humana Military Healthcare Services (HMHS) contracted with TRICARE to provide networks of healthcare providers to TRICARE patients. The Respondent, Florida Hospital, is a not for profit hospital that entered into a sub-agreement to be a HMHS participating hospital and part of the network of providers that HMHS agreed to make available to TRICARE under the prime contract.

In 2008, OFCCP informed Florida Hospital that it had been selected for a compliance review. OFCCP later filed an administrative complaint with DOL's Office of Administrative Law Judges when Florida Hospital refused to comply with OFCCP's request for a compliance review. Florida Hospital argued that it did not qualify as a federal contractor or subcontractor and that OFCCP lacked jurisdiction. The ALJ granted summary decision in favor of OFCCP.

While the matter was pending on appeal before the ARB, President Obama signed the NDAA into law on December 11, 2011. Section 715 of the NDAA, entitled "Maintenance Of The Adequacy Of Provider Networks Under The Tricare Program" amended 10 U.S.C.A. 1097b to provide that "For the purpose of determining whether network providers under [TRICARE] provider network agreements are subcontractors for purposes of the Federal Acquisition Regulations or any other law, a TRICARE managed care support contract that includes the requirement to establish, manage, or maintain a network of providers may not be considered to be a contract for the performance of health care services or supplies on the basis of such requirement."

In December 2010, OFCCP had issued Policy Directive 293 on "Coverage of Heath Care Providers and Insurers," addressing inter alia coverage questions pertaining to TRICARE, and concluding that OFCCP jurisdiction is driven by the existence of a federal contractor or subcontractor relationship, giving as an example as a covered relationship Florida Hospital's healthcare services to TRICARE beneficiaries. Four months after enactment of Section 715 of NDAA, OFCCP rescinded Policy Directive 293.

The ARB ordered additional briefing on the impact of Section 715 on the Florida Hospital appeal pending before it.

The ARB first determined that Section 715 applies to the pending appeal because its application imposed no retroactive effect. The ARB found that Section 715 "appears to remove from the definition of 'subcontract' for purposes of [41] C.F.R. Part 60 (as it relates specifically to this case), the subcontract/sub-agreement between HMHS and Florida Hospital establishing Florida Hospital as a medical network provider for TRICARE beneficiaries pursuant to the prime contract between TRICARE and HMHS." USDOL/OALJ Reporter at 18. The ARB found no significance to OFCCP's argument that Section 715 had retroactive effect because it impaired its right to take a compliance review of Florida Hospital. Thus, the ARB determined that Section 715 applies to the appeal before it.

The basis for OFCCP's jurisdiction in the matter was grounded in the regulations at 41 C.F.R. Chap. 60, which permit compliance reviews of Federal contractors and subcontractors. The focus thus was on the regulatory definition of a "subcontract" at 41 C.F.R. § 60.1.3. That regulation defines "subcontract" as "any agreement or arrangement between a contractor and any person (in which the parties do not stand in the relationship of an employer and an employee: (1) For the purchase, sale or use of personal property or nonpersonal services which, in whole or in part, is necessary to the performance of any one or more contracts; or (2) Under which any portion of the contractor's obligations under any one or more contracts is performed or undertaken or assumed."

Although OFCCP conceded that Section 715 removed the basis for its jurisdiction under the second prong of the regulatory definition of subcontract, it argued that Section 715 did not remove jurisdiction under the first prong because Florida Hospital's services as a participant in the network were "necessary to the performance" of the prime contract. The ARB rejected this argument finding that under the particular contract at issue, Section 715 would apply and preclude OFCCP jurisdiction.

Three members of the Board concurred in part and dissented in part.

TIMELINESS OF PETITION FOR ARB REVIEW; ARB CLOSES CASE AFTER RESPONDENT FAILED TO FILE PETITION EVEN AFTER BEING GRANTED TWO ENLARGEMENTS OF TIME TO DO SO

In Administrator, Wage and Hour Div., USDOL v. Abacuss Software Technologies, LLC , ARB No. 12-104, ALJ No. 2012-LCA-15 (ARB Oct. 18, 2012), no party filed a timely petition for review of the ALJ's Decision and Order awarding back pay and interest under the H-1B non-immigrant worker provisions of the INA. The Respondent, however, was subsequently granted an enlargement of time to file a petition for review by the ARB. The Respondent did not file a petition for review within the enlarged time but instead requested an additional three-month enlargement of time. The Administrator opposed the request, noting inter alia, that filing a petition for review only requires a statement of the issues and the reason or reasons that the petitioner believes the ALJ incorrectly decided the case. The ARB denied the request for a three month enlargement of time, but gave the Respondent an opportunity to file the petition within a lesser amount of time (the decision does not state how long). The Respondent again did not file the petition within the enlarged period of time, and again requested additional time for the same reasons previously given. The ARB denied the motion and closed the case before the ARB, noting that the ALJ's decision had become the Secretary's final decision and order in the case.

[STAA Digest II P]
SUMMARY DECISION; WHERE COMPLAINANT FAILED TO ESTABLISH ANY LINK BETWEEN HIS PROTECTED ACTIVITY AND HIS DISCHARGE FOR FALSIFICATION OF DRIVING LOGS, THE ALJ PROPERLY GRANTED SUMMARY DECISION

In Abbs v. Con-Way Freight, Inc. , ARB No. 12-016, ALJ No. 2007-STA-37 (ARB Oct. 17, 2012), the ARB affirmed the ALJ's dismissal of the STAA whistleblower complaint on summary decision for failure to establish a causal link between the Complainant's discharge and any STAA-protected activity. The ARB found that the ALJ should have applied the "contributing cause" standard of the 2007 amendments to the STAA to the case, which arose in 2005, but that even under that standard the complaint failed because the Complainant failed to establish any causal link between his protected activity and his discharge for falsification of his log book and payroll record. The record showed that the Complainant had admitted the falsification and that it was undisputed that the Complainant's supervisor had told him that he was free to take safety breaks when he needed them. Moreover, the Respondent presented a chart as an appendix to its motion for summary decision showing that of 41 employees who had been discharged between 2000 and May 2011, 14 of the discharges had been for falsifying driving logs.

[STAA Digest IV A 2 b ii]
TEMPORAL PROXIMITY; INFERENCE OF CAUSATION BROKEN BY INTERVENING EVENT OF FALSIFICATION OF RECORDS

In Abbs v. Con-Way Freight, Inc. , ARB No. 12-016, ALJ No. 2007-STA-37 (ARB Oct. 17, 2012), the ARB affirmed the ALJ's finding that any inference of causation based on temporal proximity between the Complainant's protected activity and the adverse action had been broken where (1) there was an intervening event sufficient to independently cause the discharge (admitted falsification of driving logs and payroll records), and (2) it was undisputed that the Complainant's supervisor had told the Complainant that he was free to take safety breaks when he needed them.

Denial of reconsideration and motion to recuse.

DISMISSAL OF APPEAL BASED ON PERSISTENT AND CONTUMACIOUS REFUSAL TO COMPLY WITH ARB'S BRIEFING ORDER

In Bidwai v. Board of Education of Prince George's County , ARB No. 12-072, ALJ No. 2011-LCA-29 (ARB Oct. 11, 2012), the ARB dismissed the pro se Prosecuting Party's appeal based on the Prosecuting Party's persistent and contumacious refusal to comply with the Board's briefing order despite the ARB's explicit warning of the consequences of his failure to comply.