USDOL/OALJ Reporter: ARB Decision Caselist - November 2011

Order approving withdrawal of appeal of ALJ's attorney fee decision.

[Editor's note: When first published, the ARB No. was shown as 12-013. On December 2, 2011, however, the ARB issued an Errata correcting the Case No. to ARB No. 12-011.]

In Kaufman v. U.S. Environmental Protection Agency , ARB No. 10-018, ALJ No. 2002-CAA-22 (ARB Nov. 30, 2011), the ARB summarily affirmed the ALJ's determination that the Complainant's environmental whistleblower complaints were not timely where the complaints were not filed within 30 days after the Complainant had unambiguous notice of the adverse actions taken to change his assigned duties as an ombudsman, the minimal aberrations occuring after this action did not evidence a change in the Respondent's decision, and the Complainant did not show that he was entitled to equitable relief from the limitations period.

BACK WAGE DETERMINATION; WHD ADMINISTRATOR'S OPTION TO CONSULT ETA FOR A PWD IS DISCRETIONARY; WHD INVESTIGATOR ACTS REASONABLY IN USING OES DATA TOGETHER WITH OTHER CREDIBLE INFORMATION IN DETERMINING WAGE

In Administrator, Wage and Hour Div. v. The Lambents Group , ARB No. 10-066, ALJ No. 2008-LCA-36 (ARB Nov. 30, 2011), the Respondents were held liable for the payment of back wages and civil money penalties. Under the regulations, the Wage and Hour Division (WHD) Administrator determines whether an employer has the proper documentation to support its prevailing wage attestation, and if the documentation is nonexistent or insufficient, the Administrator may find a violation of the regulations. The regulations permit the Administrator to consult with the Employment and Training Administration (ETA) to determine the prevailing wage rate. The ARB held, however, that contrary to the Respondent's argument on appeal, the Administrator's decision to go to ETA for a prevailing wage determination is discretionary under 20 C.F.R. § 655.731(d)(1), not mandatory.

The ARB acknowledged that the regulations do not describe how the WHD investigator should determine the appropriate wage rate for purposes of calculating back wages, but found that a reasonable effort had been made in this case. In determining the wage rate, the investigator relied on OES Level II data for the geographic area where the employees worked and other information such as telephone conversations with employees, and the position descriptions. The ARB rejected the Respondent's argument on appeal that the ALJ erred in not making an independent wage determination, finding that the regulations expressly prohibit the ALJ from doing so. 20 C.F.R. § 655.840(c).

The ARB noted that the ALJ had credited the WHD investigator's testimony that the Respondent had agreed that the appropriate wage level was OES Level II, in further support of the prevailing wage determination. The ARB stated that "While we generally defer to an ALJ's credibility determination, as a general matter the prevailing wage should not be subject to agreement between an investigator and an employer, particularly when, as here, there is no written record of the agreement. Section 655.731(b)(3) sets out the various ways for documenting the prevailing wage, and it is reasonable for investigators to use such documentation to determine a prevailing wage for purposes of calculating back pay in the context of an enforcement action." USDOL/OALJ Reporter at 8, n.29.

RENUMERATION FOR BILLABLE HOURS AS 1099 INCOME IS NOT "CASH WAGES PAID" FOR PURPOSES OF H-1B BACK PAY CALCULATION

In Administrator, Wage and Hour Div. v. The Lambents Group , ARB No. 10-066, ALJ No. 2008-LCA-36 (ARB Nov. 30, 2011), the Respondent paid the employees with a combination of monthly salary plus a percentage of their billable hours which the Respondent recorded as "per diem" payments and for which the Respondent recorded the payments with the IRS as 1099 income. The ALJ concluded that the 1099 income payments should have been treated as wages, but "the fact that they were not makes them ineligible [for qualification] as cash wages paid pursuant to the prevailing regulations." USDOL/OALJ Reporter at 7 (quoting ALJ decision). The ARB agreed, writing:

"�Cash wages paid' for purposes of satisfying the H-1B required wage shall consist only of those payments that meet all the [] criteria" set forth in 20 C.F.R. § 655.731(c)(2)(i)-(iv). Payments must be shown in the employer's payroll records and disbursed to the employee, less authorized deductions. The employer must report the payments to the Internal Revenue Service as the employee's earnings, with appropriate withholdings for taxes and deductions under the Federal Insurance Contributions Act."

USDOL/OALJ Reporter at 8 (citing 33 U.S.C. § 3101, et seq; 20 C.F.R. § 655.731(c)(2)) (footnote omitted).

In Israel v. Schneider National Carriers, Inc. , ARB No. 09-115, ALJ No. 2005-STA-51 (ARB Nov. 17, 2011), the Complainant was in non-work status due to his health. The ARB found that substantial evidence supported the ALJ's determination that the Complainant's termination was based solely on the Complainant's failure to communicate with the company and refusal to return the keys to his assigned truck when requested, and that protected activity played no role in the decision to terminate the Complainant's employment.

SCOPE OF ALJ'S REVIEW AUTHORITY IN H-1B LCA CASE; PRESUMPTION THAT ADMINISTRATOR INVESTIGATED ALL CLAIMS WITHIN A COMPLAINT UNLESS THE COMPLAINANT WAS SPECIFICALLY NOTIFIED THAT A CLAIM LACKED REASONABLE CAUSE FOR INVESTIGATION

In Puri v. University of Alabama Birmingham Huntsville , ARB No. 10-004, ALJ Nos. 2008-LCA-8 and 43 (ARB Nov. 30, 2011), following prehearing development of the case the only issue remaining before the ALJ was whether the Respondent was required to pay the Complainant wages from the date that the Respondent's decision to fire him became final to the date of the end of the H-1B LCA employment period. The ALJ concluded that this claim, which encompassed the issue of a bona fide termination, had not been before the Wage and Hour Division (WHD) Administrator for investigation. Relying on the ARB decision in Watson v. Electronic Data Sys. Corp. , ARB Nos. 04-023, -029, -050 (ARB May 31, 2005), the ALJ concluded that she did not have jurisdiction to address this claim and dismissed the Complainant's request for a hearing.

On appeal,the ARB found that the ALJ erred when evaluating her jurisdiction over the claim for wages beyond the date of termination by focusing on whether the Administrator investigated the claim for such wages. The focus rather, is on whether the Administrator investigated the complaint. The ARB held that " In the absence of notice by the Administrator pursuant to 20 C.F.R. §§ 655.806(a)(2) that any particular claim contained in Puri's complaint failed to present reasonable cause for investigation, the presumption is that his entire complaint was investigated." USDOL/OALJ Reporter at 10. In making its ruling, the ARB noted that its decision in Jain v. Empower IT, Inc ., ARB No. 08-077, ALJ No. 2008-LCA-8 (ARB Oct. 30, 2009), cited Watson in holding that "the prerequisite for requesting a hearing on a claim is that the Administrator has conducted an investigation and made a determination on that claim." USDOL/OALJ Reporter at 11 (footnote omitted). The ARB held, however, that "[t]he ALJ's interpretation of the jurisdictional prerequisite is nevertheless unsustainable because its overly narrow focus on whether specific 'claims' were investigated, like the ARB's narrow focus in Jain , ignores the plain language of the H-1B regulations and is not supported by the ARB's holding in Watson ." USDOL/OALJ Reporter at 11. The ARB ruled in a footnote: "We find the Board's overly narrow focus in Jain unsustainable. Accordingly, we reject Jain as having any precedential force or effect on the question of an ALJ's jurisdictional authority to review a request for hearing filed pursuant to 20 C.F.R. § 655.820." Id. at n.49. Because the record contained no evidence that the Administrator notified the Complainant that any of his claims contained in his complaint lacked reasonable cause for investigation, it would be presumed that the Administrator investigated the entire complaint and that the ALJ had authority to address the Complainant's request for a hearing on the payment of wages up through and including the end of his H-1B LCA period.

[Nuclear and Environmental Digest XIII B 8]
REFUSAL TO HIRE; THIRD ELEMENT OF REFUSAL TO HIRE PRIMA FACIE CASE PERMITS COMPLAINANT TO SHOW EITHER THAT THE POSITION WAS FILED OR REMAINED OPEN; PRONG THREE INCLUDES AN INFERENCE OF CAUSATION ELEMENT; AN INFERENCE OF CAUSATION IS NOT RAISED MERELY BY MECHANICALLY RECITING THE ELEMENTS OF A PRIMA FACIE REFUSAL TO HIRE CASE, ALTHOUGH IT IS DIFFICULT TO DEFINE PRECISELY WHAT MORE IS NECESSARY

In Saporito v. Progress Energy Service Co. , ARB No. 11-040, ALJ No. 2011-ERA-6 (ARB Nov. 17, 2011), the Complainant filed an ERA complaint alleging that the Respondent retaliated against him when it refused to hire him for any of 15 jobs for which he applied. The ALJ granted summary decision against the Complainant on the grounds that the complaint was untimely as to 8 of the jobs, and because the Complainant had not stated a claim on which relief could be granted as to the other 7 jobs. On appeal, the ARB affirmed the ALJ's timeliness determination but remanded for further proceedings in regard to the other 7 jobs.

Initially, the ARB found that the ALJ had applied an overly restrictive standard as to the third element of a prima facie case for a refusal to hire claim. Specifically, the ALJ applied the criteria stated in Hasan v. Sargent & Lundy , ARB No. 03-030, ALJ No. 2000-ERA-7, slip op. at 3 (ARB July 30, 2004), that after a complainant's rejection, the position must have remained open and the employer continued to seek applicants from persons of complainant's qualifications. The ARB, however, noted that in a different Hasan case, the 10th Circuit Court of Appeals

ruled in an ERA "refusal to hire" case that the third prong, requiring a showing that the employer left the position open and continued to seek applicants, was "too limited." The court stated that rather than show that the position remained open, a complainant can either show that the position "was filled or remained open" and the employer continued to seek applicants with complainant's qualifications. This showing for complainants in refusal to hire cases � that a position remained open or was filled � is well settled and applies in ERA cases pursuant to Hasan , as it has applied in refusal to hire cases in other contexts.

USDOL/OALJ Reporter at 7 (footnotes omitted), quoting and summarizing Hasan v. U.S. Dep't of Labor , 298 F.3d 914, 917 (10th Cir. 2002).

The ARB then turned to what a complainant must proffer to survive a summary decision motion on the inference of causation element of a prima facie refusal to hire case. The ARB stated:

   Even if a complainant makes a showing of adverse action, he or she must still assert facts supporting the element of causation to maintain a whistleblower claim under the ERA, i.e., that "there are circumstances that raise an inference that the protected activity was the likely reason for the adverse action." In the case of a refusal to hire claim, a causation showing that satisfies prong three may be met in a situation where the fact that a vacancy stayed open raised suspicion. If an employer continues to seek applicants with the same qualifications as the complainant, an inference of improper motive could arise related to the reason the employer provided for rejecting the complainant. Yet, it is also true that an inference of causation could arise because of the manner in which the job is filled. If it is filled with a substantially less qualified individual, again, an inference of improper motive could arise. But, again, to satisfy the causation element required under ERA, the key question is whether the allegations allow for an inference of a causal link between the protected activity and the employer's refusal to hire. Making allegations that track or fail to track the exact language of the previously mentioned prima facie elements may not be the determining factor in every case.

The ARB observed that the Complainant in the instant case had "repeatedly and mechanically" recited the elements of a prima facie refusal to hire case, and concluded that they were "nothing more than cookie cutter assertions falling short of the allegations sufficient to support an inference that actions were taken partly or entirely because of protected activity." The ARB stated that being known as a whistleblower and a failed attempt to obtain a job did not necessarily create an inference of retaliation. The ARB wrote:

We do not require the "facial plausibility standards" used in the federal courts, but a bit more is needed in this particular case. It is impossible to identify exactly how much more is needed, because there are too many variables. But some examples include a good faith assertion that he was more qualified than someone who was hired, or he was ranked among the top three candidates for one of the jobs, or the employment pool for a particular job was very small, or that the urgency to find someone was very high and yet the employer rejected an available and qualified applicant, etc. This showing may also be satisfied where there is temporal proximity between proceedings associated with one of his whistleblower complaints, and when he applied for a job.

USDOL/OALJ Reporter at 8 (footnotes omitted). The ARB also noted that it was unclear from the Complainant's allegations whether the Respondent was still considering applicants or whether the Complainant had been rejected � in other words, whether the claims were ripe for litigation.

The ARB, however, remanded to permit the Complainant to amend his complaint and add information to support an inference of an ERA whistleblower claim for the 7 claims that were timely.

Order dismissing DOL complaint based on Complainant's notice of intent to file a de novo complaint in federal district court.

In Dick v. J.B. Hunt Transport, Inc. , ARB No. 10-036, ALJ No. 2009-STA-61 (ARB Nov. 16, 2011), the ARB found that substantial evidence supported the ALJ's findings of fact that were the basis for his conclusion that the Complainant had not engaged in protected activity. Specifically, the Complainant failed to demonstrate an objectively reasonable belief that making a delivery in one customer's dark parking lot involved a safety violation issue. Nor did the Complainant demonstrate that he was being instructed to falsify logbooks. Rather, substantial evidence supported the finding that the Complainant was being instructed to complete the logbooks accurately.

Complainant's motion to reconsider denied where the motion did not refer to a difference in fact or law from that previously presented to the ARB; refer to a new, material change in fact or law; or point to any failure by the ARB to consider material facts.

PROTECTED ACTIVITY; PROTECTED ACTIVITY CONCERNS WHETHER A COMPLAINANT HAS A REASONABLE BELIEF THAT THERE IS A VIOLATION WHEN HE MAKES THE COMMUNICATION, NOT WHETHER HE COMMUNICATES THAT BELIEF TO THE RESPONDENT OR WHETHER HE PUTS THE RESPONDENT ON NOTICE OF PROTECTED ACTIVITY; SUCH NOTICE, HOWEVER, MAY BE RELEVANT TO THE ISSUE OF CAUSATION

In Prioleau v. Sikorsky Aircraft Corp. , ARB No. 10-060, ALJ Nos. 2010-SOX-3 (ARB Nov. 9, 2011), the Complainant was a systems engineer who had numerous job duties, including duties relating to computers and security. The Complainant submitted an internal report to management pointing out that there was a conflict between the Respondent's legal hold policy and its records retention policy of deleting emails after a given number of days. The Complainant pointed out technical issues about complying with legal holds and suggested that subcontractors should also receive legal hold notices. Shortly after returning from scheduled leave, the Complainant was fired. The Complainant filed a SOX whistleblower complaint. Both OSHA and the ALJ summarily dismissed the complaint on the ground that the Complainant had not engaged in protected activity because his internal complaint did not mention fraud, illegal activity, or anything that could reasonably be perceived to be a violation of 18 U.S.C.A. §§ 1341, 1343, 1344 or 1348; any rule or regulation of the Securities and Exchange Commission; or any provision of federal law relating to fraud against shareholders.

On appeal, the ARB found that the ALJ should not have granted summary decision. The ARB indicated that although the Complainant did not mention fraud or violations of the SEC in his internal report, in his OSHA complaint he stated that the combination of the legal hold policy and the conflicting electronic deletion policy "made it clear that the company and its employees may commit fraud." Moreover, the Complainant's training and experience with information technology audits made it clear to him that he was dealing with a SOX internal controls issue that fell under SOX and faulty fraudulent reporting. Moreover, the Complainant stated in his complaint that after making his report to all levels of management, he believed that it would be forwarded to the Respondent's legal and IT departments, and the company that developed the Respondent's computer infrastructure.

Thus, the ARB disagreed with the ALJ's conclusion that, as a matter of law the Complainant did not engage in protected activity because he did not alert the Respondent in his report of any suspected fraud against shareholders. The ARB wrote:

    First, the ALJ erred in finding that that Prioleau's case must be dismissed because protected activity must relate to shareholder fraud. As indicated above, § 1514A prohibits an employer from retaliating against an employee who complains about "any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail fraud], 1343 [wire, radio, TV fraud], 1344 [bank fraud], or 1348 [securities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders." 18 U.S.C.A. § 1514A. As we observed in Sylvester v. Paraxel Int'l LLC , ARB No. 07-123, ALJ Nos. 2007-SOX-039, -42 (May 25, 2011), of the "six categories" set out in SOX § 1514A, "only the last one refers to fraud against shareholders." Sylvester , ARB No. 07-123, slip op. at 19. "In examining the SOX's language, it is clear that a complainant may be afforded protection for complaining about infractions that do not relate to shareholder fraud." Id. at 20.

    Second, the ALJ did not properly undertake the analysis of whether Prioleau reasonably believed that he reported a violation of the Securities and Exchange Act to Sikorsky. The issue whether activity is protected concerns whether a complainant has a reasonable belief that there is a violation when he makes the communication, not whether he communicates that belief to the respondent or whether he puts the respondent on notice of protected activity. The reasonable belief must be both subjective and objective. The Fourth Circuit has stated that the question of "objective reasonableness" is a mixed question of law and fact. Welch v. Chao, 536 F.3d 269, 278 n.4 (4th Cir. 2008). Further, "[o]ften the issue of objective reasonableness' involves factual issues and cannot be decided in the absence of an adjudicatory hearing." (citations omitted). Sylvester, ARB No. 07-123, slip op. at 15.

    Objective reasonableness is evaluated based upon the knowledge available to a reasonable person with the same training and experience. Id. at 14. Prioleau argued that someone in his position would know that what he reported constituted a violation that the SOX protected, thus demonstrating the objective reasonableness of his belief. Prioleau submitted evidence demonstrating that he received SOX training in July 2008 (Comp. Br. at 7) and was familiar with SOX provisions requiring certification of a company's financial reporting system. Comp. Br. at 7-8. He alleged that earlier in his career he had participated in an internal audit in preparation for SOX compliance. Complaint at 4. He alleged that as a former IT specialist he had helped design UTC's computer infrastructure and became knowledgeable regarding the impact of automatic scripts on SOX sections 302 and 404, relating to internal controls. Complaint at 5 n.11. These factual allegations are sufficient to create a genuine issue of material fact regarding whether Prioleau had a reasonable belief that his report constituted protected activity.

USDOL/OALJ Reporter at 7-8 (footnotes omitted). In a footnote, the ARB observed that "[a]lthough the complainant does not have to put the employer on notice of protected activity to have engaged in protected activity, whether the employer was put on notice may be relevant to whether it retaliated because the employee engaged in protected activity." Id. at n.4. One member of the ARB dissented on the ground that the Complainant's assertions did not "objectively connect the perceived problem to a 'reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.'" Id. at 15 (quoting Complainant's OSHA complaint).

Approval of withdrawal of appeal of ALJ decisions.