Whistleblower Digest
REMOVAL TO FEDERAL DISTRICT COURT
[Last Updated Jan. 28, 2015]
- Appeal of Secretary's Final Decision
- Bad Faith
- Collateral Estoppel
- Dismissal of DOL Complaint, Procedure
- Exhaustion of Administrative Remedies
- Mandamus
- When DOL Jurisdiction Ends
- Notice to DOL of Intent to Remove
- Motion to Reopen
Appeal of Secretary's Final Decision
FEDERAL COURT DECISIONS
ONCE THE ARB HAS ISSUED A FINAL DECISION, THE COMPLAINANT'S VENUE FOR REVIEW IS IN THE COURT OF APPEALS AND NOT THE DISTRICT COURTIn Levi v Anheuser-Busch Co., Inc. , No. 08-00398 (W.D.Mo. Oct. 27, 2008) (case below ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-37 and 108, 2007-SOX-55), the district court dismissed the Plaintiff's three consolidated SOX claims where he had already proceeded through the administrative process to a final order of the Secretary of Labor. The court wrote: "When the ARB issued its Final Decision and Order affirming dismissal of all three of Plaintiff's complaints before the USDOL, the appropriate United States Court of Appeals became Plaintiff's exclusive venue for review of the Secretary's order. In his complaint, Plaintiff indicates he has already sought review by the United States Court of Appeals for the D.C. Circuit. Pursuant to 49 U.S.C. § 42121(b)(4)(B) and 18 U.S.C. § 1514A(b)(2)(A), Plaintiff cannot collaterally attack the final decision of the Secretary of Labor in proceedings in a separate United States District Court." Slip op. at 6 (footnote omitted). In a footnote the court noted that a plaintiff wishing to file a SOX claim in district court must both meet the criteria found in 18 U.S.C. § 1514A(b)(1)(B) (passage of 180 days without a final decision by the Secretary, and lack of bad faith), and file a notice of intent to file a complaint in district court with the ALJ or ARB, as appropriate, fifteen days in advance of filing in district court. 29 C.F.R. § 1980.114(b). The Plaintiff had a fourth SOX complaint still pending before the ARB, which he had not indicated that he was seeking review of by the district court. But even if he had, the district court indicated that without the advance notice required by 29 C.F.R. § 1980.114(b), the Plaintiff could not properly invoke the district court's jurisdiction.
Bad Faith
FEDERAL COURT DECISIONS
AMENDMENT OF EXISTING DISTRICT COURT ACTION TO INCLUDE ERA WHISTLEBLOWER COMPLAINT; NO PREJUDICE SHOWN DESPITE PLAINTIFF'S DEPOSITION HAVING ALREADY BEEN TAKEN WHERE DEFENDANTS WERE ON NOTICE THAT PLAINTIFF INTENDED TO ADD THE ERA COMPLAINT UNDER 42 U.S.C. § 5851(b)(4) IF DOL DID NOT TIMELY RENDER A FINAL DECISIONUnder 42 U.S.C. § 5851(b)(4), if one year has passed from the filing of an employee's ERA whistleblower complaint with OSHA without a final decision from the Secretary of Labor, the employee may file an action in federal district court. In Richardson v. Fluor Corp. , No. 13-cv-01908 (N.D. Cal. Feb. 5, 2014) (2014 WL 492344), the Plaintiff timely filed an ERA whistleblower complaint on October 5, 2012 claiming that he had been discharged for speaking out about the unsafe work performed by a union steward, rather than for the reasons stated by the Defendants related to the Plaintiff's claustrophobia. The Plaintiff later filed a disability discrimination complaint in federal district court alleging that the Defendants failed to accommodate his claustrophobia and improperly terminated his employment in violation of the Americans With Disabilities Act and the California Fair Employment and Housing Act. In his first amended complaint, the Plaintiff did not allege an ERA whistleblower complaint, but stated that he "expressly reserves the right to amend this complaint to seek relief from this court if, after October 5, 2013, no final decision had yet been made on his OSHA complaint." After the year had passed without action on the ERA administrative complaint, the Plaintiff sought leave from the district court to file a second amended complaint to add a claim under the ERA and include certain new allegations. The Defendants opposed the motion.
The court noted that: "Rule 15(a)(2) of the Federal Rules of Civil Procedure provides that leave to amend a complaint should be 'freely given when justice so requires.' Fed. R. Civ. P. 15(a)(2). The Ninth Circuit has repeated counseled that Rule 15 'is to be applied with extreme liberality.' Eminence Capital, LLC v. Aspeon, Inc. , 316 F.3d 1048, 1051 (9th Cir. 2003). Four factors are commonly used to determine the propriety of a motion for leave to amend. These are: bad faith, undue delay, prejudice to the opposing party, and futility of amendment. Ditto v. McCurdy , 510 F.3d 1070, 1079 (9th Cir. 2007) (citing Foman v. Davis , 371 U.S. 178, 182 (1962))." Slip op. at 4.
The Defendants claimed prejudice because they had already deposed the Plaintiff. The court rejected the claim noting that the Defendants were aware of the Plaintiff's intention to add the ERA complaint. The court, however, directed that the Defendants be given a limited opportunity to depose the Plaintiff regarding his new claim in order to ameliorate any prejudice. The Defendants next claimed bad faith, not on the ground that the Plaintiff was seeking a tactical advantage, but rather on the ground that he should have alleged certain facts earlier and that some of the new allegations contradicted his deposition testimony. The court examined the challenged allegations. The court found no bad faith relating to the proposed amendments, but disallowed one set of allegations relating to whether the Defendant-Employer breached the implied covenant of good faith and fair dealing when it did not offer or pay any severance benefits, because those allegations had no bearing on the Plaintiff's existing claims or the ERA claim in particular.
The Defendants also alleged that the Plaintiff had failed to meet and confer in good faith prior to filing the motion to amend, as required by the court's standing order. The court found that both parties had failed to engage in a meaningful discussion regarding the Plaintiff's proposed amended complaint and warned that further transgressions of any order of the court may result in sanctions.
REMOVAL TO FEDERAL COURT; PROOF OF FILING WITH THE SECRETARY OF LABOR; PRESUMPTION OF DELIVERY; BAD FAITH NOT SHOWN MERELY BY FAILURE TO FOLLOW PROCEDURE
In Murray v. TXU Corp. , No. 3:03-CV-0888-P (N.D.Tx. Aug. 27, 2003) (unpublished), the Defendant challenged the District Court's jurisdiction over the Plaintiff's SOX suit on the ground that it was not clear that the Plaintiff had timely filed his complaint with the Secretary of Labor. The court rejected the challenge based on the "well-recognized presumption concerning receipt of properly addressed, paid-for, and mailed documents" which the Plaintiff raised by sworn affidavit of his counsel. Slip op. at 3 (citation omitted). The Defendant attempted to rebut by asserting that there was no evidence to establish that the person who signed a return receipt worked at DOL, but the court found that merely making this observation was insufficient to rebut the presumption. The Defendant also pointed out that the Secretary had not taken any actions to investigate the complaint; the court, however, held that this circumstance did not rebut the presumption of receipt. Finally, the Defendant argued that the Plaintiff caused or contributed to DOL not investigating the complaint within the 180 days because the Plaintiff had not filed with the OSHA Area Director as provided in the regulations and had not contacted the Secretary about the status of the complaint. The court, however, found that the Plaintiff's failure to follow procedure "and not holding the Secretary's feet to the irons" might have caused delay, but they did not by themselves indicate bad faith on the part of the Plaintiff.
FEDERAL COURT JURISDICTION; MERE SUGGESTION THAT PLAINTIFF MAY HAVE BEEN UNCOOPERATIVE AND THAT DELAY WAS IN PART DUE TO SETTLEMENT NEGOTIATIONS INSUFFICIENT TO DEFEAT FEDERAL COURT JURISDICTION
The mere fact that the OSHA administrative file suggested that the SOX whistleblower Plaintiff may have not fully cooperated with OSHA investigators and that the delay in issuance of OSHA's final determination was due in some part to settlement negotiations was insufficient to defeat the federal district court of jurisdiction based on bad faith of the Plaintiff, "absent a greater showing." Collins v. Beazer Homes USA, Inc. , __ F.Supp.2d __, 2004 WL 2023716 (N.D.Ga. Sept. 2, 2004). The court noted that a plaintiff's ability to file in federal court is not premised on a showing of good faith, but on a failure to show that the delay in OSHA's final determination was a result of bad faith.
FEDERAL COURT JURISDICTION; PROOF THAT COMPLAINT WAS SENT TO THE SECRETARY OF LABOR IN WASHINGTON, DC; FAILURE OF PLAINTIFF TO FILE WITH OSHA IN APPLICABLE GEOGRAPHICAL REGION AND TO CONTACT DOL TO INQUIRE ABOUT THE COMPLAINT DOES NOT ESTABLISH BAD FAITH REQUISITE TO DEPRIVE DISTRICT COURT OF JURISDICTION
In Murray v. TXU Corp. , 279 F.Supp.2d 799 (N.D. Tex. 2003), the Defendants moved to dismiss the Plaintiff's federal court claim under the SOX whistleblower provision for lack of subject-matter jurisdiction, arguing that there was a question as to whether the Plaintiff had timely filed a complaint with the Secretary of Labor prior to filing in the federal court. The Plaintiff presented evidence showing that his counsel sent a SOX complaint by Federal Express to the Secretary of Labor at the Frances Perkins Building in Washington, D.C., and invoked the well recognized presumption concerning receipt of properly addressed, paid-for, and mailed documents. The Defendants responded by asserting that there was no evidence that the person who signed for the documents was authorized to accept a complaint or even worked for DOL or the Federal Government. The court, however, observed that the Defendant presented no evidence describing DOL procedure for handling Fed Ex deliveries.
The Defendants also urged the court to infer nonreceipt based on the Secretary's inaction. The court, however, found the Secretary's lack of action on the complaint to be insufficient to rebut the presumption of receipt of the complaint.
The Defendants argued that the Plaintiff should be found to have contributed to DOL's failure to decide the claim in 180 days because he did not file with the OSHA Area Director for the applicable geographical area, and did not contact the Secretary after failing to receive a written report 60 days after filing. The court found that such factors fell short of a showing the Secretary's delay was due to bad faith on the part of the Plaintiff. The court noted that the statute does not identify whose burden it is to make a showing of bad faith, but found that under the posture of the case, the Defendants bore that burden.
Finally, the court denied the Defendants' motion to stay the proceeding to permit the Secretary time to investigate the Plaintiff's claims.
ADMINISTRATIVE REVIEW BOARD DECISIONS
DE NOVO PROCEEDING IN FEDERAL DISTRICT COURT; RESPONDENT'S OBJECTIONS TO DISMISSAL OF ADMINISTRATIVE APPEAL BEFORE THE ARB INEFFECTIVE BECAUSE THE REGULATIONS ONLY REQUIRE COMPLAINANT TO GIVE NOTICE OF INTENT TO OBTAIN DE NOVO FEDERAL DISTRICT COURT REVIEW AFTER THE DISTRICT COURT FILING
In Candler v. URS Corp. , ARB No. 13-045, ALJ No. 2012-SOX-5 (ARB July 3, 2013), The ARB was notified that the Complainant filed her SOX complaint in federal district court seeking de novo review under 18 U.S.C.A. § 1514A. The ARB issued an order to show cause why the Board should not dismiss the administrative complaint under 29 C.F.R. § 1980.114. The Complainant then filed a notice that she was electing to proceed in federal district court. The Respondent opposed dismissal of the administrative complaint "because she waived her right to go to district court in a representation to the ALJ, Candler engaged in bad faith delay, and literal application of section 1514A(b)(1)(B) to this case would lead to an absurd result." The ARB, however, dismissed the complaint, writing that "[p]ursuant to 29 C.F.R. § 1980.114(b), a complainant is required to give notice of his or her intent to obtain de novo review in district court within seven days after filing a complaint in the court."
REFILING OF SOX COMPLAINT IN FEDERAL COURT; BAD FAITH NOT SHOWN BY LITIGATION TACTICS, INADVERTENT FAILURE TO SERVE ONE RESPONDENT WITH NOTICE OF INTENT TO FILE IN FEDERAL COURT, OR FACT THAT ALJ HAD FOUND THAT THE COMPLAINT WAS SUBJECT TO ARBITRATION
In Vroom v. General Electric Co. , ARB No. 10-121, ALJ No. 2010-SOX-19 (ARB Nov. 8, 2010), the Complainant filed a petition for review of the ALJ's decision with the ARB, and later filed a Notice of Intent to File in Federal Court requesting that the ARB dismiss the administrative complaint. The SOX Act and regulations, 18 U.S.C.A. §§ 1514A(b)(1)(B); 29 C.F.R. §§ 1980.114, provide that if the Board has not issued a final decision within 180 days of the date on which the complainant filed the complaint, and there is no showing that the complainant has acted in bad faith to delay the proceedings, the complainant may bring an action at law or equity for de novo review in the appropriate United States district court.
The Respondents argued that the ARB should deny the motion to dismiss because when he amended his complaints, changed respondents, and took procedural steps to extend the life of his case, the Complainant acted in bad faith to delay the proceedings. The ARB found, however, that such actions did not appear to be so outside the realm of good practice that the Complainant obviously took them in bad faith in an intentional attempt to run out the clock. The ARB also observed that the Complainant had waited an additional six months after the 180-day period expired to indicate his intention to file in district court.
One Respondent argued that the ARB should deny the Complainant's motion because he failed to serve his original notice of intent to file on that Respondent as the SOX regulations require, and that if he had done so it would have urged the Board to decide the case before the 15-day-notice period expired. The ARB found the failure to serve that Respondent was inadvertent -- the result of an incorrectly addressed e-mail - and that the Respondent had not been harmed by this omission "because even if it had filed a motion urging the Board to decide the case during the notification period, the Board would have denied the motion given the press of work before it and the cases it was already in the process of deciding."
Both Respondents argued that the Complainant' complaint was not properly before the ARB because the ALJ found the complaint to be subject to arbitration, and the Complainant did not timely appeal this finding. The ARB found, however, that the only grounds the regulations permit the ARB to consider when disposing of a motion to dismiss to file anew in district court is whether the complainant has acted in bad faith.
Accordingly, the ARB granted the Complainant's motion to withdraw his complainant so that he may proceed in district court.
DISMISSAL BASED ON FILING OF NOTICE OF INTENT TO FILE SOX ACTION IN FEDERAL COURT; BAD FAITH NOT SHOWN
In Moldauer v. Constellation Brands, Inc. , ARB No. 09-042, ALJ No. 2008-SOX-73 (ARB Mar. 9, 2009), the ARB dismissed the appeal based on the Complainant's notice pursuant to 29 C.F.R. § 1980.114 of intent to file a SOX action in federal court. The Respondent opposed dismissal of the ARB appeal based on a contention that the Complainant had delayed the ALJ hearing in bad faith by failing to respond timely to an order to show cause issued by the ALJ, and in "improvident" motion to stay the ALJ proceeding. The ARB found no authority to support the contention that a pro se's complainant's failure to respond to a single order and single improvident filing constituted bad faith.
Collateral Estoppel
FEDERAL COURT DECISIONS
COLLATERAL ESTOPPEL DID NOT APPLY TO DOL ADMINISTRATIVE PROCEEDINGS UNDER SOX WHISTLEBLOWER PROVISIONS WHEN DECISION WAS ON APPEAL AND MORE THAN 180 DAYS HAD PASSED SINCE THE INITIAL FILING OF THE COMPLAINT WITH THE DEPARTMENT
In Lawson v. FMR LLC , Nos 08-10466, 08-10758 (D. Mass. Mar. 31, 2010)(Memorandum and Order)(case below 2007-SOX-27), two former employees of a nonpublic mutual fund company sought the protection of Sarbanes-Oxley Act whistleblower provision, alleging that they were unlawfully retaliated against after complaining about the company's improper business activities. In denying the employers' motion to dismiss the District Court found: (1) principles of collateral estoppel did not apply to Department of Labor administrative proceedings under SOX whistleblower provisions when the decision was on appeal and more than 180 days had passed since the initial filing of the complaint with the Department; and (2) plaintiffs were covered "employees" for purposes of SOX whistleblower provision.
Dismissal of DOL Complaint, Procedure
ADMINISTRATIVE REVIEW BOARD DECISIONS
REMOVAL OF CLAIM TO FEDERAL COURT
In Pittman v. Siemens AG , ARB No. 14-046, ALJ No. 2013-SOX-29 (ARB June 5, 2014), neither party responded to the ARB's order to show cause why it should not dismiss the administrative complaint based on the Complainant's notice of removal to district court under 18 U.S.C. § 1514A(b)(1)(B). Accordingly, the ARB granted the Complainant's motion to withdraw so that he could proceed in district court.
ARB DISMISSAL OF APPEALS SO THAT THEY MAY BE CONSOLIDATED WITH RELATED DISTRICT COURT ACTION; ARB WILL NOT COUNTENANCE FORUM SHOPPING AND PIECEMEAL LITIGATION
In Jordan v. Sprint Nextel Corp. , ARB Nos. 10-113, 11-020, ALJ Nos. 2006-SOX-98, 2010-SOX-50 (ARB Aug. 6, 2012), the ARB denied the Complainant's motion for reconsideration of notice it had provided in Jordan v. Sprint Nextel Corp. , ARB Nos. 10-113, 11-020, ALJ Nos. 2006-SOX-98, 2010-SOX-50 (ARB June 29, 2012), of its intention to dismiss the Complainant's second and third SOX complaints so that they could be consolidated for adjudication before the district court with the first complaint on which the Complainant had already provided notice of intent to file a complaint in district court. In the decision denying reconsideration, the ARB reiterated the reasoning stated in the June 29, 2012 notice: that the ARB would not countenance forum shopping and piecemeal litigation; that the ARB retains complete discretion whether to accept a complainant's petition for review; and that in the instant case, all three complaints derived from the same or overlapping facts. Accordingly, the ARB ordered dismissal of the appeals.
COMPLAINANT'S NOTICE OF INTENT TO FILE DE NOVO ACTION IN FEDERAL DISTRICT COURT ON ORIGINAL SOX COMPLAINT; ARB PROVIDES NOTICE OF ITS INTENT TO DISMISS APPEALS OF RELATED COMPLAINTS SO THAT THEY MAY BE CONSOLIDATED WITH THE DISTRICT COURT ACTION
In Jordan v. Sprint Nextel Corp. , ARB Nos. 10-113, 11-020, ALJ Nos. 2006-SOX-98, 2010-SOX-50 (ARB June 29, 2012), the ARB provided notice under the "special circumstances" regulation at 29 C.F.R. § 1980.115 of its intention to dismiss, 30 days hence, the Complainant's Second and Third SOX complaints. The Complainant had filed with the presiding ALJ a notice of intent to proceed de novo in federal district court on the Complainant's First SOX complaint, and the ALJ dismissed the First complaint on that basis. At the time of the ARB's notice a de novo action had not yet been filed in district court. The Second complaint alleged false statements about the Complainant made by named Respondents or their attorneys to OSHA, and the Third complaint alleged false statements about the Complainant made by named Respondents to the SEC. In response to an order to show cause issued by the ARB why the Second and Third complaints should not be dismissed so that they could be consolidated for adjudication before the district court, the Complainant argued that the Second and Third complaints did not involve questions of law or fact in common with the First complaint, and therefore they should not be consolidated. Moreover, the Complainant argued that under SOX and its implementing regulations, he had the right to determine whether and when to proceed in district court. The ARB, however, stated that it "cannot countenance Jordan's desire to proceed with his complaints in different forums, as it would endorse and encourage forum-shopping and piecemeal litigation of SOX complaints." USDOL/OALJ Reporter at 4. The ARB also noted that it retains complete discretion whether to accept the Complainant's petitions for review. The ARB also found that all three complaints, the first two of which had already been consolidated before the ALJ, derived from the same or overlapping facts.
NOTICE OF INTENT TO FILE IN DISTRICT COURT; ARB REINSTATES APPEAL TO DOCKET WHERE COMPLAINANT ARGUED THAT THE ARB HAD MISCONSTRUED HER INTENTION; ADJUDICATIVE LATITUDE IN CONSTRUING PAPERS FILED BY PRO SE LITIGANTS
In Wimer-Gonzales v. J.C. Penney Corp., Inc. , ARB No. 10-148, ALJ No. 2010-SOX-45 (ARB Feb. 7, 2012), the Complainant filed a motion for reconsideration of the ARB's dismissal of her DOL complaint so that so could pursue her case de novo in federal district court. The Complainant argued that she had not intended the Board to dismiss her complaint so she could proceed in district court, but had only communicated that the ARB appeal had gone beyond 180 days without a decision and that she knew of her right to take the case to district court. The Board found that although the Complainant had titled her filing "Notice of Intent to File Complaint in the United States District Court," it would reinstate her appeal given her pro se status. The Board noted that it had issued an Order to Show Cause before dismissing the appeal.
REMOVAL TO FEDERAL COURT; ARB DENIES MOTION TO STAY DISMISSAL OF ARB APPEAL TO PERMIT ATTEMPT TO MEDIATE OR TO PERMIT THE RESPONDENT TO ATTEMPT TO HAVE THE CASE RETURNED TO THE ARB; COMPLAINANT'S ADMISSION IN MALPRACTICE SUIT THAT THE SOX CLAIM WAS NOT TIMELY FILED WAS BEYOND ARB'S AUTHORITY TO ADDRESS ONCE THE COMPLAINANT REMOVED TO FEDERAL COURT
In Koeck v. General Electric Consumer and Industrial , ARB No. 08-068, ALJ No. 2007-SOX-73 (ARB Aug. 28, 2008), the Complainant filed notice with the ARB that she intended to remove her SOX case to federal court, and the ARB issued an order to show cause why the appeal to the ARB should not be dismissed. The Respondent initially argued that the ARB should stay a decision pending an attempt to mediate the case and, in the alternative, because, if mediation was unsuccessful, it intended to move the district court to dismiss Koeck's complaint on the grounds of collateral estoppel or return the case to the Board for decision. The ARB found that the Respondent, however, did not argue that "the complainant has acted in bad faith to delay the proceedings," which are the only grounds the regulations provide for denying dismissal under the regulation. The Respondent subsequently argued that the ARB should dismiss the complaint because she admitted in a malpractice suit against her former attorneys that they had failed to timely file her SOX complaint. The ARB found, however, that the Complainant's filing of a de novo complaint in district court had deprived the ARB of jurisdiction to rule on the merits of her claim. Accordingly, the ARB dismissed the appeal.
REMOVAL TO FEDERAL COURT; WHETHER DISMISSAL OF ARB APPEAL MAY BE HELD IN ABEYANCE
In Zang v. Fidelity Management & Research Co. , ARB No. 08-078, ALJ No. 2007-SOX-27 (ARB Aug. 26, 2008), the Complainant had notified the ARB that he was removing the case to federal court, but the ARB had held the appeal before it in abeyance based on the Respondent's contention that it would be filing a motion with the district court to dismiss the appeal or to issue a mandamus to DOL to issue a ruling on the appeal of the ALJ's decision. The ARB had believed that the district court's decision was imminent. However, it had not become apparent that it was not. The ARB thus dismissed the appeal.
REMOVAL TO DISTRICT COURT; MOTION FOR MANDAMUS ORDERING DOL TO ISSUE A RULING ON APPEAL OF ALJ'S DECISION
In Zang v. Fidelity Management & Research Co. , ARB No. 08-078, ALJ No. 2007-SOX-27 (ARB May 28, 2008), the ALJ had granted summary decision against the Complainant, and the Complainant filed a petition for review with the ARB. Thereafter, the Complainant filed a notice of intent to file a SOX complaint in federal district court. The ARB issued an order to show cause why the ARB appeal should not be dismissed. In response, the Respondents filed an opposition stating that they intended to file a motion with the district court to dismiss the SOX complaint with prejudice or in the alternative to issue a mandamus to DOL to issue a ruling on the appeal of the ALJ decision. The ARB held that, in the interest of judicial economy, it would hold the appeal in abeyance pending the ruling of the district court on the Respondents' motion.
REMOVAL TO FEDERAL COURT; WHETHER ARB DISMISSAL SHOULD BE WITH OR WITHOUT PREJUDICE
In Mozingo v. The South Financial Group, Inc. , ARB No. 07-040, ALJ No. 2007-SOX-2 (ARB Feb. 8, 2007), a SOX whistleblower case, the ALJ granted summary decision against the Complainant and the Complainant petitioned for ARB review. Subsequently, the ARB received the Complainant's Notice of Intent to File Lawsuit in Federal District Court. The ARB ordered the parties to show cause why it should not dismiss the appeal in view of 18 U.S.C.A. § 1514(b)(1)(B). The Complainant then filed a Motion to Dismiss Without Prejudice. The Board denied the motion to dismiss without prejudice because the Complainant cited no statutory or regulatory basis, nor proffered any grounds, for doing so. Nonetheless, the Board dismissed the appeal because the Complainant had opted to pursue his complaint in district court rather than at the Board.
REMOVAL TO FEDERAL COURT
In Bulls v. Chevron Texaco, Inc. , ARB Nos. 07-014, 07-016, ALJ No. 2006-SOX-117 (ARB Jan. 17, 2007), the ALJ found that the SOX whistleblower complaint was not timely filed and that the Complainant was not entitled to either equitable tolling or equitable estoppel. The Complainant filed a petition for review with the ARB, but the same day also filed a Notice of Intent to File Lawsuit in Federal District Court. Under SOX if the Board has not issued a final decision within 180 days of the date on which the complaint was filed and there is no showing of bad faith by the complainant to delay the proceedings, the complainant may bring an action in the appropriate United States district court. In the instant case the 180-day period had already expired by the time the Complainant petitioned for ARB review. Neither party responded to the ARB's order to show cause why the appeal should not be dismissed, and therefore the Board dismissed the appeal.
DISMISSAL OF APPEAL; COMPLAINANT DECIDES TO PROCEED IN FEDERAL DISTRICT COURT AFTER FILING OF APPEAL WITH THE ARB
In Heaney v. GBS Properties LLC , ARB No. 05-039, ALJ No. 2004-SOX-72 (ARB May 19, 2005), the ALJ had issued a recommended decision dismissing the complaint. Several months after filing an appeal with the ARB, the Complainant - acting pro se - wrote to the ARB stating that his attorney had filed an action in federal district court and that he requested to proceed de novo in that forum. The ARB dismissed the appeal, noting that the Sarbanes-Oxley whistleblower provision provides that if the Board has not issued a final decision within 180 days of the date on which the complainant filed the complaint and there is no showing that the complainant has acted in bad faith to delay the proceedings, the complainant may bring an action at law or equity for de novo review in the appropriate United States district court, which will have jurisdiction over the action without regard to the amount in controversy.
Similarly, in Allen v. Stewart Enterprises, Inc. , ARB No. 05-059, ALJ Nos. 2004-SOX-60 to 62 (ARB Aug. 17, 2005), the Complainants filed their complaint on February 2, 2004. OSHA found that the complaint lacked merit, and the Complainants requested a hearing. On February 15, 2005 an ALJ issued a recommended decision finding against the Complainants. The Complainants filed a Petition for ARB review on March 22, 2005. On July 18, 2005, the Complainants informed the Board that they intended to purse their SOX case in federal court, and the Board dismissed the appeal pursuant to 18 U.S.C.A. § 1514A(b)(1)(B); 29 C.F.R. § 1980.114. The Board noted that, as usually is the case, the 180-day period for DOL to deciding the case had expired before the Complainants filed their petition with the Board.
Exhaustion of Administrative Remedies
FEDERAL COURT DECISIONS
EXHAUSTION OF ADMINISTRATIVE REMEDIES; WHERE OSHA COMPLAINT PUT INDIVIDUAL DEFENDANTS ON NOTICE THAT IT WAS BEING ALLEGED THAT THEY HAD VIOLATED SOX, EXHAUSTION REQUIREMENT WAS MET EVEN THOUGH THE OSHA COMPLAINT DID NOT CLEARLY NAME THE INDIVIDUALS AS RESPONDENTS IN THE ADMINISTRATIVE PROCEEDING
In Jones v. Southpeak Interactive Corp. of Delaware , No. 13-2399 (4th Cir. Jan. 26, 2015) (2015 WL 309626; 2015 U.S. App. LEXIS 1114), the Appellee's original SOX complaint filed with OSHA, Southpeak Interactive was named as the respondent. The complaint mentioned the company's chief executive and the complaint's chairman as persons who were alleged to have violated the Act, but did not specifically identify them as respondents. After OSHA had not issued a final decision within 180 days of the complaint, and the Appellee filed a complaint in federal district court, the chief executive and the chairman were named as defendants. The Appellants argued that the Appellee had not exhausted administrative remedies in regard to the named individuals. The Fourth Circuit held that the administrative complaint satisfied the exhaustion requirement. The record did not suggest that the Appellee was trying to circumvent the SOX exhaustion requirement. The complaint filed with OSHA was substantially similar to the complaint filed in district court, and the alleged harm of a retaliatory discharge was identical. The OSHA complaint plainly identified the individuals as persons who allegedly violated the Act who the complaint was being filed against. The court found that nothing more precise was required for the form of the OSHA complaint, and that OSHA's subsequent treatment of the complaint could not take away the Appellee's opportunity to seek recourse. The record showed no doubt that the individuals were well aware of the allegations against them and that it had been alleged that they personally had violated the Act. The court found that it would not have been surprising, therefore, when the Appellee named them in the instant civil action.
EXHAUSTION OF ADMINISTRATIVE REMEDIES; ON FRCP 12(b)(6) MOTION, COURT WAS WILLING TO DRAW REASONABLE INFERENCE THAT COMPLAINT WAS TIMELY FILED WITH DOL AND THAT PLAINTIFF WAITED SUFFICIENT TIME WITHOUT A FINAL DOL DECISION BEFORE FILING IN DISTRICT COURT
In Rock v. Lifeline Systems Co. , No. 13-11833 (D. Mass. Apr. 22, 2014)(2014 WL 1652613), the Plaintiff was a sales person who charged that she was illegally terminated from employment under several laws for reporting a fire hazard with the Defendant's medical alert devices. The Defendant moved to dismiss a claim under the whistleblower provision of the Consumer Product Safety Improvement Act, 15 U.S.C. 2087, on the ground that the Defendant had not exhausted her administrative remedies, citing Jallali v. USA Funds , 2012 WL 32918783 at *5 (S.D.Fla. Aug. 13, 2012). The court found that Jallali was inapplicable as in that case the Plaintiff had not alleged that it complied with any of the procedural requirements of 15 U.S.C. § 2087(b) and had not addressed arguments that she failed to exhaust her administrative remedies. Here, the Plaintiff had timely filed SOX whistleblower complaint with DOL, and later added a CPSIA complaint. The Plaintiff filed in district court after the DOL had not issued a final decision within 180 days of the filing of the complaint. The court found: "Although [the Plaintiff] did not specify the date she added the CPSIA charge, a reasonable inference can be drawn that [the Plaintiff] properly filed the CPSIA charge within the requisite 180 day time period. Again interpreting the record in [the Plaintiff's] favor, a reasonable inference therefore arises that she complied with section 2087(b)(4)'s filing requirements by waiting the requisite 210 days before filing suit in this court." Slip op. at 31-32 (citations omitted).
DISTRICT COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION OVER A SOX WHISTLEBLOWER COMPLAINT WHERE THE PLAINTIFF FAILED TO EXHAUST ADMINISTRATIVE REMEDIES; A PLAINTIFF DOES NOT EXHAUST ADMINISTRATIVE REMEDIES WHERE HE FILED HIS COMPLAINT WITH THE SECRETARY OF LABOR RATHER THAN WITH OSHA AS REQUIRED BY THE REGULATIONS
In Delmore v. McGraw-Hill Companies , 12-cv-1306 (E.D.Wash. July 12, 2013), the court dismissed the Plaintiff's SOX complaint under FRCP 12(b)(1) for lack of subject matter jurisdiction where the Plaintiff failed to exhaust his administrative remedies. Although the Plaintiff alleged that he filed a complaint with the Secretary of Labor and filed his federal court action only after 180 days had passed without communication from DOL, the court found that he had not exhausted administrative remedies where he did not dispute that (1) the administrative procedure for SOX claims requires a complainant to file a complaint with OSHA; and (2) that he did not file a complaint with OSHA.
FAILURE TO STATE A CLAIM UNDER SOX WHERE PLAINTIFF FAILED TO FILE A WHISTLEBLOWER COMPLAINT WITH OSHA PRIOR TO FILING IN DISTRICT COURT
In Bond v. Rexel, Inc. , No. 5:09-CV-122, 2011 WL 1578502 (W.D.N.C. Apr. 26, 2011), the plaintiff filed a complaint against her former employer, which included a cause of action under Sarbanes-Oxley Act, as well as several other employment based actions. The Court held that the plaintiff's SOX allegations failed to state a claim upon which relief could have been granted because the plaintiff did not allege that she filed a SOX whistleblower complaint with the Occupational Safety and Health Administration (OSHA) at any time prior to filing her claim in federal district court. The plaintiff's complaint also failed to allege any facts suggesting that she filed a claim with OSHA within the 90 day statute of limitations period or otherwise. Therefore, the plaintiff's SOX claim failed as a matter of law and was dismissed with prejudice.
EXHAUSATION OF ADMINISTRATIVE REMEDIES
In Simkus v. United Air Lines, Inc. , No. 11 C 2165, 2012 WL 3133603 (N.D. Ill. July 31, 2012) (case below ALJ No. 2010-SOX-48), the plaintiff filed suits under a myriad of statutes, including the Toxic Substances Control Act ("TSCA"), 15 U.S.C. § 2601 et seq., and the Sarbanes-Oxley Act ("SOX"), 18 U.S.C. § 1514A. His SOX complaint was dismissed as untimely. Moreover, because the plaintiff failed to include a TSCA complaint when he filed his SOX complaint with OSHA, his TSCA complaint was dismissed for failure to exhaust his administrative remedies.
EXHAUSTION OF ADMINISTRATIVE REMEDIES
In Roganti v. Metropolitan Life Ins. Co. , No. 12 Civ. 0161, 2012 WL 2324476 (S.D.N.Y. June 18, 2012) (related to ALJ No. 2005-SOX-2), the complaint was dismissed for failure to exhaust administrative remedies because the plaintiff admittedly did not first file with OSHA.
TO HAVE EXHAUSTED ADMINISTRATIVE REMEDIES, PLAINTIFF MUST HAVE PREVIOUSLY PRESENTED EACH CLAIM - INCLUDING SPECIFIC ADVERSE ACTIONS, PROTECTED ACTIVITY, AND GENERAL NATURE OF THE FACTS - TO OSHA BEFORE FILING IN DISTRICT COURT
In Wong v. CKX, Inc. , No. 11 Civ. 6291, 2012 WL 3893609 (S.D.N.Y. Sept. 11, 2012) (case below ALJ No. 2010-SOX-36), the plaintiff, Senior Tax Counsel for an entertainment company, repeatedly raised concerns to senior management that if its UK-based subsidiary was conducting business in the United States (as she believed it was), than the company needed to pay United States taxes on that subsidiary's income. She believed the company may owe the Unites States government nearly $100 million dollars in back taxes, and their failure to do so rendered false the company's SEC filings regarding their tax liabilities. Two months after she lodged her complaints, the plaintiff was terminated, and filed a complaint with OSHA alleging retaliatory termination in violation of SOX. OSHA dismissed the plaintiff's complaint, and after an ALJ held a three-day hearing on the merits, the plaintiff filed this action for de novo review in district court.
The defendant argued that the court lacked jurisdiction to hear plaintiff's complaint because the complaint that the plaintiff filed before the district court contained factual differences from her OSHA complaint. Specifically, the defendant noted that the plaintiff's district court complaint did not include her allegation in her OSHA complaint that the company's senior management concealed the plaintiff's concerns from the Audit Committee of the Board of Directors. Additionally, in her OSHA complaint, she alleged that she complained about the company's tax position in 2006, but in the district court complaint she said she first complained in 2009, closer to the date of her termination.
The district court began by clarifying the standard for exhausting administrative remedies, which requires that "each separate and distinct claim [be] pled before the agency." Wong at *4 (citing Sharkey v. J.P. Morgan Chase & Co. , 805 F.Supp.2d 45, 53 (S.D.N.Y.2011)). The court elaborated that it is permissible for the plaintiff to include more specific allegations in a subsequent district court complaint, so long as the specific claims, "including specific adverse employment actions, protected activity, and the general nature of the facts that formed [p]laintiff's belief in violations of the enumerated statutes giving rise to the protected activity, were timely presented in her OSHA Complaint." Id. In this case, the court found that "the general nature of the facts pled in the OSHA complaint and the complaint before this Court is the same," and "the thrust of the plaintiff's underlying claim here is the same as the one she filed with OSHA." Id. at *5.
INDIVIDUAL LIABILITY; INDIVIDUAL NOT SPECIFICALLY NAMED IN OSHA COMPLAINT AS A PARTY
In Bridges v. McDonald's Corp. , No. 1:09-cv-01880 (N.D.Ill. Dec. 21, 2009) (case below 2008-SOX-41), the district court granted summary judgment dismissing the count of the Plaintiff's SOX claim against her former supervisor, where that supervisor had not been named as a party when the case was before OSHA and OALJ. The court acknowledged that the SOX regulation may provide for individual liability, but found a complainant is nonetheless obligated to exhaust her administrative remedies for each claim that she seeks to assert against each defendant. The mere fact that an individual is named in the body of the OSHA complaint is insufficient to put OSHA and that individual on notice that the complainant is pursuing a claim against that individual. The court found that the limited exception recognized in Title VII case law permitting a claim against an unnamed party when that party had adequate notice of the proceeding and the opportunity to participate in conciliatory proceedings, is not applicable in SOX proceedings because the Title VII procedures are geared toward fostering settlement, while the SOX administrative scheme is judicial in nature. Accordingly, the court found that the Plaintiff had failed to exhaust her administrative remedies as to her SOX claim asserted against the supervisor as an individual.
EXHAUSTION; MERE FACT THAT COMPLAINANT IS AN ATTORNEY IS NOT AN EXEMPTION FROM THE REQUIREMENT TO EXHAUST ADMINISTRATIVE REMEDIES BEFORE FILING IN FEDERAL COURT
In Curtis v. Century Surety Co. , No. 08-16236 (9th Cir. Mar. 23, 2009) (unpublished), the Ninth Circuit affirmed the District Court's ruling in Curtis v. Century Surety Co. , No. CV 05-1538 (D.Ariz. Aug. 24, 2006), granting summary in favor of the Defendant on the Plaintiff's SOX whistleblower claim because the Complainant did not fulfill the exhaustion requirements of 18 U.S.C. § 1514A(b). The Ninth Circuit found that the Plaintiff had conceded that had not exhausted; the Ninth Circuit rejected the argument that being an attorney exempts the Plaintiff from doing so in this case.
The District Court's decision contains more detail about the Plaintiff's position: that the statutory exhaustion requirement "do[es] not apply because compliance would require him to breach his fiduciary duty to Defendant and require him to divulge information subject to the attorney-client privilege in violation of the Ethics Rules of the State Bar of Arizona." This District Court found that the only authority cited by the Plaintiff, a California State Bar Ethics Alert and Washington State Bar Opinion reminding lawyers that they remain bound by the ethical rules of conduct surrounding breach of attorney-client confidences despite the passage of disclosure requirements under SOX, only related to individuals divulging privileged information, not merely information deemed confidential by an employer, and that the Plaintiff had not established how the information upon which he would have relied would have been privileged, or that the purported privileged information would have been necessary to the administrative complaint. The District Court found that Congress recognized in the SOX that there would be circumstances in which attorney employees would be whistleblowers regarding violations of securities laws, but did not create exceptions for attorneys.
EXHAUSTION OF ADMINISTRATIVE REMEDIES; FAILURE TO NAME EMPLOYER AS DEFENDANT
In Smith v. Psychiatric Solutions, Inc. , No. 3:08-cv-00003 (N.D. Fla.. Mar. 31, 2009), the court held that the Plaintiff could only pursue her SOX whistleblower complaint in federal court against defendants named in her administrative complaint because the federal court's jurisdiction depended on the claim having been administratively exhausted. 18 U.S.C. § 1514(b)(1)(A). The Plaintiff had only named the publicly traded parent corporation in her OSHA complaint, and had not named the subsidiary for which she worked. Since the Plaintiff did not allege in her complaint or amended complaint that the parent company was her employer, a necessary element of a SOX whistleblower claim, the parent company was entitled to summary judgment. Even if the parent had been alleged to be the Plaintiff's employer, there was no evidence to support an employment relationship. The fact that an insurance document had the parent's name on it and that the parent had sent an official to investigate the Plaintiff's post-termination grievances were legally insufficient to establish such an employment relationship, while voluminous other documentary evidence suggested that the subsidiary was the Plaintiff's employer.
EXHAUSTION OF ADMINISTRATIVE REMEDIES UNDER SOX; FILING OF STATE COMMON-LAW CLAIM FOR WRONGFUL TERMINATION
In Williams v. Boston Scientific Corp. , No. C:08-cv-01437 (N.D. Cal. May 13, 2008), the Defendants moved to stay the Plaintiff's diversity action (which plead both California and federal actions, including a SOX whistleblower complaint), pending the Plaintiff's exhaustion of administrative remedies. At the time the motion had been filed, 180 days had not yet passed since the SOX complaint had been filed with OSHA. Notwithstanding that the 180 days had passed by the time the district court ruled on the motion, the court found no merit in the motion because California Supreme Court had explicitly held that common-law claims for wrongful termination predicated on violation of a statute need not comply with the underlying statute's exhaustion requirements. The court held, therefore that the "Plaintiff need not exhaust administrative remedies under the Sarbanes-Oxley Act in order to assert common-law claims for wrongful termination."
FEDERAL COURT JURISDICTION; RETALIATION AFTER FILING OF OSHA COMPLAINT CANNOT BE ASSERTED IN LATER FEDERAL COURT PROCEEDING UNLESS THE PLAINTIFF SHOWS THAT HE AMENDED HIS OSHA COMPLAINT OR OTHERWISE REPORTED THE RETALIATION TO OSHA
In Portes v. Wyeth Pharmaceuticals, Inc. , No. 06-CV-2689 (S.D.N.Y. Aug. 20, 2007) (case below 2005-SOX-98), the Plaintiff alleged that the Defendant retaliated against him after he filed his administrative SOX complaint when it disparaged his character and reputation by falsely claiming that he demeaned his supervisor and co-workers and generally damaged relationships with key internal clients of his department. Because the Plaintiff did not allege that he amended his OSHA complaint or otherwise reported the retaliation to OSHA, the court found that he could not assert this claim in federal court. Specifically, the court noted that SOX Section 1514A(b)(1) requires that violations be first presented to DOL, and that district court jurisdiction requires exhaustion of the administrative remedy.
DISTRICT COURT JURISDICTION; COMPLAINT MUST FIRST BE FILED WITH THE SECRETARY OF LABOR
In Mann v. Gannett Co., Inc. , No. 2:06-CV-00888 (M.D. Ga. June 8, 2007), the Plaintiff had reported to the Defendant's attorney her belief that the Defendant was defrauding customers by overcharging for advertisements. The Plaintiff later sued the Defendant under the Victim and Witness Protection Act of 1982. The court granted summary judgment for the Defendant, finding that the the VWPA does not provide for a private right of action. In the ruling, the court noted that the Plaintiff had mentioned in her brief that the whistleblowing provision of the SOX supported her case. The court observed that there may have been some confusion on the part of the Plaintiff because the whistleblower provision of the SOX is found at 18 U.S.C. § 1514A, while the VWPA is found at 18 U.S.C. § 1514. Assuming for purposes of decision that the Plaintiff meant to rely on the SOX instead of, or in addition to, the VWPA, the court still found dismissal proper because a SOX complaint must be filed with the Secretary of Labor before filing a lawsuit in federal district court.
RIGHT TO FILE IN FEDERAL COURT IF OSHA MAKES ITS DETERMINATION AFTER 180 DAYS HAVE PASSED; COMPLAINANT IS NOT REQUIRED TO EXHAUST REMEDIES BEFORE ALJ AND ARB
Where OSHA issued its determination after 180 days had passed since the filing of the complaint under the whistleblower provision of the SOX, and the Complainant filed for de novo review in federal district court rather than requesting a hearing before a DOL ALJ, the Complainant was not required to exhaust administrative remedies prior to filing the district court action. Hanna v. WCI Communities, Inc . , No. 04-80596-CIV. (S.D. Fla. Nov. 18, 2004). The court also rejected the Respondent's argument that the OSHA findings were entitled to res judicata effect.
EXHAUSTION OF ADMINISTRATIVE REMEDIES; POST-OSHA COMPLAINT RETALIATION; COMPLAINANT MUST AMEND OR FILE NEW COMPLAINT WITH OSHA IN ORDER FOR FEDERAL DISTRICT COURT TO PROCEED WITH POST COMPLAINT RETALIATION CLAIM
In Willis v. Vie Financial Group, Inc. , No. Civ.A. 04-0435 (E.D. Pa. Aug. 6, 2004) (available at 2004 WL 1774575), the court held that the exhaustion requirement of the whistleblower provision of the Sarbanes-Oxley Act precludes recovery for a discrete act of retaliation that arose after the filing of the administrative complaint which was never presented to OSHA for investigation. In Willis , the original OSHA complaint filed in April of 2003 was based on a threatened termination and a stripping of job responsibilities. The Complainant was terminated in May 2004, but he never sought to amend his administrative complaint, nor did he file a new complaint, nor did he inform OSHA that he was complaining in any way about his termination. At some point (the district court's decision does not identify when this occurred) the case was removed to federal court. Because an OSHA complaint was never filed in regard to the termination, the Complainant did not exhaust his administrative remedies (which under the SOX process are judicial in nature compared with the informal conciliatory process in Title VII cases), and the termination complaint could not be pursued before the federal district court.
EXHAUSATION OF ADMINISTRATIVE REMEDIES; INDIVIDUALS NOT NAMED AS DEFENDANTS IN OSHA COMPLAINT
In Bozeman v. Per-Se Technologies, Inc. , 1:03-CV-3970 (N.D. Ga. Sept. 12, 2006), the court granted summary judgment dismissing as defendants two officers of the Defendant company based on the Plaintiff's failure to exhaust administrative remedies where the officers had not been named in the heading of the administrative complaint filed with OSHA. The court rejected the Plaintiff's contention that the officers were covered by the administrative complaint because they were named as actors and therefore had notice as to the claims against them, finding that the same argument had been rejected by the court in Hanna v. MCI Communities, Inc. , 2004 U.S. Dist. LEXIS 25652, at *7-9 (S.D. Fla. Nov. 15, 2004). Merely mentioning the officers as actors in the body of the complaint is insufficient because OSHA is not thereby put on notice that it was required to investigate the individual officers' actions.
EXHAUSTION OF ADMINISTRATIVE REMEDIES; ASSERTION OF TORT CLAIM RATHER THAN STATUTORY CLAIM
In Romaneck v. Deutsche Asset Management , No. C-5-2473 (N.D. Cal. Aug. 17, 2006), the Defendant sought summary judgment on the Plaintiff's SOX whistleblower claim based on failure to exhaust administrative remedies. The court denied the motion, holding that "a plaintiff asserting a common law tort claim for wrongful termination based on a particular statute need not comply with that statute's administrative remedies. Stevenson , 16 Cal. 4th at 904-05. Therefore, it is irrelevant that Romaneck has not complied with the statutory enforcement scheme provided for by SOX because Romaneck does not assert a statutory claim under that act." Slip op. at 8.
Mandamus
FEDERAL COURT DECISIONS
SOX PROVISION FOR DE NOVO REVIEW IN DISTRICT COURT; DISTRICT COURT DOES NOT HAVE THE INHERENT AUTHORITY TO IMPOSE PRECLUSION PRINCIPLES TO ALJ DECISION PENDING ON APPEAL BEFORE THE ARB WHEN THE COMPLAINANT FILES THE DISTRICT COURT ACTION
In Stone v. Instrumentation Laboratory Co. , No. 08-1970 (4th Cir. Dec. 31, 2009) (case below ARB Nos. 07-122 and 08-113, ALJ No. 2007-SOX-21), the Plaintiff had filed a SOX whistleblower complaint with OSHA, and had requested an ALJ hearing after OSHA issued its findings. The ALJ granted summary decision, and the Plaintiff appealed to the ARB. While the appeal was pending before the ARB, the Plaintiff brought a de novo action in district court. More than 180 days had passed after the filing of the complaint with OSHA. The district court applied preclusion principles, and issued a mandamus to DOL ordering the ARB to rule on the appeal within 90 days. The Plaintiff, believing that the ARB no longer had jurisdiction over the matter, declined to prosecute the appeal before the ARB. The ARB dismissed the appeal for failure to prosecute. The Plaintiff thereafter obtained a final judgment from the district court, and appealed to the Fourth Circuit.
On appeal, the Fourth Circuit observed that the relevant portion of the SOX whistleblower law states that an aggrieved individual may bring "an action at law or equity for de novo review in the appropriate district court of the United States" if a final decision has not been issued by the Secretary of Labor within 180 days after the filing of an administrative complaint. 18 U.S.C. § 1514A(b)(1)(B). The court of appeals found this language to be plain and unambiguous. The district court found that the provision had not abrogated its inherent power to apply preclusion principles. The court of appeals, however, found that the "de novo review" language required the district court to consider the merits anew. The Appellees argued that de novo review after the ALJ had already issued a ruling would lead to an absurd result, relying in part on comments made by the Secretary of Labor in the preamble to the Federal Register notice of implementing regulations. See 69 Fed. Reg. 52104, 52111-12 (Aug. 24, 2004). The Secretary had suggested that courts may apply preclusion principles where there had been extensive litigation before DOL that had resulted in a decision by the ALJ or Secretary, and that courts might treat a petition for de novo review as a petition for mandamus. The court of appeals rejected the Appellee's absurdity argument, stating that "[n]either the Secretary nor the courts have the authority to engage in creative interpretation of the statute to avoid duplication of efforts, even if the goal for doing so is laudable." Slip op. at 17 (citation omitted). The court stated that if the SOX procedures were unworkable in practice, the remedy must be provided by Congress rather than the courts. The court also found that literal interpretation of the statute did not, in fact, lead to an absurd result, as SOX whistleblower cases involve fact patterns where time is of the essence, and as Congress could design a scheme aiding SOX whistleblower plaintiffs even if it was less efficient than the Secretary of Labor would have contemplated.
The court of appeals did not reach the issue of whether a de novo hearing before a district court would be available if the ARB issued a final decision more than 180 days after the administrative complaint was filed.
REMOVAL TO FEDERAL COURT AFTER THE ALJ ISSUED DECISION ON SUMMARY JUDGMENT; MANDAMUS FOR ARB TO ISSUE DECISION ON THE MERITS
On November 30, 2007, the ARB dismissed the Complainant's appeal in Stone v. Instrumentation Laboratory, SpA , ARB No. 07-122, 2007-SOX-21 (Nov. 30, 2007), after the Complainant filed a de novo action in federal district court on his SOX claim. On July 2, 2008, the district court stayed the proceedings before it and issued a mandamus to the DOL to reinstate the proceedings within 14 days and to order the ARB to rule on the merits of the Complainant's appeal within 90 days. Stone v. Instrumentation Laboratory, SpA , No. 07-cv-03191 (D.Md. July 2, 2008). The court also granted the Defendant's motion to dismiss. The court reviewed the law on collateral estoppel and found little authority on the subject under SOX. The court noted that in Allen v. Stewart Enterprises, Inc. , No. 05-4033 (E.D.La. Apr. 6, 2006), the court had stayed its proceedings and remanded for the ARB to rule on the merits on the ground that relitigating the case after it had been fully litigated before an ALJ and the Complainant had requested ARB review would be absurd. The court noted that in Hanna v. WCI Communities, Inc. , 348 F. Supp. 2d 1322 (S.D.Fla. 2004), the court found that OSHA's findings were entitled to neither res judicata nor collateral estoppel effect. The court noted that the Hanna court had stressed the absence of an ALJ or ARB decision in the matter. The court noted that in the case before him, unlike Hanna , the ALJ had issued a decision and the Complainant had filed an ARB appeal before suit in the federal court. The Complainant had an opportunity to fully litigate his claims, filing voluminous briefs, declarations, and supporting exhibits, which were considered by the ALJ in a 24 page decision. The court rejected the Complainant's claim that he was not afforded an adequate opportunity to litigate his claims because the ALJ dismissed without discovery and a hearing. The court found that discovery had not been necessary to resolve the legal issue before the ALJ. The court found that the ALJ's decision was a final judgment on the merits for purposes of collateral estoppel.
On July 14, 2008, the ARB issued an Order Reinstating Case and Establishing Briefing Schedule. In view of the fact that the district court had ordered expedited review, the ARB stated that it would grant no motions for enlargement of time to file briefs.
In Stone v. Instrumentation Laboratory, SpA , ARB No. 08-113, 2007-SOX-21 (ARB July 31, 2008), the ARB therefore dismissed the appeal on July 31, 2008 for failure to prosecute because the Complainant had refused to file a brief with the ARB. The Complainant had refused because "[he] believes that the ARB does not properly have jurisdiction over this matter since Stone filed his SOX claim in the United States District Court."
DISTRICT COURT ACTION; STAY OF ACTION AND MANDAMUS WHERE COMPLAINANTS TRANSFERRED TO DISTRICT COURT ONLY AFTER LENGTHY ADMINISTRATIVE ADJUDICATION THAT WAS PENDING REVIEW BEFORE THE ARB WHEN TRANSFERRED
In Allen v. Stewart Enterprises, Inc. , No. 05-4033 (E.D.La. Apr. 6, 2006) (case below ARB Nos. 06-081, ALJ Nos. 2004-SOX-60 to 62), the ALJ had issued a 109 page decision, which was pending on review at the ARB. The parties had filed briefs, and the Respondent filed a motion to strike the Complainants' brief because it violated the ARB's page limits. The ARB issued an Order to Show Cause. At this point, the Complainants' informed the ARB that they would transfer to federal district court. Before the district court, the Respondent filed a motion for mandamus relief.
The district court stayed the district court action, and issued a mandamus for the ARB to reinstate the appeal and issue a decision within 90 days. The court found that it would be absurd to start a whole new trial at this point. The court cited principles of collateral estoppel and issue-law preclusion, and its inherent power to stay a proceeding and issue a mandamus against an agency.
Pursuant to the order of mandamus, the ARB issued a decision affirming the ALJ on July 27, 2006. Allen v. Stewart Enterprises, Inc. , ARB No. 06-081, ALJ Nos. 2004-SOX-60 to 62 (ARB July 27, 2006).
DISTRICT COURT JURISDICTION; FACTORS SUGGESTING THAT THE COURT ASSERT EQUITABLE REMEDIES SUCH AS MANDAMUS OR PROCEED AS A REGULAR FEDERAL QUESTION CASE
In Stone v. Duke Energy Corp. , 3-03-CV-256 (WD NC June 10, 2003) (case below 2003-SOX-12), the complaint had been investigated by OSHA and Complainant requested a hearing before an ALJ. The ALJ scheduled a hearing. Complainant's attorney subsequently informed the ALJ that he would be filing a civil complaint in District Court under 18 U.S.C. § 1514A(b)(1)(B) and would therefore no longer continue with the administrative proceeding. The ALJ issued a ruling that he would retain jurisdiction until such time as he ruled on a pending motion for summary decision or until a district court asserted jurisdiction over the matter. Upon application to the District Court for the Western District of North Carolina, the court observed that more than 180 days had passed since the filing of the complaint and that there was no indication of bad faith or delay on the part of the Complainant. The court then considered how its jurisdiction should be exercised, observing that :
... while the statute provides for a cause of action allowing the Court to hear the case under its federal question jurisdiction, it does not specifically limit the remedies available to the Court once it exercises jurisdiction. For example, the Secretary of Labor has opined, in a recent interim final rule, that a Court might, upon a finding that significant resources have been expended by the Department of Labor to adjudicate the dispute, and that findings of fact have been made after ample process, choose to exercise its discretion by issuing a writ of mandamus compelling the Secretary to complete the administrative proceeding. 29 CFR § 1980.114. Note that the statute specifically authorizes equitable remedies. So both mandamus and the stay Plaintiff seeks would be available remedies.
The court determined that mandamus would not be appropriate where there was no prospect that the Secretary would issue a final order anytime in the immediate future, and although some administrative resources had been expended on the matter, an initial investigation was all that had yet occurred. Thus, the court ordered the Secretary of Labor's proceeding stayed and took jurisdiction "in the manner of a typical federal question case."
Notice to DOL of Intent to Remove
FEDERAL COURT DECISIONS
REMOVAL TO DISTRICT COURT; ADVANCE NOTICE TO ALJ OR ARB AS A JURISDICTIONAL REQUIREMENTIn Levi v Anheuser-Busch Co., Inc. , No. 08-00398 (W.D.Mo. Oct. 27, 2008) (case below ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-37 and 108, 2007-SOX-55), the district court dismissed the Plaintiff's three consolidated SOX claims where he had already proceeded through the administrative process to a final order of the Secretary of Labor. The court wrote: "When the ARB issued its Final Decision and Order affirming dismissal of all three of Plaintiff's complaints before the USDOL, the appropriate United States Court of Appeals became Plaintiff's exclusive venue for review of the Secretary's order. In his complaint, Plaintiff indicates he has already sought review by the United States Court of Appeals for the D.C. Circuit. Pursuant to 49 U.S.C. § 42121(b)(4)(B) and 18 U.S.C. § 1514A(b)(2)(A), Plaintiff cannot collaterally attack the final decision of the Secretary of Labor in proceedings in a separate United States District Court." Slip op. at 6 (footnote omitted). In a footnote the court noted that a plaintiff wishing to file a SOX claim in district court must both meet the criteria found in 18 U.S.C. § 1514A(b)(1)(B) (passage of 180 days without a final decision by the Secretary, and lack of bad faith), and file a notice of intent to file a complaint in district court with the ALJ or ARB, as appropriate, fifteen days in advance of filing in district court. 29 C.F.R. § 1980.114(b). The Plaintiff had a fourth SOX complaint still pending before the ARB, which he had not indicated that he was seeking review of by the district court. But even if he had, the district court indicated that without the advance notice required by 29 C.F.R. § 1980.114(b), the Plaintiff could not properly invoke the district court's jurisdiction.
PRIOR NOTICE OF INTENT TO FILE COMPLAINT IN DISTRICT COURT; VALIDITY OF REGULATION
In JDS Uniphase Corp. v. Jennings , No. 1:06-CV-00200 (E.D.Va. Feb. 7, 2007), the court questioned, without deciding, whether the DOL regulation at 29 C.F.R. § 1980.114(b), which requires that the complainant file a notice with the ALJ or ARB 15 days before filing a complaint in district court, was promulgated in excess of DOL's statutory authority insofar as it imposes additional jurisdictional requirements beyond those in the text of the SOX itself.
ADMINISTRATIVE REVIEW BOARD DECISIONS
REMOVAL TO FEDERAL COURT; COMPLAINANT IS NOT REQUIRED TO WITHDRAW DOL COMPLAINT PRIOR TO FILING IN FEDERAL DISTRICT COURT
A complainant is not required to withdraw his SOX complaint before DOL prior to filing a de novo action in federal district court where DOL has not made a final decision in his case within 180 days of the filing of the complainant with OSHA. Nixon v. Stewart & Stevenson Services, Inc. , ARB No. 05-066, ALJ No. 2005-SOX-1 (ARB Sept. 28, 2007).
REMOVAL TO DISTRICT COURT; LACK OF NOTICE OF SUIT
The ARB dismissed the appeal before it where the Complainant had begun a proceeding in U.S. District Court seeking a de novo hearing on his SOX claim. The Board observed that the record did not show that the Complainant ever notified the ALJ or the ARB of this suit until after the ARB issued a briefing schedule. McIntyre v. Merrill Lynch Pierce Fenner & Smith, Inc. , ARB No. 04-055, 2003-SOX-23 (ARB July 27, 2005).
When DOL Jurisdiction Ends
FEDERAL COURT DECISIONS
DISTRICT COURT ONLY OBTAINS JURISDICTION IF THE SECRETARY HAS NOT ISSUED A FINAL DECISION WITHIN 180 DAYS OF THE COMPLAINTIn Wingard v. Countrywide Home Loans, Inc. , No. 2:07cv904-MHT (M.D.Ala. Sept. 18, 2008), the court rejected the Plaintiff's contention that she was entitled to by-pass the administrative process at DOL for a SOX whistleblower complaint if the Secretary had not issued a decision within 60 days under 29 C.F.R. § 1980.105(a). The court found that the statute and the regulation clearly provide that the whistleblower can only by-pass the administrative process and file in district court if the Secretary has not issued a decision within 180 days of the complaint, and that the Plaintiff's argument was senseless. The court therefore dismissed the district court action.
FILING OF COMPLAINT WITH DISTRICT COURT BY QUALIFYING SOX COMPLAINANT DEPRIVES ALJ OF JURISDICTION
Once a qualifying complainant files his complaint with a federal district court under section 1514A(b)(1)(B) of the SOX, jurisdiction vests in the district court and an ALJ no longer has jurisdiction. Stone v. Duke Energy Corp. , 432 F.3d 320 (4th Cir. 2005) (case below 2003-SOX-12). In Stone , once the complainant filed his district court action the ALJ's order closing the matter before OALJ correctly stated simply that the administrative complaint was no longer before him.
ADMINISTRATIVE REVIEW BOARD DECISIONS
FILING OF ACTION IN DISTRICT COURT GIVES DISTRICT COURT COMPLETE JURISDICTION OVER THE MATTER, AND THE COMPLAINANT CANNOT PROCEED AGAINST SOME RESPONDENTS IN FEDERAL COURT WHILE MAINTAINING AN APPEAL BEFORE THE ARB IN REGARD TO OTHER RESPONDENTSIn Fuqua v. SVOX AG , ARB Nos. 14-014, 14-069, ALJ Nos. 2013-SOX-46, 2014-SOX-18 (ARB Aug. 27, 2014), the Complainant filed two SOX complaints naming both business entities and individuals as Respondents. The ALJ granted summary decision on the first complaint against the Complainant, and the Complainant filed a petition for ARB review. A different ALJ recommended dismissal of the second complaint, and the Complainant again requested ARB review. The Complainant notified the ARB that he had filed an action in federal court against the business entity Respondents on the first complaint, but stated that he had not removed any other part of the complaint and continued to seek ARB review regarding the remaining parties. The Respondents then filed a notice with the ARB that the Complainant had filed a district court suit, and argued that this suit deprived the ARB of jurisdiction. The ARB ordered the Complainant to show cause why the Board should not dismiss his complaints pursuant to 18 U.S.C.A. § 1514A(b)(1)(B).
The Complainant argued that the ARB "should allow him to proceed against the named individual Respondents before the Board, while simultaneously proceeding against SVOX AG and SVOX USA, Inc. in district court pursuant to 18 U.S.C.A. § 1514A(b)(1)(B) because (1) international service of process on the individual respondents is difficult and costly, (2) he is entitled to the administrative remedy he seeks, and (3) the case against the individuals cannot be joined with the case he filed in district court." USDOL/OALJ Reporter at 3. The Complainant argued that the second complaint was separate from the first complaint, and thus should not be dismissed by the ARB. The Respondents argued that the federal district court complaint encompassed both OSHA complaints and that OSHA complaints were "based on the same or overlapping facts." Id. at 4.
The ARB stated that section 1514(b)(1)(B) indicates that "the complaint and the action are one and the same and once a complainant files in district court for de novo review of 'the complaint,' jurisdiction over 'the complaint' rests with the district court." Id. The ARB stated that the Complainant provided no argument and no citation to any convincing authority establishing ARB authority to "bifurcate 'the complaint' once an action on the complaint has been filed with the district court and thereby attempt to retain jurisdiction over some portion of the complaint." Id. The ARB stated that inconvenience to the Complainant was not a sufficient basis for the ARB to ignore the limits of the ARB's jurisdiction. The ARB thus held that the district court had complete jurisdiction over the first complaint and the ARB had none. The ARB, however, found that whether the Complainant's district court action also encompassed the second OSHA complaint was unclear, and therefore a three judge panel of the ARB would consider the jurisdiction issue as the case arose in due course.
WHERE STATE ACTION ALLEGING SOX COMPLAINT WAS REMOVED TO FEDERAL DISTRICT COURT MORE THAN 180 DAYS AFTER COMPLAINT WAS FILED WITH OSHA, DISTRICT COURT PROCEEDINGS DEPRIVED ALJ OF JURISDICTION
In Cheng v. Worldwide Energy & Manufacturing USA, Inc. , ARB No. 12-111, ALJ No. 2012-SOX-26 (ARB May 13, 2014), the Complainant filed a SOX whistleblower complaint. The parties submitted a settlement agreement, but OSHA dismissed the complaint for failure to include certain language in the agreement. While the complaint was pending before OSHA, the Complainant filed a state court action which included a federal SOX claim. The state action was removed to U.S. district court, where the parties jointly stipulated to a dismissal due to a settlement. The Complainant then requested a hearing before a DOL ALJ. The ALJ dismissed the complaint finding that the district court proceedings resolving the SOX complaint deprived the ALJ of jurisdiction. The ARB affirmed the dismissal. The removal to federal court had occurred more than 180 days after the complaint's filing with OSHA, giving the district court jurisdiction over the SOX matter. The ARB wrote: "the proceedings that led to the DOL's loss of jurisdiction in this case (removal of Cheng's SOX whistleblower claim from state to federal court) is distinguishable from proceedings where a complainant pursues a non-SOX claim arising out of the same set of facts and involving the same parties in state court based on state law, or in federal court based on federal law. In that situation, SOX would not foreclose DOL's jurisdiction over a complainant's federal SOX administrative action. On review, however, Cheng fails to present any legal basis for disturbing the ALJ's dismissal order for lack of jurisdiction. " USDOL/OALJ Reporter at 3 (footnote omitted).
WAIVER OF OPTION TO FILE SOX COMPLAINT IN FEDERAL DISTRICT COURT; ARB DENIES INTERLOCUTORY REVIEW OF IMPACT OF DODD-FRANK AMENDMENTS TO SOX AND OF COMPLAINANT'S CONTENTION OF LACK OF FULL UNDERSTANDING OF WAIVER MADE BY HER ATTORNEY
In Mara v. Sempra Energy Trading, LLC , ARB No. 12-021, ALJ No. 2009-SOX-18 (ARB Jan. 31, 2012), the ALJ found that the Complainant had waived the option to file her SOX complaint in federal district court, and later dismissed the complaint. The Complainant filed a complaint in federal district court, and then moved to amend that complaint to include the SOX claim. The district court found that there had been a clear waiver and recommended that the Complainant return to Department of Labor to see if it would allow her to pursue the complaint there. The Complainant then filed a late petition for review with the ARB. The ARB accepted the petition and remanded the case to the ALJ for additional proceedings. On remand, the Complainant moved the ALJ to nullify the waiver. The ALJ denied the motion and the Complainant moved for reconsideration. Following briefing, the ALJ ruled on reconsideration that Dodd-Frank amendments to the SOX did not apply retroactively to effectively invalidate the waiver and authorize the Complainant to proceed to a jury trial in district court. The ALJ, however, granted the Complainant's motion to certify three questions for interlocutory appeal to the ARB: (1) whether the Dodd-Frank amendment to the SOX affording a right to a jury trial applies retroactively; (2) whether the waiver was valid when made knowingly by the Complainant's counsel but without full understanding of the Complainant herself; and (3) whether a Dodd-Frank amendment to SOX proscribing waivers of SOX protections applies to agreements with the court, and if so, does it apply retroactively. The ALJ, however, denied a stay of the proceedings.
The ARB declined to exercise its discretion to engage in interlocutory review, finding that it was not persuaded that resolution of the issues would "materially advance the ultimate termination of the litigation." The ARB noted that it was undisputed that the Complainant had sought relief in district court, and that the district court judge stated at the hearing that he would not review the Complainant's SOX claim because of her waiver. The ARB also denied the Complainant's petition for interlocutory review of various issues that she raised related to her waiver under the collateral order doctrine.
FILING OF COMPLAINT IN FEDERAL DISTRICT COURT DEPRIVES DOL OF JURISDICTION; THEREFORE MOTION TO STAY DOL PROCEEDING WILL BE DENIED
In Kelly v. Sonic Automotive, Inc. , ARB No. 08-027, ALJ No. 2008-SOX-3 (ARB Dec. 17, 2008), the Complainant had filed a timely request for a hearing before a DOL ALJ, and about a month later filed a SOX lawsuit in the U.S. district court. He then filed a motion to stay the ALJ proceedings until the federal court "acknowledged jurisdiction" over the SOX claim. The ALJ, however, issued a decision canceling the hearing and dismissing the complaint without prejudice. On appeal, the ARB ruled that "once Kelly filed his action in district court seeking de novo review of his SOX complaint, the Department of Labor was deprived of jurisdiction of Kelly's complaint and thus could not stay the proceedings before the Department." The ARB therefore dismissed the Complainant's appeal of the ALJ's dismissal of his complaint. The Complainant had argued that a stay of a judicial proceeding pending an arbitration is specifically authorized by the Federal Arbitration Act (FAA). The ARB found that it did not need to decide whether the FAA was applicable because the Complainant had not moved before the DOL for a stay pursuant to the FAA. Moreover, the ARB found that even if such a motion had been filed and granted, once the Complainant invoked his right to de novo review in the district court, DOL was deprived of jurisdiction, the stay would no longer have been effective. The ARB stated that the proper procedure for the Complainant would be to request a stay of the district court with jurisdiction over the complaint (which in fact the Complainant had done).
ALJ JURISDICTION OVER SOX COMPLAINT ONCE COMPLAINANT FILES SUIT IN FEDERAL DISTRICT COURT
In Powers v. Pinnacle Airlines, Inc. , ARB No. 05-138, ALJ No. 2005-SOX-65 (ARB Oct. 31, 2005), the Complainant had filed a complaint that pleaded both AIR21 and SOX whistleblower causes of action. The Respondent filed a motion to dismiss the SOX complaint and the ALJ issued an order directing the Complainant to respond. The Complainant filed a "Notice of Intent" to file a SOX claim in federal district court. The ALJ, however, found that she retained jurisdiction over the SOX claim and, about one month later, issued an order dismissing the SOX complaint for failure to state a claim upon which relief can be granted. The Complainant took an interlocutory appeal of this, and other rulings of the ALJ.
The ARB held that once the Complainant files her SOX suit in federal district court, the ALJ no longer had jurisdiction to enter any order in the case other than one dismissing it on the ground that the Complainant had removed the case to district court. Similarly, the ARB was divested of jurisdiction over the interlocutory appeal in regard to the SOX complaint.
ADMINISTRATIVE LAW JUDGE DECISIONS
DISMISSAL FOR FAILURE TO FILE SUBSTANTIVE RESPONSE TO MOTION FOR SUMMARY DECISION; MERE STATEMENT OF INTENT TO FILE IN FEDERAL COURT DOES NOT END DOL JURISDICTION
In Rusick v. Merrill Lynch & Co., Inc. , 2006-SOX-45 (ALJ Mar. 22, 2006), the Respondent filed a motion for continuance together with a motion for summary decision. During a telephone conference several days later, the Complainant's counsel stated that the Complainant intended to remove to federal district court upon the expiration of the administrative period. The ALJ extended the time period for a response to the motion for summary decision, stated that in the event of removal to federal court she would not expect a timely response to the motion, instructed the Complainant to file notice of his intention to remove, and rescheduled the hearing. The Complainant filed the notice, and the ALJ directed that OALJ be served with copies of the federal court pleading, noting that she would retain jurisdiction until so served. Having received no pleadings, about five weeks later the ALJ reminded the parties that a DOL hearing was still scheduled. About a week later, the Respondent moved for dismissal based on the Complainant's failure to respond to its motion for summary decision. The Complainant responded, reiterating his intention to remove to federal district court.
The ALJ observed that she had fully expected compliance with her order setting an extended time period for responding to the summary decision motion if the Complainant did not remove the case, and wrote: "The expiration of the 180 day period does not trigger the expiration of the Secretary's jurisdiction over complaints brought under the Act, but merely provides Complainant the option to remove the complaint to Federal district court. Absent such removal, the Secretary's jurisdiction remains. Accordingly, Respondent's motion remains outstanding." Slip op. at 4. Because the Complainant did not respond to the Respondent's motion except to disparage the Respondent's pleadings and to repeat his intention to remove to federal court, despite having more than one month to file a response, the ALJ found the motion unopposed and granted dismissal of the complaint. The ALJ, however, observed that the DOL's decision was not final until the period for filing an appeal with the ARB had expired, and that the Complainant remained free to remove to federal court until then.
In Rusick v. Merrill Lynch & Co., Inc. , 2006-SOX-45 (ALJ Apr. 6, 2006), the Complainant moved for "review" of the order of dismissal, which the ALJ construed as a motion for reconsideration. The Complainant had filed his complaint in Federal court the day after the ALJ issued the order of dismissal. The ALJ determined that she no longer had jurisdiction over the case, and therefore denied reconsideration, observing, however, that she did not believe that the dismissal would be prejudicial to the federal court action.
REMOVAL TO FEDERAL COURT; COMPLAINANT'S RENEGE ON REPRESENTATION THAT HE UNDERSTOOD THAT DELAYS CAUSED BY HIM WOULD TOLL THE 180 DAY PERIOD
In Nixon v. Stewart & Stevenson Services, Inc. , 2005-SOX-1 (ALJ Feb. 16, 2005), the ALJ denied the Complainant's motion for a voluntary withdrawal of his complaint to pursue an action de novo in federal district court where the Complainant had obtained several delays in the hearing date over the objection of the Respondent and based on the concession by the Complainant that the delays would toll the 180 day clock. By the ALJ's reckoning, the tolled 180 day time period would not expire for several more months.
The ALJ concluded that because the withdrawal under these circumstances could result in a finding that the Complainant had not exhausted administrative remedies thereby depriving the district court of jurisdiction, he would deny the motion to withdraw, but would also consider the request as a motion for a stay pending filing with a district court.
The ALJ recognized that the ultimate determination of whether the 180 day period had elapsed and whether jurisdiction is properly in federal district court is for the federal district court, but that he was still obliged to address whether a stay was appropriate. The ALJ found that it was not because of the delays sought by the Complainant or caused by the Complainant's failure to comply with discovery obligations, and because it was bad faith to renege on his representation that he understood that the 180 day period would be tolled. The ALJ went on to consider, and grant the Respondent's motion for summary decision on the ground that the Complainant did not engage in protected activity.
REMOVAL TO DISTRICT COURT; ORDER OF COURT DIRECTING ALJ TO DEMONSTRATE WHETHER DOL'S FAILURE TO ISSUE FINAL DECISION IN 180 DAYS WAS ATTRIBUTABLE TO THE COMPLAINANT'S BAD FAITH
In Corrada v. McDonald's Corp. , 2004-SOX-7 (ALJ Jan. 23, 2004), the Complainant notified the ALJ that she intended to remove the case to Federal District Court and moved for a stay of the ALJ proceeding. The ALJ denied the stay pending assertion of jurisdiction by the District Court. Subsequently, a claim was filed in District Court. The District Court then faxed to the ALJ an order asserting jurisdiction and staying the DOL proceeding. In the order, the District Court ordered the ALJ to demonstrate whether the failure of DOL to issue a final decision within 180 days was due to the bad faith of the complainant. The ALJ noted no indication of bad faith on the part of the complainant, and found that since the District Court had asserted jurisdiction, DOL's role in the matter had terminated. Thus, the DOL proceeding was dismissed.
Motion to Reopen
ADMINISTRATIVE REVIEW BOARD DECISIONS
MOTION TO REOPEN ADMINISTRATIVE SOX COMPLAINT THAT HAD BEEN DISMISSED WHEN THE COMPLAINANT PROVIDED NOTICE THAT HE WOULD PROCEED IN FEDERAL DISTRICT COURT; MOTION CONSIDERED UNDER "EXTRAORDINARY CIRCUMSTANCES" STANDARD APPLIED TO FRCP 60(b)(6) MOTIONS
In Pittman v. Diagnostic Products Corp. , ARB No. 12-103, ALJ No. 2006-SOX-53 (ARB Sept. 21, 2012), the ARB issued notice that it did not accept the Complainant's petition for review of the ALJ's order denying a motion for relief under rule 60(b)(6). In Pittman v. Diagnostic Products Corp. , 2006-SOX-53 (ALJ Aug. 9, 2012), the ALJ had, in October 2010, dismissed the SOX complaint when the Complainant elected to pursue the matter before the district court. In July 2012, the Complainant moved to vacate the order of dismissal and reinstate his claim, arguing that although the statute allows him to bring his claim in the district court, he had not done so, and thus the Department of Labor still had jurisdiction. The ALJ found that he had ancillary jurisdiction to consider the Complainant's motion for relief, but that the Complainant failed to present sufficient facts to justify the relief sought, applying the "extraordinary circumstances" applied to FRCP 60(b)(6) motions. The Complainant offered no explanation for why he had failed to pursue the matter in district court.
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