- Brown v. Lockheed Martin Corp, ARB No. 10-050, ALJ No. 2008-SOX-49 (ARB Feb. 28, 2011)
Final Decision and Order PDF | HTM
Summary:
PROTECTED ACTIVITY; REASONABLY BELIEVED REPORT OF MAIL OR WIRE FRAUD DOES NOT REQUIRE A SHOWING OF FRAUD AGAINST SHAREHOLDERS TO BE PROTECTED UNDER SOX
In Brown v. Lockheed Martin Corp., ARB No. 10-050, ALJ No. 2008-SOX-49 (ARB Feb. 28, 2011), the ARB affirmed the ALJ's finding that that the Respondent violated the SOX's employee protection provision when it constructively discharged the Complainant for protected activity. The Complainant was a Communications Director. After working for the Respondent for several years, the Complainant learned of allegations that her supervisor, then Vice President of Communications, had engaged in fraudulent and illegal activities, largely related to the supervisor having developed sexual relationships with several soldiers, with respect to a "Pen Pal" program the Respondent had established for communications between Lockheed employees and U.S. soldiers in Iraq. The Complainant came to believe the allegations, and after relating the concerns to the president of Technical Operations. The Complainant later contacted the Vice President of Human Resources, who filed an anonymous complaint on the Complainant's behalf, assuring the Complainant that no one would learn of her identity and that there would be no retaliation. Within a few days, the Pen Pal program was discontinued and the supervisor's position was changed (although she remained a vice-president). The supervisor then attempted to find out who had reported on her. Although she initially blamed another employee, the Complainant eventually admitted upon being confronted by her former supervisor that she had told the HR Vice President "several things" although she wasn't sure that her comments resulted in the complaint. From that point, the Complainant's position in the company deteriorated, eventually resulting in the Complainant providing the Respondent with a "notice of forced termination."
The ALJ found that the Complainant's actions were protected because she had definitively and specifically communicated to the president of Technical Operations her reasonable belief that her supervisor had engaged in fraudulent conduct, and that the actions satisfied the reasonable belief prong under mail and wire fraud theories because the supervisor mailed letters to solicit prospective paramours and sent gifts to paramours, which were presumed to have been billed to the U.S. government as part of the Pen Pal program.
The ARB agreed, explaining that "SOX protects employees who report conduct that the employee reasonably believes constitutes a violation of the specified federal securities laws. . . . The "reasonable belief"standard requires [the Complainant] to prove both that she actually believed that [her supervisor] committed wire and/or mail fraud and that a person with her expertise and knowledge would have reasonably believed that as well. ... Under Section 806(a)(1), once an employee proves that she reported conduct that she reasonably believed constituted mail or wire fraud, then she proved she was engaged in protected activity. Furthermore, Section 806(a)(1) does not require that the mail fraud or wire fraud pertain to a fraud against the shareholders." USDOL/OALJ Reporter at 9 (citations omitted). The ARB agreed with the ALJ's conclusion that the Complainant reasonably believed that her supervisor engaged in mail and wire fraud. The ARB noted that the ALJ had applied a high standard in determining whether the Complainant engaged in protected activity. Specifically, the ALJ relied on Platone v. United States Dept. of Labor, 548 F.3d 322 (4th Cir. 2008), to examine whether the Complainant's disclosures "definitively and specifically" related to fraudulent conduct under SOX. The ARB, however, found that it was unnecessary to determine whether this was the appropriate standard because the Complainant met the high standard in this case.
The ARB also affirmed the ALJ's findings on constructive discharge that a reasonable person in the Complainant's shoes would have found continued employment intolerable and would have been compelled to resign. The ARB affirmed the ALJ's finding that protected activity motivated the Employer's adverse actions.
Summary:
[STAA Digest X A 3]
NOTICE OF WITHDRAWAL OF APPEAL MUST SPECIFY WHETHER IT IS GROUNDED IN WITHDRAWAL OF OBJECTIONS OR IN AN ADJUDICATORY SETTLEMENT
NOTICE OF WITHDRAWAL OF APPEAL MUST SPECIFY WHETHER IT IS GROUNDED IN WITHDRAWAL OF OBJECTIONS OR IN AN ADJUDICATORY SETTLEMENT
Where the Complainant filed a notice of withdrawal of appeal with the ARB, the ARB ordered the Complainant to state whether he was withdrawing his objections to the OSHA findings and order, or whether the parties had entered into an adjudicatory settlement, in which case the parties are required to file a copy of the settlement for review. In response, the Complainant filed a copy of a settlement agreement, which the ARB then approved. Goulet v. Tri-Tech, ARB No. 10-067, ALJ No. 2009-STA-56 (ARB Feb. 28, 2011).
Summary:
[Nuclear and Environmental Digest XVIII A 5 a]
NOTICE OF WITHDRAWAL OF APPEAL MUST SPECIFY WHETHER IT IS GROUNDED IN WITHDRAWAL OF OBJECTIONS OR IN AN ADJUDICATORY SETTLEMENT
NOTICE OF WITHDRAWAL OF APPEAL MUST SPECIFY WHETHER IT IS GROUNDED IN WITHDRAWAL OF OBJECTIONS OR IN AN ADJUDICATORY SETTLEMENT
In Hamilton v. PBS Environmental Buidling Consultants, Inc., ARB No. 11-010, ALJ No. 2009-CER-3 (ARB Feb. 28, 2011), OSHA had dismissed the Complainant's complaint under several environmental whistleblower laws, but the ALJ awarded reinstatement and other remedies. The Respondent petitioned for ARB review, but later filed a stipulated dismissal of its petition for review. The ARB ordered the Respondent to state whether it was withdrawing its objections to the ALJ's findings and order, or whether the parties had entered into an adjudicatory settlement, in which case the parties are required to file a copy of the settlement for review. The Respondent replied that it was withdrawing its objections. The ARB thus granted the Respondent's notice of withdrawal of objections to the ALJ's D. & O., and stated that the ALJ's D. & O. thereby became the final decision of the Secretary of Labor.
Summary:
[Nuclear and Environmental Digest IX H 4]
SANCTIONS AGAINST A COMPLAINANT FOR CONTINUED RE-LITIGATION OF A COMPLAINT
SANCTIONS AGAINST A COMPLAINANT FOR CONTINUED RE-LITIGATION OF A COMPLAINT
In Saporito v. Florida Power & Light Co., ARB Nos. 09-009, 09-010, ALJ No. 2008-ERA-14 (ARB Feb. 28, 2011), the ARB affirmed the ALJ's denial of the Respondent's motion for sanctions against the Complainant for his continued re-litigation of his termination from employment in 1988. The ARB, however, emphasized that ALJs have the authority to control the cases before them. The ARB also noted that the Complainant has several other appeals pending before it involving the same parties, and stated that it might revisit the issue of sanctions if it is appropriately before it in the remaining appeals.
Summary:
[STAA Digest IV A 2 b ii]
CAUSATION; TEMPORAL PROXIMITY DECISIVE IN ESTABLISHING PRIMA FACIE CASE; BUT COMPLAINANT STILL MUST ESTABLISH CAUSATION ELEMENT BY PREPONDERANCE OF THE EVIDENCE WHEN THE MERITS REACHED IN THE PROCEEDING
CAUSATION; TEMPORAL PROXIMITY DECISIVE IN ESTABLISHING PRIMA FACIE CASE; BUT COMPLAINANT STILL MUST ESTABLISH CAUSATION ELEMENT BY PREPONDERANCE OF THE EVIDENCE WHEN THE MERITS REACHED IN THE PROCEEDING
In Spelson v. United Express Systems, ARB No. 09-063, ALJ No. 2008-STA-39 (ARB Feb. 23, 2011), the ARB affirmed the ALJ's finding that the Complainant failed to establish that his termination for insubordination was causally related to protected activity. The ARB noted that an inference of causation based on temporal proximity of adverse action and protected activity is decisive in establishing a prima facie case, but is not dispositive at the merits stage of an adjudication where the complainant is required to prove each element of a claim by a preponderance of the evidence.
[STAA Digest IV B 2 c]
LEEWAY-FOR-INTEMPERATE-BEHAVIOR PRINCIPLE IS NOT LIMITED IN APPLICATION TO REFUSAL-TO-DRIVE COMPLAINTS
LEEWAY-FOR-INTEMPERATE-BEHAVIOR PRINCIPLE IS NOT LIMITED IN APPLICATION TO REFUSAL-TO-DRIVE COMPLAINTS
In Spelson v. United Express Systems, ARB No. 09-063, ALJ No. 2008-STA-39 (ARB Feb. 23, 2011), the ARB noted that the ALJ had misstated the ARB's holding in Harrison v. Roadway Express, Inc., ARB No. 00-048, ALJ No. 1999-STA-037 (Dec. 31, 2002), aff'd sub nom. Harrison. v. Roadway, 390 F.3d 752 (2d Cir. 2004). The ARB stated that it did not hold in that decision that the concept of leeway for intemperate behavior applies only to the STAA "refusal to drive" provision and not to the "filed a complaint" provision. Rather, the ARB declined in that case to apply the "intemperate but protected" theory because the complainant's conduct was unemotional, deliberate and repeated, rather than impulsive, emotionally motivated conduct incidental to protected activity.
Summary:
TIMELINESS; EQUITABLE TOLLING BASED ON FILING OF PRECISE CLAIM IN WRONG FORUM; WRONG FORUM FILING NEED NOT ESTABLISH PRIMA FACIE CASE FOR PURPOSES OF DETERMINING WHETHER TIMELY COMPLAINT WAS FILED
TIMELINESS; EQUITABLE TOLLING BASED ON FILING OF PRECISE CLAIM IN WRONG FORUM; RESPONDENT MAY PRESENT EVIDENCE TO SUPPORT AN ARGUMENT THAT EQUITABLE TOLLING SHOULD NOT APPLY BECAUSE COMPLAINANT DID NOT FOLLOW OSHA'S ADVICE ABOUT HOW TO FILE A COMPLAINT
In Butler v. Anadarko Petroleum Corp., ARB No. 09-047, ALJ No. 2009-SOX-1 (ARB Feb. 17, 2011), the Complainant contacted OSHA for guidance shortly after her termination by the Respondent. OSHA instructed her to go to its website to fill out a form. The Complainant found a form relating to physical injury on the job rather than circumstances associated with her dismissal, and thus did not file the form with OSHA. Later she presented a typed testimony of the events of her case to the FBI. Thereafter, she filed a complaint in federal district court alleging in part a violation of the SOX whistleblower provision. Later, after the SOX filing deadline, the Complainant presented to OSHA her filings with the FBI and district court. OSHA found that equitable tolling applied, but denied the complaint on the merits. A hearing was requested. The ALJ found that the complaint was not timely and that equitable tolling did not apply because the FBI filings and district court complaint did not contain valid SOX complaints.
The ARB agreed with the ALJ that the FBI filings did not present a precise SOX complaint sufficient to invoke equitable tolling under the wrong forum ground for equitable modification of a limitations period. Rather it was merely a timeline of the events surrounding the Complainant's grievance. The ARB, however, disagreed that the district court complaint was not the precise claim in the wrong forum. The ARB explained:
Essentially, the ALJ's ruling focused on whether Butler's federal court complaint sufficiently stated a prima facie SOX claim rather than whether it alleged enough to meet the time limitations bar in the SOX statute. The SOX regulations contemplate that OSHA may interview a complainant to supplement the complaint and then determine whether a prima facie claim exists. See 29 C.F.R. § 1980.104(b). Logically, then, a SOX complainant may satisfy the time limitation bar by filing an initial, written complaint that may fall short of a prima facie case but clearly identifies that it is a SOX claim. Therefore to the extent the ALJ's R. D. & O. may be interpreted as defining "precise" to require that the complaint filed in the wrong forum must establish a "prima face case," we reject it as being overly narrow and inconsistent with equitable tolling principles. When the claim is filed in the wrong forum, it should be measured against the same standards under which an OSHA complaint is measured for timeliness. Additionally, the wrongly filed claim must be the same claim as the OSHA complaint ultimately filed. If the ALJ was addressing the sufficiency of the allegations, the ALJ should have considered the facts contained in the record OSHA forwarded, given that OSHA supplements the facts in the original complaint and forwards the complaint and the Secretary's findings to the Office of Administrative Law Judges. 29 C.F.R. § 1980.104(b), 105(b). The only issue the ALJ addressed in this case was the time limitations issue.
USDOL/OALJ Reporter at 4-5. The ARB reviewed the district court complaint and found that it comported with the requirements of 29 C.F.R. § 1980.103(b) for purposes of tolling the statute's filing requirement. The Respondent, however, argued that equitable tolling should not apply because OSHA had directed the Complainant to the proper forum, but she declined that guidance. Based on the facts alleged, the ARB did not believe that equitable tolling was barred, but since the facts surrounding the original communication with OSHA were not presented or litigated before the ALJ, the ARB found only that the district court complaint was a valid SOX complaint for purposes of tolling, and stated that on remand the parties could further adjudicate equity issues based on newly discovered evidence not addressed in the ARB's order.
Summary:
Approval of settlement agreement.
Summary:
[Nuclear and Environmental Digest XX B 9]
CHEMICAL PERSONNEL RELIABILITY PROGRAM (CPRP) CERTIFICATION DETERMINATION IS NOT THE EQUIVALENT OF A SECURITY CLEARANCE DETERMINATION, AND IS REVIEWABLE BY A DOL ALJ UNDER THE WHISTLEBLOWER PROVISIONS OF THE CAA, SDWA AND THE SWDA
CHEMICAL PERSONNEL RELIABILITY PROGRAM (CPRP) CERTIFICATION DETERMINATION IS NOT THE EQUIVALENT OF A SECURITY CLEARANCE DETERMINATION, AND IS REVIEWABLE BY A DOL ALJ UNDER THE WHISTLEBLOWER PROVISIONS OF THE CAA, SDWA AND THE SWDA
In Van Winkle v. Blue Grass Chemical Activity, ARB No. 09-035, ALJ No. 2006-ERA-24 (ARB Feb. 17, 2011), the ALJ dismissed the Complainant's CAA, SDWA and SWDA whistleblower complaint on the ground that he did not have the authority to review the merits of any alleged retaliation reasons for revoking a Department of the Army Chemical Personnel Reliability Program (CPRP) certification because such a revocation is a matter of national security barred by consideration by a "nonexpert body" under Department of the Navy v. Egan, 484 U.S. 518, 527-529 (1988). Instead, the ALJ ruled that he could only review whether an agency complied with its procedures for revoking a security clearance. The ARB found persuasive decisions of the MSPB that Egan's restriction on court review authority was limited in scope to security clearances and does not extend to CPRP certification determinations. The ARB also held that the ALJ erred in determining whether the Respondent revoked the Complainant's CPRP certification in accord with its own procedures because such a review is beyond the DOL's subject matter jurisdiction.
Summary:
[Nuclear and Environmental Digest XI B 2 c]
NONRETALIATORY REASON FOR ADVERSE ACTION; MANAGERIAL INCOMPETENCE IS NOT A VALID DEFENSE
NONRETALIATORY REASON FOR ADVERSE ACTION; MANAGERIAL INCOMPETENCE IS NOT A VALID DEFENSE
In Abdur-Rahman v. DeKalb County, ARB Nos. 08-003, 10-074, ALJ Nos. 2006-WPC-2 and 3 (ARB Feb. 16, 2011), the Respondent filed a motion for reconsideration of the ARB's reversal of the ALJ's decision denying the complaint based on the ALJ's conclusion that the true reason for dismissal of the Complainants' complaints was managerial incompetence rather than protected activity. The Respondent argued that if the ARB had used the substantial evidence standard of review rather than the de novo standard, it would have found in its favor. The Complainants agreed that the substantial evidence standard of review applies to an ALJ's findings of fact, but that what the ARB reviewed de novo was a legal conclusion. The ARB did not decide whether the substantial evidence standard applied, but held that even if it did, it would not compel it to reconsider or change its earlier decision. The ARB stated that its conclusion had been based based on the ALJ's finding that the protected activity was a contributing factor to the Complainants' terminations and his rejection of every other stated non-retaliatory reason. The majority stated that its ruling had been consistent with its previous decisions in which it found "indirect admissions of retaliation when the employer's stated non-retaliatory justifications for adverse action flowed entirely or almost entirely from the protected activity. Stated differently, it is not a valid legal defense to fire employees because a supervisor is incompetent to deal with whistleblowing activities. Given the ALJ's findings in this case, the supervisor's incompetence was clearly not a legitimate, non-retaliatory reason." USDOL/OALJ Reporter at 5-6 (footnotes omitted). One member of the Board wrote a concurring opinion.
Summary:
ARB affirmed ALJ's recommendation to dismiss STAA complaint where Bankruptcy Court had entered a reorganization plan that discharged and released the Respondent from claims pending against it, including the Complainant's STAA complaint.
Summary:
FAILURE TO PAY PREVAILING WAGE RATES FOR SKILLED LABOR AND COMPENSABLE TIME PRECEDING START TIME
In Pythagoras General Contracting Corp. v. Administrator, Wage and Hour Division, USDOL, ARB Nos. 08-107, 09-007, ALJ No. 2005-DBA-14 (ARB Feb. 10, 2011) (errata issued Mar. 3, 2011), the ARB affirmed the ALJ's finding that the Petitioner/Respondents violated the labor standards and prevailing wage provisions of the Davis-Bacon Act (DBA) and its implementing regulations, the United States Housing Act of 1937 (U.S. Housing Act), and the Contract Work Hours and Safety Standards Act (CWHSSA). The ARB, however, increased the ALJ's back pay and fringe benefits award from $447,670.36 to $792,396.19. Specifically, the ARB affirmed the ALJ's finding that 1) the Petitioner/Respondents failed to pay certain employees at prevailing wage rates for skilled labor actually performed; 2) the Petitioner/Respondents routinely failed to pay certain employees for one-half hour of compensable time preceding the 8 a.m. start time; 3) two employees performed no skilled labor work for which they were not compensated; and 4) the Petitioner/Respondents' willful underpayment of wages due to misclassification of workers and failure to pay for all hours worked justified debarment.
Burdens of proof and production
The ALJ's and ARB's rulings were informed by the Supreme Court decision in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), that laid out the evidentiary principles to be applied when an employer's records are "inaccurate or inadequate." Under these principles, the Administrator has the initial burden of proving that the employees performed work for which they were improperly compensated and of showing the amount and extent of that work as a matter of just and reasonable inference. "The burden then shifts to the employer to come forward with evidence of the precise amount of work performed or with evidence to negate the reasonableness of the inference to be drawn from the employee's evidence. If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate." Mt. Clemens, 328 U.S. at 687-688. In the instant case, the Petitioner/Respondents' payroll records were incomplete, and many had been discarded or had never been produced in the first place. The Administrator therefore turned to employee testimony to establish hours of compensable work.
Reliance on testimony of small number of employees; award to nontestifying employees
On appeal, the Petitioner/Respondents challenged the ALJ's findings because they relied on the representative testimony of a small number of employees. The ARB held, however, that "[t]he fact that the ALJ relied on the testimony of a small number of employees does not refute his determination that the quality of this testimony was representative of the work and working conditions of the other employees who worked at the site but did not testify, even those whose work fell within another job classification." USDOL/OALJ Reporter at 12. The ARB found that the ALJ's comprehensive analysis of the testimonial evidence could serve as the basis for awarding compensation to non-testifying workers, and was consistent with Mt. Clemens.
The Petitioner/Respondents also contended that the ALJ erred when he awarded back wages to employees who did not testify at the hearing but who did submit statements to the Wage and Hour investigator, because "the Administrator did not verify or authenticate them and they were neither sworn to, notarized, nor accompanied by copies of a government issued photo identification card." USDOL/OALJ Reporter at 19. The ARB held, however, that employee interview statements are permissibly used as evidence in administrative cases, and found no error in the ALJ's decision to rely on the statements of non-testifying employees.
Factors supporting debarment
The Petitioner/Respondents contended that debarment was improper because there is no evidence that the company or its owner committed willful or aggravated violations of the applicable labor standards. The ARB, however, agreed with the ALJ's determination that debarment was warranted. Specifically, the ARB pointed to evidence (1) that company officials signed and certified the accuracy of incomplete and inaccurate payrolls that reflected the misclassification of its workers; (2) that payroll records had been manipulated at least with regards to one employee; (3) that the Petitioner/Respondents failed to correct ongoing violations or to ensure future compliance with applicable labor standards resulting in the labor standards violations continuing through the project's end; and (4) that company officials engaged in attempted witness coercion or intimidation.
Back wage calculation; once Administrator establishes just and reasonable inference for hours worked, the employer must do more to rebut than merely present a contrary reasonable inference
On appeal, the Administrator argued that the ALJ set the compensation too low because he erroneously credited the Petitioner/Respondents' calculation of back wages for certain employees. The ARB characeterized the Administrator's argument as that the Petitioner/Respondents merely offered a "parallel" inference and failed to meet the "demanding" standard of Mt. Clemens. The ARB agreed with the Administrator that the rebuttal evidence was legally insufficient to rebut the just and reasonable inference the Administrator established. The ARB wrote:
Once the ALJ determined that the Administrator established a just and reasonable inference for the hours worked in a higher classification and the amounts owed, to rebut such inference, the employer needed to present more than a contrary reasonable inference based on generalized records. Allowing a wage claim to be defeated by an equally contrary inference based on generalized records would remove the incentive for employers to keep precise records as required by law. We believe this concept is consistent with the Supreme Court's announcement in Mt. Clemens that it should not be t he employee that is penalized by the lack of complete and accurate records. The employer must rely on individualized records, such as assignment rosters and other records that might contain individualized information (e.g., field supervisor records, daily logs of work crew supervisors, and other work crew records). Additionally, to adhere to the letter and spirit of the FLSA, we believe that the employer must account for all of the time an employee claims he or she worked in a higher classification. Otherwise, as happened in this case, an employer can defeat a prevailing wage claim by looking at general project records and innocently or deliberately fail to find where the employee could have worked in the higher classification. Only by accounting for the entire disputed claim can an employer properly negate the just and reasonable inference the Administrator's evidence raised. The employer's accounting must be consistent with the project records and the number of employees working on each particular day. ... In sum, to properly rebut a just and reasonable inference under the demanding requirements first announced in Mt. Clemens, an employer must present rebuttal evidence that, (1) is based on individualized records, and (2) fully accounts for the work hours in question, consistent with the project as a whole.
USDOL/OALJ Reporter at 23-24.
Summary:
[Nuclear and Environmental Digest VIII B 1 b]
TIMELINESS OF PETITION FOR ARB REVIEW; LACK OF PUBLISHED REGULATION COVERING REQUESTS FOR EXTENSIONS OF TIME WITH THE ARB DID NOT PREVENT COMPLAINANT'S ATTORNEY FROM DILIGENTLY PURSUING AN APPEAL
TIMELINESS OF PETITION FOR ARB REVIEW; LACK OF PUBLISHED REGULATION COVERING REQUESTS FOR EXTENSIONS OF TIME WITH THE ARB DID NOT PREVENT COMPLAINANT'S ATTORNEY FROM DILIGENTLY PURSUING AN APPEAL
In Prince v. Westinghouse Savannah River Co., ARB No. 10-079, ALJ No. 2006-ERA-1 (ARB Feb. 2, 2011), the ARB denied the Complainant's motion to reconsider its earlier decision finding that the Complainant's petition for review of an ALJ's whistleblower decision was untimely. The only new argument made with the motion to reconsider was that the ARB did not have a published regulation regarding motions for an enlargement of time to file a petition for review. The ARB found, however, that other litigants had sought and been granted such enlargements, and therefore the lack of a published regulation did not preclude these other counsel from diligently representing their clients.
