Sarbanes-Oxley Act (SOX)
Whistleblower Digest
REQUEST FOR HEARING
[Last Updated April 7, 2008]

Table of Contents

Answer to Request for Hearing (Not Required)

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ADMINISTRATIVE REVIEW BOARD DECISIONS

WHETHER THE RESPONDENT IS REQUIRED TO ANSWER THE COMPLAINT FILED WITH OSHA AND A COMPLAINANT'S OBJECTIONS TO THE OSHA FINDINGS/REQUEST FOR HEARING

In Brady v. Direct Mail Management, Inc. , ARB No. 06-044, ALJ No. 2006-SOX-16 (ARB Mar. 26, 2008), it was undisputed that the complaint was not timely filed. Moreover, no grounds existed for equitable relief. The Complainant argued that the Respondent had waived its right to defend against the complaint because it had not answered the complaint filed with OSHA and had not responded to the Complainant's objections to the OSHA findings/request for hearing. The ARB affirmed the ALJ's grant of summary judgment against the Complainant, but clarified the analysis in regard to the waiver issue. The ARB held that the regulations make the filing of response to the complaint filed with OSHA, and to the objections/request for hearing, discretionary, not mandatory. See 29 C.F.R. §§ 1980.104(a), (c), 1980.106(a), (b). (The ALJ had held that OALJ's general rules of practice and the SOX procedural rules were inconsistent, and had not referenced the SOX rule about the filing of an answer to a complaint.) Finally, the ARB observed that OSHA had dismissed the complaint only eight days after it was filed on the ground of lack of timeliness, and held that "[w]here OSHA dismissed the complaint before the running of the time (20 days after notice) in which [the Respondent] would have had to respond to the complaint, [the Respondent] did not waive its right to defend against it." USDOL/OALJ Reporter at 7.

ADMINISTRATIVE LAW JUDGE DECISIONS

FILING OF COMPLAINT; ANSWER IS NOT REQUIRED UNDER SOX PROCEDURAL RULES

In Jordan v. Sprint Nextel Corp. , 2006-SOX-41 (ALJ Mar. 14, 2006), the Respondent filed a motion to dismiss/motion for summary decision. The Complainant argued, in part, that Respondent's motion must be denied because it failed to answer his complaint, which he identified as his objections to the OSHA findings and request for an ALJ hearing. The ALJ ruled:

    Discrimination complaints under Sarbanes-Oxley are expressly governed by the rules set forth in 29 C.F.R. Part 1980. There is no requirement under 29 C.F.R. Part 1980 that a respondent file an answer or otherwise respond either to an initial complaint filed with OSHA or to a request for hearing filed by a complainant with the Office of Administrative Law Judges after a complaint has been denied or dismissed. Inasmuch as Respondent was not required to respond to either of Complainant's filings, Respondent did not waive its right to contest Mr. Jordan's allegations or, as it has done here, to seek summary judgment.

Slip op. at n.4.

FILING OF SOX COMPLAINT OR REQUEST FOR HEARING WITH OALJ DOES NOT REQUIRE AN ANSWER FROM THE RESPONDENT

In Brady v. Direct Mail Management , 2006-SOX-16 (ALJ Jan. 5, 2006), the Complainant asserted that the Respondent waived the right to contest any of her allegations because it did not respond to her initial complaint, citing 29 C.F.R. § 18.5 in support. The ALJ found the reference to section 18.5, which is part of the general Rules of Practice and Procedure before OALJ, to be misplaced. Under the general rule of practice, whenever those rules are inconsistent with any rule of special application, the latter controls, § 18.1(a), and there is no requirement under the rules governing SOX discrimination complaints, 29 C.F.R. part 1980, that a respondent file an answer or otherwise respond to either an initial complaint filed with OSHA or to a request for a hearing filed with OALJ.

Cross-Appeal

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ADMINISTRATIVE LAW JUDGE DECISIONS

FINALITY OF OSHA DETERMINATION; WHERE COMPLAINANT APPEALED TO OALJ, OSHA DETERMINATION NEVER BECAME FINAL, AND RESPONDENT WAS NOT REQUIRED TO APPEAL COLLATERAL ADVERSE DETERMINATIONS

In Goodman v. Decisive Analytics Corp. , 2006-SOX-11 (ALJ Jan. 10, 2006), the ALJ found that the Complainant's timely appeal of the Regional OSHA Administrator's determinations provided a timely objection such that none of the Regional Administrator's findings became final [since the Respondents were the prevailing parties before OSHA, an order of reinstatement was not at issue]. Since the Complainant's timely objection to the OSHA determination transferred the complaint to OALJ for a de novo determination on the merits, the Respondents were not bound by OSHA's prior determinations. The ALJ also found "as the prevailing party before the Regional Administrator on the ultimate issue of discrimination, the Respondents were not obligated to appeal collateral adverse determinations."

Failure to Serve Opposing Party

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ADMINISTRATIVE LAW JUDGE DECISIONS

REQUEST FOR HEARING; FAILURE TO TIMELY SERVE OPPOSING PARTY

In Richards v. Lexmark International, Inc. , 2004-SOX-49 (ALJ Oct. 1, 2004), the Complainant failed to timely serve a copy of his objections to the OSHA determination letter and request for an ALJ hearing on the Respondent or the Respondent's attorney. The Respondent moved for summary decision based on this failure. In response, the Complainant asserted that OSHA's determination letter did not inform him of this requirement and that the Respondent was not prejudiced by the oversight. The ALJ noted that individual ALJs have disagreed over whether failure to comply with requirements to serve the respondent with a copy of a hearing request constitutes grounds for dismissal of the complaint, but found that regardless of how the issue is framed, the pertinent inquiry is whether the respondent was prejudiced by the improper service. In the instant case, the ALJ found that the Respondent had not been prejudiced and therefore denied the motion for dismissal of the complaint.

[Editor's note: In Richards v. Lexmark International, Inc. , 2004-SOX-49 (ALJ June 30, 2006), the ALJ reviewed this issue under a preponderance of the evidence standard (rather than the "in the light most favorable to nonmoving party" standard used in deciding a motion for summary decision) and affirmed her prior ruling.]

[Editor's note: See Shirani v. Calvert Cliffs Nuclear Power Plant, Inc. , ARB No. 04-101, ALJ No. 2004-ERA-9 (ARB Oct. 31, 2005) (similar issue decided by the ARB under the ERA)]

HEARING REQUEST; FAILURE TO SERVE RESPONDENT SUBJECT TO EQUITABLE TOLLING

In Lerbs v. Buca Di Beppo, Inc. , 2004-SOX-8 (ALJ Dec. 30, 2003), Complainant timely filed a request for an ALJ hearing but did not serve Respondent. The ALJ's office faxed a copy of hearing request to Respondent several days after the case was assigned to the presiding ALJ. Thereafter, Respondent filed a motion to dismiss based on Complainant's failure to serve on it a copy of the objections to the OSHA findings and request for formal hearing.

Noting that the question appeared to be one of first impression under the SOX whistleblower regulations, the ALJ found that the applicable SOX regulations were non-jurisdictional and therefore subject to equitable considerations. The ALJ found that the OSHA determination letter had not instructed Complainant that he was required to simultaneously serve a copy of his objections on the other parties of record. Thus, the ALJ found the instant case was analogous to Spearman v. Roadway Express, Inc. , 1992-STA-1 (Sec'y Aug. 5, 1992), in which the Secretary had allowed equitable tolling under the STAA whistleblower regulations where the complainant had promptly filed a request for review with the appropriate agencies but failed to serve it on his employer due to a confusing and misleading notice from OSHA. The ALJ also noted similarity to Gates v. Georgia-Pacific Corp ., 492 F.2d 292 (9th Cir. 1974) and Swint v. Net Jets Aviation, Inc. , 2003-AIR-26 (ALJ July 9, 2003) (ALJ observed that AIR21 regulations were used for SOX cases until SOX regulations were published, therefore making Swint authority with persuasive value). Finally, the ALJ found that there was no evidence that delayed receipt of the hearing request hampered Respondent's ability to develop evidence or otherwise proceed with the litigation.

Timeliness

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ADMINISTRATIVE REVIEW BOARD DECISIONS

TIMELINESS OF REQUEST FOR ALJ HEARING; EQUITABLE TOLLING NOT SUPPORTED WHERE ATTORNEY FAILED TO TIMELY APPEAL OR PROVIDE NOTICE TO COMPLAINANT SO THAT SHE COULD APPEAL

In Lotspeich v. Starke Memorial Hospital , ARB No. 05-072, 2005-SOX-14 (ARB July 31, 2006), the Complainant filed her request for an ALJ hearing 80 days after the OSHA determination, and the ALJ issued several orders to show cause to permit the Complainant to establish equitable grounds for tolling of the limitations period. The Complainant alleged that OSHA had failed to send her a copy of the determination letter, and that her attorney had failed to forward her a copy. The ARB agreed with the ALJ that, even if the Complainant had not received a copy of the OSHA determination, delivery of a copy to her attorney constituted notice of that determination. The attorney's failure to timely appeal or to send a copy to the Complainant so that she could timely appeal did not support equitable tolling.

TIMELINESS OF REQUEST FOR HEARING; DATE OF RECEIPT OF OSHA FINDINGS; SUMMARY JUDGMENT STANDARD

The ALJ erred in granting summary judgment to the Respondent based on a finding that the Complainant's request for hearing was not timely under the 30-day limitations period. OSHA denied the complaint on January 16, 2004 and the Complainant did not file her request for hearing until March 4, 2004. The Complainant, however, averred in her March 4 filing that she did not receive the OSHA finding until February 4, 2004. Since on a motion for summary judgment the evidence must be viewed in the light most favorable to the non-moving party, summary judgment should not have been granted. Reddy v. Medquist, Inc. , ARB No. 04-123, ALJ No. 2004-SOX-35 (ARB Sept. 30, 2005).

ADMINISTRATIVE LAW JUDGE DECISIONS

TIMELINESS OF REQUEST FOR HEARING; RECEIPT OF OSHA DECISION LETTER BY COMPLAINANT'S COUNSEL

In Savastano v. WPP Group, PLC , 2007-SOX-34 (ALJ July 18, 2007), the ALJ found that the request for an ALJ hearing was timely where it had been filed on the 30th day after the Complainant's counsel received the OSHA decision letter.

REQUEST FOR ALJ HEARING; REQUEST FOR EXTENSION OF TIME CONSTRUED AS TIMELY OBJECTIONS SUBJECT TO TIMELY SUBSTITUTION WITH FORMAL PLEADING SETTING FORTH OBJECTIONS TO OSHA FINDINGS

In Stewart v. Horn Murdock Cole , 2006-SOX-90 (ALJ Feb. 21, 2007), the Complainant's attorney had filed a fax requesting a 30-day extension of time to file objections to OSHA's findings, asserting that the Complainant had never received the findings, and that the law firm had only received them a few days earlier. The ALJ accepted the fax as a timely objection and request for hearing, subject to substitution of a formal pleading setting forth objections. Counsel later advised that the Complainant would not be filing anything further. Because the ALJ's acceptance of the fax as a timely objection was contingent on substitution with a formal pleading, and the Complainant indicated that no further pleading would be forthcoming, the ALJ dismissed the matter pursuant to 29 C.F.R. § 1980.106(a). Alternatively, the ALJ also dismissed under 29 C.F.R. § 1980.111(c) for failure to pursue the matter.

TIMELINESS OF REQUEST FOR HEARING; DATE OF RECEIPT OF OSHA DETERMINATION BY THE COMPLAINANT

In Richards v. Lexmark International, Inc. , 2004-SOX-49 (ALJ Oct. 1, 2004), OSHA had mailed its determination letter by certified mail to the Complainant's last known address, and the Postal Service had forwarded the letter to a forwarding address and made several attempts at delivery, leaving notices each time. The Complainant did not pick up the letter. OSHA did not send a copy of the letter to the Complainant's attorney. Complainant and his attorney thereafter asserted that they did not learn of the OSHA determination letter until a deposition several months later. The request for an ALJ hearing was made several days after the deposition. Before the ALJ, the Respondent moved for summary decision based on an untimely hearing request. The ALJ, however, found that the hearing request was timely, observing that the Sarbanes Oxley Act regulations set the trigger date for the time period for requesting an ALJ hearing as "receipt" of the OSHA determination letter rather than actual or constructive notice. The Respondent cited Graham-Humphreys v. Memphis Brooks Museum of Art, Inc. , 209 F.3d 552, 554 (6th Cir. 2000), a Title VII case, as support for its motion. In Graham-Humphreys , a similar "receipt" regulation was at issue, and the court held that there was presumptive receipt of the EEOC's right to sue letter within 5 days of mailing, and constructive receipt of notice of the letter when the Postal Service placed it in the complainant's mailbox. The ALJ, however, found that in the case before her the Complainant rebutted any presumption of receipt because he had denied such receipt and there was no evidence in the record that he had actually received it (the ALJ viewing all evidence and drawing reasonable inferences in the light most favorable to the Complainant under the summary decision standard). The ALJ distinguished the Graham-Humphreys finding of constructive receipt because in that case the complainant was expecting to receive the right to sue letter in the mail and had received the Postal Service notice of attempted delivery but failed to take action to receive delivery. In the instant case, in contrast, neither the Complainant nor his attorney had reason to suspect that they would be receiving a letter from OSHA at that particular time and there was no evidence in the record of physical receipt of the Postal Service notice.

[Editor's note: In Richards v. Lexmark International, Inc. , 2004-SOX-49 (ALJ June 30, 2006), the ALJ reviewed this issue under a preponderance of the evidence standard (rather than the "in the light most favorable to nonmoving party" standard used in deciding a motion for summary decision) and affirmed her prior ruling.]

[Editor's note: Compare Robinson v. Northwest Airlines, Inc. , 2004-AIR-37 (ALJ Oct. 28, 2004), decided under similar AIR21 regulations, in which the ALJ concluded that receipt meant date of delivery of the OSHA determination letter by certified mail to the last known address of the complainant].

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