Sarbanes-Oxley Act (SOX)
Whistleblower Digest
PROCEDURE BEFORE THE ADMINISTRATIVE REVIEW BOARD ("ARB")
[Last Updated Dec. 16, 2014]

Table of Contents

Authority

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ADMINISTRATIVE REVIEW BOARD DECISIONS

ARB'S REVIEW AUTHORITY DOES NOT INCLUDE JURISDICTION TO RULE ON VALIDITY OF DULY PROMULGATED REGULATION

In Gonzales v. J.C. Penney Corp., Inc. , ARB No. 10-148, ALJ No. 2010-SOX-45 (ARB Sept. 28, 2012), the Complainant and the Respondent entitled into a settlement of the Complainant's SOX complaint, which had been approved by OSHA. The Complainant sought a hearing before an ALJ seeking to rescind the agreement. The ALJ granted summary decision in favor of the Respondents. On appeal, the Complainant argued that the Dodd-Frank Act precludes settlement of SOX complaints on the theory that such settlements would constitute a waiver of rights under the Act. The ARB noted that the SOX regulations as amended following the Dodd-Frank amendments to the SOX still expressly provide for settlement of SOX cases. Thus, the ARB declined to rule on the Complainant's argument because the delegation of authority to the ARB expressly provides that the ARB does not have jurisdiction to pass on the validity of duly promulgated regulations.

MOTION FOR ORDER REQUIRING POSTING OF SUPERSEDEAS BOND; ARB DOES NOT HAVE THE AUTHORITY TO GRANT SUCH A REMEDY

In Kalkunte v. DVI Financial Services, Inc. , ARB No. 05-139, ALJ No. 2004-SOX-56 (ARB Aug. 26, 2005), the ARB denied the Complainant's motion requesting that the Board issue an order requiring the Respondent to post a supersedeas bond, the Board finding that nothing in the delegation of authority to the Board from the Secretary nor in the SOX provided the Board with the authority to grant the requested relief. The Complainant had received a favorable ruling from the ALJ, but feared that because the Respondent was engaged in bankruptcy proceedings and was actively liquidating its assets, it would be unlikely to have any assets remaining by the time the Board issued its decision.

SUBPOENAS; REQUEST FOR SUBPOENAS WHILE CASE PENDING BEFORE THE ARB

In Reid v. Constellation Energy Group, Inc. , ARB No. 04-107, ALJ No. 2004-ERA-8 (ARB Oct. 13, 2004), Halpern v. XL Capital, Ltd. , ARB No. 04-120, ALJ No. 2004-SOX-54 (ARB Oct. 13, 2004) and Cummings v. USA Truck, Inc. , ARB No. 04-043, ALJ No. 2003-STA-47 (ARB Sept. 15, 2004), the ARB denied the requests of pro se complainants to obtain subpoenas from the ARB. The Board observed in each case that the Board acts in an appellate capacity and its decision is based only on evidence considered by the ALJ in the initial hearing.

Briefing

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ADMINISTRATIVE REVIEW BOARD DECISIONS

DISMISSAL FOR FAILURE TO FILE TIMELY OPENING BRIEF WITH ARB; ARB DOES NOT ACCEPT FILINGS BY EMAIL OTHER THAN THE PETITION FOR REVIEW; WARNING THAT PREFILING RESTRICTIONS MAY BE IMPOSED ON COMPLAINANT WHO FILES DUPLICATIVE COMPLAINTS

In Pittman v. Dell, Inc. , ARB No. 12-065, ALJ No. 2012-SOX-6 (ARB Aug. 16, 2012), the ARB dismissed the Complainant's appeal where he failed to file a brief in compliance with the ARB's briefing order, even after the ARB gave him an enlargement of time to do so. The ARB noted that it had rejected the Complainant's motion to stay appeal because it had been filed by email despite the ARB having specifically informed the Complainant that it would not accept documents other than the Petition for Review by email. The ARB did not stay the appeal, but did give the Complainant one more opportunity to file his opening brief. The Complainant, however, did not file the brief as ordered. In a footnote, the ARB noted the ALJ's observation that the Complainant had filed duplicative complaints and suggestion that the ARB impose prefiling restrictions on the Complainant similar to those imposed on a different complainant. The ARB wrote: "We suggest that Pittman keep this request in mind if he files additional complaints of a 'duplicative' nature with the Department of Labor." USDOL/OALJ Reporter at 3, n.5.

FAILURE TO COMPLY WITH ARB ORDER TO SHOW CAUSE REQUIREMENT THAT RESPONSE BE RECEIVED BY A DATE CERTAIN

In Castillo v. Bayside Engineering, Inc. , ARB No. 11-046, ALJ No. 2010-NTS-2 (ARB Sept. 6, 2011), the Complainant filed a motion to reconsider the ARB's July 28, 2011 dismissal of his appeal for failure to file a timely appellate brief and failure to proffer an explanation in response to the ARB's order to show cause. The ARB noted that the Complainant had not claimed its briefing order, which had been sent certified mail, return receipt requested. The Complainant argued that he had sent his response to the order to show cause by certified mail on July 15, 2011. The Respondent opposed the motion to reconsider on the ground that the ARB's order to show cause required the Complainant's response to be received by the ARB by July 19, 2011. The Complainant responded the Respondent's response arguing for the first time that he did not timely receive the ARB's briefing order and had so notified the ARB. The ARB ruled that the Complainant did not establish grounds for reconsideration of the dismissal, because even accepting as fact that the response had been mailed on July 15, 2011, the order to show cause required receipt of the response by July 19, 2011. The ARB noted that the Complainant did not exercise due diligence as he had not contacted the ARB to verify timely receipt. The ARB also found that even if timely, the response failed to explain why the Complainant did not timely file his opening appellate brief. The ARB also noted that the Complainant had not explained why he did not claim the ARB's briefing order. Finally, given the Complainant's pro se status, the ARB reviewed the Complainant's untimely brief to determine whether affirmance of the ALJ 's decision would result in a miscarriage of justice. but found that it identified no error of fact or law that would have compelled the ARB to reverse the ALJ's determinations that the Complainant did not timely file his complaint and did not demonstrate grounds for equitable tolling of the limitations period.

PETITION FOR ARB REVIEW; SPECIFICITY REQUIREMENT

A blanket objection to of all of the ALJ's findings and conclusions does not satisfy the specificity requirement of 29 C.F.R. § 1980.110(a) for a petition for ARB review. Brookman v. Levi Strauss & Co. , ARB No. 07-074, ALJ No. 2006-SOX-36 (ALJ July 23, 2008).

WAIVER OF FINALITY ARGUMENT; SECOND ALJ DECISION THAT WAS NOT APPEALED

In Wallum v. Bell Helicopter Textron, Inc. , ARB No. 09-081, ALJ No. 2009-AIR-6 (ARB Sept. 2, 2011), the ALJ had granted summary decision on the ground that the Respondent was not a covered employer under the AIR21 whistleblower provision. This complaint was based on the Complainant's suspension. The Complainant appealed. The Complainant filed a second complaint when he was terminated. The second complaint was adjudicated by the same ALJ, who again granted summary decision on the coverage issue. The Complainant did not appeal this second ALJ decision, and the ALJ's decision became the Secretary's final decision pursuant to 29 C.F.R. § 1979.110. The ARB stated in a footnote to a remand decision on the appeal of the first ALJ decision: "Regardless whether the finality of this second decision would have had any effect on our adjudication of the coverage issue presented in this appeal, Bell Helicopter has waived its opportunity to so argue both before the Board and the ALJ on remand (even if it had been inclined to do so) by its failure to raise the argument before the Board in this appeal." Slip op. at 2, n.3 (citation 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).

BRIEFING OF ISSUES BEFORE THE ARB; PRO SE STATUS OF COMPLAINANT DOES NOT NEGATE RESPONSIBILITY TO PROVIDE LEGAL ARGUMENT WITH SUPPORTING AUTHORITY; MERE GENERAL ASSERTION OF ERROR BY ALJ IS A WAIVER OF THE ISSUE ON APPEAL

In Nixon v. Stewart & Stevenson Services, Inc. , ARB No. 05-066, ALJ No. 2005-SOX-1 (ARB Sept. 28, 2007), the Complainant was the environmental manager for a federal defense contractor. He asserted that he engaged in protected activity when he reported information to officers that showed violations of environmental laws, which he reasonably believed would result in legal proceedings and financial penalties, which, in turn, would invoke reporting requirements mandated by the SEC. On appeal, the Complainant only made a general assertion that the ALJ's finding in this respect was in error, and did not make any supporting argument. Citing authority to effect that even pro se litigants must provide some legal argument with supporting authority, the ARB found the issue waived on appeal.

BRIEFS; LEAVE TO FILE SURREPLY

In Beck v. Citigroup, Inc. , ARB 06-140, ALJ No. 2006-SOX-3 (ARB May 23, 2007), the ARB stated that it is guided by the Federal Rules of Appellate Procedure, Rule 28, in determining whether to permit the filing of a surreply. The ARB stated that a surreply may be filed to address new matters raised in a reply to which a party would otherwise be unable to respond, and that case law that is substantially new and decided after the respondent had filed its brief may provide grounds for a surreply brief. In the instant case, however, the ARB did not find that grounds had been demonstrated for leave to file a surreply (disparagement of the Respondent's law firm and citation of a new (and irrelevant) ARB decision).

DISMISSAL FOR CAUSE; FAILURE TO FILE APPELLATE BRIEF

In Stevenson v. Neighborhood House Charter School, ARB No. 05-156, ALJ No. 2005-SOX-87 (ARB Nov. 29, 2005), the Complainant filed a petition for review of the ALJ's decision granting summary decision in favor of the Respondent on the ground that it was not an employer covered under the whistleblower provision of SOX. The ARB issued a briefing schedule warning that failure to file a timely initial brief may result in dismissal of the appeal. The Complainant failed to file an opening brief. After the conclusion of the briefing schedule she filed a request for an extension of time, but failed to provide a persuasive explanation for why she had not filed a timely brief or a timely motion for an extension of time. Accordingly the ARB dismissed the appeal.

DISMISSAL FOR CAUSE; FAILURE TO FILE APPELLATE BRIEF WITH THE ARB

In Cunningham v. Washington Gas Light Co. , ARB No. 04-078, ALJ No. 2004-SOX-14 (ARB Apr. 21, 2005), the ARB dismissed the Complainant's appeal where he failed to file a brief and failed to file a response to the Board's subsequent show cause order. The show cause order had given the Complainant the option of treating his petition for review as the brief, provided that it was served on the opposing party.

ARB BRIEFING REQUIREMENTS; REFERENCE TO FRAP TO EXCUSE UNTIMELY FILING OF AMICUS BRIEF

In Welch v. Cardinal Bankshares Corp. , ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 19, 2005), the ARB referenced the FRAP 29(e) to determine that two petitioners' motions for leave to file amicus briefs were untimely, but nonetheless accepted the briefs for filing "for good cause shown."

TIMELINESS OF APPELLATE BRIEF

Where Complainant failed to file a timely brief or motion for enlargement of the briefing schedule based on good cause, the ARB dismissed the complaint based on failure to prosecute. The Board observed that although the Complainant was not personally responsible for the failure of his attorney to make a timely filing, he was accountable for the acts and omissions of his attorney. Steffenhagen v. Securitas Sverige, AR , ARB No. 03-139, ALJ No. 2003-SOX-24 (ARB Jan. 13, 2004).

To the same effect Gass v. Lockheed Martin Energy Systems, Inc. , ARB No. 03-093, ALJ No. 2000-CAA-22 (ARB Jan. 29, 2004); Melendez v. Exxon Chemical Americas , ARB No. 03-153, ALJ No. 1993-ERA-6 (ARB Mar. 30, 2004).

Consolidation of Appeals

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ADMINISTRATIVE REVIEW BOARD DECISIONS

CONSOLIDATION OF APPEALS ON REVIEW BEFORE ARB; COMMON LEGAL ISSUES AND EVIDENCE

In Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the ARB consolidated two appeals of the same Complainant against the same Respondent in view of the substantial identity of the legal issues and the commonality of much of the evidence, and in the interest of judicial and administrative economy.

Declination of Review

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ADMINISTRATIVE REVIEW BOARD DECISIONS

POSSIBILITY THAT ERRONEOUS FINDING BY ALJ AS TO WHETHER CERTAIN ACTIVITY WAS PROTECTED UNDER SOX MAY HAVE LED TO OTHER ERRONEOUS FINDINGS BY THE ALJ WAS NOT CONSIDERED BY THE ARB ON APPEAL WHERE RELIEF AWARDED TO COMPLAINANT ALREADY SUFFICIENT TO MAKE HER WHOLE

In Gunther v. Deltek, Inc. , ARB Nos. 13-068, -069, ALJ No. 2010-SOX-49 (ARB Nov. 26, 2014), the ARB noted that the ALJ had erred in finding that concerns raised by the Complainant with management could not be protected activity because management was aware of the problems. See Inman v. Fannie Mae , ARB No. 08-060, ALJ No. 2007-SOX-47, slip op. at 7 (ARB June 28, 2011). The Complainant contended on appeal that this error may have led to other errors concerning adverse action and dismissal of certain named individuals. The ARB, however, found it unnecessary to address these matters as the relief awarded to the Complainant made her whole.

PETITION FOR REVIEW; DECLINATION OF REVIEW BY ARB; ALJ'S DECISION BECOMES FINAL DECISION OF THE SECRETARY

In Walker v. Aramark Corp. , ARB No. 04-006, ALJ No. 2003-SOX-22 (ARB Nov. 13, 2003), Complainant timely filed a petition for review of the ALJ's Decision and Order with the ARB. Noting that pursuant to 29 C.F.R. § 1980.110(b) the ALJ's decision becomes the final decision of the Secretary unless the ARB issues an order accepting the case for review, and that the ARB had not issued such an order, the ARB issued an order closing the case.

Interlocutory Appeals

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ADMINISTRATIVE REVIEW BOARD DECISIONS

APPEALS DISMISSED AS INTERLOCUTORY WHERE ALJ HAD NOT YET ISSUED SUPPLEMENTAL DECISION ON DAMAGES

In Gunther v. Deltek, Inc. , ARB Nos. 12-097, -099, ALJ No. 2010-SOX-49 (ARB Sept. 11, 2012), the ALJ included a notice of appeal rights in her decision on the merits, but had clearly indicated that damages would be addressed in a supplemental order. The Complainants filed appeals with the ARB, and the ARB issued an order to show cause why the appeals should not be dismissed because there were no grounds for an interlocutory appeal. Neither party responded to the order to show cause. The ARB found that the ALJ had not yet fully disposed of the complaint before her, found that the Complainants' petitions for review were interlocutory, and dismissed the interlocutory appeals.

ARB DECLINES INTERLOCUTORY REVIEW OF ALJ'S DENIAL OF PRELIMINARY REINSTATEMENT DURING REMAND

In Prioleau v. Sikorsky Aircraft Corp. , ARB No. 12-098, ALJ No. 2010-SOX-3 (ARB Aug. 30, 2012), the ARB declined to grant interlocutory review of the ALJ's denial of the Complainant's motion for preliminary reinstatement during a remand proceeding. The ARB found that the appeal was neither a proper interlocutory appeal nor an appeal of a collateral order, and that the request for reinstatement was premature based on a misunderstanding of the ARB's remand order in which the ARB had found that the Complainant had proffered sufficient evidence to generate a genuine issue of material fact that he engaged in protected activity.

INTERLOCUTORY REVIEW ON WAIVER OF PRIVILEGES ISSUE DENIED WHERE ALJ DECLINED TO CERTIFY ISSUE AND PROTECTIVE PROCEDURES ARE AVAILABLE

In Johnson v. U.S. Bancorp , ARB No. 11-018, ALJ No. 2010-SOX-37 (ARB Mar. 14, 2011), the Respondent had hired an attorney to independently investigate the Complainant's allegations of fraudulent activities under the SOX. The attorney determined that the Complainant's allegations were not supported and instead that the Complainant committed ethics violations. As a result of the investigation, the Complainant was fired. The Complainant filed a SOX complaint. During discovery, the Complainant sought information that the Respondent claimed was protected from disclosure pursuant to both attorney-client privilege and work product privilege. The ALJ found that the attorney hired by the Respondent had been both an attorney and investigator, and consequently there had been a waiver of the attorney-client privilege. The ALJ found a waiver of the work-product privilege when the Respondent placed its investigation at issue by asserting it as an affirmative defense. The ALJ ordered in camera inspection of the documents for which privilege was claimed, and the joint drafting of protective orders where there was a legitimate need to protect the identity of third-party customers or employees. The Respondent filed a motion requesting that the ALJ certify to the ARB for interlocutory review under 28 U.S.C. 1292(b) the issue of whether there had been a waiver of the attorney-client privilege . The ALJ did not find sufficient ground to certify or to stay the proceeding pending an interlocutory appeal. The Respondent then filed a direct petition for interlocutory review with the ARB. The ARB decided the petition based on the lack of certification by the ALJ and the availability of protective, in camera, and other orders to preserve any potentially privileged material or evidence, citing Mohawk Indus. Inc. v. Carpentier , 558 U.S. __, 130 S.Ct. 599, 608 (2009).

ASSISTANT SECRETARY FOR OSHA'S PETITION TO INTERVENE FOR PURPOSE OF SEEKING INTERLOCUTORY REVIEW BY THE ARB OF AN ALJ'S ORDER IS PROPERLY FILED WITH THE ALJ RATHER THAN THE ARB

SUBPOENA; CERTIFICATION OF FACTS TO DISTRICT COURT; QUESTION OF AUTHORITY OF ARB TO REVIEW ALJ'S CERTIFICATION ORDER MOOTED BY DISTRICT COURT'S REFUSAL TO FILE ALJ'S ORDER

In Davis v. The Home Depot, Inc. , ARB No. 08-114, ALJ No. 2006-SOX-17 (ARB Sept. 29, 2008), the ALJ issued a subpoena to compel a former Home Depot employee to testify at a SOX hearing. The former employee failed to appear. The ALJ then certified the facts to the District Court for the District of Columbia pursuant to 29 C.F.R. § 18.29(b)(2008), and requested the court to compel the former employee's attendance and testimony before the ALJ. The Assistant Secretary for OSHA then filed with the ARB a motion to intervene, and a petition for review of the ALJ's order certifying facts to the U.S. district court. In the meantime, the Chief Judge of the district court wrote to the ALJ refusing to accept her order, and questioning her authority to file the order within the participation of the U.S. Attorney's office or the Department of Justice. The ALJ replied that she believed that the Chief Judge's interpretation was incorrect, but because the Assistant Secretary was seeking interlocutory review of the order before the ARB, she would await the ARB's decision and then consider whether to resubmit the order to the district court. The ARB, not knowing about the exchange of letters between the Chief Judge and the ALJ, issued an order permitting the parties to brief the question of whether the Assistant Secretary should be permitted to intervene. The ALJ then issued an order granting the Assistant Secretary's petition to intervene, finding that such a motion should have been filed before her since the only proceedings in the case were pending before her.

The ARB suggested that the proper procedure would have been for it to decide where the Assistant Secretary's petition to intervene should have been filed, but since it agreed with the conclusion that it should have been filed before the ALJ, found no useful purpose to remand to the ALJ. The ARB dismissed the Assistant Secretary's petition for review (assuming that it would even have been proper for the ARB to review the ALJ's certification order), finding that the Chief Judge's refusal to file the ALJ's certification order and the ALJ's decision not to refile it, left no justiciable issue to decide.

INTERLOCUTORY APPEAL; ATTORNEY-CLIENT PRIVILEGE CLAIM

In Jordan v. Sprint Nextel Corp. , ARB No. 06-105, ALJ No. 2006-SOX-41 (ARB June 19, 2008), the ALJ certified for interlocutory review the question of whether the Complainant could rely on statements and documents subject to the attorney-client privilege to prosecute his case. The Respondent had filed a motion to dismiss based on the Board's decision in Willy v. The Coastal Corp. , ARB No. ARB No. 98-060, ALJ No. 1985-CAA-001 (ARB Feb. 27, 2004). That decision, however, had been called into question because the Fifth Circuit had reversed the ARB decision on privileged information in Willy v. Admin. Review Bd. , 423 F.3d 483 (5th Cir. 2005). The ALJ found the Fifth Circuit's decision to be persuasive, but found it appropriate to certify the issue under the collateral appeal exception to the general rule disfavoring interlocutory review. The ARB, although disagreeing with some of the ALJ's analysis, agreed that the collateral appeal criterion for an interlocutory appeal had been meet because of the institutional benefits of allowing interlocutory review of attorney-client privilege claims. The ARB also concurred "in the ALJ's conclusion that once Jordan is allowed to rely on the communications, the issue whether they are subject to the privilege is effectively unreviewable because Sprint will suffer irreparable injury by the publication of the communications regardless whether the Board ultimately reverses the ALJ's decision permitting Jordan to rely on the communications." USDOL/OALJ Reporter at 6 (footnote omitted). The ARB recognized that that a party might be able to obtain relief from an ALJ's discovery order in federal district court, but that found that "given the administrative nature of the proceedings before the Labor Department in whistleblower cases, we believe that it is more appropriate for the Board to consider and dispose of these limited attorney-client discovery issues in the first instance, rather than forcing the parties into district court." Id. at 7. The ARB therefore accepted the petition for interlocutory review and set a briefing schedule for the parties.

INTERLOCUTORY APPEALS DISFAVORED

In Walton v. Nova Information , ARB No. 06-100, ALJ Nos. 2005-SOX-107, 2006-SOX-18 (ARB Sept. 29, 2006), the Respondent filed an appeal of the ALJ's order denying a motion to dismiss. The ARB issued an order to show cause why the Board should not dismiss its interlocutory appeal based on its strong policy against piecemeal appeals. The Respondent did not respond, and the ARB dismissed the interlocutory appeal.

INTERLOCUTORY APPEAL; "DEATH KNELL" THEORY GENERALLY WILL NOT SUPPORT INTERLOCUTORY REVIEW IN REGARD TO ALJ'S RULINGS ON DISCOVERY, VENUE AND SUMMARY JUDGMENT

In Johnson v. Siemens Building Technologies, Inc. , ARB No. 07-010, ALJ No. 2005-SOX-15 (ARB Jan. 19, 2007), the ALJ granted a request by the Respondents to deny the Complainant further extensions of time to file a response to their motion for summary judgment. Before the ALJ ruled on the motion for summary judgment, the Complainant sought an interlocutory appeal with the ARB, arguing that the ALJ's ruling denying the filing of a response to the summary judgment motion constitutes a "death knell" to her litigation. The ARB observed that "death knell" theories are generally disapproved as grounds for an interlocutory order in regard to rulings on discovery, venue, and summary judgment. The Board found that the Complainant could appeal any adverse ruling, and that any error could be readily remedied should the Complainant prevail on such an appeal.

INTERLOCUTORY APPEAL; FAILURE TO REQUEST ALJ CERTIFICATION

In Powers v. Pinnacle Airlines, Inc. , ARB No. 05-138, ALJ No. 2005-SOX-65 (ARB Oct. 31, 2005), the ARB stated that the proper procedure for obtaining an interlocutory appeal of an ALJ's orders is to request that the ALJ certify the issue in the same manner as a federal district court under 28 U.S.C.A. § 1292(b). Where the Complainant was aware of this procedure, having previously filed an interlocutory appeal in a prior case, but failed to follow that procedure, the ARB dismissed her interlocutory appeal. The ARB also found that even if the procedure had been followed, it would not exercise its discretion to consider the interlocutory appeal because the Complainant had failed to articulate sufficient grounds warranting departure from the Board's strong policy against piecemeal appeals.

APPEAL OF OALJ CASE ASSIGNMENT POLICIES

In Powers v. Pinnacle Airlines, Inc. , ARB No. 05-138, ALJ No. 2005-SOX-65 (ARB Oct. 31, 2005), the Complainant requested in her interlocutory appeal that the Board order OALJ to reassign her case to a different OALJ office, purportedly so she could save money on postage and delivery time. The Board denied the motion because the Complainant had not previously requested OALJ to transfer her case on these grounds, so there was no decision for the Board to review. The Board also observed that "absent proof of grounds for recusal, or in the rare case, change of venue, the OALJ's case assignment policies are within its purview and are not subject to Board review." USDOL/OALJ Reporter at 8 (footnotes omitted).

INTERLOCUTORY APPEAL; ALJ ERROR IN PLACING NOTICE OF APPEAL RIGHTS ON MERITS DECISION IN BIFURCATED PROCEEDING WHERE DAMAGES WERE STILL TO BE LITIGATED

In Welch v. Cardinal Bankshares Corp. , ARB No. 04-054, ALJ No. 2003-SOX-15 (ARB May 13, 2004), the ALJ had issued a Recommended Decision and Order on January 29, 2004 in favor of the Complainant on the merits of the complaint, but reserved for further adjudication the question of damages. Because the ALJ had inadvertently placed a Notice of Appeal Rights on the R D & O, he issued an erratum on February 3, 2004 stating that the R D & O had not been intended to be a final appealable order and ordering that the Notice of Appeal Rights be deleted from the R D & O. On February 3, 2004, the Respondent filed a petition for review with the Board, and the Board issued a Notice of Appeal on February 6, 2004. The Complainant filed a motion to dismiss the appeal as premature or to hold it in abeyance until a final judgment was issued by the ALJ. The Respondent opposed dismissal of the appeal.

The ARB held that because the ALJ had not yet fully disposed on the case, the appeal was interlocutory. The Respondent argued that a "decision of the administrative law judge" is subject to immediate review under 29 C.F.R. § 1980.110(a). The ARB, however, rejected this contention as ignoring section 1980.110(c), the ALJ's erratum, and ARB precedent about interlocutory appeals. The Respondent argued that the Board's Notice of Appeal cause the ALJ's decision to be irrevocably "vacated." The ARB, however, found no support for the assertion that it could not correct a premature acceptance of a petition for review, and noted that section 1980.110(b) only states that the ALJ's decision becomes "inoperative" and not vacated when the Board accepts the case.

The Board also rejected the Respondent's contention that it would be prejudiced if the ARB refused to hear the case now based on the regulatory 120-day period for ARB review -- the Board holding that the review period had not yet begun to run, and that that 120-day period was directory and not jurisdictional.

INTERLOCUTORY APPEAL; RECORD OF DENIAL OF INTERLOCUTORY APPEAL IS PART OF RECORD FOR LATER REVIEW

In Windhauser v. Trane , ARB No. 05-061, ALJ No. 2005-SOX-17 (ARB Aug. 31, 2005), the Respondent took an interlocutory appeal of the ALJ's order denying a stay of the Secretary's order of reinstatement. Subsequently the ALJ issued an order dismissing the case based on a settlement; the ALJ's order included a monetary sanction against the Respondent for its failure to reinstate the Complainant. The Respondent filed a timely petition for review of this order. The ARB then issued an order to show cause why the earlier interlocutory appeal should not be dismissed as moot. The Respondent, in response, agreed that the interlocutory appeal was moot, but stated that facts relating to the interlocutory appeal would likely be relevant to the appeal of the dismissal/sanctions order and requested that dismissal of the interlocutory appeal be without prejudice to its ability to present these facts in the appeal of the dismissal/sanctions order. The ARB ruled that the interlocutory review proceedings were part of the record for the Board's review on appeal of the sanctions order, and that the Respondent could present relevant facts in support of its petition for review of the sanctions order. The Board therefore dismissed the interlocutory appeal as moot.

ADMINISTRATIVE LAW JUDGE DECISIONS

INTERLOCUTORY APPEAL; CERTIFICATION OF ISSUE BY ALJ

In Jordan v. Sprint Nextel Corp. , 2006-SOX-41 (ALJ Mar. 14, 2006), the ALJ held that the Complainant was not precluded from relying on statements or documents covered by the attorney-client privilege in pursuant of his SOX claim, and denied the Respondent's motion to dismiss. The Respondent requested that it be permitted to seek interlocutory review by the ARB based on (1) plainly substantial grounds for disagreement with the ALJ's ruling, (2) material advancement of the litigation, and (3) the special sensitivity presented by disclosure of privileged information. The ALJ reviewed ARB and court decisions relating to the collateral order exception to general principle of finality, and acknowledged that it was conceivable that the ARB or other courts might reach a different conclusion than he had on the attorney-client issue. The ALJ also noted that a decision on this issue would have significant implications for SOX complainants who are attorneys who, like the Complainant in the instant case, are under a legal duty to report perceived violations of securities laws. The ALJ observed that it would be difficult, if not impossible, to undo any potential harm to the Respondent if there were an improvident disclosure of confidential information should the ARB later rule that the Complainant may not rely on such information to prosecute his claim. The ALJ noted that if the ARB ruled that the Complainant could not rely on such information, it would be fatal to his claim. The ALJ concluded that interlocutory review would promote, rather than impede the litigation process, and therefore certified the issue to the ARB.

Official Notice

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FEDERAL COURT DECISIONS

OFFICIAL NOTICE; ARB NOT REQUIRED TO TAKE OFFICIAL NOTICE OF ALLEGATIONS RELATING TO CHARACTER AND CREBILITY IN A SEPARATE CASE

In Bechtel v. Administrative Review Bd., U.S. Dept. of Labor ,     F.3d     , No. 11-4918 (2d Cir. Mar. 5, 2013) (2013 WL 791334) (case below ARB No. 09-052, ALJ No. 2005-SOX-33), the Complainant argued that the ARB should have taken official notice of a proceeding concerning the Respondent and John Nano (the Respondent's president and CEO) in the United States District Court for the District of Connecticut. See 29 C.F.R. § 18.201 (governing official notice of adjudicative facts). The Court of Appeals found "no abuse of discretion in the ARB's decision not to take judicial notice of allegations relating to John Nano's character and credibility in a separate case. See 29 C.F.R. § 18.201(b); cf. Int'l Star Class Yacht Racing Ass'n v. Tommy Hilfiger U.S.A., Inc., 146 F.3d 66, 70�71 (2d Cir.1998) (testimony from another case regarding facts that are not common knowledge or derived from an unimpeachable source is not properly subject to judicial notice). In short, we conclude that the ARB's decision with respect to these issues was not �arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.' 5 U.S.C. § 706(2)(A)." Bechtel, supra , slip op. at 12 (footnote omitted).

Pro Se Litigants

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ADMINISTRATIVE REVIEW BOARD DECISIONS

PRO SE LITIGANTS HELD TO LESS EXACTING PLEADING STANDARDS, BUT CANNOT SHIFT BURDEN OF LITIGATING CASE TO THE ADJUDICATOR AND ULTIMATELY BEAR THE BURDEN OF PLEADING ALL ELEMENTS OF A COMPLAINT

In Pik v. Credit Suisse AG , ARB No. 11-034, ALJ No. 2011-SOX-6 (ARB May 31, 2012), the original complaint filed with OSHA contained no factual allegations addressing whether the Complainant had engaged in SOX protected activity. The ALJ issued an Order to Show Cause why the case should not be dismissed for failure to allege protected activity. When the Complainant only responded with a general, conclusory statement, the ALJ dismissed the complaint. The ARB affirmed. The ARB, evidently concerned about the application of pleading standards when the complainant is pro se, explained that ultimately all litigants are responsible for the presentation of their case. The Board wrote:

    Initially, we note that adjudicators must accord a party appearing pro se fair and equal treatment, but a pro se litigant "cannot generally be permitted to shift the burden of litigating his case to the courts, nor avoid the risks of failure that attend his decision to forego expert assistance." Thus, although an ALJ has some duty to assist pro se litigants, a judge also has a duty of impartiality and must refrain from becoming an advocate for the pro se litigant. In the end, pro se litigants have the same burdens of proving the necessary elements of their cases as litigants represented by counsel.

USDOL/OALJ Reporter at 4-5 (footnotes omitted). The ARB noted that the Complainant appeared pro se and was entitled to some leeway, but that "a complainant must at least point to facts that fairly identify the activity protected by the SOX statute, particularly where the issue of extraterritoriality must be resolved." USDOL/OALJ Reporter at 5. The ARB also stated in regard to the Complainant's appellate brief: "Again, we are aware that pro se pleadings are held to less exacting standards than those prepared by counsel and are to be liberally construed, but the Board must be able to discern cogent arguments in any appellate brief, even one from a pro se litigant." USDOL/OALJ Reporter at 5 (footnote omitted).

Reconsideration

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ADMINISTRATIVE REVIEW BOARD DECISIONS

FAILURE TO COMPLY WITH ARB ORDER TO SHOW CAUSE REQUIREMENT THAT RESPONSE BE RECEIVED BY A DATE CERTAIN

In Castillo v. Bayside Engineering, Inc. , ARB No. 11-046, ALJ No. 2010-NTS-2 (ARB Sept. 6, 2011), the Complainant filed a motion to reconsider the ARB's July 28, 2011 dismissal of his appeal for failure to file a timely appellate brief and failure to proffer an explanation in response to the ARB's order to show cause. The ARB noted that the Complainant had not claimed its briefing order, which had been sent certified mail, return receipt requested. The Complainant argued that he had sent his response to the order to show cause by certified mail on July 15, 2011. The Respondent opposed the motion to reconsider on the ground that the ARB's order to show cause required the Complainant's response to be received by the ARB by July 19, 2011. The Complainant responded the Respondent's response arguing for the first time that he did not timely receive the ARB's briefing order and had so notified the ARB. The ARB ruled that the Complainant did not establish grounds for reconsideration of the dismissal, because even accepting as fact that the response had been mailed on July 15, 2011, the order to show cause required receipt of the response by July 19, 2011. The ARB noted that the Complainant did not exercise due diligence as he had not contacted the ARB to verify timely receipt. The ARB also found that even if timely, the response failed to explain why the Complainant did not timely file his opening appellate brief. The ARB also noted that the Complainant had not explained why he did not claim the ARB's briefing order. Finally, given the Complainant's pro se status, the ARB reviewed the Complainant's untimely brief to determine whether affirmance of the ALJ 's decision would result in a miscarriage of justice. but found that it identified no error of fact or law that would have compelled the ARB to reverse the ALJ's determinations that the Complainant did not timely file his complaint and did not demonstrate grounds for equitable tolling of the limitations period.

MOTION TO RESCIND FINAL DECISION AND ORDER BASED ON NOTICE OF INTENT TO RE-FILE IN DISTRICT COURT; DOL JURISDICTION DOES NOT TERMINATE UNTIL CLAIM IS ACTUALLY RE-FILED

In Smale v. Torchmark Corp. , ARB No. 09-012, ALJ No. 2008-SOX-57 (ARB Apr. 30, 2010), the ARB rejected the Complainant's contention that the ARB's Final Decision and Order should be rescinded because he did not receive a copy of the decision in a timely fashion. The same day that the ARB issued its decision, the Complainant had placed in the mail a notice to the ARB that he intended to re-file his SOX complaint in federal district court. The ARB did not receive the notice until 7 days after the decision had been issued. The ARB found that the timing of the Complainant's receipt of the ARB decision had no impact on his legal position in relation to his desire to re-file his complaint in federal district court. The ARB stated that if the Complainant does re-file, it will be up to the district court to decide if it can obtain jurisdiction after the ARB has issued its final decision. The ARB acknowledged that it normally issues an order to show cause upon receiving a notice of intent to re-file a SOX whistleblower complaint in federal district court, but that since it had already issued its decision in the instant case, further action by the Board upon receipt of the notice was neither necessary or appropriate.

The ARB rejected the Complainant's argument that the Respondent's citation to the ALJ decision in Rusick v. Merrill Lynch & Co., Inc., ALJ No. 2006-SOX-045 (Mar. 22, 2006), was inapposite. In Rusick , the ALJ advised a complainant who had informed the ALJ of his intent to file in district court, that she would retain retain jurisdiction until served with a copy of the federal court filing. When the respondent later moved for dismissal and the complainant failed to oppose the motion except to reiterate the intent to re-file in federal court, the ALJ granted the motion, finding that she retained jurisdiction of the complaint until the complainant filed in district court. In the instant case, the Complainant argued that Rusick was distinguishable because in that case the notice was submitted to the ALJ before the 180-day period specified in 18 U.S.C.A. § 1514A(b)(1)(B) had run, whereas in the instant case the 180-day period had long passed. The ARB, however, held that "the determinative fact was not when the complainant gave notice of his intent to re-file (either before or after the 180-day period had run), but whether [the ALJ] retained jurisdiction to decide the case, which she did until such time as the complainant re-filed his complaint in district court." USDOL/OALJ Reporter at 4.

RECONSIDERATION; MUST BE FILED WITHIN A REASONABLE TIME, WHICH MUST BE WITHIN A SHORT TIME AFTER THE DECISION OR RAISE A RULE 60(b)-TYPE GROUND OR SHOW GOOD CAUSE FOR THE DELAY; 27 DAYS IS NOT A SHORT TIME; BOARD'S CASELAW ON RECONSIDERATION IS ADEQUATE TO ESTABLISH RECONSIDERATION PROCEDURE; LOSS OF SOX JURISDICTION UPON REMOVAL TO FEDERAL COURT DOES NOT NEGATE ARB'S JURISDICTION OVER OTHER WHISTLEBLOWER LAWS RAISED IN THE APPEAL

In Powers v. Paper, Allied-Industrial Chemical & Energy Workers Int'l Union (PACE) , ARB No. 04-111, ALJ No. 2004-AIR-19 (ARB Dec. 21, 2007), the ARB applied its ruling in Henrich v. Ecolab, Inc., ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB May 30, 2007), that a motion for reconsideration must be filed within a "reasonable time." In applying this requirement, the motion must be filed within a "short time" after the decision, or, after a longer period if the petition raises Rule 60(b)-type grounds or showed "good cause" for the delay. In Powers , the Board found that 34-days for the filing of the Complainant's motion for reconsideration was too long to be characterized as a "short time." In a footnote, the Board also suggested that the 27 days from the date that the Complainant alleged she received the Board's decision was also not a short time, but did not reach the issue of whether the time frame begins upon issuance or receipt of the decision.

The Board found that the Complainant did not show good cause for the delay based on the absence of applicable procedures, the Board finding ample caselaw precedent for its "short time" requirement. It also found that it was under no obligation to inform the Complainant about the requirement and that a pro se litigant bears the risk of foregoing expert assistance. The case had been remanded, and the Complainant observed that the ALJ had not issued any orders on remand; but the Board found the ALJ's schedule of communications to be irrelevant.

The Board then reviewed a series of other grounds raised by the Complainant for reconsideration, and found that only one of them raised a Rule 60(b)-type ground warranting a longer period for the filing of a motion to reconsider - namely, that the Complainant had removed her SOX complaint to federal district court prior to the ARB's decision. The Board observed that it was not aware of the filing of the SOX complaint in federal court, but found that the issue of subject matter jurisdiction cannot be waived. The Board then screened the jurisdictional ground for reconsideration to determine whether there existed a reason to reconsider, and found that its assuming that it had jurisdiction over the SOX complaint when it actually did not constituted manifest error. The ARB, however, rejected the Complainant's contention that the entire remand order was void, the ARB finding that it still had jurisdiction over the portions of the complaint raising AIR21 and various environmental whistleblower laws. Accordingly, the Board modified those portions of the remand order that referenced the SOX complaint, and reissued the order.

MOTION FOR RECONSIDERATION; AUTHORITY OF THE ARB TO RECONSIDER ITS DECISIONS UNDER THE SOX WHISTLEBLOWER PROVISION; SUCH A MOTION MUST BE FILED WITHIN A REASONABLE TIME TO BE TIMELY; SCREENING OF MOTIONS TO DETERMINE APPROPRIATENESS FOR RECONSIDERATION

In Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB May 30, 2007), the ARB ruled that it has the authority to reconsider a decision issued pursuant to the whistleblower provision of the Sarbanes-Oxley Act. The ARB stated that "unless some other standard applies to reconsideration of SOX decisions, or we or our predecessors have adopted a different standard for determining timeliness of reconsideration petitions, we must apply a 'reasonable time' standard when determining the timeliness of [such a] petition." USDOL/OALJ Reporter at 6. Reviewing the OALJ rules of practice and procedure, rules of procedure for federal district and circuit courts, and previous decisions of the ARB and its predecessors, the ARB found that it had not adopted a different standard, and therefore the "reasonable time" standard applied. In defining what constitutes a reasonable time, the ARB turned to a decision it had rendered in a Service Contract Act proceeding, Thomas & Sons Bldg. Contractors, Inc. , ARB No. 98-164, ALJ No. 1996-DBA-33 (ARB June 8, 2001). The ARB concluded that in Thomas & Sons , and other decisions of the ARB and its predecessors, a three-part approach had been delineated:

   In sum, the Board and its predecessors have presumed a petition timely when the petition was filed within a short time after the decision. The Board and its predecessors also have granted reconsideration where a petition, though filed after a longer period, raised Rule 60(b)-type grounds or showed "good cause" for the delay. Finally, the Board and its predecessors have rejected as untimely those petitions filed more than a short time after the decision, when such petitions have neither raised Rule 60(b)-type arguments nor shown good cause for delay.

USDOL/OALJ Reporter at 15. The Board then applied this test to the Complainant's motion for reconsideration. The Complainant's motion was filed on the 60th day after the ARB's decision. The ARB suggested that 14 to 30 days might be sufficiently short a time, but did not specifically so rule, holding only that 60 days was not a "short" time. The Board found that the Complainant's grounds for reconsideration presented rehearing-type arguments (which do not themselves justify a delay in filing a petition for reconsideration) rather than Rule 60(b)-type grounds. Finally, the Board held that the Complainant 's belief that he would not suffer penalty if he did not file within a short time, and his argument that the Respondent would not be prejudiced by a reconsideration, did not show good cause for the delay.

The ARB then stated even if the Complainant's motion had been timely, it would have been rejected as failing to demonstrate that the Board's decision should be reconsidered. The ARB observed that it is guided by federal court practice in applying standard screening hurtles in determining whether reconsideration is warranted. In the instant case, the Complainant's motion was based in part on portions of his deposition which were not in evidence. The ARB cited caselaw to the effect that "[a] party that has not presented known facts helpful to its cause when it had the opportunity cannot ordinarily avail itself of Rule 60(b) after it has received an adverse judgment." USDOL/OALJ Reporter at 20 (citations omitted). Finally, the ARB found that the Complainant's remaining arguments that it made errors in judgment in determining whether the ALJ's findings and credibility determinations were supported by substantial evidence were not supported by any demonstrations of materials errors of law, fact or process; or any changed circumstances warranting Rule 60(b) relief; or any other circumstance warranting reconsideration under ARB precedent.

MOTION FOR RECONSIDERATION OF ARB DECISION; ARB ADOPTS PRINCIPLES EMPLOYED BY FEDERAL COURTS

In Getman v. Southwest Securities, Inc. , ARB No. 04-059, ALJ No. 2003-SOX-8 (ARB Mar. 7, 2006), the ARB reiterated that it has adopted principles employed by the federal courts in deciding requests for reconsideration, such as "(i) material differences in fact or law from that presented to a court of which the moving party could not have known through reasonable diligence, (ii) new material facts that occurred after the court's decision, (iii) a change in the law after the court's decision, and (iv) failure to consider material facts presented to the court before its decision. " Slip op. at 1-2 (citations omitted). In Getman , the Board denied reconsideration where the Complainant's motion for reconsideration merely reiterated points raised in the original appeal and rejected in the Board's final decision.

Standard and Scope of Review

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FEDERAL COURT DECISIONS

ALJ'S LEGAL ERROR ITSELF IS NOT GROUNDS FOR REVERSING ARB DECISION AFFIRMING ALJ'S DETERMINATION WHERE ARB APPLIES CORRECT LEGAL STANDARD; THE APA HAS THE SAME TYPE OF HARMLESS ERROR RULE AS COURTS APPLY IN CIVIL CASES

In Bechtel v. Administrative Review Bd., U.S. Dept. of Labor ,     F.3d     , No. 11-4918 (2d Cir. Mar. 5, 2013) (2013 WL 791334) (case below ARB No. 09-052, ALJ No. 2005-SOX-33), the ALJ had in a decision on remand from the ARB, although initially correctly reciting the correct legal framework for evaluating a claim under the Sarbanes-Oxley Act, 18 U.S.C. § 1514A, gone on to elaborate in a manner that suggested that the ALJ erroneously believed that, in addition to the framework specified by the statute and regulations, there existed a second burden-shifting system that applied when the complainant failed to prove a prima facie case by a preponderance of the evidence. On appeal, the Complainant's central argument was that, even after the ARB remanded the case, the ALJ persisted in applying an erroneous legal standard, and that for this reason, the ARB's second and final decision, affirming the ALJ's determination, ought to be reversed. The Court of Appeals found that the ALJ's misstatement of the legal framework for analyzing a SOX whistleblower claim was beside the point because the ARB recognized that error and explained why it did not affect the outcome of the case. The court found that the ARB had concluded, relying on the evidentiary findings of the ALJ, that the Complainant had failed to prove by a preponderance of the evidence that his protected activity was a contributing factor in the adverse employment action. The court found that the failure to prove this element was a sufficient reason to rule against the claim, and the ALJ's legal error with respect to an additional aspect of his claim was immaterial. The court stated that there was no need for the ARB to remand a second time to the ALJ when the correct outcome was clear, and noted that the Administrative Procedure Act has the same kind of harmless-error rule that courts apply in civil cases.

ADMINISTRATIVE REVIEW BOARD DECISIONS

    -- Subtantial Evidence

    ARB STANDARD OF REVIEW; NOT ENOUGH TO SHOW THAT SUBSTANTIAL EVIDENCE SUPPORTS APPELLANT'S VIEW OF THE CASE; MUST SHOW THAT SUBSTANTIAL EVIDENCE DID NOT SUPPORT THE ALJ'S FINDINGS

    "[A] party cannot prevail on appeal simply by demonstrating that substantial evidence supports his view. Rather, in order to convince us not to adopt an ALJ's recommendation a party must demonstrate that substantial evidence did not support the findings necessary to that recommendation." Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), slip op. at 17-18.

    -- ALJ Findings of Fact

    STANDARD OF REVIEW; DEFERENCE TO ALJ'S FACTUAL FINDINGS

    The ARB will defer to an ALJ's factual findings, especially where they are predicated on the ALJ's weighing and determining the credibility of conflicting witness testimony. Halloum v. Intel Corp. , ARB No. 04-068, 2003-SOX-7 (ARB Jan. 31, 2006).

    -- -ALJ Credibility Findings

    CREDIBILITY DETERMINATIONS; DEMEANOR BASED CREDIBILITY DETERMINATIONS AFFORDED GREAT DEFERENCE, BUT NON-DEMEANOR BASED DETERMINATIONS ARE REVIEWED UNDER SUBSTANTIAL EVIDENCE STANDARD

    ALJ credibility determinations that rest explicitly on demeanor are given great deference; but where the ALJ does not explicitly state that his credibility determination is based on witness demeanor the ARB does not accord the determination such great deference. In such a case, the ARB treats the determination as an ordinary finding of fact and reviews it under the substantial evidence standard. Henrich v. Ecolab, Inc. , ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006).

    ALJ'S CREDIBILITY DETERMINATIONS NOT BASED ON DEMEANOR; IN AIR21 AND SOX CASES, SUCH DETERMINATIONS ARE REVIEWED UNDER THE SUBSTANTIAL EVIDENCE STANDARD RATHER THAN DE NOVO

    In Walker v. American Airlines, Inc. , ARB No. 05-028, ALJ No. 2003-AIR-17 (ARB Mar. 30, 2007), the Complainant argued on appeal that the ARB should overturn the ALJ's credibility determinations. According to the Complainant, because the ALJ determination was not demeanor based it should be reviewed de novo. The ARB rejected the argument that de novo was the appropriate standard of review, noting that the caselaw cited by the Complainant was all from environmental whistleblower cases. In contrast, in AIR21 and SOX cases the ARB is required to review an ALJ's fact determinations under the substantial evidence standard. Because the ALJ's credibility determinations were not explicitly based on demeanor, the Board would not afford those determinations the "great deference" that a demeanor-based determination would receive. Nonetheless, because they were factual findings, the ARB was required to uphold them if supported by substantial evidence.

    -- New Evidence/Argument

    CONVERSION OF MOTION TO DISMISS TO MOTION FOR SUMMARY DECISION WITHOUT NOTICE AND DISCOVERY; ARB WILL NOT REVIEW WHERE ISSUE RAISED FOR FIRST TIME ON APPEAL AND COMPLAINANT DID NOT SHOW HOW ADDITIONAL DISCOVERY WOULD HAVE AVOIDED DENIAL OF COMPLAINT

    In Lewandowski v. Viacom Inc. , ARB No. 08-026, ALJ No. 2007-SOX-88 (ARB Oct. 30, 2009), the Complainant argued on appeal that the ALJ's decision to treat the Respondent's motion to dismiss as a motion for summary decision without notice and without discovery was error. The ARB declined to consider the argument because it was raised for the first time on appeal, and because the issue on which the ALJ granted summary decision did not turn on disputed facts. Morever, the Complainant did not articulate how additional discovery would have avoided denial of the complaint.

    NEW EVIDENCE SUPPORTING ASSERTION OF PROTECTED ACTIVITY; FACT THAT STATE COMMISSION LATER ASSESSED A PENALTY AS THE COMPLAINANT FEARED, WAS NOT MATERIAL; SUCH AN ASSESSMENT DOES NOT RETROACTIVELY VALIDATE THE COMPLAINANT�S ACTIONS AS PROTECTED UNDER THE SOX

    In Nixon v. Stewart & Stevenson Services, Inc. , ARB No. 05-066, ALJ No. 2005-SOX-1 (ARB Sept. 28, 2007), the Complainant was the environmental manager for a federal defense contractor. He asserted that he engaged in protected activity when he reported information to officers that showed violations of environmental laws, which he reasonably believed would result in legal proceedings and financial penalties, which, in turn, would invoke reporting requirements mandated by the SEC. On appeal to the ARB, the Complainant sought to have the ARB consider new evidence in the form of an excerpt from a Texas commission showing that a penalty against the Respondent was assessed, thus proving that legal proceedings occurred. Before addressing the admissibility of the new evidence, the ARB had found that the Complainant had not adequately briefed on appeal the ALJ's finding that there was no evidence of pending environmental litigation or a known environmental proceeding contemplated by government officials that would have triggered the Respondent's duty to disclose under the SEC rule. Thus, the ARB found any argument on this issue waived. Rather, the ARB found that the only argument on appeal concerned whether the Respondent engaged in mail fraud. The Board found that there was no evidence that the Complainant communicated the allegation of mail fraud prior to the hearing before the ALJ. Thus, the ARB, observing that it had found no protected activity, declined to consider the new evidence, finding that it was not material because "[t]he fact that what Nixon anticipated would happen did happen, namely that the Texas Commission did assess a penalty against the Respondent for environmental violations, does not retroactively make any activity Nixon engaged in prior to his termination activity protected under the SOX."

    WAIVER OF ARGUMENTS NOT PRESENTED BEFORE THE ALJ

    Where the Complainant had the opportunity to make her procedural due process arguments before the ALJ, but did not do so, the ARB found that she waived such arguments for appeal. Reddy v. Medquist, Inc. , ARB No. 04-123, ALJ No. 2004-SOX-35 (ARB Sept. 30, 2005).

    NEW EVIDENCE ON APPEAL; ARB RELIES ON OALJ RULES OF PRACTICE AND PROCEDURE FOR GUIDANCE

    When considering whether to consider new evidence, the ARB ordinarily relies upon the standard found in the OALJ Rules of Practice and Procedure, which provides that "[o]nce the record is closed, no additional evidence shall be accepted into the record except upon a showing that new and material evidence has become available which was not readily available prior to the closing of the record." 29 C.F.R. § 18.34(c). Harvey v. Home Depot U.S.A., Inc. , ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006).

    SCOPE OF ARB REVIEW; ARB WILL NOT CONSIDER ARGUMENTS AND EVIDENCE RAISED FOR THE FIRST TIME ON APPEAL

    The ARB will not consider arguments and evidence raised for the first time on appeal. Carter v. Champion Bus, Inc. , ARB No. 05-076, ALJ No. 2005-SOX-23 (ARB Sept. 29, 2006).

    REOPENING RECORD; SUBMITTER MUST ESTABLISH THAT NEWLY PROFFERED EVIDENCE IS RELEVANT AND MATERIAL AND WAS NOT AVAILABLE PRIOR TO CLOSING OF THE RECORD BEFORE THE ALJ

    In Halloum v. Intel Corp. , ARB No. 04-068, 2003-SOX-7 (ARB Jan. 31, 2006), the Complainant submitted to the ARB an affidavit that had not been in evidence before the ALJ. The ARB noted that its review was limited to the record made before the ALJ and the ALJ's recommended decision and order, but that it could order the ALJ to open the record where proffered evidence is relevant and material and was not available prior to the closing of the record. The ARB declined to do so in the instant case because the Complainant had failed to establish either requirement for reopening a record.

    -- Waiver

    COMPLAINANT'S FAILURE TO EXPRESSLY EXCEPT TO ALJ'S FINDING OF LACK OF TIMELINESS OF COMPLAINT WHEN PETITIONING FOR ARB REVIEW; ARB MAY REVIEW ALJ'S FINDING WHERE NOT TO DO SO WOULD RESULT IN MANIFEST INJUSTICE, NO ADDITIONAL FACT-FINDING WAS REQUIRED, AND THE ISSUE HAD BEEN FULLY LITIGATED BEFORE THE ALJ

    In Avlon v. American Express Co. , ARB No. 09-089, ALJ No. 2008-SOX-51 (ARB Sept. 14, 2011), the ARB had earlier held that the ALJ had erred in his determination that the Complainant's SOX whistleblower complaint was not timely filed. The Respondent filed a motion for reconsideration, arguing that that the ARB erred by ruling on the issue because the Complainant had not petitioned for review of the timeliness issue and the Complainant had therefore waived review of that issue. The regulation at 29 C.F.R. § 1980.110(a) provides that a "petition for review must specifically identify the findings, conclusions or orders to which exception is taken. Any exception not specifically urged ordinarily will be deemed to have been waived by the parties." The ARB acknowledged that it appeared that the Complainant had waived the issue by not expressly preserving it in her petition for review, but nonetheless found that it had authority to review the claim. The ARB stated: "Indeed, not reviewing that claim would render a manifest injustice as it would possibly cause her entire case to be dismissed as it is the central issue on which the ALJ's decision rests. Moreover, because no additional fact-finding is required and the parties fully litigated this issue before the ALJ, we are well within the bounds of our discretion to address that issue on Avlon's petition for review." USDOL/OALJ Reporter at 5-6 (footnote omitted). The ARB found that the regulation at 29 C.F.R. § 1980.110(a) "does not mandate that the Board limit its review to the ALJ's holdings of fact or conclusions of law assigned as errors in the petition of review." USDOL/OALJ Reporter at n.1 (citation omitted). One member of the ARB filed a concurring opinion. That member stated that the majority's opinion bypassed the first crucial question of whether the Complainant had expressly and clearly waived all consideration of her claim that she was constructively discharged, and found that it would be absurd to dismiss the entire case merely because she broad brushed her claim. The concurring member indicated, however, that if a complainant expressly and clearly waives a claim, the ARB must follow such a choice even if the case was fully litigated below.

Stay of ARB Order

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ADMINISTRATIVE REVIEW BOARD DECISIONS

STAY OF ARB ORDER ON MONETARY DAMAGES DURING APPEAL; FOUR-PART TEST

In Evans v. Miami Valley Hospital , ARB Nos. 07-118, 07-121, ALJ No. 2006-AIR-22 (ARB Jan. 13, 2010), the ARB in an earlier decision had affirmed the ALJ's decision finding that the Respondent had violated the AIR21 whistleblower provision, and awarding reinstatement, back pay, compensatory damages, and attorney's fees. The Respondent filed a motion with the ARB for a stay of the money damages award pending its appeal in the Sixth Circuit. The ARB found that the Respondent's motion failed the four-part test used by the ARB to determine whether to stay its own actions. First, the ARB noted that the Respondent had not addressed the likelihood that it would prevail on appeal, and had simply objected to the ARB's interpretation of protected activity under AIR21. The Board found that its interpretation was consistent with common sense, and that substantial evidence supported the ALJ's finding that the Complainant had not deliberately violated FAA regulations. Second, the ARB rejected the Respondent's argument that it would be irreparably harmed because the Complainant might not repay the money if the Respondent prevailed on appeal. The ARB stated that the loss of the respondent's very business must be threatened for recoverable monetary loss to constitute irreparable harm. Third, the ARB found that the Complainant would be harmed if not returned to the position he would have been in if his employer had not retaliated against him. Finally, the ARB found that the Respondent had made no argument regarding a public interest that would be served by a stay.

Substitution of Party

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ADMINISTRATIVE REVIEW BOARD DECISIONS

SUBSTITUTION OF PARTY BASED ON DEATH OF COMPLAINANT; ARB APPLIES FED. R. APP. P. 25 AND 43(a)(1)

In Wallum v. Bell Helicopter Textron, Inc. , ARB No. 09-081, ALJ No. 2009-AIR-6 (ARB Sept. 2, 2011), the ALJ had granted summary decision on the ground that the Respondent was not a covered employer under the AIR21 whistleblower provision. The Complainant died while the matter was pending on appeal before the ARB, and the Complainant's widow filed a motion under Fed. R. Civ. P. 25(a)(1) for substitution of party. The Respondent did not oppose the motion but noted that if the ARB decided that it is a covered employer, it would object to the survival of any claim purporting to seek punitive or exemplary damages.

Applying Fed. R. App. P. 25 and 43(a)(1), and a three-factor analysis developed by the Sixth Circuit Court of Appeals, Murphy v. Household Fin. Corp. , 560 F.2d 206, 208-09 (6th Cir. 1977), the ARB granted the widow's motion for substitution of party. The ARB noted that AIR21 does not provide for punitive damages.

Timeliness of Petition for Review

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ADMINISTRATIVE REVIEW BOARD DECISIONS

TIMELINESS OF PETITION FOR ARB REVIEW; FAILURE TO SHOW GROUNDS FOR TOLLING OF UNTIMELY PETITION

In Levi v. Aerotek, Inc. , ARB No. 12-077, ALJ Nos. 2012-SOX-11 and 12 (ARB Sept. 6, 2012), the Complainant filed a petition for review of the ALJ's dismissal of his complaints. It appearing that the petition was not timely filed, the ARB issued an order to cause why the petition should not be dismissed. The Complainant responded by requesting that the ARB withdraw the show cause order because at the time the ARB issued it, the ALJ's decision had already become the final order of the Secretary of Labor pursuant to 29 C.F.R. § 1980.110(b). The ARB found that 29 C.F.R. § 1980.110(b) was inapplicable because the Complainant admittedly did not timely file the petition for review . The ARB observed that instead of responding to the order to show cause with an attempt to establish that the limitations period should be tolled, the Complainant had requested that the ARB withdraw the order. Based on these circumstances, the ARB withdrew the order to show cause, and dismissed the appeal as untimely.

REQUEST FOR ARB REVIEW; TIMELINESS IS BASED ON BUSINESS DAYS; FAILURE OF COMPLAINANT TO SPECIFICALLY IDENTIFY OBJECTIONS IS ADDRESSED BY PERMITTING AMENDMENT OF REQUEST, IF OBJECTION IS TIMELY MADE BY RESPONDENT

In Dampeer v. Jacobs Engineering Group, Inc. , ARB No. 12-006, ALJ No. 2011-SOX-33 (ARB Dec. 5, 2011), the ALJ issued his decision on September 16, 2011 and the Complainant filed her petition for ARB review on September 30, 2011. The Respondent moved to dismiss under 29 C.F.R. § 1980.110(a)(2011) on the ground that the petition for review was not timely as it was filed more than 10 days after the ALJ's decision. The ARB found, however, that the regulation provided for filing within 10 business days after the ALJ's decision, that September 30, 2011 was the 10th business after the ALJ's decision., and therefore the request for review was timely.

In the alternative, the Respondent argued that the petition for review should be dismissed under 29 C.F.R. § 1980.110(a)(2011) because the Complainant's petition for review failed to specifically identify the findings, conclusions or order to which she objected. The ARB agreed that the petition was broad, but stated that it would have permitted the Complainant to amend the request for review had the Respondent timely objected. But the Respondent waited nearly six weeks to object after the Complainant's brief was filed fully explicating her arguments, and the ARB thus found that it would serve no useful purpose to now require amendment of the request for review.

TIMELINESS OF PETITION FOR ARB REVIEW; OALJ RULES OF PRACTICE AND PROCEDURE ARE NOT APPLICABLE TO ARB PROCEEDINGS TO ADD FIVE DAYS TO THE FILING PERIOD, BUT EVEN IF THEY DO (1) THE SOX REGULATION CONTROLS AS THE OALJ RULE IS INCONSISTENT AND (2) BY ITS OWN TERMS, THE OALJ RULE DOES NOT APPLY BECAUSE THE PERIOD FOR FILING IS SET BY REGULATION TO BEGIN ON THE DATE OF THE ALJ'S DECISION RATHER THAN SERVICE OF THE DECISION

In Gooding v. ABB, Ltd. , ARB No. 11-059, ALJ No. 2011-SOX-18 (ARB Dec. 12, 2011), because it appeared that the Complainant, who lives in Germany, had filed his petition for ARB review more than 10 business days from the date on which the ALJ issued his Order of Dismissal, the ARB issued an Order to Show Cause requiring the Complainant to demonstrate why the Board should not dismiss his petition as untimely. The Complainant argued that his petition for review was timely under the OALJ procedural rule for calculating the timeliness of filings at 29 C.F.R. § 18.4(c)(3), which adds five days to the prescribed period for certain filings. The ARB rejected this argument for three reasons. First, the OALJ rules of practice and procedure do not apply to ARB proceedings. Second, even if the OALJ rules apply, those rules state that if inconsistent with a rule of special application, the rule of special application controls. Because the SOX regulation at 29 C.F.R. § 1980.110(a) "states that the limitations period for filing a petition with the Board begins on the date of the ALJ's decision, section 18.4(c)(3)'s provision allowing for 5 extra days must be considered as inconsistent with the language of section 1980.110(a)." USDOL/OALJ Reporter at 5 (footnote omitted). Third, even if the OALJ rules of practice apply:

... section 18.4(c)(3) specifically provides, "Whenever a party has the right or is required to take some action within a prescribed period after the service of a pleading, notice, or other document upon said party, and the pleading, notice or document is served upon said party by mail, five (5) days shall be added to the prescribed period." But 29 C.F.R. § 1980.110(a) provides that "[a] petition must be filed within 10 business days of the date of the decision of the administrative law judge," not within 10 days of the date upon which the decision was served upon "said party." Thus, 29 C.F.R. § 18.4(c)(3), by its terms, is inapplicable to the filing of a petition for review.

USDOL/OALJ Reporter at 5 (footnote omitted). Accordingly, the ARB found that the petition for review was not timely, and dismissed the petition for review.

TIMELINESS OF PETITION FOR ARB REVIEW; TIMELY FILING WITH THE ALJ OF A MOTION FOR RECONSIDERATION TOLLS TIME PERIOD FOR REQUESTING ARB REVIEW

In Gattegno v. Prospect Energy Corp. , ARB No. 06-118, ALJ No. 2006-SOX-8 (ARB May 29, 2008), the Respondents argued that the Complainant's appeal to the ARB was not timely because it was not filed within 10 days of the date the ALJ issued his decision. The Complainant had filed a motion for reconsideration, and did not file the ARB appeal until within 10 days after the ALJ ruled on the motion. The ARB held:

    Although the SOX regulations do not provide for reconsideration by the Board of its own decisions, the Board has recently held in Henrich v. Ecolab, Inc. that its authority to reconsider its SOX decisions is inherent because the authority has not been limited by statute or regulation. The Seventh Circuit Court of Appeals has recently confirmed that the timely filing of a motion for reconsideration of a Board decision tolls the limitations period for filing a notice of appeal with the federal courts of appeals.

    The Respondents have not pointed to any statute or regulation that limits an administrative law judge's reconsideration of his or her own decisions. Thus, guided by Henrich and the Seventh Circuit's decision in Saban, we find that Gattegno's motion for reconsideration, filed within ten business days of the date of the ALJ's R. D. & O., tolled the limitations period for filing her petition for review with the Board, and that her petition for review, filed within ten business days of the ALJ's Order denying reconsideration was timely filed.

USDOL/OALJ Reporter at 15 (footnotes omitted).

TIMELINESS OF PETITION FOR ARB REVIEW; EQUITABLE GROUNDS FOR RELIEF FROM TIME LIMITATION; NOTICE OF DECISION BY E-MAIL

In Flood v. Cendant Corp. , ARB No. 04-069, ALJ No. 2004-SOX-16 (ARB Jan. 25, 2005), the Complainant was found to have failed to establish equitable grounds for excusing a failure to file a timely request for ARB review where the Complainant received notice of the ALJ's decision by e-mail (the ALJ having agreed to communicate by e-mail to accommodate the Complainant's travel in Europe), but had not filed his request for review within 10 days of that date.

TIMING OF APPEAL OF ALJ'S BIFURCATED DECISION ON THE MERITS AND DAMAGES

Where an ALJ issues a recommended decision on the merits of the case, reserving damages issues for further adjudication, and later issues a decision on damages, the ARB will consider the recommended resolution of the merits and damages claims to have merged into a single final decision, and will review both the merits and damages issues if an appeal is taken at that point. Welch v. Cardinal Bankshares Corp. , ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB Mar. 14, 2005). The Board had earlier found that the Respondent's appeal at the time of the merits decision was interlocutory.

PETITION FOR ARB REVIEW; EACH PARTY MUST FILE PETITION FOR REVIEW WITHIN 10 DAYS OF ALJ DECISION; SUBSEQUENT CROSS-PETITIONS ARE NOT PERMITTED

In Henrich v. Ecolab, Inc. , ARB No. 05-036, ALJ No. 2004-SOX-51 (ARB Mar. 31, 2005), the ALJ had ruled that the Complainant had engaged in protected activity and that the Respondent was aware of at least some of that activity, but recommended dismissal of the complaint on the ground that the Complainant had failed to establish that protected activity was a contributing factor in the Respondent's decision to terminate the Complainant's employment. The SOX regulations require the filing of a petition for ARB review within 10 business days of the date of the ALJ's recommended decision and order. The Complainant timely filed a petition for ARB review. Several weeks later the Respondent filed a cross-petition for review.

The ARB noted that the SOX regulations do not provide for cross-petitions for appeal. The Board therefore considered the Respondent's petition to be untimely and looked to determine whether equitable grounds existed for tolling the time period for requesting review. The Respondent argued, essentially, that it would be inefficient to require that that a party file an unnecessary protective appeal in cases in which it would not choose to appeal unless the other party did, and that Congress could not have so intended. The Respondent cited as an example, FRAP 4(a)(3), which applies to appeals of right. The ARB observed that under FRAP 5(b), which governs appeals by permission (as in SOX cases), a party may have to file a protective appeal. The Board held that the SOX rules "do in fact require a party to file a protective appeal that ultimately may be unnecessary."

TIMELINESS OF REQUEST FOR BOARD REVIEW; OBLIGATION OF COMPLAINANT TO CAREFULLY READ ALJ'S NOTICE OF APPEAL RIGHTS

In Minkina v. Affiliated Physician's Group , ARB No. 05-074, ALJ No. 2005-SOX-19 (ARB July 29, 2005), equitable grounds for tolling the period for requesting Board review were not established based on the Complainant's inability to find an attorney nor her confusion over the appeal period because the ALJ's notice of appeal rights informed the Complainant of the process for perfecting an appeal and it was her obligation to read it carefully.

Time Period for ARB Review

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ADMINISTRATIVE REVIEW BOARD DECISIONS

TIMELINESS OF REQUEST FOR ARB REVIEW; SLOW DELIVERY OF ALJ DECISION; FAILURE TO REQUEST ENLARGEMENT OF TIME FROM ARB SHOWS A LACK OF DUE DILIGENCE

In Romero v. The Coca Cola Co. , ARB No. 10-095, ALJ Nos. 2010-SOX-21 (ARB Sept. 30, 2010), the Complainant's attorney did not receive the ALJ's decision until April 19, 2010. The petition for ARB review was due on April 21, 2010, but not filed until April 29, 2010. The ARB found that extraordinary circumstances justifying equitable tolling was not warranted where the attorney did not contact the ARB to request an enlargement of time to file the petition, and therefore failed to establish due diligence. Lack of prejudice to the Respondent was not an independent ground for tolling of the limitations period.

ARB REVIEW; TIME PERIOD FOR ARB REVIEW IS DIRECTORY AND NOT JURISDICTIONAL

In Welch v. Cardinal Bankshares Corp. , ARB No. 04-054, ALJ No. 2003-SOX-15 (ARB May 13, 2004), the ARB held that the 120-day period stated in the regulations for it to issue a final decision was directory and not jurisdictional.