back pay equal to the mid-point of a Level 20 (10) position from the date of Hobby's
termination to the date of reinstatement;
reimbursement for all lost benefits at the mid-point of a Level 20 (10) employee, plus
interest;
training necessary to the completion of his duties in his reinstated position;
$250,000 in compensatory damages;
$23,721.27 as compensation for loss of use of automobile benefits as provided by the
company, plus interest;
$20,384.21 for health and life insurance expenses, plus interest;
$6,3345.12 for repayment for tax penalties incurred by Hobby when he withdrew
retirement account funds prematurely, plus interest;
$3,605.31 for reimbursement of job search expenses, plus interest;
the cash value of 19 weeks of vacation time, plus interest;
expungement of any negative references or commentaries in his employment record;
and
issuance of a "welcome back" memorandum.
RD&O at 69-70.
II. ISSUES PRESENTED
A. Whether Hobby should be reinstated to a position at Georgia Power, or awarded front pay
in lieu of reinstatement.
B. The pay level at which Hobby should be reinstated and back pay calculated.
C. Whether Hobby should be awarded full back pay, or whether the amount of back pay
should be reduced because he failed to mitigate damages.
D. Whether Hobby should be awarded $250,000 in compensatory damages.
E. Whether Hobby should be awarded compensation for vacation time.
F. Whether the ordered remedies should be assessed only against Georgia Power, or against
both Georgia Power and its parent, the Southern Company.
III. STANDARD OF REVIEW
Under the Administrative Procedure Act, the Board has plenary power to
review an ALJ's factual and legal conclusions. See 5 U.S.C. §557(b)(1994). As a
result, the Board is not bound by the conclusions of the ALJ, but retains complete freedom to review
factual and legal findings de novo. SeeMasek v. Cadle Co., ARB No. 97-
069, ALJ No. 95-WPC-1, slip op. at 7 (ARB Apr. 28, 2000) (under analogous employee protection
[Page 6]
provisions of several environmental acts); Stone & Webster Eng'g Corp. v. Herman, 115
F.3d 1568, 1571-72 (11th Cir. 1997). See generally Mattes v. United States Dep't of
Agriculture, 721 F.2d 1125, 1128-30 (7th Cir. 1983) (relying, inter alia, on Universal
Camera Corp. v. NLRB, 340 U.S. 474, 496 (1951) in rejecting argument that higher level
administrative official was bound by ALJ's decision).
IV. DISCUSSION
A. Whether Hobby should be reinstated to a position at Georgia
Power, or awarded front pay in lieu of reinstatement.
1. Reinstatement vs. front pay
general background.
In his 1995 decision on liability, the Secretary ordered Georgia Power to
"offer Complainant reinstatement to the same or a comparable position to which he is entitled,
with comparable pay and benefits." Hobby v. Georgia Power Co., No. 90-ERA-30,
slip op. at 15 (Sec'y Aug. 4, 1995). Consistent with the Secretary's decision, the ALJ similarly
recommended that Hobby should be reinstated to a Level 10 position, which would be today's
equivalent to the Level 20 position that he occupied in 1990 under the payroll classification system
then in effect. Before this Board, Georgia Power argues that the reinstatement order should be
revisited and reversed, and the case instead should be remanded to the ALJ to determine whether
front pay should be awarded.
The employee protection provision of the ERA provides that a wrongfully
terminated individual shall be reinstated "to his former position." 42 U.S.C.
§5851(b)(2)(B). This is based upon the principle that a complainant should be restored to a
position equivalent to that which he or she would have occupied but for the illegal action of the
employer. Reinstatement is viewed as the default or presumptive remedy in wrongful termination
cases under the ERA. See, e.g., Creekmore v. ABB Power Sys. Energy Servs., Inc.,
No. 93-ERA-24 (Dep. Sec'y Feb. 14, 1996); Smith v. Littenberg, 92-ERA-52 (Sec'y Sept.
6, 1995).
Although reinstatement is primarily a "make-whole" remedy for
a prevailing complainant in a discrimination case, intended to return the complainant to the position
that he or she would have occupied but for the unlawful discrimination, reinstatement also serves
as an important deterrent to other discriminatory acts that might be committed by the offending
[Page 7]
respondent. As the Supreme Court observed in a leading Title VII case, courts have "not
merely the power but the duty to render a decree which will so far as possible eliminate the
discriminatory effects of the past as well as bar like discrimination in the future."
Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-419 (1975) (emphasis added). We find
this prophylactic objective (i.e., preventing "like discrimination in the future")
to be particularly compelling in connection with whistleblower statutes like the employee protection
provision of the ERA. The whistleblower protection laws are not intended merely to protect the
private rights of individual employees, but are part of a broader enforcement scheme that promotes
critical public interests. "Congress recognized that employees in the . . . industry are often best
able to detect . . . violations and yet, because they may be threatened with discharge for cooperating
with enforcement agencies, they need express protection against retaliation for reporting these
violations." Brock v. Roadway Express, Inc., 481 U.S. 252, 258 (1987) (explaining
rationale for comparable whistleblower provision of the Surface Transportation Assistance Act).
Thus "[t]he Department of Labor does not simply provide a forum for private parties
to litigate their private employment discrimination suits. Protected whistleblowing under the ERA
may expose not just private harms but health and safety hazards to the public." Beliveau
v. United States Dep't of Labor, 170 F.3d 83, 88 (1st Cir. 1999). Similarly, referring to the
analogous employee protection provision of the Clean Water Act, the Third Circuit explained
that:
Such "whistle-blower" provisions are intended to
promote a working environment in which employees are relatively
free from the debilitating threat of employment reprisals for publicly
asserting company violations of statutes protecting the environment,
such as the Clean Water Act and nuclear safety statutes. They are
intended to encourage employees to aid in the enforcement of these
statutes by raising substantiated claims through protected procedural
channels. * * * The whistleblower provision was enacted for the
broad remedial purpose of shielding employees from retaliatory
actions taken against them by management to discourage or punish
employee efforts to bring the corporation into compliance with the
Clean Water Act's safety and quality standards. If the regulatory
scheme is to effectuate its substantial goals, employees must be free
from threats to their job security in retaliation for their good faith
assertions of corporate violations of the statute.
Passaic Valley Sewerage Comm'rs v. United States Dep't of Labor, 992 F.2d 474, 478
(1993), cert. denied, 510 U.S. 964 (1993). Quite simply, reinstatement is important not
only because it vindicates the rights of the complainant who engaged in protected activity, but also
because the return of a discharged employee to the jobsite provides concrete evidence to other
employees that the legal protections of the whistleblower statutes are real and effective. See
Allen v. Autauga County Bd. of Educ., 685 F.2d 1302, 1306 (11th Cir. 1982) (in a case under
Age Discrimination in Employment Act, observing that "reinstatement is an effective deterrent
to preventing employer retaliation against employees").
[Page 8]
Although reinstatement is the presumptive remedy in wrongful discharge cases
under the whistleblower statutes, there are circumstances in which alternative remedies are preferred.
For example, front pay in lieu of reinstatement may be appropriate where the parties have
demonstrated "the impossibility of a productive and amicable working relationship,"
Creekmore, supra, slip op. at 9, or where reinstatement otherwise is not possible. See,
e.g., Doyle v. Hydro Nuclear Servs., Inc., No. 89-ERA-22 (ARB Sept. 6, 1996) (reinstatement
impractical because company no longer engaged workers in the job classification occupied by
complainant, and had no positions for which complainant qualified); Blackburn v. Metric
Constructors, Inc., No. 86-ERA-4 (Sec'y Oct. 30, 1991) (Secretary reverses earlier reinstatement
orders based on evidence developed on remand that company's electricians were terminated
at conclusion of project with no expectation of continued employment). Cf. Goldstein v.
Manhattan Indus., Inc., 758 F.2d 1435, 1449 (11th Cir. 1985), cert. denied, 474 U.S.
1005 (in ADEA case, reinstatement, not front pay, was appropriate remedy where there was
no evidence that "discord and antagonism between the parties would render reinstatement
ineffective as a make-whole remedy"). Georgia Power argues against Hobby's reinstatement
under these front pay theories, asserting (1) that Hobby should not be reinstated to a senior
management position because he lacks the skills needed to perform such work, and other corporate
executives therefore would not have confidence in his abilities; (2) that other Georgia Power
managers would not view Hobby as trustworthy after having litigated a whistleblower case against
the company; and (3) that Hobby's position as General Manager of NOCA was abolished, and there
is no longer any comparable position within the company to which Hobby can be reinstated. We
consider the company's arguments.
2. Whether reinstatement should be denied
because Georgia Power management would
lack confidence in Hobby's ability to perform
in a senior management position.
Georgia Power offers several related arguments challenging Hobby's ability
to function at a high level within the company. For example, Georgia Power asserts that Hobby has
not functioned as a senior corporate manager in "the rapidly transforming electric utility
industry" since his discharge in 1990, and therefore lacks the skills needed to perform in a
senior position. The company claims that it improperly is being forced to reinstate Hobby to "a
position for which he is unqualified," and that Hobby therefore would not have credibility
among his peers in the industry. See Respondent Georgia Power Company's Initial Brief
in Support of Petition for Review (GP Initial Brief) at 17-18, citing Coston v. Plitt Theaters,
Inc., 831 F.2d 1321, 1331 (7th Cir. 1987); vac'd on other grounds, 486 U.S. 1020
(1988) (ability to perform a high-level function is a recognized factor in assessing a request for
reinstatement). Georgia Power asserts that a lack of trust and confidence in Hobby's ability to
perform his tasks would "unduly hinder" its operations and "create [a] substantial
likelihood of future litigation," thus making reinstatement inappropriate. GP Initial Brief at
18, citing and quoting Francoeur v. Corroon & Black Co., 552 F.Supp. 403, 413 (S.D.N.Y.
1982).
[Page 9]
We recognize that Hobby's relatively senior position within Georgia Power
makes these concerns plausible when considering whether Hobby should be returned to the corporate
offices. As noted, when deciding whether to reinstate we must consider such factors as the source
of the alleged hostility or friction, its severity, and whether it would be impossible for the parties to
reestablish a viable working relationship. In addition, the reinstatement question must be considered
against the backdrop of the public policies underlying the ERA and the other environmental
whistleblower laws.
A. The ALJ's recommended damage awards that were not
challenged before the ARB.
Several elements of the ALJ's recommended damage award were not
challenged by either party in their appeals to the ARB, and we adopt them with slight modifications.
The parties have entered into stipulations that address the manner of calculating some of these
awards. See RD&O at 4-6 and attachments.
1. Productivity Improvement Plan (PIP)
and Performance Pay Plan (PPP).
Georgia Power's Productivity Improvement Plan (PIP) is an incentive plan for
Georgia Power executives. The plan pays out bonuses annually and the amount received depends
upon not only the executive's grade level but also the overall financial performance of the company.
T. 2126; RD&O at 5, 65. The Pay Performance Plan (PPP) provides a bonus to employees based
on a standard PPP Funding Percentage Value, and is calculated using either the salary range mid-
points of each of Georgia Power's organizations' employees (for the years 1989 to 1996) or the
employee's actual salary (from 1996 to the present). RD&O at 65 and Appendix E.
T. 494-512; CX-132-D. Hobby incurred tax penalties for early distribution of his IRA account.
We adopt the ALJ's determination Georgia Power shall reimburse Hobby for tax penalties resulting
from early distribution of the stock and IRA account, plus interest.27
RD&O at 5, CX 132 G, p.2. Hobby argues that the work he completed for Creditor Resources
in 1992 was performed while he was working full time for Talent Force, after regular working hours
[Page 38]
and over weekends, and that this amount should be excluded from the back pay calculation. We
reject this argument. Because these monies were nevertheless "interim earnings," we
include this amount in the interim earnings calculation.
For purposes of computing and compounding interest, all interim
earnings shall be credited against Georgia Power's gross back pay obligation during the quarter in
which the interim earnings were earned.29
Doyle v. Hydro Nuclear Servs., ARB Nos. 99-041, 042 & 00-012, ALJ No. 89-ERA-22,
slip op. at 19-20 (ARB May 17, 2000) (citations and footnotes omitted).
D. Other affirmative relief
Hobby's employment record with Georgia Power shall be expunged of any
negative references or commentaries or other materials regarding Hobby's work performance in
connection with his discharge. In addition, the company shall issue a "welcome back"
memo, consistent with standard company practice. See RD&O at 68.
E. Attorney fees and costs
Georgia Power shall pay Hobby attorney fees and costs associated with this
litigation, including Hobby's costs in attending the hearing (e.g., transportation, lodging,
meals). Hobby may present a fee petition to the ALJ no later than 30 days following the date of this
Order.
1 This appeal has been assigned
to a panel of two Board members, as authorized by Secretary's Order 2-96. 61 Fed. Reg. 19,978
§5 (May 3, 1996).
2 The employee protection
provisions of the ERA were amended as part of the Comprehensive National Energy Policy Act of
1992 §2902, Pub. L. No. 102-486, 106 Stat. 2776 (Oct. 24, 1992).
However, the amendments applied only prospectively, and therefore do not apply to this case which
was filed in 1990. SeeYule v. Burns Int'l Security Serv., No. 93-ERA-12 (Sec'y
May 24, 1995).
3
The Secretary of Labor issued final agency decisions in ERA whistleblower cases prior to 1996. In
April 1996 the Secretary delegated this authority to the newly-created Administrative Review Board.
Secretary's Order 2-96, 61 Fed. Reg. 19978 (May 3, 1996).
4
Decisions and orders of the ARB, Secretary and DOL Administrative Law Judges opinions are
published on the Department of Labor's World Wide Web site at www.oalj.dol.gov.
5
Questions about the lawfulness of Georgia Power's and Southern Company's decision to consolidate
various nuclear plant operations, and Georgia Power's reaction to these questions, were implicated
in another ERA whistleblower case brought by Allen Mosbaugh, a Georgia Power manager at the
company's Alvin Vogtle nuclear plant. Mosbaugh v. Georgia Power Co., Nos. 91-ERA-1,
11(Sec'y Nov. 20, 1995). The Mosbaugh case subsequently was settled.
Mosbaugh v. Georgia Power Co., Nos. 91-ERA-1, 11 (ARB Aug. 23, 1996).
6
Hobby remained on the payroll at Georgia Power until February 23, 1990.
7
Contrary to the ALJ, the Secretary also concluded that Hobby did engage in protected
activity at the January 1990 pre-hearing meeting on Fuchko; however, the Secretary held
that this protected activity did not motivate Georgia Power to terminate Hobby. Id. at 10.
8
In 1995 Georgia Power adopted a new pay grade structure, and position levels was revised such that
a position at the old Level 18 became Level 9, Level 20 became Level 10, and so on. T. 1728,
RD&O at 4 n.2.
9
To the extent that other Georgia Power executives testified during the liability phase of this
proceeding that they had formed a low opinion of Hobby toward the end of his tenure with the
company, the Secretary found this changed view to be further evidence of discriminatory bias by the
company. Id. at 20.
10
The ALJ opined that the elimination of the NOCA operation and Hobby's General Manager position
was "inextricably entwined with the discriminatory act." RD&O at 55.
11
At the time of the hearing on damages, Evans was the President and CEO of Mississippi Power
Company. Prior to holding this position, he served as a Vice President at Southern Company
Services and at Georgia Power. Tr. 827-8. Evans was Hobby's supervisor at Georgia Power in
January 1990. RD&O at 28.
12
Hobby also disagrees with the ALJ's analysis of his progression rate, asserting that he ascended the
pay grades at an even faster rate than the ALJ acknowledged.
13
There are, of course, countervailing legal and evidentiary concerns that may shift the burden of proof
to other parties on specific issues. Id. A good example of this burden shifting is the
question whether a complainant has appropriately mitigated damages (discussed infra),
where the burden of proving a "failure to mitigate" falls on the defendant.
14
The ALJ rejected the premise that employees automatically are elevated to the next grade level when
they reach the maximum pay, crediting Steve Wilkinson's testimony that most employees at Georgia
Power who reach Level 10 remain at that level because there are few positions available above that
level. RD&O at 57. In testimony that addressed this issue squarely, Wilkinson stated that employees
do not automatically receive level increases upon reaching the maximum salary level for their current
level, but that such a promotion would require the opening of a position at the higher level. T.
2137-8, 2144.
15
Because of the result that we reach on this issue, we do not need to address a second problem in
Hobby's argument, i.e., that neither of the Southern Company comparators were employed
by the respondent in this case, Georgia Power.
16
Georgia Power expended significant energy developing and presenting evidence concerning
downsizing at the company, advancing the theory that Hobby's entitlement to back pay would have
ended relatively early because he would have been separated from the company as part of a general
reduction in the management ranks. See RD&O at 63-64. However, the analyses compiled
by the company "were seriously flawed." Id. Perhaps for this reason, the
company does not raise this downsizing argument as part of this appeal.
17
As an aside, we note that a position paying $65,000/yr. (or less) obviously is not "substantially
equivalent" in compensation to Hobby's former position as NOCA General Manager, where
he was paid over $100,000/yr. with significant benefits.
18
In addition, the ALJ concluded that one of Hobby's witnesses, Dr. Soeken, lacked credibility because
his opinion was "so fraught with bias that it was implausible." Id. at 62 n.107.
19
One legal scholar has questioned the Weaver-type alternative approach for proving a failure
to mitigate damages:
In line with the common law avoidable consequences rule, the defendant's liability for backpay is
reduced by sums the plaintiff earned or could have earned in other employment. The reduction is
to be made in the sum of any actual earnings received by the plaintiff in other employment. The
reduction is also to be made for any income the plaintiff could reasonably have earned in substitute
employment, if the plaintiff in fact earned nothing. The rule requiring a reduction for income the
plaintiff could reasonably have earned but did not, is often expressed in terms of the usual evidence
given on the point by saying that the plaintiff cannot recover for any period of time in which she was
not using reasonable diligence to find substitute employment. But the plaintiff's lack of
diligence, though perhaps sufficient to put the burden on the plaintiff to show that no substitute jobs
existed, is not itself the critical issue. The critical point is whether the plaintiff actually earned
money or could reasonably have done so in a comparable job. If no such job existed, the plaintiff's
post-discharge behavior is of no consequence.
Reduction in the recovery by the amount the plaintiff could have earned is required only if
the plaintiff had an opportunity to earn income in a job that counts as a substitute for the job in which
the plaintiff was wronged; it must be a job that is a "substantial equivalent" of the job
from which the plaintiff was wrongfully discharged or one that becomes acceptable as an equivalent
when time has demonstrated that the plaintiff must lower her sights.
II Dan B. Dobbs, Law Of Remedies §6.10(4) at 221-22 (2d ed. 1993) (emphasis added).
20
Soon after Hobby was terminated by Georgia Power in 1990, Smith told Hobby that Oglethorpe
would be interested in having him as an employee. T. 161. Hobby also spoke with Frank Wreath
at Oglethorpe Power, who informed him that the company would be "very, very
interested" in hiring him after the hearing phase of his legal claim against Georgia Power. T.
159-60, 163.
In January 1991, Hobby again contacted Oglethorpe and was informed that they were still interested
in him. T. 166. In mid-1991, Tom Kilgore, an acquaintance of Hobby's, became Oglethorpe's new
president. Wreath told Hobby that Kilgore had been informed of his interest in a position at
Oglethorpe. T. 167. Additionally, one of Oglethorpe's board members privately informed Hobby
that there was no reason why Oglethorpe's board would oppose his hiring. T. 167-9.
Hobby met with Kilgore soon after Kilgore began serving as Oglethorpe's president. Kilgore was
re-assessing Oglethorpe's organizational structure, but told Hobby that he would contact him in a few
weeks. T. 169-70. Separate from these discussions, in August 1991, Hobby responded to an
advertisement placed by Oglethorpe seeking a Program Director of Power Production. T. 172-73,
RD&O at 14. The position was ultimately offered to one of Oglethorpe's then-current employees.
T. 174.
By this time, Kilgore, Smith, Wreath, and Dave Self (Oglethorpe's Vice President of Power
Production) all had told Hobby that he might be needed in a number of departments at the company.
T. 215-16. In September 1991 Hobby again met with Wreath, who informed him that Kilgore
believed that Hobby's ERA case needed to be resolved before he could be hired, but that this was the
only impediment. T. 225-26.
In November 1991, Smith contacted Hobby for a job interview for a position at Oglethorpe. Hobby
expected to meet with Kilgore as part of the interview, but was unable to do so. In December 1991
he contacted Smith about the interview and was told that a hiring decision would not be made until
after the holidays. T. 236-38.
Hobby contacted Oglethorpe in January and February 1992 and was told that no action had yet been
taken on his hiring. T. 238. Soon after receiving this news, Hobby contacted an employment
recruiter and engaged a firm to assist in job placement elsewhere.
21
Although Hobby entered into a long-term contract with the R.L. Stevens employment firm to assist
in his job search, this relationship ended in September 1992 when Hobby was unable to pay the
company's fees. RD&O at 38.
22
We note favorably the ALJ's discussion of Hobby's difficulties after he was terminated by Georgia
Power. See RD&O at 65-68.
23
We note that the parties agreed during the hearing that compensation manager Steve Wilkinson could
be used to calculate compensation and employee benefit figures pursuant to this Order. T. 2175,
RD&O at 33 n.58.
24
Earlier in the Recommended Decision, the ALJ states that George Power should pay Hobby PPP and
PIP benefits at the "average award provided to level 20 (10) employees." RD&O at 65.
The "average award" is not necessarily the same as the award made to an employee at
the mid-point. Because we order Georgia Power to pay back pay at the mid-point level,
infra, we similarly adopt the mid-point formulation for the bonus payments.
25
The ALJ determined Hobby's medical and life insurance costs to be $20,384.21, increasing by
$120/mo. after April 15, 1998.
26
Hobby received retirement and pension benefits through Georgia Power's Employee Stock
Ownership Plan (ESOP) and Employee Savings Plan (ESP) T. 576-80, 608-9; CX-132-K; CX-
132-P. If Hobby had worked for Georgia Power beyond April 20, 1990, he would have received an
amount equal to 5.3 % of his annual salary on March 15th of each year from 1990. RD&O at 5.
Georgia Power's Stock Option Plan allows employees to purchase stock at a fixed price; the longer
employees stay with the company, the more shares of stock they are allowed to purchase. T. 573-76,
608, 2139-40; CX-132-J; CX-132-O.
27
Hobby represents that he incurred $6,345.12 in tax penalties in connection with the stock sales, and
$314.11 in penalties in connection with the IRA distribution. RD&O at 22 nn.29, 30. Combined,
these penalties total penalty $6,659.23, a figure that is at variance with the ALJ's calculation
See RD&O at 70 item 13. We assume that the ALJ's summary figure is the inadvertent
result of a computation error.
The ALJ noted that Hobby's proposed interest calculation regarding the tax penalty was incorrect,
and resulted in a doubling of interest. RD&O at 68. Hobby does not challenge this ALJ finding on
appeal.
28
In his cross-petition, Hobby notes that the ALJ's RD&O contains an ambiguity with regard to the
back pay calculation. On the one hand, the ALJ states that back pay should be tied simply to the
mid-point of the Level 20 (10) pay scale (RD&O at 70), while elsewhere the ALJ states that the mid-
point salary range should increase by 4% each year. RD&O at 58 n.104. In this Final Decision, we
direct that the back pay calculation be geared solely to the pay grade mid-point.
29
For example, assume that Hobby was entitled to $30,000 in gross back wages from Georgia Power
during a particular calendar quarter, but received $10,000 in interim earnings during that quarter
from a different employer. The net back wages owed by Georgia Power for the calendar quarter
would be $20,000. This $20,000 net back wage is the amount that would be added to the back pay
total on which interest would be paid and compounded.
30
As in Doyle, the parties in this case have agreed to round the AFR to whole percentage
points. See RD&O at 5. We therefore order rounding of the AFR under the same
methodology used in Doyle.
31
Board Member E. Cooper Brown did not participate in the consideration of this case.
32
Because this decision resolves all issues with the exception of the collateral issue of attorney fees
and costs, it is final and appealable. See Fluor Constructors, Inc. v. Reich, 111 F.3d 979
(11th Cir. 1997) (under the Energy Reorganization Act, a decision that resolves all issues except
attorney fees is final.)