DATE: April 21, 1994
CASE NOS. 87-ERA-23
87-ERA-24
IN THE MATTER OF
CHARLES HILL, ET AL.,
COMPLAINANTS,
v.
TENNESSEE VALLEY AUTHORITY
RESPONDENT.
IN THE MATTER OF
EDNA OTTNEY,
COMPLAINANT,
v.
TENNESSEE VALLEY AUTHORITY
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
This case was remanded by the Secretary to the
Administrative Law Judge (ALJ) on May 24, 1989, for a hearing on
the merits after the Secretary found that the employee protection
provision of the Energy Reorganization Act of 1974, as amended
(ERA), 42 U.S.C. § 5851 (1988), prohibits covered employers
from discriminating against any employee, not only their own
[PAGE 2]
employees. Hill and Ottney v. TVA, 87-ERA-23, 24, Sec'y.
Dec. May 24, 1989, slip op. at 4. Complainants here were employees of
a contractor of Respondent, the Quality Technology Company (QTC),
investigating and reporting to Respondent concerns of
Respondent's employees about quality and safety issues at
Respondent's nuclear power plants in 1985 and 1986. Complainants
allege that Respondent terminated QTC's contract, causing the
layoff of Complainants, in retaliation for Complainants'
"gathering and disclosing concerns of TVA employees about the
safety of TVA nuclear power plants." ALJ Recommended Decision
and Order of July 24, 1991 in Case No. 87-ERA-24 (No. 24 R. D.
and O.) at 1-2. [1] Complainants Charles Hill and others in
Case No. 87-ERA-23 filed a complaint on October 16, 1986, and
Complainant Edna Ottney filed a complaint in Case No. 87-ERA-24
on October 24, 1986.
The ALJ recommended that the complaints be dismissed as
untimely and found that there were no grounds for tolling the 30
day time limit in the ERA. 42 U.S.C. § 5851(b)(1) (1988);
[2] Recommended Decision and Order of July 24, 1991 in Case No.
87-ERA-23 (No. 23 R. D. and O.) at 15-22. Complainants argued
before the ALJ, and continue to assert to me, that the statute of
limitations should be tolled because Respondent fraudulently
concealed the true reasons for its actions by means of a media
campaign to mislead them, as well as members of Congress, the
press and the public. Respondent's announced reasons for
terminating the contract were that QTC was lazy, slow, wrote poor
reports and cost too much, but Complainants argue Respondent
"fraudulently withheld from QTC the gravamen of its claim against
TVA -- that TVA discharged complainants in retaliation for their
reporting safety violations." Complainants' Memorandum of Points
and Authorities in Support, in Part, and in Opposition, in Part,
to the Recommended Decision and Order of the Administrative Law
Judge in Case No. 87-ERA-23 (Complainants' Memorandum) at 27. [3]
I begin, as in any timeliness case under the whistleblower
provisions in 29 C.F.R. Part 24 (1993), with the leading case of
School Dist. of Allentown v. Marshall, 657 F.2d 16 (3d
Cir. 1981). The Third Circuit held in that case that the time
limit in the Toxic Substances Control Act, 15 U.S.C. §
2622(b)(1988), is like a statute of limitations and is not
jurisdictional. 657 F.2d at 19; seealsoDoyle
v. Alabama Power Co., Case No. 87-ERA-43, Sec'y. Dec. Sept.
29, 1989, slip op. at 2, aff'd, Doyle v. Secretary,
U.S. Dep't. of Labor, 949 F.2d 1161 (11th Cir. 1991).
However, as the court in Allentown pointed out, "the
restrictions on equitable tolling . . . must be scrupulously
observed" and that such tolling is appropriate in three principle
sitations: where 1) the defendant has actively misled the
plaintiff respecting the cause of action; 2) the plaintiff has in
some
[PAGE 3]
extraordinary way been prevented from asserting his rights; or 3)
the plaintiff has raised the precise statutory claim in issue but
has mistakenly done so in the wrong forum. 657 F.2d at 19-20,
citingSmith v. American President Lines,
Ltd., 571 F.2d 102 (2d Cir. 1978). In addition, the court
warned that "[t]he tolling exception is not an openended
invitation to the courts to disregard limitations periods simply
because they bar what may be an otherwise meritorious cause."
Id. at 20.
Complainants attack the ALJ's R. D. and O. as misapplying
the law of equitable tolling through fraudulent concealment.
Three elements must be proven to show fraudulent concealment: 1)
wrongful concealment of its action by Respondent, 2) failure of
Complainants to discover the operative facts that are the basis
of the cause of action within the limitations period, and 3)
Complainants' due diligence until discovery of the facts.
Dayco Corp. v. Goodyear Tire & Rubber Co., 523 F.2d 389,
394 (6th Cir. 1975). The ALJ's decision on this point, as well
as the authorities he cited and those relied on by Complainants
have been carefully reviewed, [4] and I find he has
properly interpreted and applied the law of equitable tolling
through fraudulent concealment, and I adopt parts V, VI and VII
of the No. 23 R. D. and O. I have several observations, and
references to additional authorities, which bolster the ALJ's
conclusion.
As a preliminary matter, courts have long recognized that
statutes of limitation and other similar filing deadlines should
be equitably modified only in exceptional circumstances. Even
so, when allegations have been made under the Energy
Reorganization Act that an employer has retaliated against
workers for raising safety concerns, this general rule must not
be applied in such a way that the underlying purposes of that law
are frustrated. Thus, it is exceedingly important that an
appropriate balance be struck between fidelity to the statutory
directive that complaints be pursued and investigated in a timely
manner on the one hand and fairness to whistleblowing
complainants on the other.
If the Complainants in this case had been misled by TVA
about the facts giving rise to a cause of action, or if
Complainants had attempted to pursue their claims with due
diligence, this balance may have tipped in their favor. Such
facts, however, have not been established. Instead, as the
administrative law judge concluded, not only did the Complainants
have good reasons not to rely on TVA's statements, but they did
not rely on them. Thus, the evidence shows that the Complainants
simply were not misled into sitting on their rights by TVA's
statements. In addition, the Complainants have not offered a
compelling explanation for why they delayed so long in
investigating TVA's allegedly unlawful practices. As a result,
[PAGE 4]
and as I explain in more detail below, the facts of this
particular case lead me to conlude that the Complainants' failure
to meet the ERA's then applicable 30-day filing period cannot be
excused.
The core of Complainants' argument is that equitable tolling
applies where the Respondent has concealed the motives for its
actions, even though the essential elements of a claim are known
to a Complainant. See Complainants' Memorandum at 20 and
27 ("TVA affirmatively concealed the true reasons for its refusal
to renew QTC's contract" and "fraudulently withheld from QTC the
gravamen of its [QTC's] claim against TVA -- that TVA discharged
complainants in retaliation for their reporting safety
violations.") Complainants urge me to reject the ALJ's
conclusion that equitable tolling applies only where a Respondent
has concealed its actions which give rise to a cause of
action, but not when it conceals its motives. Id. at 35.
The substantial weight of authorities supports the ALJ's
interpretation of the doctrine of equitable tolling by fraudulent
concealment and, as noted above, I adopt it. Indeed,
Complainants' position would require a Respondent either to
confess violation of the ERA or be subject to suit for an
indefinite period until the Complainant obtains evidence of
Respondent's illegal motive.
Complainants rely on dictum in Gomez v. Great Lakes Steel
Div., Nat'l Steel Corp., 803 F.2d 250 (6th Cir. 1986), that
"[p]erhaps a case for fraudulent concealment could have been made
had [defendant] actively misled [plaintiff] by fabricating
reasons for this lack of promotion." 803 F.2d at 255. But, as
explained below and in the ALJ's Recommended Decision and Order
in Case No. 23 at 17-21, the Complainants never proved that they
were misled by whatever reasons TVA gave for terminating QTC's
contracts. Thus, even if I were constrained to apply the
Gomez dictum, I would find it inapplicable to the facts of
this case. In addition, the actual holding of that case, that
concealment of motives but not actions does not toll the
pertinent statute of limitations, supports the ALJ's conclusion.
The Sixth Circuit said:
[Defendant] never admitted to [plaintiff] its alleged
motivation of discrimination in not promoting him. . . .
[But] the essential element . . . [of] fraudulent
concealment is concealment of the existence of the
claim . . . [not] concealment of the evidence necessary to
prove such a claim. . . . [Plaintiff]'s argument seeks a
per se rule that once an allegedly discriminatory act
occurs and the employer fails to admit to the employee that
the act was founded in discrimination, fraudulent concealment
has occurred. Adoption of such a rule would effectively read the
[PAGE 5]
statute of limitations out of employment discrimination
actions.
Id. at 255.
I also do not agree with Complainants' assertion that
Jensen v. Frank, 912 F.2d 517 (1st Cir. 1990), supports
their position on equitable tolling and was miscited by the ALJ.
Complainants' ellipsis marks in their quotation from Jensen v.
Frank omit important modifiers which significantly limit the
scope of what is in any event no more than dictum. The
actual comment of the First Circuit, with words omitted by
Complainants underlined, was "citing a pretextual basis for
discharge may conceivably constitute active misleading
in certain instances." 912 F.2d at 521. But plaintiff in
Jensen simply was not misled, the First Circuit held,
having told an EEO counselor that he had been discriminated
against on the basis of national origin. He later learned of
another case where an employee of the same national origin had
been treated more leniently than plaintiff for the same offense,
and claimed the time for filing his complaint should not have
begun to run until he obtained that knowledge. The court said
this argument confus[es] notice with evidence and
overlook[s] the very purpose of the administrative
requirement that timely contact be made. Not knowing every
detail of a suspected plot cannot excuse a discharged
employee from sleeping on his rights. It can ordinarily be
assumed that many facts will come to light after the date of
the employee's termination, and indeed one purpose of a
charge and a complaint is to initiate the process of
uncovering them.
912 F.2d at 521-22 (citation omitted); see alsoPacheco
v. Rice, 966 F.2d 904, 907 (5th Cir. 1992) ("It is to be
expected that some relevant facts will come to light after the
date of an employee's termination--one purpose of filing an
administrative complaint is to uncover them. . . . The
requirement of diligent inquiry imposes an affirmative duty on
the potential plaintiff to proceed with a reasonable
investigation in response to an adverse event." (Citations
omitted.))
The Fourth Circuit also has rejected the argument that
"active concealment" of the reasons for an adverse employment
action tolls the state of limitations:
this contention amounts to little more than a claim
that the company's proffered reasons for its adverse
employment action were pretextual. . . . If equitable
tolling applied every time an employer advanced a non-
[PAGE 6]
discriminatory reason for its employment decisions, it would be
"tantamount to asserting that an employer is equitably estopped
whenever it does not disclose a violation of the statute."
(Citation omitted.) If this were the case, the [time limit]
would have little meaning.
Olson v. Mobil Oil Corp.,904 F.2d 198, 203 (4th
Cir. 1990).
Similarly, in Merrill v. Southern Methodist Univ.,
806 F.2d 600 (5th Cir. 1986), the Fifth Circuit expressly
rejected the theory that the time limit in Title VII of the Civil
Rights Act of 1964 does not begin to run until "the date the
victim [of discrimination] first perceives that a discriminatory
motive caused the act, rather than the date of the actual act
itself." Id. at 605. That court held that the time
begins to run from the date plaintiff knew of the alleged
discriminatory act, because "[i]t might be years before a person
apprehends that unpleasant events in the past were caused by
illegal discrimination. In the meantime, under [plaintiff's]
theory, the employer would remain vulnerable to suits based on
these old acts." Id., citingDelware State
College v. Ricks, 449 U.S. 250 (1980);
see alsoChapman v. Homco, Inc., 886 F.2d 756, 758
(5th Cir. 1989), cert.denied, 494 U.S. 1067 (1990)
(age discrimination complaint filed only two days late dismissed
as untimely although plaintiff did not learn of replacement by
younger worker until weeks after discharge); Klausing v.
Whirlpool Corp., 38 Fair Empl. Prac. Cas. (BNA) 667, 671
(S.D. Ohio 1985) ("[T]he failure to tell plaintiff that he was
demoted because of his age is not the type of deception or fraud
that operates to toll the limitations period.").
In contrast, where the employer has misled the employee
about the nature of the action taken against the employee, time
limits are tolled until the employee learns the true character of
the adverse action. In Donovan v. Hahner, Foreman & Harness,
Inc., 736 F.2d 1421, 1427-28 (10th Cir. 1984), for example,
the 30 day time limit under the Occupational Safety and Health
Act for filing a retaliation complaint was tolled because the
employer misled the employee into believing he had been laid off,
not fired and because the employee made diligent efforts to
discover his true employment status, but was misled about it by
the employer.
Several courts have held that statutes of limitation begin
to run when the plaintiff possesses facts sufficient to make out
a prima facie case, not when the plaintiff obtains
evidence that proves discriminatory motive. For example, in
Christopher v. Mobil Oil Corp., 950 F.2d 1209 (5th Cir.
1992), cert. denied, 113 S. Ct. 68 (1992), the Fifth
Circuit held that
a showing of deception as to motive supports equitable
[PAGE 7]
estoppel only if it conceals the very fact of discrimination;
equitable estoppel is not warranted where an employee is aware of
all the facts constituting discriminatory treatment but lacks
direct knowledge of the employer's subjective discriminatory
purpose. . . ." [W]hen 'facts that would support a cause of
action are or should be apparent,' the statute commences even if
the employee is not aware of all the evidence that he will
ultimately rely upon at trial."
905 F.2d at 1217. [5]
In the context of statutes comparable to the ERA, which
provide for preliminary administrative investigations prior to
filing suit or requesting a formal hearing, time limits begin to
run when a complainant has "knowledge of facts that would support
a charge of discrimination." Vaught v. R.R. Donnelley
& Sons Co., 745 F.2d 407, 411 (7th Cir. 1984) (citation
omitted) (emphasis in original.) [6] This approach is logical
and I follow it because the purpose of a charge "is only to
initiate the . . . investigation, not to state facts sufficient
to make out a prima facie case." Id. Here,
Complainants even had facts sufficient to make out a prima
facie case in April 1986, [7] and certainly had enough to
file a complaint with the Wage and Hour Division. See 29
C.F.R. § 24.3(a) (1992).
In Heideman v. PFL, Inc., 904 F.2d 1262 (8th Cir.
1990), cert. denied, 111 S. Ct. 676 (1991), a sales
manager who was fired in 1979 filed suit under the Age
Discrimination in Employment Act in 1986 when he obtained a copy
of an internal "'smoking gun' memorandum . . . describ[ing] a
policy designed to rid the company of older managers."
Id. at 1264. He also argued that the statute of
limitations should be tolled because the employer "affirmatively
concealed the reason for his discharge.
. . [that] he was fired for being too old," but the court said
[w]e have no doubt that this is so. No employer is likely
to admit to the disadvantaged employee a flagrant violation
of federal law against discrimination on the basis of age,
race or gender. Whether or not an employer tells its
employee the true reason for the adverse employment decision
is not the standard. Nor is it especially relevant that, as
the facts show, [defendant] has attempted to conceal its
discriminatory actions.
Id. at 1266. [8]
Equitable tolling was not justified because Plaintiff's
delayed filing of a complaint in Heideman was not caused
by the employer's concealment or misrepresentation. As in this
case, plaintiff "was on notice from the very beginning that
something was amiss," but let the limitations period run. 904
F.2d at 1266. Plaintiff never believed the employer's
explanation for his discharge, testifying that "it didn't make
any sense,"
[PAGE 8]
Heideman v. PFL, Inc., 710 F. Supp 711, 719 (W.D. Mo.
1989), and "he was certain at the time he was not being told the
true reason for his discharge." 904 F.2d at 1266. "[Defendant]
did not prevent [plaintiff] from finding out the truth merely
because it did not openly proclaim its master plan to fire older
employees because of their age." Id. at 1267.
Complainants here also did not believe Respondent's public
explanation for termination of the QTC contract because "the
[termination] letter didn't make sense from a business
perspective," T. (transcript of hearing) 600; see also T.
594; 711; 718; 1064; 1118; 1140 (characterization of QTC's work
in newspapers was "flat wrong"). Complainants thought "the first
effort [should be] to try to . . . determine what was behind the
issuance of the letter." T. 600. Although Complainants concede
they were quite knowledgeable about the ERA and its time limit,
T. 597-98, they did not file a complaint until October 1986
because "there was no evidence . . . that we had been, in
fact, discriminated against." T. 600 (emphasis added).
I agree with the ALJ that the newspaper and trade journal
articles about the controversy over termination of the QTC
contract should have aroused Complainants' suspicions that
Respondent's articulated reasons were pretextual. Respondent's
January 22, 1986 letter was characterized as "look[ing] . . .
like a coverup," clip from Jan. 23, 1986 Knoxville-News Sentinel
attached to Nov. 1, 1990 Stipulation; "[t]aking QTC out of the
nuclear concerns business at Watts Bar, complained one agency
engineer. . . 'is like Richard Nixon firing Archibald Cox,'"
id., Jan. 23, 1986 Chattanooga News-Free Press; "'I'm
afraid that QTC was doing too good a job and (TVA officials)
[sic] may have wanted to keep them from looking into things,'
said Rep. Jim Cooper, D-Tenn.," id., Jan. 24, 1986
Knoxville Journal; "'TVA management appears to be engaged in
'damage limitation,'' [Rep. John] Dingell said. 'It appears that
the two organizations that were created to identify and resolve
such problems NSRS [Nuclear Safety Review Staff] and QTC are
being suppressed,'" id., Feb. 2, 1986 Chattanooga Times.
One of the articles reported that "Watts Bar employees
immediately contacted their representatives in Washington [after
the QTC contract was canceled] . . . They charged that TVA
doesn't want a contractor around which tells the agency news it
doesn't want to hear. QTC has uncovered several confirmed cases
of harassment by TVA managers . . . ." Id.,
Jan. 26, 1986 Energy Daily. If Respondent's own employees
suspected cancellation of the QTC contract was retaliatory, it is
reasonable to expect Complainants should have as well. [9]
Complainants claim the ERA time limit did not begin to run
until they saw an article in the Knoxville Journal of
September 22, 1986, quoting William Wegner, an assistant to TVA's
[PAGE 9]
Manager of the Office of Nuclear Power, that "[w]e were going to
have to do something about QTC. . . . It was a cancer to be
dealt with." Complainants claim that they first believed
termination of the QTC contract was discriminatory when they read
this statement. Charles Hill, the lead Complainant in Case No.
23, testified, for example, that this statement led him to
realize Respondent's explanations for its action were
rationalizations, that is, pretextual. T. 602.
Mr. Wegner's statement may be evidence of discriminatory
motive, but the fact that Complainants became aware of it months
after termination of the QTC contract does not warrant equitable
tolling. Only concealment of the fact that a cause of action
exists, not concealment of evidence proving violation of the
statute, justifies equitable tolling. SeeGomez v.
Great Lakes Steel at 255; Christopher v. Mobil Oil
Corp., at 1217.
Mr. Wegner testified he recollected that Chuck Mason, Deputy
Manager of Nuclear Power of TVA, made the "cancer" statement
during the November 1985 review conducted by Mr. Wegner and
Admiral White, T. 3284-88. Mr. Wegner's report of the statement
was first put in writing in a Wage-Hour Administration report of
an interview with Mr. Wegner, conducted on May 30, 1986, in
connection with another ERA complaint, C-498, but the Knoxville
Journal did not report the "cancer" statement until September 22,
1986. Under Complainants' theory, if Mr. Wegner's statement had
not been available to the Knoxville Journal, or the newspaper had
run its two-part series on "The Saltwater Network" several months
later, the time limit would not have begun to run until then, or
until Complainants obtained evidence by some other means of
Respondent's discriminatory motive. If no such evidence had come
to light, under their theory they could still file a complaint
within 30 days of whenever it did. This interpretation would
virtually eliminate the time limit from the ERA, as the cases
discussed above point out, and I cannot adopt it.
Accordingly, I adopt the ALJ's recommendation that the
complaints in these cases be DISMISSED because they are time
barred. [10]
SO ORDERED.
ROBERT B. REICH
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1]
The ALJ submitted a detailed 38 page decision in Case No. 87-
ERA-23, where a full record also was developed, and a four page
decision in Case No. 87-ERA-24 which essentially incorporated and
adopted the conclusion in No. 23 that the complaints were
untimely. Unless otherwise noted these decisions will be refered
to collectively as "the R.D. and O."
[2] The ERA was amended in 1992 to, among other things,
lengthen the time for filing complaints to 180 days.
Comprehensive National Energy Policy Act § 2902, Pub. L. No.
102-486, 106 Stat. 2776 (Oct. 24, 1992). The new time limit, however,
only applies to claims filed on or after the date of enactment, October
24, 1992.
[3]
Complainants' Motion to Enlarge Page Limit for Complainants'
Brief to the Secretary of Labor in Case No. 87-ERA-23, to submit
a brief five pages in excess of the 35 page limit established in
the briefing schedule in this case, is granted.
[4]
Although not crucial to their argument, I note that
Complainants cited several ALJ recommended decisions in a manner
which implies they were final decisions of the Secretary.
See administrative decisions cited at pp. 15, 16, and 18
of Complainants' Memorandum. ALJ recommended decisions in ERA
cases are simply that and have no precedential value unless
explicitly adopted by the Secretary. The ALJ decisions cited by
Complainant were not adopted by the Secretary.
[5]
The Secretary's decisions on tolling the time limits in
whistleblower cases follow court decisions that the time begins
to run "when the facts which would support the
discrimination complaint were apparent or should have been
apparent to a person with a reasonably prudent regard for his
rights similarly situated to Complainant." McGough v. United
States Navy, Case Nos. 86-ERA-18, 19, 20, Sec'y Dec. Jun. 30,
1988, slip op. at 9-10 (citing numerous cases) (emphasis added).
See alsoIn the Matter of Charles Kent, Case No.
84-WPC-2, Sec'y. Dec. Apr. 6, 1987, slip op. at 11 (equitable
tolling warranted where Respondent "misrepresented or
fraudulently concealed facts necessary to support [a]
complaint. (emphasis added.))
[6]
Complainants protest that had they filed a complaint based on
the "limited" information available before May 1, 1986, their
attorneys would have been subject to sanctions under Rule 11 of
the Federal Rules of Civil Procedure. But as the court pointed
out in Cada v. Baxter Healthcare Corp., 920 F.ed 446, 452,
"we are speaking not of a judicial complaint, but of an
administrative complaint. There is no duty of precomplaint
inquiry in EEOC proceedings, as distinct from federal court
actions (Fed. R. Civ. P. 11)." SeealsoCox v.
Radiology Consulting Assoc., Inc., Case No. 86-ERA-17, Sec'y
Dec. Nov. 6, 1986, slip op. at 8 ("The purpose of [a complaint]
is to empower the Department of Labor to investigate a claim and
gather evidence. The claim does not have to be fully developed
and proven when filed.")
[7]
A prima facie case consists of a showing that the
employee "engaged in protected conduct, that the employer was
aware of that conduct and . . . took some adverse action against
him. In addition . . . '[Complainant] must present evidence
sufficient to raise the inference that . . . protected activity
was the likely reason for the adverse action.' [citation
omitted.]" Dartey v. Zack Co. of Chicago, 82-ERA-2,
Sec'y. Dec. Apr. 25, 1983, slip op. at 7-8. Temporal proximity
between the protected conduct and the adverse action raises an
inference of discrimination. Couty v. Dole, 886 F.2d 147,
148 (8th Cir. 1989).
[8]
The court reached this result even though defendant's conduct
toward plaintiff and other older employees "appear[ed] [to the
court of appeals] to have been egregious," and the "smoking gun
memorandum" virtually constituted direct evidence of
discrimination. 904 F.2d at 1264.
[9]
Complainants point out that various members of Congress who at
first questioned Respondent's actions in terminating the QTC
contract later softened their criticism, in response,
Complainants' assert, to Respondent's campaign of deception. A
legislator's reasons for pursuing or declining to pursue an
inquiry may have many origins; all, however, are irrelevant here.
[10]
In view of my dismissal of these complaints as untimely, it is
not necessary for me to reach the merits or address the other
issues discussed in the ALJ's R. D. and O.
