USDOL/OALJ Reporter: ARB Decision Caselist -- December 2010

DUE PROCESS; FAILURE TO PROVIDE OPPORTUNITY FOR RESPONDENT TO PRESENT EVIDENCE AND ARGUMENT ON THEORY OF LIABILITY NEVER EXPRESSLY CLAIMED BY COMPLAINANT

In Williams v. American Airlines, Inc. , ARB No. 09-018, ALJ No. 2007-AIR-4 (ARB Dec. 29, 2010), the Complainant filed an AIR21 whistleblower complaint based on a disagreement concerning the correct wrench to use to repair a thrust reverser problem. Following a hearing, the ALJ did not find illegal retaliation in relation to the torch wrench incident, but sua sponte, found that the Respondent had retaliated against the Complainant in regard to a different incident involving whether a second inspection was required when a brake change operation took longer than normal. The Respondent argued on appeal that the ALJ violated its due process rights by inserting a new theory of liability. The ARB agreed that a due process violation had occurred.

The ARB noted that: "When issues not raised by the pleadings are reasonably within the scope of the original complaint and are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Implied consent cannot be automatically attached to every potential issue related to evidence introduced at trial." Slip op. at 17-18. The Complainant was able to point to many instances in the administrative investigation and litigation proceedings where reference had been made to the second incident; but the ARB found that the Complainant had never claimed or expressly argued that the second incident involved protected activity and was a contributing factor to the allegedly illegal retaliation. The ARB found that the Respondent had never been given notice or an opportunity to defend against the second theory of liability. The ARB, however, found that the proper remedy was to remand the case to the ALJ to take additional evidence and argument on the issue. The ARB found that the Respondent could not claim complete surprise by the ALJ's finding of illegal retaliation on the issue given the Complainant's discovery responses, that a substantial part of the Complainant's case and a motion in limine involved the second incident and associated written warnings, and that OSHA had investigated the second incident. The ARB urged the ALJ and the parties on remand to work together to ensure a full and fair hearing on the issue, and stated that after such, the ALJ was free to reconsider whether the second incident was a contributing factor to the written warnings as part of illegal retaliation.

ADVERSE EMPLOYMENT ACTION; ARB CLARIFIES IT INTERPRETATION OF WHEN WRITTEN WARNINGS CONSTITUTE ADVERSE EMPLOYMENT ACTION; FINDS THAT BURLINGTON NORTHERN STANDARD SUPPORTS CLEAR REGULATORY DEFINITION; REJECTS SIXTH CIRCUIT AUTHORITY IN MELTON V. YELLOW TRANSP. INC. REGARDING RELEVANCY OF APPEAL PROCESS ON WARNINGS; REJECTS ITS OWN DECISION IN SIMPSON V. UNITED PARCEL SERVICE ; ADOPTS "MORE THAN TRIVIAL" STANDARD

In Williams v. American Airlines, Inc. , ARB No. 09-018, ALJ No. 2007-AIR-4 (ARB Dec. 29, 2010), the Complainant, an aviation maintenance mechanic, argued with a supervisor about whether a second inspection was required after a brake change operation had taken longer than normal. The second inspection eventually was made, but management believed there was a job performance issue. The fallout from the incident escalated and the Complainant reported the incident to the FAA. While a committee considered the report, a counseling session was held with the Complainant, and a counseling record was entered into the Complainant's personnel file. This record was often the first step in the Respondent's disciplinary process. It was a permanent record and could not be grieved. Later, the record was revised to delete references to the inspection, but other negative references about the Complainant's job performance remained. The ALJ found that the report to the FAA was protected activity and the counseling report was a retaliatory adverse action.

ALJ did not err in applying Burlington Northern "Materiality" Standard to AIR21 whistleblower complaint

In finding that the personnel file constituted adverse personnel action, the ALJ relied upon ARB decisions that have embraced the "materiality" standard articulated in Burlington Northern & Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006), a case decided under Title VII of the Civil Rights Act of 1964. On appeal, the Respondent objected that the ALJ's analysis allegedly contradicted ARB precedent, and that Burlington Northern did not change the meaning of "adverse action" in ARB cases, despite the substitution of the "materially adverse" test for the "tangible job consequences" test. The ARB held that the ALJ correctly applied ARB precedent, and that the ALJ's "totality of circumstances" approach was correct and is supported by substantial evidence and sound legal reasoning.

Written warning or counseling session is presumptively adverse in certain circumstances

The ARB observed that AIR 21 prohibits "discrimination" against an employee with respect to the employee's "compensation, terms, conditions, or privileges of employment," and that the term "discriminate" is not defined in the statute, but that in implementing regulation, the Department of Labor has interpreted AIR 21's prohibition against discrimination to include efforts "to intimidate, threaten, restrain, coerce, blacklist, discharge or in any other manner discriminate against any employee" because the employee has engaged in protected activity. 29 C.F.R. § 1979.102(b). The ARB stated:

We view the list of prohibited activities in Section 1979.102(b) as quite broad and intended to include, as a matter law, reprimands (written or verbal), as well as counseling sessions by an air carrier, contractor or subcontractor, which are coupled with a reference to potential discipline. In fact, given this regulation, we believe that a written warning or counseling session is presumptively adverse where: (a) it is considered discipline by policy or practice, (b) it is routinely used as the first step in a progressive discipline policy, or (c) it implicitly or expressly references potential discipline.

Slip op. at 10-11 (footnotes omitted). In the instant case, the ARB found that the entry that had been made in the Complainant's personnel record memorialized the supervisor's recitation of the Employer's Rules of Conduct with the Complainant and "encouraged" the Complainant to correct his performance as any future performance issues or violations of the Employer's Rules of Conduct could result in corrective action up to and including termination." The ARB found that the revised record stated that performance issues or violation of the Rules of Conduct could result in corrective action. The ARB found that this "warning" clearly fell within the list of prohibited retaliatory actions under 29 C.F.R. § 1979.102(b), particularly the prohibitions against intimidation and threatening an employee for engaging in protected activity.

Availability of appeal process for written warning is irrelevant; ARB expresses disagreement with Sixth Circuit in Melton v. Yellow Transp. Inc.

The ARB stated that

   We believe it is irrelevant whether the employer's personnel policies allow its employees to appeal or formally challenge a written warning. A great number of workers are "at will" employees who have no right to appeal a suspension or termination, much less a written warning. Personnel policies are often drafted solely by the employer and hinge on the employer's unilateral assessment as to the extent of appellate procedures it can address given limited resources. Consequently, we respectfully disagree with the Sixth Circuit Court's statement that it is "counterintuitive" to declare a written warning a "materially adverse" employment action where the employee had no right to appeal it pursuant to internal employment policies. See Melton v. Yellow Transp., Inc. , 2010 WL 1565494, at *6 (6th Cir. 2010) (it seems "counterintuitive" to declare illegal an employment action that cannot be appealed internally).

Slip op. at n.52.

ARB decision in Simpson v. United Parcel Serv . Rejected as controlling precedent

The Respondent cited the ARB's decision in Simpson v. United Parcel Serv. , ARB No. 06-065, ALJ No. 2005-AIR-031, slip op. at 4 (ARB Mar. 14, 2008), to support its contention that the "warnings" memorialized in the Complainant's personnel record did not constitute adverse employment action. The ARB found that Simpson' s discussion of whether warning letters constituted adverse action was dicta, and that it relied on ARB precedent that pre-dated the Supreme Court's decision in Burlington Northern, and which arose under the STAA whose implementing regulations did not specify intimidation or threats as prohibited activity. The ARB held that because Simpson failed to address the binding AIR21 regulations, it must be rejected as controlling precedent.

Burlington Northern standard merely reinforces clear mandate of AIR21 regulations

The ARB stated that "Given the clear mandate in Section 1979.102(b), it is unnecessary in this case to turn to Title VII cases like Burlington Northern . Nevertheless, the ALJ's resort in this case to Burlington Northern's "materially adverse" test does not change the result and, if anything, lends support for the conclusion that the [written warnings memorialized in the Complainant's personnel record] constitute adverse employment action under AIR 21." Slip op. at 12 (footnote omitted). The ARB noted that it has often looked to Title VII authority in adjudicating whistleblower cases under its jurisdiction, but cautioned that the use of Title VII principles must bedone with careful and critical examination and keeping in mind the backdrop of AIR21 safety issues. Reviewing the ruling the Burlington Northern , the ARB concluded:

   Even under Burlington Northern , we believe that the supervisor's warning and threatening counseling session in this case constitutes a materially adverse action (more than trivial). Employer warnings about performance issues are manifestly more serious employment actions than the trivial actions the Court listed in Burlington Northern . Such warnings are usually the first concrete step in most progressive discipline employment policies, regardless of how the employer might characterize them. We simply doubt that the Court intended to consider a supervisor's written warning or reprimand or threatened discipline as "trivial." To the contrary, we are of the opinion that they are patently not trivial and, therefore, presumptively "material" under Burlington Northern .

Slip op. at 14.

ARB provides definition of "adverse action" as "more than trivial" to clarify confusion caused by use of terms "materially adverse" and "tangible consequences"

The ARB stated that in some previous decisions it used the terms "materially adverse" and "tangible consequence" interchangeably, that in Title VII jurisprudence the terms are not always accepted as interchangeable, and that mixing the terms in whistleblower cases may cause unnecessary confusion. Thus,

To settle any lingering confusion in AIR 21 cases, we now clarify that the term "adverse actions" refers to unfavorable employment actions that are more than trivial, either as a single event or in combination with other deliberate employer actions alleged. Unlike the Court in Burlington Northern , we do not believe that the term "discriminate" is ambiguous in the statute. While we agree that it is consistent with the whistleblower statutes to exclude from coverage isolated trivial employment actions that ordinarily cause de minimis harm or none at all to reasonable employees, an employer should never be permitted to deliberately single out an employee for unfavorable employment action as retaliation for protected whistleblower activity. The AIR 21 whistleblower statute prohibits the act of deliberate retaliation without any expressed limitation to those actions that might dissuade the reasonable employee. Ultimately, we believe our ruling implements the strong protection expressly called for by Congress.

Slip op. at 15 (footnotes omitted).

In the instant case, the ARB agreed with the ALJ's ultimate legal conclusion that the notations made in the Complainant's personnel record were materially adverse employment actions either standing alone or under the totality of the circumstances. However, the ARB found that the written warnings issue had been raised sua sponte by the ALJ after the conclusion of the hearing, resulting in lack of a fair opportunity for the Respondent to present additional evidence and legal argument on the issue, and therefore remanded for further proceeding before the ALJ.

SANCTIONS FOR WILLFUL, CONTUMACIOUS DISREGARD OF THE DISCOVERY PROCESS

TAKING OFFICIAL NOTICE OF DISCOVERY ABUSE IN PRIOR CASES IS ERROR WHERE THE FACTS WERE NOT FACTS GENERALLY KNOWN WITHIN THE TERRITORIAL JURISDICTION OF THE ALJ OR CAPABLE OF ACCURATE AND READY DETERMINATION BY RESORT TO SOURCES WHOSE ACCURACY CANNOT REASONABLY BE QUESTIONED

In Administrator, Wage and Hour Division, USDOL v. Global Horizons Manpower, Inc. , ARB No. 09-016, ALJ No. 2008-TAE-3 (ARB Dec. 21, 2010), the ESA issued an assessment of back wage liability in the amount of $142,105.47 and civil penalties in the amount of $57,500.00 against the Respondent for violations relating to temporary alien labor certification of H-2A agricultural workers in 2003 and 2004. The Respondent requested a hearing before an ALJ.

During pre-hearing discovery before an ALJ the Administrator filed a motion to compel the Respondent to respond to discovery. The ALJ granted the motion to compel. The Administrator then moved for, and the ALJ awarded, sanctions due to the Respondent's tactics thwarting the Administrator's discovery requests. The sanctions included a partial judgment on the Administrator's claims. After subsequent violations, the Administrator sought a full judgment ("terminating sanctions") as a sanction for Global's willful and flagrant abuse of pre-hearing discovery, which the ALJ granted because of the bad faith by repeatedly disobeying court orders; withholding documents from the Administrator's request; willfully failing to provide documents responsive to specific requests; obstructing the completion of a deposition; and engaging in a dump of filler and duplicate documents in the responses it did make.

On appeal, the ARB noted that entering a judgment against a non-complying party is a severe sanction that mandates close scrutiny, but affirmed the ALJ's award of full sanctions, agreeing that against Global. For the above reasons, we agree with the ALJ that the Respondent's conduct constituted willful, contumacious disregard of the discovery process.

The ARB found that the ALJ erred in taking administrative notice of alleged discovery abuse by the Respondent in other cases because the facts which the ALJ took notice of were not facts generally known within the territorial jurisdiction of the ALJ or capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. The ARB noted that "Generally, documents that are part of the public record may be judicially noticed to show, for example, that a judicial proceeding occurred or that a document was filed in another court case, but a court may not take judicial notice of findings of facts from another case to support a contention before it." Slip op. at 14 (citations omitted). The ARB, however, found that the error was harmless as the ALJ 's sanctions awards had been supported with detailed findings of violations particular to this case and independent of the Respondent's conduct in other cases.

Approval of settlement agreement.

[STAA Digest II Y]
REFILING OF CLAIM IN FEDERAL DISTRICT COURT; IMPACT OF FAILURE TO GIVE ARB 15 DAY NOTICE OR TO FILE OPENING BRIEF WITH THE ARB

In Austerman v. Behne, Inc. , ARB Nos. 10-149, 11-001, ALJ No. 2010-STA-18 (ARB Dec. 17, 2010), the ALJ issued a decision finding that the Complainant failed to establish that the Respondent had retaliated against him because of activity protected under the STAA, and the Complainant appealed to the ARB. Thereafter, the Complainant notified the ARB that he had commenced a civil action in federal court as authorized by 49 U.S.C.A. § 31105(c), for de novo review of the complaint currently pending before the Board. The Respondent filed a motion asking that the ARB dismiss the appeal for failure to prosecute as the Complainant neglected to give the Board the 15-day notice of his intent to file in district court as provided in 29 C.F.R. § 1978.114(b), and he failed to file an opening brief.

The ARB denied the Respondent's motion, stating:

   The 15-day notice gives the Board the opportunity to issue a decision in a case before it is removed from DOL jurisdiction, if the issuance is imminent, or alerts the Board that the case will soon be removed, so that it will not expend its limited resources on a case that it will not have the opportunity to decide. Neither situation applies here. Our decision was not imminent, nor did we begin the decision-making process within 15 days of Austerman's notification to us that he had filed in district court.

   Austerman has demonstrated his intention to prosecute his case, just not before the Board. Accordingly, we would be inclined to permit Austerman to file his opening brief, time having expired, rather than to dismiss his case for failure to prosecute as the Respondents argue. But if we did so, Austerman would simply give the Board the 15-day notice he should have given before initially filing in district court, and then he would re-file in district court. For all that effort, we would be in no different position than we are now. Accordingly, because forcing Austerman to comply with the 15-day notice requirement in this case would serve no useful purpose, and the Respondents have failed to demonstrate that Austerman has acted in bad faith to delay the proceedings, we GRANT his motion to withdraw his complaint so that he may proceed in district court.

Slip op. at 2-3. The ARB noted that had it been in a position to issue the decision within 15 days, the outcome might have been different. The ARB declined, however, to characterize the dismissal as "without prejudice" as requested by the Complainant, explaining:

Obviously, since the case before the district court is de novo, the dismissal is without prejudice in regard to the district court case. But if Austerman means to suggest that the complaint is dismissed without prejudice to re-file with the Department of Labor, should he be dissatisfied with the outcome of his district court case, we doubt whether such an action would comport with the intent or language of the statute. In any event, this question need not be addressed until, or if, Austerman attempts to re-file his complaint before the Department of Labor.

Slip op. at n.7.

Approval of settlement agreement.

Approval of settlement agreement.

otion for reconsideration denied where the Complainant had not argued that there were material differences in the law or fact from those presented to the ARB of which he could not have been aware through reasonable diligence; did not assert that there had been a change in the law or that new facts had arisen since the ARB's decision; and did not indicate that the ARB did not consider material facts prior to issuing that decision.

Approval of settlement agreement.

[Nuclear and Environmental Digest IX I]
TIMELINESS; BINDING JUDICIAL ADMISSION

[Nuclear and Environmental Digest VIII B 2 c]
ARGUMENT MAY BE HEARD ON APPEAL EVEN IF NOT FORCEFULLY ARGUED BEFORE THE ALJ

In Kanj v. Viejas Band of Kumeyaay Indians , ARB No. 09-065, ALJ No. 2006-WPC-1 (ARB Dec. 1, 2010), the Respondent argued for the first time, on the opening day of the evidentiary hearing, that the Complainant's retaliation claim was time barred. This was three years after the OSHA complaint had been filed, and two and a half years after the Respondent's initial answer to the complaint. The ALJ did not rule on the timeliness issue, but continued with the hearing, and directed the parties to brief the timeliness issue post-hearing. Ultimately, the ALJ ruled that the claim was time barred.

The Respondent had earlier moved for leave to file an amended answer asserting an affirmative defense that "some" of the claims were barred by the statute of limitations, with the Respondent's counsel attesting that "adding the defense of the statute of limitations will inject no new factual issues into the case" and that the Respondent "concedes that the filing of the Complaint with the Department of Labor was timely as to [the Complainant's] termination." The Complainant objected, but the ALJ granted the motion to amend. The amended answer only asserted as an affirmative defense that "some" of the claims were barred by the statute of limitations, and did not mention a statute of limitations defense as to the retaliation claim.

On appeal, the ARB found that the Respondent had made a judicial admission that conclusively resolved the issue of timeliness. The Respondent argued that the Complainant waived the right to argue on appeal that there was a binding judicial admission because the Complainant had staunchly objected at the hearing to the raising of the new defense, alleging estoppel, waiver and laches. Although the Complainant had not argued estoppel in his post-hearing brief, he raised it in a motion for reconsideration of the ALJ's decision, expressly referring to the declarations made by the Respondent's counsel. The ARB stated:

We believe that Kanj's objections during the evidentiary hearing and his arguments in his motion for reconsideration sufficiently preserved his right to argue on appeal that the Tribe should be barred from raising the limitations defense to the retaliation claim. See, e.g., Rose v. Dole, 945 F.2d 1331, 1334 (6th Cir. 1991) (argument may be heard on appeal even if not forcefully raised below). Most importantly, it would be a great miscarriage of justice to allow a party to raise a limitations defense at the evidentiary hearing after years of litigation and then foreclose the right of appeal because the opponent fumbled a response after being unfairly surprised.

Slip op. at 6 (footnote omitted). Returning to its finding that there had been a binding judicial admission, the ARB explained:

We view the Tribe's admissions that Kanj's claim was timely and that the Tribe terminated his employment on July 25, 2005, as binding factual representations and concessions that the Tribe made, upon which Kanj reasonably and in good faith relied. See, e.g., Christian Legal Soc. v. Martinez , 130 S. Ct. 2971, 3005 (2010) (a party's admissions in a joint stipulation of facts was binding on the parties); American Title Ins. Co. v. Lacelaw Corp. , 861 F.2d 224, 226 (9th Cir. 1988) ("[U]nder federal law, stipulations and admissions in the pleadings are generally binding on the parties and the Court. Not only are such admissions and stipulations binding before the trial court, but they are binding on appeal as well.") ( quoting Ferguson v. Neighborhood Housing Servs., 780 F.2d 549, 551 (6th Cir. 1986) (citations omitted)); Gospel Missions of America v. City of Los Angeles, 328 F.3d 548, 557 (9th Cir. 2003) (wherein the Ninth Circuit found that both it, as the appellate body, and the trial court, had discretion to consider a statement made in briefs to be a judicial admission). As a result, the Tribe is deemed bound by their admissions that Kanj's complaint was timely. Our finding is dispositive of this matter because it completely resolves the limitations issue as to Kanj's retaliation complaint. We have strong concerns about the unfair surprise that occurred as well, but we do not need to address that issue or the merits of the Tribe's limitation defense.

Slip op. at 7.