Federal Court Whistleblower Decisions - 2017

Aviation Investment and Reform Act for the 21st Century

  • Watson v. Air Methods Corp. , No. 15-1900 (8th Cir. Aug 31, 2017)
    Opinion
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    Summary :

    PREEMPTION OF STATE WRONGFUL DISCHARGE CLAIM BY THE AIRLINE DEREGULATION ACT; 8TH CIRCUIT RETREATS FROM BOTZ

    “We ... hold that the [Airline Deregulation Act ("ADA"), 49 U.S.C. § 41713(b)(1)] does not expressly pre-empt Watson’s state-law wrongful-discharge claims involving post hoc reporting of alleged violations of air-safety regulations.” Watson v. Air Methods Corp. , 870 F.3d 812 (8th Cir. Aug 31, 2017) (en banc), slip op. at 2 (overrules Botz v. Omni Air International , 286 F.3d 488 (8th Cir. 2002), in relevant part).

  • Hobek v. Boeing Co. , No. 16-cv-3840 (D. S.C. July 20, 2017) (2017 WL 3085856; 2017 U.S. Dist. LEXIS 112939)
    Order and Opinion (adopting Magistrates' Report and Recommendation)
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    Summary :

    STATE LAW PUBLIC POLICY EXCEPTION TO AT-WILL EMPLOYMENT SUIT COULD NOT BE MAINTAINED WHERE PLAINTIFF HAD ADEQUATE REMEDY UNDER AIR21; ALTHOUGH PLAINTIFF RAISED BOTH SAFETY AND QUALITY CONCERNS, MAGISTRATE FOUND THAT IN AIRCRAFT CONTEXT, SAFETY AND QUALITY ARE ONE IN THE SAME; FACT THAT PLAINTIFF DID NOT PURSUE AN AIR21 COMPLAINT DOES NOT CREATE A CAUSE OF ACTION IN FEDERAL COURT

    In Hobek v. Boeing Co. , No. 16-cv-3840(D. S.C. June 8, 2017) (2017 U.S. Dist. LEXIS 115343) (Magistrates’ Report and Recommendation adopted by the court on July 6, 2017), the Plaintiff filed a complaint that alleged, in pertinent part, a cause of action for wrongful discharge in violation of public policy— retaliation for raising concerns about quality and safety. The Defendant moved for dismissal of the public policy cause of action on the ground that AIR21 is an existing statutory remedy. The Plaintiff argued that AIR21 is limited to reports regarding safety and does not include quality complaints or age discrimination. The Magistrate was not persuaded, finding that the Plaintiff had a reasonable means of redress under AIR21 based on his allegations. The district court adopted the Magistrate’s recommendation. The district court noted:

    Although Plaintiff has argued that his complaints related to both safety and quality so were not adequately covered by the AIR21 statutory remedy, the Magistrate found that, in the aircraft context, safety and quality are one and the same. In response to Plaintiffs argument that the AIR21 statutory remedy is only available to individuals who had made a report within the AIR21 framework, the Magistrate explained that Plaintiffs failure to exercise his rights under AIR21 does not create a cause of action in federal court.

    Hobek v. Boeing Co. , No. 16-cv-3840 (D. S.C. July 20, 2017) (2017 WL 3085856; 2017 U.S. Dist. LEXIS 112939), slip op. at 2 (emphasis as in original). Because the Plaintiff had only raised general objections to the Magistrate’s report and recommendations, the District Court reviewed the Magistrate’s determination under a clear error standard.

  • Portalatin v. Pro Pilots, LLC , No. 17-cv-3247 (D.N.J. July 6, 2017) (2017 U.S. Dist. LEXIS 103907; 2017 WL 2881346) (unpublished)
    Opinion
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    Summary :

    PREEMPTION OF STATE LAW CLAIM; COURT GRANTS LEAVE TO FILE ADMINISTRATIVE COMPLAINT WITH DOL

    The Plaintiff’s state law claim was found to be preempted by the Whistleblower Protection Program for the Airline Deregulation Act, which covers certain claims brought by employees against their air-carrier employers. See 49 U.S.C. § 41713; 28 U.S.C. § 1331. The court, however, granted the Plaintiff leave to file an administrative whistleblower complaint with the U.S. Department of Labor. Portalatin v. Pro Pilots, LLC , No. 17-cv-3247 (D.N.J. July 6, 2017) (2017 U.S. Dist. LEXIS 103907; 2017 WL 2881346) (unpublished).

  • Hobek v. Boeing Co. , No. 16-cv-3840(D. S.C. June 8, 2017) (2017 U.S. Dist. LEXIS 115343)
    Magistrates' Report and Recommendation (adopted by the court on July 6, 2017)
    PDF
    Summary :

    See casenote above on Hobek v. Boeing Co. , No. 16-cv-3840 (D. S.C. July 20, 2017)

Clean Air Act

  • Kuehu v. United Airlines, Inc. , No. 16-cv-00216 (D. Haw. May 26, 2017) (2017 U.S. Dist. LEXIS 81591; 2017 WL 2312475) (case below ARB No. 12-074, ALJ No. 2010-CAA-00007)
    Order Granting Defendant's Motion for Summary Judgment
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    Summary :

    Preclusive effect of ALJ's environmental whistleblower decision on later ADA whistleblower claim.

  • Perez v. Idaho Falls School District No. 91 , No. 15-cv-00019 (D. Idaho Feb. 24, 2017) (2017 U.S. Dist. LEXIS 26806; 2017 WL 743881) (parallel case below 2015-CAA-1)
    Memorandum Decision and Order
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    Summary :

    DISTRICT COURT STAYS PROCEEDINGS UNDER THE ASBESTOS HAZARD EMERGENCY RESPONSE ACT OF 1986 PENDING THE RESOLUTION OF PARALLEL CLEAN AIR ACT PROCEEDINGS BEFORE THE U.S. DEPARTMENT OF LABOR, CITING THE POSSIBLE PRECLUSIVE EFFECT OF THE PROCEEDINGS BEFORE THE OALJ AS A KEY FACTOR

    In Perez v. Idaho Falls School District No. 91 , No. 15-cv-00019 (D. Idaho Feb. 24, 2017) (2017 U.S. Dist. LEXIS 26806; 2017 WL 743881) (parallel case below 2015-CAA-1), the Secretary of Labor filed a civil action in federal court on behalf of Penny Weymiller pursuant to the whistleblower protection provisions of the Asbestos Hazard Emergency Response Act of 1986 (“AHERA”), 15 U.S.C. § 2651(a), while Weymiller simultaneously pursued a complaint arising out of the same set of facts under the Clean Air Act, 42 U.S.C. § 7622, before the U.S. Department of Labor’s Office of Administrative Law Judges (“OALJ”). Idaho Falls Sch. Dist. No. 91 , slip. op. at 1-2. The United States District Court for the District of Idaho stayed its proceedings pending the resolution of parallel proceedings before the OALJ, citing the possible preclusive effect of the ALJ’s CAA decision on the AHERA proceedings as a key factor. Id . at 3-7.

    Consumer Product Safety Improvement Act

    • Opela v. Wausau Window and Wall , No. 17-1788 (W.D. Wis. Aug. 31, 2017) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058) (case below 2016-SOX-00040)
      Opinion and Order (claims dismissed against Apogee Enterprises and certain of it subsidiaries, but not Apogee Wausau Group, Inc. d/b/a Wausau Window and Wall)
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      Summary :

      EXHAUSTION OF ADMINISTRATIVE REMEDIES; WHERE PLAINTIFF HAD NOT TECHNICALLY NAMED IN THE ADMINISTRATIVE COMPLAINT FILED WITH OSHA ONE OF DEFENDANT’S SUBSIDIARIES, BUT THAT SUBSIDIARY HAD EFFECTIVELY PARTICIPATED AS A DEFENDANT BEFORE OSHA AND OSHA HAD TREATED IT AS A DEFENDANT, THE COURT FOUND THAT PLAINTIFF HAD EXHAUSTED HIS ADMINSITRATIVE REMEDIES AS TO THAT SUBSIDIARY AND THAT THE COURT HAD JURISDICTION TO ADJUDICATE SOX AND CPSIA CLAIMS AGAINST THAT SUBSIDIARY

      In Opela v. Wausau Window and Wall , 264 F. Supp. 3d 980 (W.D. Wis. Aug. 31, 2017) (No. 17-1788 ) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058) (case below 2016-SOX-00040), the Defendant had filed a motion to dismiss the claims of Michael P. Opela against employer and its subsidiaries asserting claims for violation of the whistleblowing protections contained in the Consumer Product Safety improvement Act (CPSIA), and in the Sarbanes-Oxley Act (SOX). Plaintiff had been terminated after he raised concerns about potentially defective manufacturing materials.

      The Court granted defendant’s motion to dismiss as to claims asserted against defendant Apogee Enterprises (“Apogee”) and certain of its subsidiaries, but denied motion to dismiss with respect to defendant Apogee Wausau Group, Inc. (“AWG”) d/b/a Wausau Window and Wall (“Wausau”). Apogee Enterprises Inc., is a publicly traded Minnesota corporation and wholly owns all other defendants. Wausau Window and Wall is a separate business unit of AWG.

      The Court dismissed the claims against Apogee, Harmon, Tubelite, Alumicor and Linetec which were (until recently) being litigated in the Court of Appeals (on appeal from the ARB and previously the ALJ’s determination), for lack of subject matter jurisdiction. The Court addressed whether it had jurisdiction over AWG who was not technically named in the OSHA complaint although it responded to the complaint and corrected the error in the misnaming of the “plaintiff’s employer.” The Court found “[b]ecause AWG is fairly interchangeable with Wausau, effectively participated as a defendant in the administrative proceedings in this case, and was treated as a defendant by OSHA, the court concluded that plaintiff had exhausted his administrative remedies as to that particular defendant and therefore the district court could exercise jurisdiction over the matter.

      The Court denied the motion to dismiss Wausau and AWG, finding that claimant had sufficiently stated a cause of action under CPSIA. The court concluded that plaintiff had also sufficiently stated he was an employee of AWG because he had alleged that he was an employee of Wausau and Wausau is a business unit of AWG and AWG paid his salary. Therefore, these facts establish that plaintiff was an “employee” of AWG.

    Energy Reorganization Act

    • Nelson v. United States Dept. of Labor , No. 15-73548 (9th Cir. Dec. 12, 2017) (2017 U.S. App. LEXIS 25079; 2017 WL 6330873) (unpublished) (case below ARB No. 13-075, ALJ No. 2012-ERA-12)
      Memorandum
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      Summary :

      In Nelson v. United States Dept. of Labor , No. 15-73548 (9th Cir. Dec. 12, 2017) (2017 U.S. App. LEXIS 25079; 2017 WL 6330873) (unpublished) (case below ARB No. 13-075, ALJ No. 2012-ERA-12), the Ninth Circuit found that the ARB properly affirmed the ALJ’s dismissal of the Petitioner’s ERA retaliation complaint because he had not engaged in protected activity. The court wrote:

      Nelson argues that his participation in a “security investigation,” in which he refused to confirm Energy Northwest’s accusations of wrongdoing, constitutes protected activity under the Act. We find that argument unpersuasive.

         Conduct within the scope of the Act’s protection must have “a sufficient nexus to a concrete, ongoing safety concern.” ... Here, Energy Northwest’s investigation was primarily concerned with internal reports of improper per diem practices and unauthorized travel expenses, not safety or security issues. Substantial evidence supports the ALJ’s conclusion, as affirmed by the ARB, that Nelson never raised a safety or security issue during the investigation. Nelson’s conduct was therefore not protected activity under the Act.

      Slip op. at 2-3 (citation omitted).

    • Smith v. Dept. of Labor , No. 15-1713 (4th Cir. Jan. 9, 2017) (unpublished) (case below ARB No. 14-027, ALJ No. 2009-ERA-7) (2017 U.S. App. LEXIS 351; 2017 WL 75763)
      Opinion
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      Summary :

      “[W]e hold that in ERA whistleblower cases in which the protected disclosures reveal the whistleblower’s own misconduct, the employer is not required to prove that it independently would have discovered the whistleblower’s misconduct. Instead, the employer must demonstrate by clear and convincing evidence that it would have imposed the same type of discipline for the same infraction by a non-whistleblowing employee, regardless of the manner in which the employer discovered the misconduct.” Slip op. at 17-18.

    Federal Railroad Safety Act

    • Grand Trunk Western Ry. Co. v. Admin. Review Bd., USDOL , No. 17-3083 (6th Cir. Nov. 20, 2017) (2017 U.S. App. LEXIS 23279; 2017 WL 5560154; 2017 FED App. 0262P) (case below ARB Nos. 14-092 and 15-008; ALJ No. 2013-FRS-33)
      Opinion [reversing the ARB]
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      Summary :

      PROTECTED ACTIVITY; PROVISION OF FRSA PROHIBITING RETALIATION FOR FOLLOWING PHYSICIAN’S TREATMENT PLAN DOES NOT APPLY TO OFF-DUTY INJURIES AND ILLNESSES

      In Grand Trunk Western Ry. Co. v. Admin. Review Bd., USDOL , No. 17-3083 (6th Cir. Nov. 20, 2017) (2017 U.S. App. LEXIS 23279; 2017 WL 5560154; 2017 FED App. 0262P) (case below ARB Nos. 14-092 and 15-008; ALJ No. 2013-FRS-33), the Sixth Circuit held that the provision of the FRSA prohibiting retaliation against an employee for following a physician’s treatment plan, 49 U.S.C. § 20109(c)(2), does not apply to off-duty injuries and illnesses.

      The complainant was disciplined for following his physician’s treatment plan for several off-duty illnesses. The complainant suffered from anxiety and depression, both of which pre-dated his employment with the respondent. His physician instructed him, as part of a treatment plan, not to work if he felt unsafe during an episode of anxiety. Slip op. at 2. The complainant subsequently missed eight days of work due to anxiety, six of which the respondent marked as unexcused absences. Id . 2-3. The complainant was ultimately terminated for excessive absenteeism. Id . at 3.

      The ALJ, relying on the ARB’s holding in Bala v. Port Authority Trans-Hudson Corp ., ARB No. 12-048, ALJ No. 2010-FRS-26 (ARB Sept. 27, 2013), found that subsection (c)(2) applies to both on-duty and off-duty injuries, found for the complainant. The ALJ found that the complainant’s absences were protected as pursuant to a treatment plan for an off-duty injury and further found that the complainant was terminated in retaliation. Williams v. Grand Trunk Western Railroad Co. , 2013-FRS-33 (ALJ Aug. 11, 2014). The ARB affirmed the ALJ’s decision. Williams v. Grand Trunk Western Railroad Co. , ARB Nos. 14-092, 15-008 (ARB Dec. 5, 2016). [Editor’s note: The Third Circuit ultimately found in the Bala case that subsection (c)(2) does not apply to off-duty injuries. Port Authority Trans-Hudson Corp. v. Sec’y, USDOL , 776 F.3d 157 (3d. Cir. 2015).]

      On appeal in the instant case, the Sixth Circuit determined that subsection (c)(2) applies only to on-duty injuries. The court did not find the lack of language limiting (c)(2) to on-duty injuries as dispositive. Instead, the court reasoned that subsection (c)(2) is properly read in conjunction with subsection (c)(1), which prohibits an employer from denying or delaying treatment to an employee “who is injured during the course of employment.” Id . at 5-7. The court emphasized that the subsections “are structurally and logically married, joined under a title—‘Prompt medical attention’ —that limits both of its subsections together to injuries sustained ‘during the course of employment. ’” Id . at 8.

      After holding that subsection (c)(2) applies only to on-duty injuries, the court bolstered its position by addressing three issues. First, the court highlighted the language in subsection(c)(2) prohibiting retaliation “for requesting medical or first aid treatment or for following orders or a treatment plan of a treating physician.” The court reasoned that “[i]f an employee who is not injured during the course of employment, § 20109(c)(1), would not request medical or first aid treatment, § 20109(c)(2), at work, then the Board must assert the text bears a different scope for the connecting clause—‘or for following orders or a treatment plan of a treating physician. ’” Id . at 9-10 (internal quotations omitted) (emphasis as in original). Second, the court discussed the legislative history of the 2008 amendments to the FRSA and concluded that “nothing suggests that anyone at the time—including the Unions themselves—contemplated that the simple clause in § 20109(c) would encompass non-work-related illnesses or injuries.” Id . at 10-12 (footnote omitted) (emphasis as in original). Finally, the court swiftly rejected the notion that either Chevron or Skidmore deference apply under the circumstances “because traditional tools resolve any ‘apparent statutory ambiguity’” in the respondent’s favor. Id . at 13.

      Thus, the Sixth Circuit has joined the Third Circuit in holding that § 20109(c)(2) does not apply to off-duty injuries and illnesses. Bala v. Port Authority Trans-Hudson Corp ., supra . Additionally, the following district court decisions have agreed that § 20109(c)(2) does not apply to off-duty injuries: Miller v. BNSF Ry. Co. , No. 14-2596, 2016 U.S. Dist. LEXIS 64869 (D. Kan. May 17, 2016) (in the Tenth Circuit); and Goad v. BNSF Ry. Co. , No. 15-650, 2016 U.S. Dist. LEXIS 178444 (W.D. Mo. Mar. 2, 2016) (in the Eighth Circuit).

    • Roop v. Kan. City Southern Ry. , No. 16-cv-413 (E.D. Okla. Oct. 26, 2017) (2017 U.S. Dist. LEXIS 177646; 2017 WL 4844832)
      Opinion and Order Denying Defendant Kansas City Southern Railway Company's Motion for Summary Judgment
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      Summary :

      TIMELINESS; SUMMARY JUDGMENT; TO BE TIMELY A COMPLAINT MUST BE FILED WITH OSHA WITHIN 180 DAYS OF AN ADVERSE ACTION; EARLIER ADVERSE ACTIONS ARE NOT ACTIONABLE, BUT MAY BE USED AS EVIDENCE IN SUPPORT OF A CLAIM FOR A CLAIM OF RETALIATION IN A TIMELY COMPLAINT

      SUMMARY JUDGMENT; PROTECTED ACTIVITY; DEPOSITION TESTIMONY IN A FELA ACTION MAY BE A PROTECTED ACTIVITY SINCE IT IS A REPORT AND IT IS MADE TO SOMEONE WITH AUTHORITY TO INVESTIGATE GIVEN THE PRESENCE OF THE RAILROAD’S COUNSEL; WHERE EMPLOYEE’S TERMINATION WAS RESCINDED AND HE WAS REINSTATED WITH SENIORITY INTACT, HE COULD BE DEEMED AN EMPLOYEE AT THE TIME OF THE PROTECTED ACTIVITY

      SUMMARY JUDGMENT; DISTRICT COURT DENIES SUMMARY JUDGMENT ON KNOWLEDGE, AND CONTRIBUTORY FACTOR ELEMENTS, AS WELL AS ON AFFIRMATIVE DEFENSE, WHERE IT CONCLUDES NUMEROUS FACTUAL DISPUTES REMAIN BETWEEN THE PARTIES

      In Roop v. Kan. City Southern Ry. , No. 16-cv-413 (E.D. Okla. Oct. 26, 2017) (2017 U.S. Dist. LEXIS 177646; 2017 WL 4844832), Plaintiff alleged that Defendant railroad intimidated, harassed, and ultimately terminated him in retaliation for the testifying on behalf of another employee in a FELA proceeding, in violation of the FRSA. Defendant sought summary judgment on multiple grounds. The district court denied the motion.

      The railroad argued that the claim was time-barred. To be actionable, a complaint must be filed with OSHA within 180 days of the retaliatory action. However, evidence of prior adverse actions may be used as support for a timely claim. Here only 127 days had passed between the termination and the complaint, so the complaint for that adverse action was timely. The court noted that earlier adverse actions that pre-dated the 180 day window would not be actionable.

      Defendant sought summary judgment on the grounds that there was no protected activity. The court held that protected activity wasn’t limited to the initial report of an injury or hazardous condition, but could extend to later reports as well. Here it occurred in a deposition, per the complaint, but deposition testimony could constitute a report in the meaning of the FRSA and since counsel for the railroad was present, it was a protected report within the meaning of the act since counsel was an authority who could investigate the allegations further. There were disputes over whether the Plaintiff provided additional detail or new information in his testimony, so the issue was not proper for summary judgment. The railroad also argued that since the Plaintiff was not an employee at the time of the protected activity, the FRSA did not apply. Plaintiff had been terminated prior to the deposition for unrelated reasons, but was later reinstated with seniority intact. The court held that the issue was too undeveloped at this point but that based on the reinstatement, at this stage it would conclude that he was an employee at the time of the report.

      The district court also summarily denied summary judgment on the knowledge and contributing factor elements of the Plaintiff’s case and Defendant’s affirmative defense. It simply stated that there were numerous material factual disputes remaining between the parties, precluding summary judgement.

    • Hall v. Soo Line R.R. Co. , No. 17-2120 (D. Minn. Oct. 20, 2017) (2017 U.S. Dist. LEXIS 173761) (case below ALJ No. 2016-FRS-00083)
      Memorandum and Order
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      Summary :

      WAIVER BASED ON LACHES IS NOT FORECLOSED IN A FRSA CASE, BUT MUST BE SUPPORTED BY A RECORD OF DELAY AND PREJUDICE; FINDING OF WAIVER NOT WARRANTED WHERE THERE WAS ONLY ONE YEAR OF LITIGATION BEFORE ALJ AND WHERE ALL OF THE DISCOVERY BEFORE THE ALJ COULD BE PRESENTED IN THE DISTRICT COURT

      ALJ’S EXCLUSION OF CERTAIN EXPERTS BASED ON COMPLAINANT’S UNTIMELY DESIGNATION WOULD NOT NECESSARILY BAR THOSE EXPERTS FROM TESTIFYING BEFORE THE DISTRICT COURT; WHERE THERE ALREADY HAD BEEN EXTENSIVE DISCOVERY BEFORE THE ALJ, THE COURT WOULD EXPECT THE PARTIES TO PRESENT A TRUNCATED DISCOVERY SCHEDULE

      In Hall v. Soo Line R.R. Co. , No. 17-2120 (D. Minn. Oct. 20, 2017) (2017 U.S. Dist. LEXIS 173761) (case below ALJ No. 2016-FRS-00083), the Defendant moved to dismiss, asking “the Court to determine that an employee who participates in the administrative review process, including engaging in discovery and motion practice, at some point waives his right to bring a lawsuit.” The Defendant noted that it had incurred expenses in defending the administrative action, and contended that it will suffer prejudice from the two-year time period between the Complainant’s injury and discovery before the court. The Defendant argued that equitable principles should bar the Complainant from pursuing the case in district court.

      The district court noted that in Gunderson v. BNSF Ry. Co. , 850 F.3d 962, 967 (8th Cir. 2017), the 8th Circuit acknowledged that the common law principles of laches could apply at some point to cut off an employee’s right to sue, or at least seek equitable relief, in an FRSA retaliation case, and although it did not definitively determine whether waiver applied in that case, indicated that a defendant seeking relief under laches should develop a record before the district court. The district court observed that the Defendant in the instant case had attempted to build such a record of delay and prejudice. The district court, however, was not convinced that waiver was appropriate in this case, noting that the Complainant had actively pursued the administrative case for less than a year from the date of the OSHA decision, and that “[w]hile it is undoubtedly frustrating to spend time and money defending an administrative action, all of the discovery the parties engaged in before the ALJ hearing will be applicable to this proceeding.” Slip op. at 6.

      The Defendant also sought a ruling that the court could rely solely on the record before the ALJ determine that the Complainant’s dismissal was not in retaliation for FRSA protected activity. The court, however, was persuaded by the Complainant that the record before the ALJ was not as fully developed as contended by the Defendant, noting for example, that the ALJ had excluded expert testimony from two witnesses because the ALJ found that the expert designations were not made until after the disclovery deadlne had passed, whereas such testimony will likely be allowed before the district court. The district court judge, however, indicated that his ruling was not an invitation to engage in extensive discovery. The judge noted that the parties had already taken mutiple depositions and engaged in document production, and that he expected that the parties would present a greatly truncated discovery schedule so that the case could be resolved.

    • Acosta v. BNSF Ry. Co. , No. 15-9288 (D. Kan. Oct. 16, 2017) (2017 U.S. Dist. LEXIS 170991) (case below ARB Nos. 14-089, 15-016, 15-022; ALJ No. 2013-FRS-00082)
      Memorandum and Order
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      Summary :

      The Department of Labor filed an action in district court seeking enforcement of the ALJ’s FRSA reinstatement order, as affirmed by the ARB. The district court stayed the action while the Defendant appealed the ARB’s decision to the 8th Circuit. In its decision, the 8th Circuit vacated the ARB’s reinstatement order. Because of this ruling by the court of appeals, the district court found that there was no longer a case or controversy, and granted the Plaintiff’s motion to dismiss the enforcement action.

    • DeMott v. CSX Trans. Inc. , 701 Fed. Appx. 262 (4th Cir. Aug. 21, 2017) (per curiam) (unpub.)
      Opinion
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      Summary :

      CONTRIBUTING FACTOR; SUMMARY JUDGMENT; FOURTH CIRCUIT VACATES SUMMARY JUDGMENT FOR RAILROAD WHERE SOME DECISION MAKERS KNEW OF THE PROTECTED ACTIVITY; THERE WAS EVIDENCE THAT LOCAL MANAGEMENT WAS TARGETING PLAINTIFF AND OTHER UNION MEMBERS, THERE WAS EVIDENCE THAT LOCAL MANAGEMENT WAS UNHAPPY WITH THE PROTECTED ACTIVITY, AND TEMPORAL PROXIMITY SUPPORTED AN INFERENCE TO RETALIATORY ANIMUS

      DeMott v. CSX Trans. Inc. , 701 Fed. Appx. 262 (4th Cir. Aug. 21, 2017) (per curiam) (unpub.): The railroad disciplined plaintiff for a variety of violations, including insubordination. Plaintiff averred that he was actually disciplined for protected activities involving reporting unsafe working conditions, publishing a safety bulletin, and making as OSHA complaint. The district court granted the railroad summary judgment and plaintiff appealed.

      After reviewing the legal standard, the panel remarked that plaintiff “undoubtedly” engaged in protected activities and it was “undisputed” that he suffered an adverse action. Plaintiff had also “adequately demonstrated” that the decision-makers knew about the protected activities. There was also evidence that local management, which encompassed some of the decision makers, were unhappy with plaintiff’s safety activities.

      Viewing the facts in the light most favorable to plaintiff, temporal proximity licensed an inference to retaliatory animus (several months from some complaints and nine days from the last complaint). There was also other evidence of retaliatory animus related to union activities and some of the discipline came after plaintiff was asked to do something he had never been told to do before and wasn’t ever told to do again. This was enough to make a case for contributing factor causation. The panel then summarily denied the railroad’s alternative argument that it was entitled to summary judgement on its affirmative defense.

    • BNSF Ry. Co. v. United States DOL Admin. Review Bd. , No. 16-3093 (8th Cir. Aug. 14, 2017) (2017 U.S. App. LEXIS 15020; 2017 WL 3469224) (case below ARB Nos. 14-089, 15-016, -022, ALJ No. 2013-FRS-82)
      Opinion
      PDF
      Summary :

      CONTRIBUTING FACTOR; EIGHTH CIRCUIT REJECTS “CHAIN OF CAUSATION” ANALYSIS AND HOLDS THAT TO ESTABLISH CONTRIBUTION THERE MUST BE EVIDENCE OF INTERNATIONAL RETALIATION AND DISCRIMINATORY ANIMUS

      APPELLATE REVIEW; EIGHTH CIRCUIT VACATES ARB DECISION ON GROUNDS THAT IT ALTERED ALJ’S LEGAL REASONING BUT IMPROPERLY FILLED-IN FACTUAL FINDINGS TO REACH SAME CONCLUSION

      CONTRIBUTING FACTOR; EIGHTH CIRCUIT REJECTS RELIANCE ON PERCEIVED PROCEDURAL DEFICIENCIES IN INTERNAL INVESTIGATORY AND DISCIPLINE PROCESS TO INFER CONTRIBUTION PROTECTED ACTIVITY; EIGHTH CIRCUIT QUESTIONS WHETHER PURSUIT OF A FELA ACTION IS PROTECTED ACTIVITY UNDER THE FRSA AND REMANDS ISSUE TO ARB TO RECONSIDER AND PROPERLY DECIDE IN THE FIRST INSTANCE AFFIRMATIVE DEFENSE; EIGHTH CIRCUIT HOLDS THAT IT IS ERROR TO REJECT EMPLOYER’S AFFIRMATIVE DEFENSE ON THE GROUNDS THAT THE LEGITIMATE REASON FOR DISCIPLINE WOULD NOT HAVE BEEN DISCOVERED BUT-FOR THE PROTECTED ACTIVITY

      PUNITIVE DAMAGES; EIGHTH CIRCUIT HOLDS PUNITIVE DAMAGES UNAVAILABLE WHERE RAILROAD DEMONSTRATED THAT IT MADE GOOD FAITH COMPLIANCE EFFORTS, REJECTS RELIANCE ON PERCEIVED PROCEDURAL DEFICIENCIES AS GROUNDS FOR PUNITIVE DAMAGES

      In BNSF Ry. Co. v. United States DOL Admin. Review Bd. [Carter] , 867 F.3d 942 (8th Cir. Aug. 14, 2017) (No. 16-3093) (2017 U.S. App. LEXIS 15020; 2017 WL 3469224) (case below ARB Nos. 14-089, 15-016, -022, ALJ No. 2013-FRS-82), the Complainant started working for BNSF in 2005. He injured his shoulder in 2007 and immediately reported it. He later filed a Federal Employer’s Liability Act (“FELA”), 45 U.S.C. § 51, et seq ., action based on that injury. During discovery in that case, BNSF deposed him. During trial preparation in 2012, a manager reviewed the deposition and noticed inconsistencies between information given in the deposition and that provided on the original employment application back in 2005. This led to a disciplinary investigation. A second investigation was launched regarding potential false statement in 2012 about getting to work on time. Both investigations produced findings that the Complainant had been dishonest, which under BNSF’s policy can result in a standalone dismissal. So they dismissed him twice in April 2012. Complainant filed a complaint under the whistleblower protection provisions of the Federal Rail Safety Act (“FRSA”), 49 U.S.C. § 20109, alleging that he was retaliated against for reporting his 2007 injury. An Administrative Law Judge (“ALJ”) found for Complainant and awarded $50,000 in punitive damages as well as reinstatement and various other remedies. 867 F.3d at 944-45. The Administrative Review Board (“ARB”) affirmed. See Carter v. BNSF Ry. Co. , ARB Nos. 14-089, 15-016, -022, ALJ No. 2013-FRS-82 (ARB June 21, 2016).

      The Eighth Circuit explained that “[t]o prevail on his FRSA complaint, Carter must ‘prove, by a preponderance of the evidence, that ‘(i) he engaged in a protected activity; (ii) BNSF knew or suspected, actually or constructively, that he engaged in the protected activity; (iii) he suffered an adverse action; and (iv) the circumstances raise an inference that the protected activity was a contributing factor in the adverse action.’’” BNSF Ry. Co. , 867 F.3d at 945 (quoting Gunderson v. BNSF Ry. , 850 F.3d 962, 968 (8th Cir. 2017) (quoting Kuduk v BNSF Ry. , 768 F.3d 786, 789 (8th Cir. 2014))). “If he meets that burden, BNSF may avoid liability if it ‘demonstrates, by clear and convincing evidence, that [it] would have taken the same unfavorable personnel action in the absence of [Carter's] protected activity.’” Id . (quoting 49 U.S.C. § 42121(b)(2)(B)(ii)) (alterations in original). BNSF had conceded that the Complainant engaged in a protected activity that it had knowledge of and that he had suffered an adverse action. Id .

      The ALJ’s decision was based on a chain-of-events finding such that even if the employer was not motivated by and gave no significance to an event, if it is a necessary link in a chain, that establishes contribution. Id . at 945-946. After noting that over four years had passed between the protected activity and adverse action and that the proffered reasons for the adverse action had nothing to do with the protected activity (lying on an application and lying about late arrivals at work vs. reporting an injury), the Eighth Circuit rejected the chain-of-events principle, approvingly citing the recent Seventh Circuit case, Koziara v. BNSF Ry. , 840 F.3d 873 (7th Cir. 2017), cert. denied , 137 S. Ct. 1449 (2017), for the proposition that the showing of contribution involves a proximate cause analysis. BNSF Ry. Co. , 867 F.3d at 946. Further, the Eighth Circuit held that there must be evidence of intentional retaliation implicating some “discriminatory animus.” Id .

      This was not the end of the analysis, since the ARB hadn’t adopted the chain-of-events basis for the decision. Instead, it had affirmed by noting evidence of a change in attitude, deficient explanations for the adverse action, and circumstantial evidence of retaliatory motive. The Eighth Circuit allowed that if such findings were sound, then the decision could be affirmed. Id . at 946-47. But it determined that the findings either weren’t in the record or were insufficient. On the change in attitude, the ALJ had not made credibility findings that would sustain the conclusion that the supervisors were targeting the Complainant. Further, no finding was made as to whether the change in attitude related to the injury report or the FELA litigation. The panel implied that retaliation for the FELA litigation would not be a violation of the FRSA (though given the rest of the opinion, they appear to leave this as an open issue for the ARB to decide in the first instance). Id . at 947.

      Next, substantial evidence did not support that finding that BNSF’s asserted rationale was not worthy of credence. The ALJ had reached the conclusion based on procedural deficiencies in BNSF’s disciplinary process. The panel held that BNSF could not be punished for using otherwise valid procedures just because the ALJ perceives them to be unfair. The question of abstract fairness was not germane to the question of whether the protected activity contributed to the decision to take the adverse action. Thus, the critical findings for a pretext determination hadn’t been made. Nor could a finding that the second dishonesty dismissal was pretext be sustained—it was premised on a finding that all of the events were tied together, but the ARB and Eighth Circuit had rejected this chain-of-events theory. Id . at 947-48.

      Turning to the “other circumstantial evidence,” the reasoning was based on a finding that the FELA litigation involved the injury and so kept the protected injury report fresh in the minds of the decision-makers. The Eighth Circuit found this finding legally deficient in that it was based on a misreading and incorrect extension of a prior ARB case ( LeDure v. BNSF Ry. , ARB No. 13-044, ALJ No. 2012-FRS-00020 (ARB June 2, 2015)) that had held that reporting an injury during a FELA case was protected by the FRSA—not that the FELA litigation itself was protected or was sufficient to keep the protected activity “current.” By doing so, the ARB had “decided without discussion a significant issue” that hadn’t been alleged and hadn’t been considered by any of the circuit courts. The lack of explanation for such an expansion frustrated judicial review and so had to be vacated. Id . at 948. In sum, “[t]he ARB was unable to salvage an ALJ analysis built upon a flawed theory of causation because the ARB lacked critical fact findings needed to affirm the ALJ's decision when applying the appropriate legal standard. To the extent the ARB filled in the missing findings, it exceeded its scope of review.” The complaint was thus remanded. Id .

      The Eighth Circuit also briefly addressed three other issues. First, it was legally improper to reject the affirmative defense on the grounds that but-for the protected activity, the employer would not have discovered the legitimate basis for the adverse action. Id . at 949. Second, punitive damages were improper even if a violation was found on remand because BNSF had shown that it made good faith efforts to comply with the FRSA based on its corporate policy and review procedures. The award had been based on the fact that BNSF fired the Complainant twice and the procedural deficiencies of the hearings. That was error on the record in the case. Id . Finally, the Eighth Circuit indicated that it was not considering the issue of whether reinstatement should not have been ordered in these circumstances. Id .

    • Foster v. BNSF Ry. Co. , 866 F.3d 962 (8th Cir. Aug. 10, 2017)
      Opinion
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      Summary :

      ADMINISTRATIVE EXHAUSTION; SUMMARY JUDGMENT; ADVERSE ACTIONS AND PROTECTED ACTIVITIES PLED IN DISTRICT COURT BUT OMITTED FROM OSHA COMPLAINT CANNOT BE PURSUED WHEN THERE WAS A FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES BECAUSE THE SCOPE OF AN INVESTIGATION THAT COULD HAVE REASONABLY BEEN EXPECTED FROM THE COMPLAINT WOULD NOT HAVE INCLUDED THE NEW CLAIMS

      PROTECTED ACTIVITY; SUMMARY JUDGMENT; REPORT OF HAZARDOUS SAFETY CONDITION ASSERTED AS PROTECTED ACTIVITY UNDER § 20109(a)(1) AS VIOLATION OF FELA FAILS WHEN COMPLAINTS DID NOT ALLEGE VIOLATION OF FELA

      CONTRIBUTING FACTOR; SUMMARY DECISION; SUMMARY JUDGMENT ON CONTRIBUTING FACTOR AFFIRMED WHERE PROTECTED ACTIVITY AT ISSUE CAME AFTER SOME ADVERSE ACTIONS AND AFTER THE TESTIMONY THAT WAS THE BASIS FOR THE CLAIM OF INTENTIONAL RETALIATION, EIGHTH CIRCUIT REQUIRES THAT THE ADVERSE ACTION BE AT LEAST IN PART INTENTIONAL RETALIATION FOR PROTECTED ACTIVTY AND REJECTS CLAIM THAT AN ASSERTION THAT THE TWO ARE INEXTRICABLY INTERTWINED ALONE CAN MAKE A SHOWING OF CONTRIBUTING FACTOR CAUSATION

      Foster v. BNSF Ry. Co. , 866 F.3d 962 (8th Cir. Aug. 10, 2017): Three joined complaints under the FRSA relating back to an injury to another worker that occurred during a crew change. The train had stopped across a bridge from the parking area and when of the new crew members fell off the bridge when walking to the train. After a hearing, the three (and others) were disciplined for a variety of safety infractions found in videos of the incident. In interviews before the hearing and at the hearing they had reported various safety infractions in the area. It was disputed, for instance, where the railroad told them to stop the train. They each received different levels of discipline, where were reduced or eliminated by the Public Law Board. They also filed FRSA complaints and then kicked them out to federal court. The district court granted summary decision for the railroad and the plaintiffs appealed.

      First, the Eighth Circuit affirmed the finding that some of the adverse actions and protected activities pled in their complaint had not been administratively exhausted because they had not been presented to OSHA. It quickly held that because the complaint has to be made with OSHA, there is an exhaustion requirement. Assuming that the “generous” Title VII standard applied in FRSA cases, the court found that some claims were still clearly unexhausted. To exhaust a claim, it must be within the scope of an investigation that could have reasonably be expected to result from the initial complaint. Here certain adverse actions hadn’t been mentioned at all and did not flow from those that were presented to the agency. The same held for some of the protected activities claimed in the district court. As to those claims, summary judgment was proper for failure to exhaust.

      The plaintiffs had presented their reports of dangers on the bridge as protected activities, but abandoned any claim under § 20109(b)(1)(A), since the railroad had not disciplined others who made those complaints, and instead characterized these as protected by § 20109(a)(1) on the theory that they were reports of violations of FELA because the railroad knew about the hazardous safety condition but did not correct it. However, this failed because the statements made as protected activity had not stated that the railroad knew about the conditions or had failed to remedy the hazardous condition.

      The last protected activity at issue was the hearing testimony. This could not have contributed to any of the alleged adverse actions except for the final discipline, since it came after that discipline. Moreover, the theory of retaliation alleged that two testifying managers harbored the retaliatory motive and were trying to protect themselves, but this testimony came before the testimony of the plaintiffs. The Eighth Circuit quickly rejected a challenge to the validity of the discipline since erroneous discipline is insufficient to establish a violation. Finally, the court rejected the claim that contribution could be shown on a theory that the protected activity and adverse action were inextricably intertwined since the Eighth Circuit had rejected this theory in Heim v. BNSF Ry. Co. , 849 F.3d 723 727 (8th Cir. 2017). To prevail, a plaintiff had to show that the discipline was at least in part intentional retaliation for the protected activity.

    • Loos v. BNSF Ry. Co. , 865 F.3d 1106 (8th Cir. 2017), rev'd on other grounds , 586 US __, 139 S.C. 893, 2013 L.Ed.2d 160, 2019 U.S. LEXIS 1734 (Mar. 4, 2019)
      Opinion
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      Summary :

      CONTRIBUTING FACTOR CAUSATION; EIGHTH CIRCUIT AFFIRMS DISTRICT COURT’S GRANT OF SUMMARY JUDGMENT FOR LACK OF PRIMA FACIE CASE OF CONTRIBUTING FACTOR WHERE IT FOUND NO DIRECT EVIDENCE, NO TEMPORAL PROXIMITY, AND NO CIRCUMSTANTIAL EVIDENCE THAT WOULD SUPPORT AN INFERENCE OF RETALIATORY MOTIVE

      In Loos v. BNSF Ry. Co. , 865 F.3d 1106 (8th Cir. 2017), rev'd on other grounds , 586 US __, 139 S.C. 893, 2013 L.Ed.2d 160, 2019 U.S. LEXIS 1734 (Mar. 4, 2019), the Eighth Circuit affirmed a decision by the United States District Court for the District of Minnesota dismissing Complainant’s claim alleging retaliation under the Federal Railroad Safety Act (“FRSA”) on summary judgment. BNSF Ry. Co. , 865 F.3d 1106, 1116.

      Complainant made a number of safety reports and was a member of Respondent’s safety committee for a period of time. Id . at 1109. Complainant reported a workplace injury sustained on December 19, 2010, which took him out of work until May 16, 2011. In May 2011, Complainant requested, but was denied leave under the Family Medical Leave Act (“FMLA”). Respondent asserted that Complainant had not worked enough hours in the previous year to qualify for FMLA leave. In the summer of 2011, Complainant requested excused absences for flare-ups of his injury, with use of the “injury on duty” (“ION”) code. However, Complainant’s supervisor informed him that the ION code was unavailable because “[w]e don’t do it anymore.” Id . at 1110.

      Complainant incurred a number of attendance violations, beginning in 2006, which resulted in escalating disciplinary actions, and culminated in the dismissal of Complainant after he missed eight-and-a-half weekdays and two weekend days between May and July 2012, when he was only allotted seven-and-a-half weekdays and no weekend days. Complainant missed five of the days due to flare-ups of his injury. Between May and July 2012, Complainant was denied permission to use the ION code to designate his absences as excused. The court states that Respondent “emphasized that it denied [Complainant’s] request because he did not provide medical documentation.” When the issue went to an internal hearing, Complainant provided a statement from his doctor “explaining that he would have to miss work because of knee-injury flare ups and that these issues were present during May, June, and July of 2012.” Id . at 1111.

      The only issue on appeal was whether there was a genuine dispute over whether Complainant’s protected activity was a contributing factor in his discharge. Complainant argued that Respondent terminated his employment in retaliation for submitting safety reports and serving on a safety committee; reporting an on-duty injury; and testifying before the U.S. Department of Labor, Office of Administrative Law Judges in a FRSA retaliation hearing. Id . at 1113.

      The court emphasized five main points. First, the court found that there was no direct evidence of causation. Second, the court found that Complainant’s protected activities were not in temporal proximity to his discharge, the most recent protected activity having occurred ten months prior to his termination. The court further noted that the Eighth Circuit has found that temporal proximity, alone, is not sufficient to establish causation. Id . Third, the court dismissed Complainant’s assertion that Respondent retaliated against him “by refusing to allow him to use the ION code when his injury flared up,” finding that “the evidence does not support the conclusion that” Respondent acted with “a retaliatory motive” in its refusal. The court emphasized that, at the time Complainant requested the ION code, the only medical documentation Respondent had was a letter from Complainant’s doctor “releasing him to work without restriction.” Id . The court further noted that if Respondent “had an across-the-board practice of disallowing the ION code for injury flare-ups, the denial in [Complainant’s] case would not be evidence that BNSF intended to retaliate against [Complainant] specifically for protected activity.” Id . at 1114. Fourth, the court found that Respondent’s decision not to make an exception to Complainant regarding FMLA requirements does not demonstrate retaliatory intent. Id . at 1115. Finally, the court finds that the circumstances surrounding Complainant’s testimony before the OALJ in a FRSA whistleblower matter “do not support an inference of retaliatory motive.” Id .

      [Editor's note: The U.S. Supreme Court has granted cert. on this case on the question of whether an employer’s payment of back pay to an employee for working time lost due to an on-the-job in-jury is taxable “compensation” under the Railroad Re-tirement Tax Act, 26 U.S.C. 3231(e)].]

    • Lockhart v. Long Island Railroad Co. , No. 16-cv-1035 (S.D. N.Y. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 122631; 2017 WL 3327603) (case below 2015-FRS-00055)
      Memorandum Opinion and Order
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      Summary :

      ADVERSE ACTION; WHERE DEFENDANT WITHDREW “LETTER OF CAUTION” AFTER RECEIVING DOCTOR’S NOTE, COMPLAINANT DID NOT SUFFER AN UNFAVORABLE PERSONNEL ACTION

      In Lockhart v. Long Island Railroad Co. , No. 16-cv-1035 (S.D.N.Y. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 122631; 2017 WL 3327603) (case below 2015-FRS-00055), the United States District Court for the Southern District of New York granted summary judgment for the Long Island Railroad Company (“Respondent”), dismissing Henry Lockhart’s (“Complainant”) claims of retaliation under the FRSA. Lockhart , slip. op. at 1. Complainant claimed a violation of FRSA, 49 U.S.C. § 20109(a)(2), where Respondent issued a Letter of Caution following an absence due to Complainant’s use of narcotic painkillers prescribed by his doctor for a toothache. Although the Letter of Caution was the first step in a disciplinary plan, Respondent withdrew it after receiving a doctor’s note from Complainant. Id . at 2. The court concluded that Complainant did not show that he suffered an unfavorable personnel action since the Letter of Caution was withdrawn. Id . at 6.

      PROTECTED ACTIVITY; DISTRICT COURT FINDS THAT FRSA 49 U.S.C. § 20109(a)(2) DOES NOT APPLY TO NON-RAILROAD EQUIPMENT-RELATED CONDITIONS SUCH AS NARCOTIC USE BY EMPLOYEES

      In Lockhart v. Long Island Railroad Co. , No. 16-cv-1035 (S.D.N.Y. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 122631; 2017 WL 3327603) (case below 2015-FRS-00055), the United States District Court for the Southern District of New York granted summary judgment for the Long Island Railroad Company (“Respondent”), dismissing Henry Lockhart’s (“Complainant”) claims of retaliation under the FRSA. Lockhart , slip. op. at 1. Complainant claimed two violations of FRSA, 49 U.S.C. § 20109(a)(2). First, Respondent issued a Letter of Caution following an absence due to Complainant’s use of narcotic painkillers prescribed by his doctor for a toothache. Id . at 2. The court concluded that Complainant’s toothache and related treatment were not work-related, and § 20109(a)(2), like § 20109(c)(2), does not protect an employee who is unable to work “due to his self-reported use of narcotics for non-work-related reasons.” Id . at 6-7.

      Second, Complainant claimed that Respondent retaliated against him by disciplining him for absences due to his use of Oxycodone prescribed for a shoulder injury sustained on duty. Id . at 8-10. The court found that subsection (a)(2) does not cover “non-railroad equipment-related conditions such as an employee’s inability to report to work due to his use of prescribed narcotics.” Id . at 8.

      PROTECTED ACTIVITY; DISTRICT COURT FINDS THAT FRSA, 49 U.S.C. § 20109(b)(1)(A) DOES NOT COVER PERSONAL, NON-WORK ILLNESS BECAUSE IT DOES NOT EXTEND BEYOND WORK-RELATED SAFETY CONDITIONS UNDER THE RAIL CARRIER’S CONTROL

      In Lockhart v. Long Island Railroad Co. , No. 16-cv-1035 (S.D.N.Y. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 122631; 2017 WL 3327603) (case below 2015-FRS-00055), the United States District Court for the Southern District of New York granted summary judgment for the Long Island Railroad Company (“Respondent”), dismissing Henry Lockhart’s (“Complainant”) claims of retaliation under the FRSA. Lockhart , slip. op. at 1. Complainant claimed that Respondent violated FRSA, 49 U.S.C. § 20109(b)(1)(A) by disciplining him for absences due to his use of Oxycodone prescribed for a shoulder injury sustained on duty. Id . at 8-10. The court found that the “hazardous condition” of subsection (b)(1)(A) does not extend beyond “work-related safety conditions under the rail carrier’s control,” and so does not cover “personal, non-work illness.” Id . at 8.

      ADVERSE ACTION; DISTRICT COURT FINDS THAT RESPONDENT DID NOT VIOLATE FRSA, 49 U.S.C. § 20109(h) BY REQUIRING DOCUMENTATION TO VERIFY MEDICAL ABSENCES UNDER § 20109(c)(2); COURT TAKES INTO ACCOUNT LACK OF INTENTIONAL RETALIATORY ANIMUS

      In Lockhart v. Long Island Railroad Co. , No. 16-cv-1035 (S.D.N.Y. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 122631; 2017 WL 3327603) (case below 2015-FRS-00055), the United States District Court for the Southern District of New York granted summary judgment for the Long Island Railroad Company (“Respondent”), dismissing Henry Lockhart’s (“Complainant”) claims of retaliation under the FRSA. Lockhart , slip. op. at 1. Complainant claimed that Respondent violated FRSA, 49 U.S.C., § 20109(c)(2) by disciplining him for absences due to his use of Oxycodone prescribed for a shoulder injury sustained on duty. Id . at 8-10. The court found that, although Complainant’s initial injury would fall under subsection (c)(2), he “present[ed] no evidence of intentional retaliatory animus” by Respondent. Id . at 8. The court emphasized that Complainant conceded that he failed to submit required documentation regarding his absences and that he would not have been disciplined had he done so. Id . at 8-9. The court rejected Complainant’s assertion that requiring documentation to verify medical absences violates § 20109(h), which states that the “rights and remedies in this section may not be waived by any agreement, policy, form, or condition of employment.” Id . at 9.

    • DiMauro v. Springfield Terminal Ry. Co. , No. 16-cv-71 (D. Me. July 26, 2017) (2017 U.S. Dist. LEXIS 117550; 2017 WL 3203390)
      Decision and Order on Defendant’s Motion for Summary Judgment
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      Summary :

      SUMMARY JUDGMENT; CONTRIBUTING FACTOR AND KNOWLEDGE; SUMMARY JUDGMENT GRANTED WHERE EVIDENCE OF RECORD INDICATED THAT DECISION MAKER HAD NO KNOWLEDGE OF PROTECTED ACTIVITY AND IT WOULD BE “RANK SPECULATION” TO DRAW AN INFERENCE TO KNOWLEDGE

      In DiMauro v. Springfield Terminal Ry. Co. , No. 16-cv-71 (D. Me. July 26, 2017) (2017 U.S. Dist. LEXIS 117550; 2017 WL 3203390), Plaintiff filed a complaint with the Federal Railway Administration, which initiated an investigation and recommendation for penalties. Plaintiff produced evidence that a supervisor expressed adversity and an intent to retaliate. Separately, Plaintiff had an interaction with the President of the Railway, after which he was investigated for dishonesty in saying that his locomotive was not ready. None of the charges were sustained, however, after witnesses supported Plaintiff’s version of the conversation. Plaintiff filed an FRSA complaint and Respondent moved for summary judgment.

      The district court granted summary judgment on the contributing factor element. The President had submitted a declaration that he had no knowledge of the report to the FRA or the investigation. Though the court characterized the exchange between the Plaintiff and President as “bizarre,” it held that there was not enough evidence to present the issue to a jury. There was no cat’s paw theory in the allegations and Plaintiff could only speculate that the President knew about the protected activity. Circumstantial evidence could make the needed showing, but Plaintiff didn’t have enough and a jury would have to engage in “rank speculation” to find for him.

    • Short v. Springfield Terminal Ry. Co. , No. 16-cv-74 (D. Me. July 26, 2017) (2017 U.S. Dist. LEXIS 117551; 2017 WL 3203391)
      Decision and Order on Defendant’s Motion for Summary Judgment
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      Summary :

      SUMMARY JUDGMENT; CLAIMS NOT ADDRESSED IN RESPONSE TO MOTION FOR SUMMARY DECISION ARE DEEMED WAIVED

      ADVERSE ACTION; BURLINGTON NORTHERN STANDARD; DISTRICT COURT ADOPTS BURLINGTON NORTHERN STANDARD FOR ADVERSE ACTION UNDER THE FRSA

      ADVERSE ACTION; SUMMARY JUDGEMENT; INVESTIGATIONS AS ADVERSE ACTION; DISTRICT COURT HOLDS THAT THE INITIATION OF AN INVESTIGATION AND CONDUCT OF A DISCIPLINARY PROCESS CAN BE ADVERSE ACTION EVEN WHERE ULTIMATELY NO DISCIPLINE IS ASSESSED, MATERIAL ADVERSITY IS A QUESTION FOR THE JURY

      In Short v. Springfield Terminal Ry. Co. , No. 16-cv-74 (D. Me. July 26, 2017) (2017 U.S. Dist. LEXIS 117551; 2017 WL 3203391), Plaintiff injured his knee at work but did not report it until the next day, potentially in violation of a safety rule about prompt reports of injury. The railroad noticed an investigation, but the outcome was that he broke no rule and no discipline was assessed. On summary decision the railroad argued that this was not an adverse action. Plaintiff had asserted other adverse actions, but since they were not addressed in response to Defendant’s motion for summary decision, the district court deemed them “waived.”

      The district court applied the Burlington Northern standard for an adverse action, which requires that the action “be harmful to the point that they could well dissuade a reasonable worker” from engaging in protected activity. After reviewing the history of the investigation in this case, the court determined that the issue had to go to a jury. It held that investigation and being subjected to the disciplinary process could be an adverse action if it was materially adverse, a question the jury was properly placed to answer. In so doing, the court disagreed with the analysis in some other district court cases suggesting that investigation could not be an adverse action, concluding that the facts of each case and disciplinary process were different. The court pointed to ARB holdings ( Vernace ) reaching the same conclusion, but explicitly stated that it was not relying on the ARB.

    • Logsdon v. BNSF Railway Co. , 262 F.Supp.3d 895 (D. Neb. June 30, 2017) (2017 WL 2838132) (case below 2014-FRS-132)
      Memorandum and Order
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      Summary :

      CONTRIBUTING FACTOR; RETALIATORY MOTIVE OR DISCRIMINATORY ANIMUS; SUMMARY JUDGMENT GRANTED WHERE NO JURY COULD CONCLUDE THAT DECISION-MAKERS LACKED GOOD FAITH BELIEF IN DISHONESTY CHARGE AND THUS WERE NOT MOTIVATED BY DISCRIMINATORY ANIMUS

      In Logsdon v. BNSF Railway Co. , 262 F.Supp.3d 895 (D. Neb. June 30, 2017) (2017 WL 2838132) (case below 2014-FRS-132), Plaintiff was a laborer and first line supervisor at a facility that repaired damaged coal cars. Before they could be repaired, excess coal had to be removed. When this was done in the facility, slip paper was placed under the cars, they were emptied, and then a laborer shoveled the coal into a dumpster. Plaintiff alleged that he hurt his back doing this when he pulled on the paper when it had 150-200 pounds of coal. He did not initially report it. Three months later he started to, but alleged his supervisor told him not to report an injury at work but instead to attribute his pain to other causes. He went along with this. He was then investigated for the report and in that process gave the account of the workplace injury. That led to another investigation and hearing in which Plaintiff and the manager testified. The company believed the manager and terminated Plaintiff for dishonesty. He filed a FELA and FRSA suit.

      Defendant moved for summary judgment. It was denied as to the FELA claim. But the court granted the motion on the FRSA claim. Defendant argued that Plaintiff could not show that his injury report was a contributing factor in his dismissal. Applying Eighth Circuit law, the Court observed that contribution required showing intentional retaliation prompted by the injury report. Defendant argued that the dismissal was solely based on its finding that Plaintiff had behaved dishonestly. In response Plaintiff alleged that BNSF had shifting explanations, but this was premised on comparing the process before the first hearing, during which Plaintiff pointed the finger at management and changed his story, and the second hearing, based on the dishonesty. As to this second hearing, there had not been any shift. Plaintiff’s main argument point to the misconduct of management in attempting to suppress the injury report initially. The Court allowed that this might have happened and reflected hostility to injury reports, but concluded that this would not alter the analysis, which turned on the termination decision. That had been made by other managers after a “thorough investigation” and turned on inconsistencies in reporting the injury. While that decision may have been incorrect, there was no evidence that it was made in bad faith or was based on “some retaliatory motive or discriminatory animus.” Hence BNSF was granted summary judgment on the FRSA complaint.

    • Lowery v. CSX Transp., Inc. , 690 Fed. Appx. 98 (4th Cir. May 26, 2017) (per curiam) (unpublished)
      Opinion
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      Summary :

      CONTRIBUTING FACTOR; SUMMARY JUDGMENT; CAT’S PAW; KNOWLEDGE; TEMPORAL PROXIMITY; WHERE MANAGER WHO KNEW ABOUT THE PROTECTED ACTIVITY INFLUENCED/ADVISED THE DECISION MAKERS AND TESTIFIED AT THE HEARING, CAT’S PAW THEORY CAN APPLY TO MAKE A SHOWING THAT THE DECISION-MAKERS KNEW ABOUT THE PROTECTED ACTIVITY AND MAY HAVE INHERITED ANIMOSITY TO THE PROTECTED ACTIVITY; COURT VACATES SUMMARY JUDGMENT WHEN MANAGERS WHO INFLUENCED DECISION COULD HAVE HAD ANIMOSITY TO THE PROTECTED ACTIVITY, THERE WAS TEMPORAL PROXIMITY, AND THERE WAS EVIDENCE THAT THE EMPLOYEE WAS PUNISHED MORE HARSHLY THAN OTHERS

      Lowery v. CSX Transp., Inc. , 690 Fed. Appx. 98 (4th Cir. May 26, 2017) (per curiam) (unpublished): Plaintiff was suspended for violation of workplace jewelry guidelines and making false statements. He contended that he was actually disciplined in retaliation for safety complaints. The district court granted summary judgment for the railroad and plaintiff appealed, alleging a number of errors. Reviewing the record, the panel concluded that Plaintiff “undoubtedly” engaged in protected activity and suffered an adverse action. He also “adequately demonstrated” that the decision-makers were aware of his protected activity. Even if they did not know, the cat’s paw theory applied because another trainmaster knew about the protected activity and had contact with/advised the three decision makers and testified at the hearing. This was sufficient to withstand summary judgment. Further, viewing the evidence in the light most favorable to plaintiff, a fact-finder could conclude that this trainmaster gave testimony as the result of retaliatory animus. In addition, another supervisor who include the trainmaster’s testimony had clear animosity to the plaintiff and knew about his protected activities. The court concluded that there was an issue of material of fact with the jury on the contributing factor evidence, noting that there was temporal proximity and that plaintiff’s discipline was greater than others who violated the policy. The panel also summarily concluded that the defendant had not established by clear and convincing evidence that it would have taken the same action absent the protected activity. The decision below was vacated and the case was remanded for further proceedings.

    • Mercier v. USDOL, Administrative Review Board , No. 15-3369 (8th Cir. May 8, 2017) (2017 U.S. App. LEXIS 8160) (case below ARB No. 13-048, ALJ No. 2008-FRS-4)
      Order [denying petitions for rehearing and rehearing en banc]
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      Summary :

      "The petition for rehearing en banc is denied. The petition for rehearing by the panel is also denied."

    • Lincoln v. BNSF Ry. , No. 15-cv-4936 (D. Kan. Apr. 24, 2017) (2017 U.S. Dist. LEXIS 61991) (cases below 2015-FRS-29 and -30)
      Memorandum and Order
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      Summary :

      EXHAUSTION OF ADMINISTRATIVE REMEDIES; PLAINTIFFS WHO WERE NOT SELECTED FOR CERTAIN POSITIONS FAILED TO EXHAUST ADMINISTRATIVE REMEDIES UNDER THE FRSA WHERE THEY APPLIED FOR THOSE POSITIONS MORE THAN 180 DAYS BEFORE THE DATE OF THE OSHA COMPLAINT OR AFTER THE COMPLAINT/AMENDED COMPLAINT

      In Lincoln v. BNSF Railway Co. , No. 15-cv-4936-DDC-KGS (D. Kan. April 24, 2017), the United States District Court for the District of Kansas granted summary judgment for Respondent, BNSF Railway Co. (“BNSF”), dismissing FRSA complaints of two Plaintiffs, Larry D. Lincoln and Brad C. Mosbrucker. Lincoln, slip op. at 1. Plaintiffs sent demand letters to BNSF describing an on-duty chemical spill that had taken place two and a half years earlier, their injuries, damages, and anticipated future damages. Id . at 3. Plaintiffs were subsequently placed on medical leave, which was extended, pending their submission of updated medical information addressing the safety concerns raised in the demand letters. Id . at 4-5. Plaintiffs applied to a number of different positions within BNSF, Id . at 15-17, pursuant BNSF’s craft transfer policy, which is triggered when a “physician does not release the employee to work” at his assigned job, Id . at 6-7. Plaintiffs were not selected for the positions they applied to. Id . at 18.

      The court cited the FRSA’s 180-day statute of limitations, 49 U.S.C. § 20109(d)(1)-(2)(ii), and found that both Plaintiffs failed to exhaust administrative remedies in some cases. Specifically, Plaintiffs failed to exhaust administrative remedies for positions that they applied to that were more than 180 days before their OSHA complaints or after their OSHA complaints or amendments. Id . at 22-23.

      CONTRIBUTING FACTOR CAUSATION; DISTRICT COURT GRANTS SUMMARY JUDGMENT FOR THE EMPLOYER BECAUSE PLAINTIFFS “ADDUCED NO EVIDENCE FROM WHICH A REASONABLE JURY” COULD FIND THAT THEIR PROTECTED ACTIVITY WAS A CONTRIBUTING FACTOR UNDER THE FRSA; TEMPORAL PROXIMITY ALONE DOES NOT PRESENT A GENUINE ISSUE OF MATERIAL FACT

      In Lincoln v. BNSF Railway Co. , No. 15-cv-4936-DDC-KGS (D. Kan. April 24, 2017), the United States District Court for the District of Kansas granted summary judgment for Respondent, BNSF Railway Co. (“BNSF”), dismissing FRSA complaints of two Plaintiffs, Larry D. Lincoln and Brad C. Mosbrucker. Lincoln , slip op. at 1. Plaintiffs sent demand letters to BNSF describing an on-duty chemical spill that had taken place two and a half years earlier, their injuries, damages, and anticipated future damages. Id . at 3. Plaintiffs were subsequently placed on medical leave, which was extended, pending their submission of updated medical information addressing the safety concerns raised in the demand letters. Id . at 4-5. Plaintiffs applied to a number of different positions within BNSF, Id . at 15-17, pursuant BNSF’s craft transfer policy, which is triggered when a “physician does not release the employee to work” at his assigned job, Id . at 6-7. Plaintiffs were not selected for the positions they applied to and alleged that they were not selected because they informed BNSF in their demand letters that BNSF “negligently . . . handled the . . . chemical spill and, as a result, violated their rights under the Federal Employees Liability Act . . . .” Id . at 18, 54-55.

      The court found that Plaintiffs “adduced no evidence from which a reasonable jury could conclude that their demand letters were a contributing factor to defendant’s decision not to hire them.” Id . at 59. The court noted that circumstantial evidence can be enough to establish the contributing factor element, but that temporal proximity alone “will not present a genuine issue of fact.” Id . at 57. Plaintiffs relied on several emails from BNSF’s doctor to other employees informing them about the information in the demand letters. Id . at 58. The court emphasized that the doctor did not make any hiring decisions and “merely referencing the contents of plaintiffs’ demand letter in an email explaining BNSF’s decision to remove plaintiffs from service because of their medical condition does not create a triable factual issue.” Id . at 58.

      Note: Because the court found that summary judgment was appropriate on the above grounds, it declined to decide whether sending the demand letters qualified as protected activity. Id . at 56.

      AFFIRMATIVE DEFENSE; DISTRICT COURT GRANTS SUMMARY JUDGMENT WHERE THE UNDISPUTED EVIDENCE ESTABLISHED, BY CLEAR AND CONVINCING EVIDENCE, THAT THE EMPLOYER WOULD HAVE REFUSED TO HIRE PLAINTIFFS FOR REASONS UNRELATED TO ANY RETALIATORY MOTIVE; PLAINTIFFS APPLIED FOR JOBS THAT REQUIRED WORK OUTSIDE, BUT BOTH PLAINTIFFS WERE RESTRICTED TO INDOOR EMPLOYMENT

      In Lincoln v. BNSF Railway Co. , No. 15-cv-4936-DDC-KGS (D. Kan. April 24, 2017), the United States District Court for the District of Kansas granted summary judgment for Respondent, BNSF Railway Co. (“BNSF”), dismissing FRSA complaints of two Plaintiffs, Larry D. Lincoln and Brad C. Mosbrucker. Lincoln , slip op. at 1. Plaintiffs sent demand letters to BNSF describing an on-duty chemical spill that had taken place two and a half years earlier, their injuries, damages, and anticipated future damages. Id . at 3. Plaintiffs were subsequently placed on medical leave, which was extended, pending their submission of updated medical information addressing the safety concerns raised in the demand letters. Id . at 4-5. Plaintiffs applied to a number of different positions within BNSF, Id . at 15-17, pursuant BNSF’s craft transfer policy, which is triggered when a “physician does not release the employee to work” at his assigned job, Id . at 6-7. Plaintiffs were not selected for the positions they applied to and alleged that they were not selected because they informed BNSF in their demand letters that BNSF “negligently . . . handled the . . . chemical spill and, as a result, violated their rights under the Federal Employees Liability Act . . . .” Id . at 18, 54-55.

      The court held that that Plaintiffs did not establish that the demand letters were a contributing factor in BNSF’s decision not to hire them. Id . at 59-60. It was uncontested that Plaintiffs sought positions that “required the worker to be able to work outside,” and that “both plaintiffs were restricted to indoor employment.” Accordingly, the court found that “no reasonable jury could find a retaliatory motive contributed to BNSF’s decision” not to hire either plaintiff. Id . at 60. The court emphasized that BNSF established “by undisputed evidence that it would have refused to hire plaintiffs for those positions for reasons unrelated to any retaliatory motive created by their demand letters.” Id . at 64.

    • Pan Am Railways., Inc. v. USDOL , No. 16-2271 (1st Cir. Apr. 20, 2017) (2017 U.S. App. LEXIS 7047; 2017 WL 1422369) (case below ARB No. 14-074; ALJ No. 2013-FRS-84)
      Opinion
      PDF
      Summary :

      APPELLATE REVIEW; COURTS OF APPEALS REVIEW FACTUAL FINDINGS FOR SUBSTANTIAL EVIDENCE, EVIDENTIARY DETERMINATIONS FOR ABUSE OF DISCRETION; DETERMINATION OF WHETHER PUNITIVE DAMAGES WERE APPLICABLE FOR SUBSTANTIAL EVIDENCE, AND AMOUNT OF PUNITIVE DAMAGES FOR ABUSE OF DISCRETION/CLEARLY EXCESSIVE

      EVIDENTIARY DETERMINATIONS; FIRST CIRCUIT AFFIRMS EXCLUSION OF COMPARATOR EVIDENCE WHERE LACK OF CONTEXT WOULD RENDER IT OF LITTLE PROBATIVE VALUE

      AFFIRMATIVE DEFENSE; FIRST CIRCUIT AFFIRMS FINDING THAT RAILROAD DIDN’T SUSTAIN AFFIRMATIVE DEFENSE WHERE COMPARATOR EVIDENCE DID NOT ADEQUATELY RELATE TO THE SITUATION AT ISSUE AND SUBSTANTIAL EVIDENCE SUPPORTED ALJ’S REJECTION OF RAILROAD’S CLAIMED MOTIVATION

      PUNITIVE DAMAGES; FRSA USES THE COMMON LAW RECKLESS DISREGARD TEST FOR PUNITIVE DAMAGES; PUNITIVE DAMAGES MAY BE AWARDED WHEN THE RAILROAD ACTED WITH “MALICE OR ILL WILL OR WITH KNOWLEDGE THAT ITS ACTIONS VIOLATED FEDERAL LAW OR WITH RECKLESS DISREGARD OR CALLOUS INDIFFERENCE TO THE RISK THAT ITS ACTIONS VIOLATED FEDERAL LAW”

      PUNITIVE DAMAGES; STANDARD OF REVIEW; ABUSE OF DISCRETION REVIEW IS DEFERENTIAL TO THOSE BETTER POSITIONED TO MAKE DETERMINATIONS; MAXIMUM STATUTORY AMOUNT AFFIRMED WHERE ALJ PERMISSIBLY FOUND WILLFUL RETALIATION, INVOLVEMENT OF HIGHER MANAGEMENT, AND A CULTURE OF HOSTILITY TO INJURY REPORTS

      In Pan Am Railways., Inc. v. USDOL , 855 F.3d 29, No. 16-2271 (1st Cir. Apr. 20, 2017) (2017 U.S. App. LEXIS 7047; 2017 WL 1422369) (case below ARB No. 14-074; ALJ No. 2013-FRS-84), Complainant reported that a pile of railroad ties were a safety hazard. It was not abated. He later tripped on the pile and injured his ankle. He reported his injury and was taken to the hospital. A manager told him to expect a disciplinary hearing. He had two days off but took three days to recover, missing a day, which meant the railroad had to report the injury. A hearing was then initiated based on the alleged failure to make sure he had secure footing before getting off a train. He was disciplined with a formal reprimand. Complainant then filed an OSHA complaint based on report the hazard and reporting the injury. It was drafted by a lawyer without review by the Complainant and contained a discrepancy with the testimony at the hearing injury as to whether after hurting his ankle he caught himself and say down or fell down. A manager deemed this major and the railroad decided to bring a second set of charges against plaintiff for filing the OSHA complaint containing a different account in one part. Complainant amended his OSHA complaint to include retaliation for bringing the initial OSHA complaint. At the second hearing, which threatened dismissal, Complainant explained that the lawyer had prepared the OSHA complaint and had gotten that one detail wrong. He also explained that no one at the railroad had asked him about the discrepancy before initiating the second round of discipline. The charge was not sustained.

      OSHA found for Complainant on the second, but not first, complaint. The railroad sought a hearing. The ALJ found the manager not very credible and found for the Complainant, rejecting the affirmative defense because the comparator evidence did not match the situation. The ALJ awarded $10K in emotional distress and the maximum amount, $250K, in punitive damages. The ARB affirmed on the grounds that substantial evidence supported the findings and the punitive damage award was not an abuse of discretion. The railroad appealed to the First Circuit.

      The First Circuit affirmed. First, the railroad argued that it had established its affirmative defense. It challenged the exclusion of certain comparator evidence, arguing that it was not hearsay under the business records exception. But they hadn’t been excluded because they were hearsay. The ALJ excluded some of the comparator evidence because there weren’t any witnesses who could provide context to them and so they didn’t have probative value. This was not an abuse of discretion. Moreover, any error was harmless since they would have only shown that there was prior discipline for false statements, which would not make the circumstances similar to those in this case. This was the same deficiency the ALJ assigned to the evidence that did come in, which the First Circuit held was permissibly found insufficient. The railroad also argued based on its not-retaliatory motive in the discrepancy, but the First Circuit held that substantial evidence supported the ALJ’s reasons for rejecting that explanation: adverse credibility findings as to the key manager. The First Circuit also flatly rejected the claim that the ALJ had improperly evaluated the evidence regarding the circumstances of the disciplinary hearing.

      The railroad also appealed the punitive damages award. The First Circuit explained that the common law test of punitive damages applied to the FRSA. This test looks to reckless disregard or to whether the railroad acted with “malice or ill will or with knowledge that its actions violated federal law or with reckless disregard or callous indifference to the risk that its actions violated federal law.” Substantial evidence supported the finding that punitive damages were warranted due to the railroad’s reckless or callous disregard for the Complainant’s rights in that the ALJ permissibly found that the railroad had willfully retaliated for filing an OSHA complaint. As to the amount, the First Circuit reviewed for an abuse of discretion and found that while it might have chosen a different amount, the ALJ’s award was not clearly excessive. The ALJ had adduced additional reasons for the award, including management’s exaggeration of the discrepancy and concerns about the culture at the railroad. The decision to pursue discipline for an OSHA complaint was made at high levels, not low level management, and showed a disregard for OSHA’s fact-finding process. Evidence also showed that 99% of reportable injuries at the railroad led to discipline, though the record indicated that the railroad’s attitude to safety was nonchalant. Affirming the amount, the First Circuit stressed deference in the abuse of discretion standard and the better placement of fact-finders in making determinations. On that standard, the award survived appeal.

    • Murdock v. CSX Transp., Inc. , No. 15-cv-01242 (N.D. Ohio Mar. 29, 2017) (2017 U.S. Dist. LEXIS 46835; 2017 WL 1165995)
      Memorandum Opinion
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      Summary :

      The district court granted the Defendant’s motion to dismiss on the ground that the Plaintiff’s off-duty personal illness falls outside the scope of the anti-retaliation provisions to the Federal Railway Safety Act.

    • King v. Ind. Harbor Belt R.R. Co. , No. 15-CV-245 (N.D. Ind. Mar. 23, 2017) (2017 U.S. Dist. LEXIS 41908; 2017 WL 1089212) (case below 2015-FRS-3)
      Opinion and Order
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      Summary :

      MOTION TO DISMISS UNDER FRCP 12(b)(1) BASED ON LACK OF TIMELINESS OF ADMINISTRATIVE COMPLAINT; TIMELINESS OF ADMINISTRATIVE COMPLAINT IS NOT JURISDICTIONAL, AND THEREFORE A MOTION TO DISMISS ON THAT BASIS WOULD NEED TO PROCEED UNDER FRCP 12(b)(6)

      In King v. Ind. Harbor Belt R.R. Co. , No. 15-CV-245 (N.D. Ind. Mar. 23, 2017) (2017 U.S. Dist. LEXIS 41908; 2017 WL 1089212) (case below 2015-FRS-3), the Defendant filed a motion to dismiss for lack of jurisdiction based on the contention that the Plaintiff’s DOL FRSA complaint was filed one day late and that the timeliness of an administrative complaint is jurisdictional, and therefore the case should be dismissed under FRCP 12(b)(1). The Plaintiff responded that “the timeliness of an administrative complaint is not a jurisdictional requirement but an affirmative defense, and that it is thus not suitable to resolution on a motion under Rule 12 when, as here, it depends on evidence outside of the complaint.” Slip op. at 1. The court referred the motion to a Magistrate Judge who “concluded that the timeliness of an administrative complaint is not a jurisdictional requirement under the FRSA. A motion to dismiss on that basis would thus have to proceed under Rule 12(b)(6), which does not permit consideration of extrinsic materials. [The Magistrate Judge] thus recommended that [the Defendant’s] motion be denied, without reaching the substance of IHB’s argument that Mr. King’s administrative complaint was untimely.” Id . at 2. The Defendant “objected to this recommendation, solely on the basis that the timeliness of an administrative complaint should be considered jurisdictional.” Id . The court summarized its ruling accepting the Magistrate Judge’s Report and Recommendation:

         The sole question at issue is whether the timely filing of an administrative complaint is a jurisdictional requirement for suits filed in federal court under the FRSA. If so, then it can be raised and decided on a motion to dismiss under Rule 12(b)(1) (a motion to dismiss for lack of subject-matter jurisdiction), which permits consideration of materials extrinsic to the complaint. If not, then [the Defendant] cannot properly raise this defense on a motion to dismiss under Rule 12, as its arguments depend on evidence outside of the complaint. The [Magistrate Judge’s] Report and Recommendation found that this requirement is not jurisdictional. The Court agrees.

      Id . at 3. The court noted that the Defendant had “not requested that the Court treat its motion as a motion for summary judgment should the requirement not be deemed jurisdictional” and the court declined to treat it as such.

    • Gunderson v. BNSF Railway Co. , No. 15-2905 (8th Cir. Mar. 10, 2017) (2017 U.S. App. LEXIS 4258; 2017 WL 942663) (case below D. Minn. No. 14–CV–0223; ALJ No. 2011-FRS-1)
      Order [affirming District Court]
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      Summary :

      CONTRIBUTING FACTOR CAUSATION; UNDER THE EIGHTH CIRCUIT’S DECISION IN KUDUK , TO SURVIVE A MOTION FOR SUMMARY JUDGMENT A PLAINTIFF MUST PRESENT SUFFICIENT EVIDENCE OF INTENTIONAL RETALIATION

      In Gunderson v. BNSF Railway Co. , No. 15-2905 (8th Cir. Mar. 10, 2017) (2017 U.S. App. LEXIS 4258; 2017 WL 942663) (case below D. Minn. No. 14–CV–0223; ALJ No. 2011-FRS-1), the 8th Circuit stated that to avoid summary judgment on the question of whether the Plaintiff’s protected activity was a contributing factor in his discharge, the Plaintiff “must submit sufficient evidence of ‘intentional retaliation prompted by the employee engaging in protected activity.’ [ Kuduk v. BNSF Ry. , 768 F.3d 786, 791 (8th Cir. 2014)]. A ‘contributing factor’ includes ‘any factor which, alone or in connection with other factors, tends to affect in any way the outcome of the decision.’ Id . In considering this element, we must take into account ‘the evidence of the employer’s nonretaliatory reasons.’ Palmer v. Canadian Nat’l Ry. , ARB No. 16-035, 2016 WL 5868560, *33 (DOL Admin. Rev. Bd. Sept. 30, 2016).” Slip op. at 10. In the instant case, the 8th Circuit found that five highly relevant facts stood out in regard to the causation issue: (1) the disciplinary investigations that led to the Plaintiff’s discharge were completely unrelated to his protected activity; (2) the Plaintiff’s prior safety-related activities were remote in time and disconnected from the disciplinary proceedings by an intervening event that independently justified adverse disciplinary action; (3) the Plaintiff was discharged after disciplinary hearings at which he was represented by union counsel, and the decisions to discharge were upheld by the Defendant internally and by a Railway Labor Act arbitration panel; (4) the merits of the discharge were again reviewed in a six-day hearing before a DOL ALJ, who concluded that the Plaintiff’s protected activity of raising safety concerns played no part in the Defendant’s decision to terminate: and (4) the decision to discharge was made by the General Manager after consulting with his supervisors and with the Defendant’s human relations officers, not by the lower-level supervisors the Plaintiff accused of safety-related bias.

      CONTRIBUTING FACTOR CAUSATION; IF DISCIPLINE WAS WHOLLY UNRELATED TO PROTECTED ACTIVITY, THEN WHETHER IT WAS FAIRLY IMPOSED IS IRRELEVANT

      In Gunderson v. BNSF Railway Co. , No. 15-2905 (8th Cir. Mar. 10, 2017) (2017 U.S. App. LEXIS 4258; 2017 WL 942663) (case below D. Minn. No. 14–CV–0223; ALJ No. 2011-FRS-1), the Plaintiff had been fired for harassing a co-worker and threatening a supervisor. On appeal, the Plaintiff challenged the merits of the Defendant’s decision to terminate his employment, and argued that they were pretextual and thus retaliatory. The Eighth Circuit was not persuaded by this contention:

      We decline to review the merits of the discipline because “federal courts do not sit as a super-personnel department that re-examines an employer’s disciplinary decisions.” Kuduk , 768 F.3d at 792 (quotation omitted). The critical inquiry in a pretext analysis “is not whether the employee actually engaged in the conduct for which he was terminated, but whether the employer in good faith believed that the employee was guilty of the conduct justifying discharge.” McCullough v. Univ. of Ark. for Med. Scis. , 559 F.3d 855, 861-62 (8th Cir. 2009). Moreover, if the discipline was wholly unrelated to protected activity, as the ALJ found, whether it was fairly imposed is not relevant to the FRSA causal analysis. “An employee who engages in protected activity is not insulated from adverse action for violating workplace rules, and an employer’s belief that the employee committed misconduct is a legitimate, non-discriminatory reason for adverse action.” Richey v. City of Independence , 540 F.3d 779, 784 (8th Cir. 2008).

      Slip op. at 11.

      EIGHTH CIRCUIT SUGGESTS THAT ON A SUFFICIENTLY DEVELOPED RECORD, LACHES OR EQUITABLE ESTOPPEL MIGHT BE AVAILABLE TO FIND A WAIVER OF THE RIGHT TO FILE A DE NOVO HEARING IN DISTRICT COURT, OR AT LEAST TO SEEK EQUITABLE RELIEF, WHERE THE COMPLAINANT ENGAGED IN PROTRACTED ADMINISTRATIVE ADJUDICATION OF HIS FRSA RETALIATION CLAIM BEFORE EXERCISING THE KICK-OUT PROVISION

      In Gunderson v. BNSF Railway Co. , No. 15-2905 (8th Cir. Mar. 10, 2017) (2017 U.S. App. LEXIS 4258; 2017 WL 942663) (case below D. Minn. No. 14–CV–0223; ALJ No. 2011-FRS-1), the Defendant argued that the Plaintiff waived his right to file a de novo action in district court because he engaged in protracted administrative adjudication of his FRSA retaliation claim. The Eighth Circuit first looked to the text of 49 U.S.C. § 20109(d)(3), and noted that if the Secretary of Labor has not issued a final decision within 210 days after the filing of the complaint, the complainant may abandon agency proceedings and proceed in district court. If a final order has been issued by the Secretary, only the courts of appeal have of jurisdiction to review the final agency action. 49 U.S.C. § 20109(d)(4); 29 C.F.R. § 1982.112(a), (b). The court found, however, that that the statute was silent on the issue raised by the Defendant. The court noted that in other contexts, a party’s wasteful pursuit of duplicate remedies is deemed a waiver of the other, but that here, the statute provides for “sequential” remedies. The court was not persuaded by the Plaintiff’s contention that § 20109(d)(3) gives the complainant an absolute right to kick-out to district court once the 210 days have elapsed, provided that the delay was not attributable to the complainant’s bad faith and that the Secretary has not yet issued a final order. The court observed that the availability of a waiver is the general rule, and that the common law principle of laches may apply to cut off a complainant’s right to sue or at least seek equitable relief at some point. The court, however, did not decide these issues because the Defendant had not developed its waiver argument, raised laches or estoppel as a defense in the district court or on appeal, or presented sufficient proof on the issue. One member of the panel did not join the majority in this part of the opinion on the ground that it was dicta.

    • Sweatt v. Union Pacific Railroad Co. , No. 16-1236 (7th Cir. Mar. 6, 2017) (unpublished) (2017 U.S. App. LEXIS 3914; 2017 WL 903527) (case below N.D. Ill. No. 14-cv-7891)
      Order [affirming District Court]
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      Summary :

      TIMELINESS OF ADMINISTRATIVE COMPLAINT; SEVENTH CIRCUIT AFFIRMS DISTRICT COURT’S HOLDING THAT CLOCK STARTS RUNNING FOR FRSA’S STATUTORY FILING DEADLINE ON THE DATE THAT COMPLAINANT BECAME AWARE OF THE ADVERSE ACTION

      In Sweatt v. Union Pacific Railroad Co. , No. 16-1236 (7th Cir. Mar. 6, 2017) (2017 U.S. App. LEXIS 3761; 2017 WL 903527) (unpublished) (case below N.D. Ill. No. 14-cv-7891), the Seventh Circuit affirmed the District Court’s grant of summary judgment for Respondent, finding that Complainant did not exhaust his administrative remedies under the FRSA before filing suit. Sweatt , slip op. at 1. Complainant requested that his employer, Respondent, pay for surgery for his carpal tunnel syndrome, which his doctor asserted was work-related. Id . at 2. Complainant filed a complaint with OSHA alleging a violation of FRSA, 49 U.S.C. § 20109(c)(1) and Complainant subsequently used the kick-out provision of FRSA to bring the suit in federal court. The District Court found that Complainant “knew by the summer of 2012 that the company would not pay for his surgery and yet he did not file his administrative complaint until January 2014, long after the 180-day deadline” of § 20109(d)(2)(A)(ii). Id . at 2.

      TIMELINESS OF ADMINISTRATIVE COMPLAINT; SEVENTH CIRCUIT AFFIRMS DISTRICT COURT’S HOLDING THAT, FOR PURPOSES OF FRSA’S STATUTORY FILING DEADLINE, RENEWING REQUESTS THAT RESPONDENT PAY FOR MEDICAL EXPENSES THAT IT HAS ALREADY DECLINED DOES NOT RESET THE CLOCK

      In Sweatt v. Union Pacific Railroad Co. , No. 16-1236 (7th Cir. Mar. 6, 2017) (2017 U.S. App. LEXIS 3761; 2017 WL 903527) (unpublished) (case below N.D. Ill. No. 14-cv-7891), the Seventh Circuit affirmed the District Court’s grant of summary judgment for Respondent, finding that Complainant did not exhaust his administrative remedies under the FRSA before filing suit. Sweatt , slip op. at 1. Complainant requested that his employer, Respondent, pay for surgery for his carpal tunnel syndrome, which his doctor asserted was work-related. Id . at 2. Complainant filed a complaint with OSHA alleging a violation of FRSA, 49 U.S.C. § 20109(c)(1) and Complainant subsequently used the kick-out provision of FRSA to bring the suit in federal court. The District Court found that Complainant “knew by the summer of 2012 that the company would not pay for his surgery and yet he did not file his administrative complaint until January 2014, long after the 180-day deadline” of § 20109(d)(2)(A)(ii). Id . at 2.

    • Mercier v. USDOL, Administrative Review Board , 850 F.3d 382 (8th Cir. Mar. 2, 2017) (No. 15-3369) (2017 U.S. App. LEXIS 3761; 2017 WL 816884) (case below ARB No. 13-048, ALJ No. 2008-FRS-4)
      Opinion
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      Summary :

      WEIGHING OF EVIDENCE; THE EIGHTH CIRCUIT FINDS THAT THE BACKGROUND EVIDENCE RULE WAS APPLIED CORRECTLY BY CONSIDERING ALL RELEVANT ACTIONS THAT OCCURRED OUTSIDE OF THE STATUTE OF LIMITATIONS

      In Mercier v. USDOL , 850 F.3d 382 (8th Cir. 2017) (case below ARB No. 13-048, ALJ No. 2008-FRS-004), the Eighth Circuit found the ARB’s final decision to be supported by substantial evidence and affirmed it, dismissing Michael Mercier’s (“Plaintiff”) FRSA complaint against Union Pacific Railroad Company (“UP”). Mercier at 385. Plaintiff alleged that UP terminated him for numerous reports of safety issues, and that UP’s stated reason for termination, violation of a waiver agreement, was pretextual. Id . at 387. Plaintiff contended that the ALJ failed to consider evidence of conduct that occurred prior to September 29, 2007, “the operative cutoff date” for the 180-day filing period of the FRSA, 49 U.S.C. § 20109(d)(2)(A)(ii). Id . at 388. The court found that the ALJ “correctly applied the background evidence rule” because he “consider[ed] all of the relevant actions that occurred prior to, and after, September 2007 in evaluating the case.” Id . at 388-89.

      HEARSAY; THE EIGHTH CIRCUIT FINDS THAT THE ALJ DID NOT IMPROPERLY RELY ON HEARSAY EVIDENCE; THE CHALLENGED TESTIMONY WAS NOT HEARSAY BECAUSE IT WAS OFFERED FOR ITS EFFECT ON THE DECISIONMAKER AND NOT OFFERED FOR THE TRUTH OF THE MATTER ASSERTED

      In Mercier v. USDOL , 850 F.3d 382 (8th Cir. 2017) (case below ARB No. 13-048, ALJ No. 2008-FRS-004), the Eighth Circuit found the ARB’s final decision to be supported by substantial evidence and affirmed it, dismissing Michael Mercier’s (“Plaintiff”) FRSA complaint against Union Pacific Railroad Company (“UP”). Mercier at 385. Plaintiff alleged that UP terminated him for numerous reports of safety issues, and that UP’s stated reason for termination, violation of a waiver agreement, was pretextual. Id . at 387. Plaintiff contended that the ALJ improperly relied on hearsay testimony. The testimony at issue detailed conversations between UP employees and between the decisionmaker and a UP employee. Id . at 389. Reasoning that the challenged testimony was offered for its effect on the decisionmaker, not for the truth of the matter asserted in it, the court found that the testimony was not hearsay. Id . at 389-90.

      CONTRIBUTING FACTOR CAUSATION; THE EIGHTH CIRCUIT FINDS THAT THE ALJ CORRECTLY APPLIED THE CONTRIBUTING-FACTOR TEST BY REQUIRING RETALIATION TO BE A CONTRIBUTING FACTOR, RATHER THAN A BUT-FOR CAUSE

      In Mercier v. USDOL , 850 F.3d 382 (8th Cir. 2017) (case below ARB No. 13-048, ALJ No. 2008-FRS-004), the Eighth Circuit found the ARB’s final decision to be supported by substantial evidence and affirmed it, dismissing Michael Mercier’s (“Plaintiff”) FRSA complaint against Union Pacific Railroad Company (“UP”). Mercier at 385. Plaintiff alleged that UP terminated him for numerous reports of safety issues, and that UP’s stated reason for termination, violation of a waiver agreement, was pretextual. Id . at 387. Plaintiff contended that the ALJ misapplied the contributing-factor test by “requir[ing] him to prove that the termination would not have occurred absent the safety reporting.” Id . at 390. The court observes that the ALJ correctly states that retaliation must be “a” contributing factor, and that the ALJ’s analysis does not “otherwise indicate that it held Mercier to the wrong standard of causation.” Emphasizing that substantial evidence supports the ALJ’s finding, the court held that the ALJ correctly applied the contributing-factor test. Id . The court also notes, although the ALJ did not make a finding on it, that Plaintiff “likely also could not meet” the knowledge prong because the decision to terminate Plaintiff was made by the EEO department, and there was no evidence in the record connecting the knowledge of the safety department to the EEO department. Id . at 391.

    • Heim v. BNSF Ry. Co. , 849 F.3d 723 (8th Cir. Feb. 27, 2017) (No. 15-3532) (2017 U.S. App. LEXIS 3460; 2017 WL 744039) (case below ALJ No. 2013-FRS-40) (Opinion)
      PDF
      Later history: Heim v. BNSF Ry. Co. , No. 17-200 (U.S., Oct. 2, 2017) (2017 U.S. LEXIS 5757; 138 S. Ct. 268; 199 L. Ed. 2d 126; 86 U.S.L.W. 3154) (denial of cert.)
      PDF
      Summary :

      SUMMARY JUDGMENT; CONTRIBUTORY FACTOR; INTENTIONAL RETALIATION/MOTIVE; EIGHTH CIRCUIT AFFIRMS SUMMARY JUDGMENT TO RAILROAD WHERE PLAINTIFF DID NOT PRODUCE SUFFICIENT EVIDENCE OF INTENTIONAL RETALIATION, HOLDS THAT NATIONWIDE COMPENSATION PROGRAM, TEMPORAL PROXIMITY, AND ADMISSION THAT THE INJURY BROUGHT THE SAFETY VIOLATION IN QUESTION TO LIGHT IS NOT SUFFICIENT TO SUPPORT THE NECESSARY INFERENCE

      In Heim v. BNSF Ry. Co. , 849 F.3d 723 (8th Cir. Feb. 27, 2017) (No. 15-3532) (2017 U.S. App. LEXIS 3460; 2017 WL 744039) (case below ALJ No. 2013-FRS-40), cert. denied 138 S. Ct. 268 (2017): Plaintiff was part of a “gang” replacing worn material under the track. That process involves declipping the rail and moving it toward the center. It remains under tension and can move suddenly, creating a “danger zone.” No rule specifically forbids entering the danger zone, but in the daily briefing workers were warned and general rules require taking precautions to avoid injury. Plaintiff’s particular role was picking up stray materials. He saw a rail clip in the danger zone and seeing no machines nearby, thought it was safe to retrieve the clip. When he did so, the declipped rail moved and hit his foot, fracturing it. BNSF disciplined him for a safety violation in the injury, with a 30 day record suspension and probation which, ultimately, did not result in any time off or loss of pay. He filed a complaint and then suit under the FRSA. There was evidence that while stepping into the danger zone was somewhat common and others weren’t discipline to it, as well as evidence that the compensation program for managers was in some way pegged to injury goals, though this was not indexed to local numbers for particular managers and evaluation of safety performance did not turn on the number of injuries.

      The district court granted BNSF summary judgment on the grounds that Plaintiff was required to show intentional retaliation but had produced sufficient evidence on the point. The Eighth Circuit affirmed. Complaint argued that because the discipline came directly out of the injury and there would have been no discipline absent the injury, his protected activity and basis for adverse action were inextricably intertwined. But apply Kuduk v. BNSF Ry. Co. , 768 F.3d 786 (8th Cir. 2014), the panel held that showing “contributory factor” required a showing of “intentional retaliation.” The factual connection between the two was insufficient. It wasn’t necessary to “conclusively” demonstrate retaliatory motive, but the Plaintiff needed to show that the discipline was at least in part intentional retaliation for the injury report.

      ="" a="" absent="" admission="" agreed="" also="" and="" any="" as="" asked="" because="" bnsf="" both="" came="" circuit="" compensation="" conclusion="" could="" danger="" decision-makers,="" eighth="" entering="" evidence="" fact-finder="" fell="" filing="" find="" finding="" for="" had="" he="" here,="" inference="" injury="" injury.="" instance="" insufficient="" intentional="" into="" judgment="" lead="" made="" managers.="" more="" motive,="" national="" no="" not="" notice="" numbers,="" of="" on="" one="" only="" other,="" p="" particular="" partly="" plaintiff="" plaintiff’s="" plaintiff.="" point="" pressured="" program="" proper.="" proximity="" punishment="" reach="" reasonable="" report.="" retaliation,="" retaliation.="" retaliatory="" short="" showed="" since="" some="" specific="" summary="" support="" temporal="" that="" the="" this="" those="" to="" turned="" undisputed="" violation="" was="" were="" zone="">

    • Blackorby v. BNSF Railway Co. , No. 15-3192 (8th Cir. Feb. 27, 2017) (2017 U.S. App. LEXIS 3462; 2017 WL 744037) (case below W.D. Mo. 4:13-cv-908; ALJ 2013-FRS-68)
      Opinion
      PDF
      Summary :

      CONTRIBUTING FACTOR CAUSATION; UNDER KUKUK , EIGHTH CIRCUIT REQUIRES A SHOWING OF INTENTIONAL DISCRIMINATION, AND REJECTS THE THIRD CIRCUIT’S ANALYSIS IN ARAUJO

      In Blackorby v. BNSF Railway Co. , No. 15-3192 (8th Cir. Feb. 27, 2017) (2017 U.S. App. LEXIS 3462; 2017 WL 744037) (case below W.D. Mo. 4:13-cv-908; ALJ 2013-FRS-68), the district court trial judge had instructed the jury that the Plaintiff need not establish intentional retaliation to prevail on his FRSA retaliation claim.

      On appeal, the Plaintiff and the United States (as amicus curiae ) urged the Eighth Circuit Court of Appeals to follow Araujo v. New Jersey Transit Rail Operations, Inc. , 708 F.3d 152 (3d Cir. 2013), in which the Third Circuit stated that a contributing factor is “any factor which, alone or in connection with other factors, tends to affect in any way the outcome of [the employer’s] decision” and that a plaintiff need not demonstrate the existence of a retaliatory motive. The Defendant argued that the Third Circuit had already rejected Araujo in Kuduk v. BNSF Railway Co. , 768 F.3d 786 (8th Cir. 2014). The court agreed, found that the Plaintiff was required to establish intentional retaliation, and therefore the jury instructions were improper. The court, however, found that the Plaintiff had presented sufficient evidence to raise an inference that his injury report prompted, at least in part, intentional retaliation by the Defendant. The Plaintiff’s evidence showed that two of the Defendant’s managers repeatedly discouraged the Plaintiff from filing an injury report. In addition, the Defendant stipulated that that managers may earn bonuses based on the rates of employee injuries. Thus, the Plaintiff was entitled to a new trial.

      DAMAGES FOR EMOTIONAL DISTRESS MUST BE SUPPORTED BY COMPETENT EVIDENCE OF GENUINE INJURY, WHICH HOWEVER, DOES NOT HAVE TO BE MEDICAL OR OTHER EXPERT EVIDENCE

      Claims for damages for emotional distress in FRSA retaliation cases must be supported by competent evidence of genuine injury, but need not be supported by medical or other expert evidence. A plaintiff’s own testimony under the circumstances of a particular case may be sufficient. Blackorby v. BNSF Railway Co. , No. 15-3192 (8th Cir. Feb. 27, 2017) (2017 U.S. App. LEXIS 3462; 2017 WL 744037) (case below W.D. Mo. 4:13-cv-908; ALJ 2013-FRS-68).

    • Bjornson v. Soo Line Railroad Co. , 237 F. Supp. 3d 889 (D. Minn. Feb. 21, 2017) (2017 U.S. Dist. LEXIS 24845; 2017 WL 690537) (cases below D. Minn. No. 14-cv-4596; ALJ No. 2014-FRS-127)
      Memorandum Opinion and Order Granting Motion for Partial Summary Judgment
      PDF
      Summary :

      PROTECTED ACTIVITY; DISTRICT COURT FINDS THAT A CHIROPRACTOR IS NOT A “TREATING PHYSICIAN” UNDER THE FRSA’S PROTECTION FOR FOLLOWING THE TREATMENT PLAN OF A TREATING PHYSICIAN

      In Bjornson v. Soo Line Railroad Co. , 237 F. Supp. 3d 889 (D. Minn. Feb. 21, 2017), the U.S. District Court for the District of Minnesota granted partial summary judgment for the Defendant under the FRSA after finding that the Plaintiff had not engaged in protected activity. Bjornson, 237 F. Supp. 3d at 890. The Plaintiff contended that he engaged in protected activity by seeing a chiropractor for an injury. Id . at 892. The Plaintiff was also being treated by a physician’s assistant, who had not referred him to a chiropractor. Id . at 891. The court found that the Plaintiff had not engaged in protected activity because a chiropractor is not a “treating physician” under the FRSA’s protection for following the treatment plan of a treating physician. Id . at 894. The court noted that a referral to a chiropractor by a medical doctor as part of a treatment plan might be protected activity. Id .

    Moving Ahead for Progress in the 21st Century Act

    • Nelson v. Carl Black Chevrolet of Nashville, LLC , No. 3:17-cv-00687 (M.D. Tenn. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 121714; 2017 WL 3298327)
      Memorandum
      PDF
      Summary :

      MAP-21 kick-out, arbitration, court’s original jurisdiction.

    Sarbanes-Oxley Act

    • Dietz v. Cypress Semiconductor Corp. , Nos. 16-1209, 16-1249 (10th Cir. Oct. 17, 2017) (2017 U.S. App. LEXIS 20236; 2017 WL 4676650) (case below D. Colo. No. 1:16-CV-00832; ARB Nos. 15-017, 15-047; ALJ No. 2014-SOX-2) (non-precedential; but may be cited for persuasive value)
      Order and Judgment
      PDF
      Summary :

      PROTECTED ACTIVITY; ALLEGATION OF MAIL FRAUD REQUIRES REASONABLE BELIEF OF INTENT TO DEPRIVE VICTIM OF PROPERTY

      In Dietz v. Cypress Semiconductor Corp. , Nos. 16-1209, 16-1249 (10th Cir. Oct. 17, 2017) (2017 U.S. App. LEXIS 20236; 2017 WL 4676650), the 10th Circuit vacated the ARB’s awards for the Plaintiff on the merits and for attorneys’ fees and costs. The court determined that the Plaintiff could not have reasonably believed that his employer was engaged in mail or wire fraud. The court found that there was insufficient evidence to conclude reasonably that the Defendant intended to deprive employees (of a company acquired by the Defendant) of their property by nondisclosure of a bonus plan in letters offering employment with the Defendant. The court noted that the “intent-to-deprive requirement is not a feature of Sarbanes Oxley itself, but rather is an element of the mail fraud and wire fraud statutes....” Slip op. at 12, n.4. In its ruling, the 10th Circuit clarified how it interpreted the ARB’s decision in Sylvester :

         In Sylvester v. Parexel International LLC , No. 07-123, 2011 WL 2165854, at *17-19 (Admin. Rev. Bd. May 25, 2011), the Board indicated that a whistleblower claimant under Sarbanes-Oxley—at least in the context of a securities-fraud complaint to his employer—need not prove or allege the specific elements of the crime he believes that his employer committed. We interpret this to mean that the whistleblower need not show the elements of the crime were actually satisfied; but that does not absolve the claimant from showing that he made his whistleblower complaint with the reasonable belief that an enumerated offense occurred or was occurring. If the facts known to the claimant could not even reasonably be squared with the elements of a crime referenced in Sarbanes-Oxley, then the whistleblower cannot be said to have formed a reasonable belief necessary to trigger protection under the statute.

      Slip op. at 12-13, n. 5 (emphasis as in original).

    • Erhart v. Bofi Holding, Inc. , No. 15-cv-2287 and -02353 (S.D. Cal. Sept. 11, 2017) (2017 U.S. Dist. LEXIS 147554; 2017 WL 4005434)
      Order Granting in Part and Denying in Part Motion to Dismiss and Strike Allegations From First Amended Complaint
      PDF
      Summary :

      PLAINTIFF STATED A PRIMA FACIE CASE UNDER THE SOX WHISTLEBLOWER PROVISION, WHERE (1) HE ALLEGED CONDUCT THAT COULD CONSTITUTE A “REASONABLE BELIEF” OF A VIOLATION OF SOX, NAMELY BANK FRAUD; (2) HE ALLEGED THAT THE DEFENDANT KNEW OF THE PROTECTED ACTIVITY THROUGH HIS REPORTED CONCERNS TO DEFENDANT’S MANAGEMENT TEAM AND TO THE SEC; (3) HE ALLEGED ADVERSE ACTIONS INCLUDING TERMINATION, DOWNGRADED PERFORMANCE RATING, REDUCTION IN BONUS AND THREATS AND HARRASSMENT; AND (4) CAUSATION COULD BE INFERRED BASED ON CLOSE TEMPORAL PROXIMITY

      In Erhart v. Bofi Holding, Inc. , No. 15-cv-2287 and -02353 (S.D. Cal. Sept. 11, 2017) (2017 U.S. Dist. LEXIS 147554; 2017 WL 4005434), the Defendant sought dismissal of Plaintiff’s SOX whistleblower claim for failure to state a claim which the court denied, finding the Plaintiff sufficiently alleged all elements of a SOX whistleblower claim.

      As to the protected activity, the court adopted the ARB’S “reasonable belief” standard from Sylvester v. Parexel International LLC , ARB No. 07-123 (ARB May 25, 2011) (en banc). The court found Plaintiff sufficiently plead he reported conduct that could constitute a reasonable belief of a violation of SOX. The Plaintiff alleged that he reported to the government that the CEO was depositing third-party checks for structured settlement annuity payments into his personal account. The court found that “it is challenging to discern what proper purpose a CEO would have for depositing ‘nearly $100,000 in checks made payable to third parties’ into his personal deposit account” and “a reasonable person in [Plaintiff’s] position could believe that CEO [] was engaged in a scheme where he deposited checks made payable from [the Defendant] to third-parties into his personal account for his own benefit- thereby possibly defrauding the Bank.” Slip op. at 17.

      The court further found that Plaintiff sufficiently alleged the Defendant knew of the protected activity, through his allegations that he reported his concerns of violations to Defendant’s management team, and that the Defendant also had knowledge of the whistleblower tips made to the SEC. The Court further found circumstantial evidence supported an inference that the Defendant was aware of the Plaintiff’s protected activity, including evidence that Defendant went through Plaintiff’s work computer and his locked file cabinets, located Plaintiff’s review of the CEO’s personal accounts, and prepared a letter terminating Plaintiff.

      The court next found Plaintiff’s allegations satisfied the adverse action requirement, including his allegations that Defendant terminated him, downgraded his performance rating, reduced his bonus, and threatened and harassed him.

      Finally, the court found that the “[Defendant’s] alleged retaliatory conduct occurred within close temporal proximity to [the Plaintiff’s] purported whistleblowing activities,” and “[c]ausation, therefore, can be inferred from the timing alone.” Slip op. at 21 (citing Van Asdale v. Int’l Game Tech. , 577 F.3d 989, 1003 (9th Cir. 1009)). Thus, the court concluded that the Plaintiff stated a prima facie case under SOX.

      MOTION TO STRIKE ALLEGATIONS UNDER RULE 12(F); MOVING PARTY MUST SHOW THAT THE ALLEGATIONS “COULD HAVE NO POSSIBLE BEARING ON THE SUBJECT OF LITIGATION” OR THAT THE ALLEGATIONS ARE “UNDULY PREJUDICIAL”

      In Erhart v. Bofi Holding, Inc. , No. 15-cv-2287 and -02353 (S.D. Cal. Sept. 11, 2017) (2017 U.S. Dist. LEXIS 147554; 2017 WL 4005434), Defendant moved to strike various allegations from the Plaintiff’s First Amended Complaint pursuant to FRCP 12(f). The court stated that motions to strike are disfavored and should not be granted unless the allegations “could have no possible bearing on the subject of the litigation” or are “unduly prejudicial.” Slip op. at 35 (citing Platte Anchor Bolt, Inc. v. IHI, Inc. , 352 F. Supp. 2d 1048, 1057 (N.D. Cal. 2004); In re Facebook PPC Advert. Litig. , 709 F. Supp. 2d 762, 773 (N.D. Cal. 2010). The Defendant sought to strike various allegations describing the perceived wrongdoing because Plaintiff failed to allege he reported the conduct to the government or other appropriate recipient. The court found Plaintiff did in fact allege he reported the wrongdoing, and even if he had not, striking the allegations would be inappropriate because Plaintiff had numerous state claims in addition to his federal whistleblower claims, and Defendant could not demonstrate that the allegations had no bearing on the litigation or were “unduly prejudicial.” Defendant also sought to strike allegations of wrongdoing because Plaintiff failed to exhaust his administrative remedies under SOX by not including all of his present allegations in his administrative filing. The court stated it “declined to carve up [Plaintiff’s] amended pleading based on what he included in his administrative complaint.” The court again stated Plaintiff filed numerous claims beyond SOX that do not include an exhaustion of administrative remedies requirement, and therefore even if he failed to exhaust his administrative remedies under SOX, the allegations are still appropriately included in the complaint to support the other claims. Lastly, Defendant moved to strike allegations where it claimed the allegations contained confidential information. The court denied the motion, finding that given the allegations were included in the New York Times several months prior, and in prior orders, “the cat [was] out of the bag.” Slip op. at 37 (citation omitted). The court further stated it had already determined in prior order that the Plaintiff was entitled to disclose confidential information in a complaint “if doing so was ‘reasonably necessary’ to pursue his retaliation claim,” and this “determination cannot be made in the context of a Rule 12(f) motion to strike.” Slip op. at 38.

    • Opela v. Wausau Window and Wall , No. 17-1788 (W.D. Wis. Aug. 31, 2017) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058) (case below 2016-SOX-00040)
      Opinion and Order (claims dismissed against Apogee Enterprises and certain of it subsidiaries, but not Apogee Wausau Group, Inc. d/b/a Wausau Window and Wall)
      PDF
      Summary :

      PLAINTIFF CANNOT BRING CLAIMS IN FEDERAL DISTRICT COURT AGAINST DEFENDANTS PREVIOUSLY DISMISSED AS PARTIES IN A FINAL ADMINISTRATIVE DECISION

      In Opela v. Wausau Window and Wall , No. 17-1788 (W.D. Wis. Aug. 31, 2017) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058), the Plaintiff initially filed an administrative complaint with OSHA against several defendants for SOX and CPSIA violations. An ALJ dismissed all claims against the defendants, except for the CPSIA claim against Defendant Wausau Window and Wall (“Wausau”). The Plaintiff then filed a federal complaint alleging SOX and CPSIA violations against numerous defendants, including those dismissed in the administrative proceeding. Defendants filed a motion to dismiss before the federal court, arguing that the ALJ decision dismissing all defendants except Wausau was a final decision only reviewable by the Seventh Circuit, preventing this court from exercising jurisdiction over any party dismissed in that order. The court agreed, noting that under CPSIA and SOX, ALJ decisions become final after 14 days absent a petition for review with the ARB, and a party can only appeal a final order of the Secretary to the appropriate Circuit Court. The court found that the Plaintiff filed his claims in federal court after the ALJ order of dismissal became final, and the Plaintiff did not contest in his opposition to the motion to dismiss that the court lacked jurisdiction to review the ALJ order. Thus, the court dismissed the claims against the defendants previously dismissed in the administrative proceeding for lack of jurisdiction.

      EXHAUSTION OF ADMINSTRATIVE REMEDIES; WHERE DEFENDANT WAS NOT NAMED IN ADMINISTRATIVE PROCEEDING, BUT WAS INTERCHANGEABLE WITH ANOTHER PARTY, EFFECTIVELY PARTICIPATED IN THE ADMINISTRATIVE PROCEEDINGS, AND WAS TREATED AS A DEFENDANT BY OSHA, THE PLAINTIFF EXHAUSTED HIS ADMINSTRATIVE REMEMDIES AGAINST THE DEFENDANT

      In Opela v. Wausau Window and Wall , No. 17-1788 (W.D. Wis. Aug. 31, 2017) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058), Defendants contended that the Plaintiff failed to named Defendant Apogee Wausau Group, Inc. (“AWG”) as a defendant in the administrative complaint with DOL, and therefore the court has no jurisdiction over AWG because Plaintiff never exhausted his administrative remedies with respect to that Defendant. The court acknowledged that generally plaintiffs seeking to bring a whistleblower complaint under CPSIA or SOX must first file a complaint with OSHA. However, the court concluded that because AWG was “fairly interchangeable with [Defendant] Wausau, effectively participated as a defendant in the administrative proceedings in this case, and was treated as a defendant by OSHA, . . . the plaintiff exhausted his administrative remedies as to [AWG].” Slip op. at 14. While the Defendants also argued that Plaintiff’s federal complaint was deficient because it did not plead any facts relating to administrative exhaustion, the court found that the pleadings were sufficient because Plaintiff loosely referenced the administrative exhaustion requirement by citing to 29 C.F.R. § 1983.114, and more significantly, the administrative record establishes “there is no doubt that the proper administrative proceedings took place, regardless of plaintiff’s failure to allege the details in the complaint.” Slip op. at 15 (internal citations omitted).

      CONSUMER PRODUCTS; WINDOW FRAMES, BOLTS AND CURTAIN WALL PRODUCTS ARE “CONSUMER PRODUCTS” UNDER THE CPSIA AS THEY ARE ‘DISTINCT ARTICLES OF COMMERCE’ AND DO NOT LOSE THEIR STATUS AS CONSUMER PRODUCTS MERELY BECAUSE THEY MAY BE INCORPORATED INTO RESIDENTIAL STRUCTURES

      In Opela v. Wausau Window and Wall , No. 17-1788 (W.D. Wis. Aug. 31, 2017) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058), Defendants moved to dismiss, in part, on the basis that they do no manufacture or distribute “consumer products,” as defined in the Consumer Product Safety Act (“CPSA”), precluding liability under CPSIA. The court found that the issue was not jurisdictional as argued by the defendants but rather went to the merits of the claim, and should be analyzed as a motion to dismiss under Rule 12(b)(6), rather than Rule 12(b)(1). The court found a plain reading of the CPSIA suggests that the products manufactured by Defendant Wausau Window and Wall (“Wausau”), namely window frames, bolts, and curtain wall products, met the definition of consumer products under 15 U.S.C. § 2052(a)(5). The court found the products sold are “not central components of a house that cannot exist independently,” and are “produced and sold separately to various customers and are used on various buildings.” Slip op. at 23. The court therefore concluded the products “are distinct articles of commerce and do not lose their status as consumer products merely because they may be incorporated into residential structures.” Slip op. at 23-24. Defendants also argued that they do not sell consumer products under 15 U.S.C. § 2052(a)(5)(a) because they distribute their products to contractors and subcontractors, who modify the products and use them for commercial purposes. The court noted that the complaint alleged the products are sold to a variety of companies and installed in many buildings and inferred “at the pleading stage that not all are industrial users, or if they are, that they may ultimately be intended for use by ordinary consumers.” Slip op. at 24.

      SUFFICIENCY OF COMPLAINT; PLAINTIFF SUFFICIENTLY ALLEGED DEFENDANT WAS HIS EMPLOYER WHERE HE PLEAD THAT HE WAS EMPLOYED BY A BUSINESS UNIT OF THE DEFENDANT AND HIS SALARY WAS PAID BY THE DEFENDANT; PLAINTIFF NOT REQUIRED TO IDENTIFY SPECIFIC PROVISIONS OF CPSIA HE ALLEGES DEFENDANT VIOLATED

      In Opela v. Wausau Window and Wall , No. 17-1788 (W.D. Wis. Aug. 31, 2017) (2017 U.S. Dist. LEXIS 141142; 2017 WL 3836058), the Defendants asserted on a motion to dismiss that Plaintiff’s complaint was insufficient because he did not allege Defendant Apogee Wausau Group, Inc. (“AWG”) was his employer and did not allege an underlying violation of the CPSIA. The court found Plaintiff did allege he was employed by AWG by pleading that he was employed by Wausau (a business unit of AWG), and his salary was paid by AWG. The court further found that while the Plaintiff failed to identify the specific statutory and code provisions he was alleging the Defendants violated, he was not required to do so and the Defendants had adequate notice of the activities that led to the lawsuit.

    • Van Elswyk v. RBS Secs. , No. 15-cv-1844 (D. Conn. Aug. 9, 2017) (2017 U.S. Dist. LEXIS 125886; 2017 WL 3431395)
      Ruling Re: Motion for Summary Judgment (Doc. No. 44)
      PDF
      Summary :

      SUMMARY JUDGMENT DENIED; DEFENDANT FAILED TO CARRY ITS BURDEN OF ESTABLISHING THAT THE UNDISPUTED MATERIAL FACTS DEMONSTRATED THAT IT WAS ENTITLED TO JUDGMENT AS A MATTER OF LAW

      In Van Elswyk v. RBS Sec., Inc. , No. 15-cv-1844 (D. Conn. Aug. 9, 2017) (2017 U.S. Dist. LEXIS 125886; 2017 WL 3431395), the Court denied summary judgment to RBS Securities, Inc. (the “Defendant”), after concluding that it failed to carry its burden of establishing that the undisputed material facts demonstrate that it was entitled to judgment as a matter of law.

      Relevant Facts :

      Van Elswyk (the “Plaintiff”) alleged that his employment was terminated in part because he expressed concern regarding accounting practices and valuation methodologies that the Defendant applied to certain life settlements and premium financing known as the Ritchie portfolio.

      Protected Activity :

      The Court rejected all of the Defendant’s arguments regarding protected activity. Specifically, the Court found that the Plaintiff demonstrated triable issues of fact regarding (1) his subjective, genuine belief that the Defendant was engaged in SOX-enumerated violations; (2) his objectively reasonable belief of SOX-enumerated violations; and (3) whether he provided information to the Defendant within the meaning of the Act.

      Knowledge :

      The Court disagreed with the Defendant’s argument that it did not have knowledge of the Plaintiff’s protected activity, particularly because the Plaintiff sent e-mails to his managers regarding his alleged protected activity.

      Contributing Factor :

      The Court found that a reasonable jury could conclude that: (1) the Plaintiff’s repeated remarks about the Ritchie portfolio’s overvaluation were a contributing factor in his termination; (2) the Plaintiff’s persistence in criticizing the accounting treatment accorded to the Ritchie portfolio was a contributing factor in his termination; and (3) the Plaintiff’s supervisors were upset that he kept bringing up the accounting treatment of the Ritchie portfolio and, therefore, sought a reason to terminate him. Finally, the Court stated that it was for a jury to decide whether communications raised by other employees, who did not suffer adverse employment actions, were distinguishable from those raised by the Plaintiff.

      Clear and Convincing Evidence :

      Finally, the Court concluded that summary judgment was improper because the Defendant did not demonstrate, in a clear and convincing manner, that it would have terminated the Plaintiff irrespective of his protected activity. Specifically, the Court emphasized that several issues of fact remained regarding the Defendant’s offered and actual justifications for firing the Plaintiff. Although the Defendant alleged that it fired the Plaintiff for violating its information security policy, the Plaintiff repeatedly countered that he had permission to use his work and personal email accounts in the ways he did. The Court stated that a jury could conclude that the Defendant decided to search the Plaintiff’s e-mails because he complained about the accounting treatment applied to the Ritchie portfolio.

    • Tolliver v. Trinity Par. Found. , No. 14-cv-1021 (D. Del. Aug. 2, 2017) (2017 U.S. Dist. LEXIS 121764; 2017 WL 3288119)
      Memorandum Opinion
      PDF
      Summary :

      SOX doesn’t apply because the defendant is not a publicly traded company.

    • Barrow v. Branch Banking & Trust Co. , No. 16-cv-675 (W.D. N.C. July 7, 2017) (2017 U.S. Dist. LEXIS 105129) (case below ALJ No. 2016-SOX-00038)
      Order
      PDF
      Summary :

      Order denying plaintiff’s motion to stay district court proceeding because of another ongoing administrative proceeding she contends involves the same facts and circumstances as the present case, and overlapping legal issues.

    • Yang v. Navigators Grp., Inc. , No. 13-cv-02073 (S.D. N.Y. June 21, 2017)
      Stipulation of Dismissal with Prejudice
      PDF
      Summary :

      Stipulation of Dismissal with Prejudice

    • Yang v. Navigators Grp., Inc. , 13-cv-02073 (S.D. N.Y. May 18, 2017) (2017 U.S. Dist. LEXIS 75990)
      Opinion and Order
      PDF
      Summary :

      "Defendant’s mitigation expert testimony is preliminarily limited in accordance with this Opinion, and Defendant’s witnesses may not testify via a live video feed."

    • Wadler v. Bio-Rad Labs., Inc. , No. 15-cv-02356 (N.D. Cal. May 10, 2017) (2017 U.S. Dist. LEXIS 71532; 2017 WL 1910057)
      Order Denying Defendants’ Renewed Motion for Judgment as a Matter of Law Pursuant to Fed. R. Civ. P. 50(B) and Motion for New Trial Pursuant to Fed. R. Civ. P. 59
      PDF
      Summary :

      PROTECTED ACTIVITY; DISCLOSURE OF VIOLATIONS OF THE FOREIGN CORRUPT PRACTICES ACT CONSTITUTE PROTECTED ACTIVITY UNDER SOX

      In Wadler v. Bio-Rad Labs., Inc. , No. 15-cv-02356 (N.D. Cal. May 10, 2017) (2017 U.S. Dist. LEXIS 71532; 2017 WL 1910057), a jury found the Defendants violated SOX and the Dodd-Frank Act, and wrongful terminated the Plaintiff in violation of public policy under California law. Following a jury verdict, Defendants filed a Renewed Motion for Judgment as a Matter of Law Pursuant to Fed. R. Civ. P. 50(b) and Motion for New Trial Pursuant to Fed. R. Civ. P. 59.

      The court found the jury’s findings that the Plaintiff engaged in protected activity, that the protected activity was a substantial or contributing factor in his termination, and that the Defendants did not establish legitimate reasons to terminate the Plaintiff, were supported by substantial evidence under Rule 50(b) and that the verdict was not against the weight of the evidence under Rule 59.

      The court rejected Defendants’ argument that the Plaintiff’s disclosure of violations of the Foreign Corrupt Practices Act (“FCPA”) was not protected activity under SOX. Defendants asserted that the reported FCPA violations did not constitute a “rule or regulation” of the SEC, and therefore the Plaintiff was required to show that he disclosed information related to “fraud against shareholders” in order to prevail under SOX. The court found that there is in fact a regulation of the SEC regarding the books and records provision of the FCPA, and stated that the FCPA is an amendment to the Securities and Exchange Act and is codified within it.

    • Lamb v. Rockwell Automation, Inc. , 249 F. Supp. 3d 904 (E.D. Wis. Apr. 7, 2017) (No. 15-CV-1415) (2017 U.S. Dist. LEXIS 53722; 2017 WL 1319824) (case below 2014-SOX-00029)
      Order [granting defendant’s motion for summary judgment]
      PDF
      Summary :

      PROTECTED ACTIVITY; DISTRICT COURT GRANTS SUMMARY JUDGMENT ON SOX CLAIM, FINDING THAT PLAINTIFF COULD NOT ESTABLISH AN OBJECTIVELY REASONABLE BELIEF THAT THE MATTER “CONSTITUTED AN EXTANT OR LIKELY VIOLATION OF” SOX

      In Lamb v. Rockwell Automation, Inc. , 249 F. Supp. 3d 904 (E.D. Wisc. 2017), the court granted Rockwell Automation, Inc.’s (“Defendant”) motion for summary judgment, dismissing the complaint brought by Lisa Lamb (“Plaintiff”) alleging retaliation in violation of the Sarbanes-Oxley Act of 2002 (“SOX”). Lamb at 905.

      Plaintiff managed an IT internal controls team that dealt with Defendant’s Systems, Applications, and Products processing system (“SAP”), “an integrated electronic system designed to streamline various business transactions and processes company-wide.” Id . at 906. Defendant utilized Governance Risk and Compliance (“GRC”) software to give employees the lowest level of SAP access necessary to do their jobs, referred to as “segregation of duties” (“SOD”). The GRC software established rules “designed to prevent one employee from obtaining such pervasive access to [Defendant’s] data as to facilitate fraud or theft of confidential business information,” and flagged employees whose privileges should be evaluated by management. Id . at 906. Plaintiff’s team “worked specifically with SAP access privileges of IT department users and how those privileges related to internal control over financial reporting for purposes of SOX compliance.” Id . at 907. GRC reports generated by Plaintiff’s team “were used by management and Defendant’s external auditors as part of their review of [Defendant’s] internal controls over financial reporting.” Id . at 907.

      Plaintiff alleged that she engaged in protected activity when she initially refused to “disable certain rules within GRC that were used to identify SAP users in the IT department with high-risk SOD conflicts,” as requested by her supervisor. Id . at 907. Plaintiff asserted during the proceedings that “disabling the rules as [her supervisor] asked was ‘not proper’ because it would hide users in the IT department with high-risk SOD conflicts . . . .” Id . at 907-908. Plaintiff contended that the purpose of the changes was to conceal a backlog of SOD conflicts that needed resolution and that concealment would “preclude an assessment of internal control over financial reporting as ‘effective’ because the GRC reports would not have all the information they needed to make an informed assessment of the company’s internal controls.” Id . at 908 (internal citations omitted). Plaintiff ultimately made the requested changes after speaking with another superior, who also directed her to make the changes. Id . at 908.

      Plaintiff contended that she was retaliated against after the above incident. Id . at 908. The parties agreed that Plaintiff’s supervisors became critical of her work and instituted a performance improvement plan. Id . at 909. Plaintiff was terminated after allowing a contractor’s employee to use her login credentials for a simulated version of the SAP. Id . at 909-910.

      The court limited its analysis to the Plaintiff’s theory of liability and found that the Plaintiff did not have an objectively reasonable belief of a violation because “no employee with [Plaintiff’s] training and experience could reasonably conclude under the circumstances that a violation of the relevant SOX provisions had occurred or was imminent. Id . at 911. Plaintiff contended that Defendants violated provisions “relating to SEC certifications about internal controls over financial reporting,” Id . at 913 n.3: that “underreporting would itself lead to a violation of federal law” because Defendant’s officials and auditors would sign financial statements with incomplete information, resulting in “material misrepresentations in those financial statements” and in the inability to “certify the effectiveness of the company’s internal controls over financial reporting,” Id . at 911.

      The court discusses with skepticism the ARB’s decision in Sylvester v. Parexel Int’l LLC , ARB No. 07-123 (ARB May 25, 2011) (en banc) (reversing the requirement that an employee’s allegations “definitively and specifically” describe a violation and approximate its basic elements and requiring only that a reasonable person in the same situation would believe that there was a violation; and finding that a reason belief of future violations are covered under SOX). Id . at 911-12.

      Ultimately, the court held that, even under the Sylvester standard, the Plaintiff did not “establish that she held an objectively reasonable belief” that the matter she complained about “constituted an extant or likely violation” of SOX. Id . at 919. Reasoning that the Plaintiff had worked for the Defendant for twenty-five years and possessed “a huge breadth of experience in managing privilege access and participating in company audits and compliance procedures,” the court found that a reasonable person in the Plaintiff’s situation would have “consider[ed] the scope of [Defendant’s] financial reporting or the other processes in place to ensure the integrity of its internal controls over financial information.” Id . at 916. The court emphasized that “the activities of [Plaintiff’s] IT controls team formed only a small part of Rockwell’s total SOX compliance program” and that Plaintiff “has magnified her limited role at [the company] within its SOX compliance program.” Id . at 916.

      PROTECTED ACTIVITY; DISTRICT COURT GRANTS SUMMARY JUDGMENT ON SOX CLAIM, DECLINING TO ADOPT ARB’S HOLDING IN SYLVESTER THAT A WHISTLEBLOWER IS NOT REQUIRED TO APPROXIMATE THE ELEMENTS OF A VIOLATION

      In Lamb v. Rockwell Automation, Inc. , 249 F. Supp. 3d 904 (E.D. Wisc. 2017), the court granted Rockwell Automation, Inc.’s (“Defendant”) motion for summary judgment, dismissing the complaint brought by Lisa Lamb (“Plaintiff”) alleging retaliation in violation of the Sarbanes-Oxley Act of 2002 (“SOX”). Lamb at 905.

      Plaintiff managed an IT internal controls team that dealt with Defendant’s Systems, Applications, and Products processing system (“SAP”), “an integrated electronic system designed to streamline various business transactions and processes company-wide.” Id . at 906. Defendant utilized Governance Risk and Compliance (“GRC”) software to give employees the lowest level of SAP access necessary to do their jobs, referred to as “segregation of duties” (“SOD”). The GRC software established rules “designed to prevent one employee from obtaining such pervasive access to [Defendant’s] data as to facilitate fraud or theft of confidential business information,” and flagged employees whose privileges should be evaluated by management. Id . at 906. Plaintiff’s team “worked specifically with SAP access privileges of IT department users and how those privileges related to internal control over financial reporting for purposes of SOX compliance.” Id . at 907. GRC reports generated by Plaintiff’s team “were used by management and Defendant’s external auditors as part of their review of [Defendant’s] internal controls over financial reporting.” Id . at 907.

      Plaintiff alleged that she engaged in protected activity when she initially refused to “disable certain rules within GRC that were used to identify SAP users in the IT department with high-risk SOD conflicts,” as requested by her supervisor. Id . at 907. Plaintiff asserted during the proceedings that “disabling the rules as [her supervisor] asked was ‘not proper’ because it would hide users in the IT department with high-risk SOD conflicts . . . .” Id . at 907-908. Plaintiff contended that the purpose of the changes was to conceal a backlog of SOD conflicts that needed resolution and that concealment would “preclude an assessment of internal control over financial reporting as ‘effective’ because the GRC reports would not have all the information they needed to make an informed assessment of the company’s internal controls.” Id . at 908 (internal citations omitted). Plaintiff ultimately made the requested changes after speaking with another superior, who also directed her to make the changes. Id . at 908.

      Plaintiff contended that she was retaliated against after the above incident. Id . at 908. The parties agreed that Plaintiff’s supervisors became critical of her work and instituted a performance improvement plan. Id . at 909. Plaintiff was terminated after allowing a contractor’s employee to use her login credentials for a simulated version of the SAP. Id . at 909-910.

      The court limited its analysis to the Plaintiff’s theory of liability and found that the Plaintiff did not have an objectively reasonable belief of a violation because “no employee with [Plaintiff’s] training and experience could reasonably conclude under the circumstances that a violation of the relevant SOX provisions had occurred or was imminent. Id . at 911. Plaintiff contended that Defendants violated provisions “relating to SEC certifications about internal controls over financial reporting,” Id . at 913 n.3: that “underreporting would itself lead to a violation of federal law” because Defendant’s officials and auditors would sign financial statements with incomplete information, resulting in “material misrepresentations in those financial statements” and in the inability to “certify the effectiveness of the company’s internal controls over financial reporting,” Id . at 911.

      The court discusses with skepticism the ARB’s decision in Sylvester v. Parexel Int’l LLC , ARB No. 07-123 (ARB May 25, 2011) (en banc) (reversing the requirement that an employee’s allegations “definitively and specifically” describe a violation and approximate its basic elements and requiring only that a reasonable person in the same situation would believe that there was a violation; and finding that a reason belief of future violations are covered under SOX). Id . at 911-12.

      The court then goes on to “decline to adopt Sylvester’s holding that a whistleblower need not even approximate the elements of a claim under a listed law.” Id . at 917. The court reasons that the Plaintiff’s alleged violations “falls into the catch-all clause of Section 1514A(a)(1), for violations of ‘any provision of Federal law relating to fraud against shareholders,’” and that “a whistleblower plaintiff must establish at a minimum that it was objectively reasonable to believe that the conduct in question would have some appreciable effect on the shareholders.” Id . at 917. Finding Plaintiff’s allegations of misconduct to be too attenuated to any future fraud against shareholders, the court held that the Plaintiff “had offer[ed] nothing to substantiate how [her supervisor’s] misconduct would have a meaningful, or even noticeable, effect on [the company] as a whole, much less its shareholders.” Id . at 918.

    • Somers v. Digital Realty Trust Inc. , No. 15-17352 (9th Cir. Mar. 8, 2017) (2017 U.S. App. LEXIS 4079; 2017 WL 908245)
      Opinion
      PDF
      Summary :

      Note: This is a Dodd-Frank Act, 15 U.S.C. § 78u-6(h) case, but it discusses SOX, 18 U.S.C. § 1514A

    • Rocheleau v. Microsemi Corp., Inc. , 680 Fed. Appx. 533 (9th Cir. Feb. 21, 2017) (unpublished) (No. 15-56029) (2017 U.S. App. LEXIS 2964; 2017 WL 677563) (case below C.D. Cal. No. 13-cv-1774; ALJ No. 2013-SOX-8)
      Memorandum
      PDF
      Summary :

      PROTECTED ACTIVITY; TO BE OBJECTIVELY REASONABLE, BELIEF THAT THE COMPLAINT RELATED TO ONE OF THE PROVISIONS ENUMERATED IN SECTION 1514A MUST SHOW THAT THE VIOLATION AT LEAST APPROXIMATED THE BASIC ELEMENTS OF SECURITIES FRAUD, AND MUST EMCOMPASS A MATERIAL MISREPRESENTATION OR OMISSION ON THE PART OF THE RESPONDENT

      PROTECTED ACTIVITY; COMPLAINANT’S REPORTS OF VIOLATIONS OF AFFIRMATIVE ACTION PROGRAM AND MISCLASSIFICATION OF THREE EMPLOYEES AS INDEPENDENT CONTRACTORS FAILED TO MEET MATERIALITY STANDARD FOR SHAREHOLDER FRAUD; CONTENTIONS ABOUT MAIL AND WIRE FRAUD WAS NOT PROTECTED ACTIVITY WHERE THE ALLEGEDLY FALSE OR SCRUBBED DATA WAS NEVER TRANSMITTED

      In Rocheleau v. Microsemi Corp. , 680 Fed. Appx. 533 (9th Cir. 2017) (unpublished), Plaintiff filed suit under the whistleblower protection provisions of the Sarbanes-Oxley Act (“SOX”), 18 U.S.C. § 1514A, as amended by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), alleging that her employer retaliated against her. The district court granted summary decision to Defendant Microsemi Corporation, Inc. on the grounds that the Plaintiff failed to make out a prima facie case of retaliation because she did not show that she engaged in any protected activity, and in particular, show that she had an objectively reasonable belief that the defendant had violated one of the enumerated provisions in SOX. In an unpublished memorandum decision, the Ninth Circuit affirmed. 680 Fed. Appx. 533, 534-35.

      The only issue on appeal was whether Plaintiff had an objectively reasonable belief that her employer engaged in one of the enumerated violations. The court stated that: “‘[T]o have an objectively reasonable belief that there has been shareholder fraud, the complaining employee’s theory of such fraud must at least approximate the basic elements of a claim of securities fraud.’” Id . (quoting Van Asdale , 577 F.3d at 1001). This included a material misrepresentation or omission on the part of the Defendant, i.e. something that a reasonable shareholder would deem important. Id . at 536 (citing Basic Inc. v. Levinson , 485 U.S. 224, 231 (1988)). Plaintiff had reported technical violations of the affirmative action program and misclassification of three employees as independent contractors. But it was not reasonable to believe that these actions could meet the materiality standard for shareholder fraud. Further complaints about affirmative action and OFCCP compliance were made prior to the time when the relevant report was due, so could not relate to any fraud. Id . The only fraud allegation presented to the district court was shareholder fraud, but even allowing newly raised contentions regarding mail and wire fraud, based on the Plaintiff’s deposition testimony the allegedly false or “scrubbed” data was never transmitted and so there could have been no mail or wire fraud. Id .

      PROTECTED ACTIVITY; NINTH CIRCUIT NOTES THAT AFTER IT ADOPTED THE ARB’S “DEFINITELYAND SPECIFICIALLY” STANDARD, THE ARB ARTICULATED A NEW REASONABLE BELIEF STANDARD; BECAUSE INSTANT CLAIM FAILED UNDER EITHER STANDARD, NINTH CIRCUIT DECLINED TO ADDRESS WHETHER IT WOULD ADOPT ARB’S NEW STANDARD

      In Rocheleau v. Microsemi Corp. , 680 Fed. Appx. 533 (9th Cir. 2017) (unpublished), the Ninth Circuit observed that in Van Asdale it had held that “a whistleblower’s ’communications must definitely and specifically relate to one of the listed categories of fraud or securities violations under [SOX].’” Id . at 535 n.2 (quoting Van Asdale , 577 F.3d at 996-97). The panel observed that the Administrative Review Board had since articulated a new standard requiring only a reasonable belief that the complaint related to one of the enumerated provisions. But since the Plaintiff’s claims failed under either standard, the panel declined to address the issue of whether it would defer to the ARB’s new interpretation. Id .

    • Erhart v. Bofi Holding, Inc. , No. 15-cv-2287 (S.D. Cal. Feb. 14, 2017) (2017 U.S. Dist. LEXIS 20959; 2017 WL 588390)
      Order Granting in Part and Denying in Part Bofi Federal Bank’s Motion for Summary Adjudication of Charles Matthew Erhart’s Twelfth Through Twenty-Fourth Affirmative Defenses
      PDF
      Summary :

      WHISTLEBLOWER PROTECTIONS UNDER SOX AND CFPA MAY BE USED AS AFFIRMATIVE DEFENSES TO A BREACH OF CONFIDENTIALITY AGREEMENT CLAIM AND VARIOUS TORT CLAIMS

      In Erhart v. Bofi Holding, Inc. , No. 15-cv-2287 (S.D. Cal. Feb. 14, 2017), Charles Erhart (“Erhart”) filed several whistleblower claims against BofI Federal Bank (“BofI”), including under the Sarbanes-Oxley Act (“SOX”), and the Consumer Financial Protection Act (“CFPA”), and BofI countersued alleging, inter alia, breach of contract and various tort claims. BofI moved in the countersuit for summary adjudication of Erhart’s affirmative defenses based on whistleblower protection provisions. The court found that whistleblower protections, including those under SOX and the CFPA, may be used in certain circumstances as an affirmative defense to a breach of a confidentiality agreement claim, by asserting the confidentiality agreement is unenforceable based on public policy grounds. The court found that a confidentiality agreement is unenforceable as to information provided to the government in support of a whistleblower claim. Further, appropriation of confidential documents, transmittal to third parties of confidential documents, and/or disclosure of confidential information in a whistleblower complaint, may be protected under a public policy exception to confidentiality agreements, if an individual can establish such conduct was “reasonably necessary” to support allegations of wrongdoing. However, a whistleblower defense cannot be asserted for disclosure of confidential information to the media, because leaks to the media are not protected under the whistleblower provisions. The court also found that whistleblower protections may be used as a defense against various tort claims, by raising a defense of justification or privilege.

    Seaman’s Protection Act

    • Harley Marine Services, Inc. v. USDOL, Administrative Review Board , No. 15-14110 (11th Cir. Jan. 26, 2017) (per curiam) (unpublished) (case below ARB Nos. 13-076, -077, ALJ No. 2012-SPA-2)
      [Denial of petition for review]
      PDF
      Summary :

      [Editor’s Note: Petition for Cert. denied Oct. 2, 2017, No. 16-1310 (U.S.)].

    Solid Waste Disposal Act

    • Beaumont v. United States Dep't of Labor , No. 17-3102 (6th Cir. Oct. 25, 2017) (2017 U.S. App. LEXIS 21408) (unpublished) (case below ARB No. 15-025, ALJ No. 2014-SWD-1)
      Order [denying petition for review]
      PDF
      Summary :

      MOTIVATING FACTOR CAUSATION; AFFIRMATIVE DEFENSE; SUBSTANTIAL EVIDENCE IN THE RECORD SUPPORTED A FINDING THAT PETITIONER-EMPLOYEE WAS TERMINATED FOR INTENTIONALLY DISABLING A SURVEILLANCE CAMERA AND NOT FOR HIS REPORTED VIOLATIONS OF ENVIRONMENTAL AND SAFETY REGULATIONS UNDER THE SWDA

      In Beaumont v. United States Dep’t of Labor , No. 17-3102 (6th Cir. Oct. 25, 2017), the Sixth Circuit denied the Petitioner's petition for review of his SWDA whistleblower complaint. The court found substantial evidence supported the ARB's affirmance of the ALJ's findings that the Petitioner had failed to prove that his protected activity was a motivating factor for his termination, and alternatively, that the Respondent proved that it would have terminated the Petitioner in the absence of his protected activity. Specifically, substantial evidence supported the ALJ's finding that the Petitioner, a gas station attendant, was terminated for intentionally disabling a surveillance camera located inside of his kiosk, and not for his complaints to his superiors and the Michigan Department of Licensing and Regulatory Affairs that the Respondent was not in compliance with several environmental and safety regulations. In finding substantial evidence existed, the Sixth Circuit relied on the following facts: (1) only authorized employees are allowed to operate, add, remove or move surveillance cameras, and a violation of the camera policy can result in termination; (2) an inspection of the Petitioner’s camera showed that someone had cut a set of wires in the camera, and video showed the Petitioner standing underneath the camera right before it was disabled; (3) the Petitioner admitted that he intentionally disabled the camera, although he claimed it was only momentarily disabled to play a joke on his managers; and (4) the individuals who investigated the incident and ultimately terminated the Petitioner had previously supported his protected activity.

    Surface Transportation Assistance Act

    • Carter v. CPC Logistics, Inc. , 706 Fed. Appx. 794 (4th Cir. Sept. 5, 2017) (per curiam) (unpublished) (No. 17-1095) (2017 U.S. App. LEXIS 17118; 2017 WL 3867816) (case below ARB No. 15-050, ALJ No. 2012-STA-61)
      Per curiam opinion
      PDF
      Summary :

      ALJ CREDIBILITY DETERMINATION; FOURTH CIRCUIT HOLDS THAT A FACTUAL FINDING BY THE ALJ BASED UPON A CREDIBILITY DETERMINATION WAS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE WHERE THE ALJ’S REASONING WAS PREMISED ON A FACTUAL ERROR

      In Carter v. CPC Logistics, Inc. , 706 Fed. Appx. 794 (4th Cir. 2017) (per curiam) (unpublished), the Fourth Circuit granted Roderick Carter’s petition for review of the ARB’s dismissal of his STAA complaint and remanded the matter to the Secretary for further proceedings. Carter , 706 Fed. Appx. at 795. Carter challenged the ARB’s adoption of the ALJ’s factual finding based on a credibility determination that Carter never mentioned fatigue breaks to his supervisors. Id . at 796. The Fourth Circuit found that the ALJ’s credibility determination was unreasonable and may have been in conflict with another factual finding. Id . at 796. The court pointed to the ALJ’s finding that “Carter made general statements on the topic [of fatigue breaks] because Carter testified that he made those general statements regarding fatigue breaks to only three men, including the two supervisors.” Id . at 796. The court also observed that Carter introduced the employer’s position statement to OSHA, which acknowledged that Carter mentioned fatigue breaks to two supervisors during discussions about his work performance. Id . at 797. Reasoning that the ALJ’s finding that Carter’s driving delays were not caused by fatigue breaks rested upon the ALJ’s factual error, the court held that the finding was not supported by substantial evidence and prejudiced Carter. The court remanded the matter. Id . at 797.

    • Irizarry v. Lily Transportation Corp. , No. 15-cv-1386 (D. Conn. July 18, 2017) (2017 U.S. Dist. LEXIS 111158)
      Memorandum of Decision
      PDF
      Summary :

      ADVERSE ACTION; NO CONSTRUCTIVE DISCHARGE WHERE DEFENDANT ASSURED PLAINTIFF THAT THE PROBLEM HE IDENTIFIED WOULD NOT REOCCUR, TOOK STEPS TO ADDRESS PLAINTIFF’S CONCERNS, AND ATTEMPTED TO CALL THE PLAINTIFF ABOUT RETURNING TO WORK AFTER HE RESIGNED

      In Irizarry v. Lily Transp. Corp. , No. 15-cv-1386 D. Conn. July 18, 2017) (2017 U.S. Dist. LEXIS 111158), the U.S. District Court for the District of Connecticut granted the motion for summary judgment filed by Lily Transportation Corporation (the “Defendant”), after concluding that it did not constructively discharge Luis Irizarry (the “Plaintiff”).

      Relevant Facts :

      The Plaintiff, a commercial truck driver, discovered and reported to the Defendant’s dispatcher that the registration and insurance documents on his truck had expired. The dispatcher told him to drive the truck anyway. After completing his deliveries, the Plaintiff returned to the Defendant’s facility, spoke with management, and resigned from his position.

      Protected Activity Established :

      The Court found that the Plaintiff engaged in protected activity when he complained that his vehicle did not have an updated registration.

      No Constructive Discharge :

      The Defendant argued that because the Plaintiff voluntarily resigned, it did not constructively discharge him. The Court explained that to meet “the high standard” applicable to a claim of constructive discharge, the Plaintiff was required to show: (1) that there was “evidence of the employer’s intent to create an intolerable environment that forces the employee to resign;” and (2) “that a reasonable person would have found the work conditions so intolerable that he would have felt compelled to resign.” Slip op. at 4.

      In finding that the Plaintiff failed to show that the Defendant intended to create an intolerable work environment, the Court explained that on two of the three occasions when the Plaintiff’s truck had paperwork issues, the Defendant resolved the problems before the Plaintiff made his deliveries. The Court acknowledged that the Plaintiff was placed in a difficult situation when he was directed to make his deliveries in a truck that did not contain an updated registration, but concluded that the circumstances did not meet the high standard required for establishing constructive discharge.

      Moreover, the Court concluded that the Defendant’s actions demonstrated its interest in retaining the Plaintiff, which undermined the Plaintiff’s constructive discharge claim. Specifically, the Court emphasized that after the Plaintiff informed the Defendant’s general manager about his concerns, she sent two e-mails to the dispatcher regarding the Plaintiff’s complaint and warned the dispatcher that at “no time do you send out a driver in a tractor that he refuses to take because of DOT issues.” Slip op. at 2. Moreover, the Defendant’s director of recruiting attempted to call the Plaintiff about returning to work for the Defendant. Furthermore, the Court reasoned that the safety manager’s assurance to the Plaintiff that he would address the Plaintiff’s concerns undercut “any claim that a reasonable person in his position would have felt compelled to resign.” Slip op. at 5.

    • Kennedy v. Supreme Forest Prods. , No. 3:14-cv-01851 (D. Conn. June 5, 2017)
      Judgment
      PDF
      Summary :

      Judgment (jury verdict $436,900).

    • Kennedy v. Supreme Forest Prods. No. 3:14-cv-01851 (D. Conn. May 25, 2017) (2017 U.S. Dist. LEXIS 80694)
      Memorandum re the Standard of Proof
      PDF
      Summary :

      Plaintiff’s burden in jury trial is only preponderance of the evidence.