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Halpern v. XL Capital, Ltd., 2004-SOX-54 (ALJ June 7, 2004)


U.S. Department of LaborOffice of Administrative Law Judges
2 Executive Campus, Suite 450
Cherry Hill, NJ 08002

(856) 486-3800

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Issue Date: 07 June 2004
Case No.: 2004-SOX-00054

In the Matter of

MARC HALPERN
    Complainant

    v.

XL CAPITAL, LTD.
    Respondent

RECOMMENDED DECISION AND ORDER
DISMISSING THE COMPLAINT

   This proceeding arises from a complaint filed on April 15, 2004 (ALJ 1)1 by Marc Halpern (Complainant) against XL Capital, LTD. (Respondent), alleging that Respondent violated §806 of the Corporate and Criminal Fraud Accountability Act of 2002, title VIII of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514A (the Act), by terminating his employment with ECS, Inc. on January 12, 2004. The applicable regulations are contained in 29 C.F.R. Part 1980. The complaint states that ECS, Inc. is a wholly-owned subsidiary of Respondent. Hearing is scheduled for June 16, 2004 in Cherry Hill, New Jersey.

   In a letter dated May 5, 2004 the Occupational Safety and Health Administration (OSHA) denied the complaint because it was untimely. (ALJ 2) In his objections and request for a hearing dated May 11, 2004 (ALJ 3), Complainant argued that the complaint was not untimely because he was not aware of the discriminatory reason for his termination until he was notified of it by a Pennsylvania unemployment compensation referee (apparently on February 8, 2004).

   On May 26, 2004 I issued an "Order to Show Cause Why the Complaint Should Not be Dismissed as Untimely." The Order to Show Cause referred to the 90-day limitations period applicable under the Act, pursuant to the Act at 18 U.S.C. § 1514A(b)(2)(D), and the pertinent regulation, 29 C.F.R. § 1980.103.

   The Act at 18 U.S.C. § 1514A(b)(2)(D) states:

Statute of Limitations. An action under paragraph (1) [i.e., filing a complaint alleging discrimination] shall be commenced not later than 90 days after the date on which the violation occurs.


[Page 2]

   The regulation at 29 C.F.R. § 1980.103 provides:

Filing of discrimination complaint.

(d) Time for filing. Within 90 days after an alleged violation of the Act occurs (i.e., when the discriminatory decision has been both made and communicated to the complainant), an employee who believes that he or she has been discriminated against in violation of the Act may file . . . a complaint alleging such discrimination . . .

The Order to Show Cause noted that Complainant had informed OSHA that on September 29, 2003 Respondent advised him that his employment was terminated and other evidence indicates he was "last employed on January 12, 2004." The Order to Show Cause stated that, as there is a 90-day limitations period for filing a complaint under the Act, "the complaint filed on April 15, 2004 was untimely even if Complainant was not fired until January 12, 2004." (Order to Show Cause at 2)

   In Complainant's June 2, 2004 response to the Order to Show Cause (ALJ 4), he states:

The Complainant was suspended from work on September 29, 2003 but was paid through January 12, 2004.

In other portions of the June 2 response Complainant argues:

  •     The 90-day limitations period should not have begun to run or should have been tolled because Respondent concealed its unlawful motivation for terminating his employment.

  •     Between September 29, 2003 and January 12, 2004 Respondent and Complainant had communications regarding a "severance package" or "separation package."

  •     Until Complainant received the unemployment compensation referee's notification referred to above he did not have knowledge that Respondent had alleged he had engaged in willful misconduct.

  •     Respondent "perpetuated a theatrical scenario" regarding its "responsiveness to Complainant's ‘whistleblowing'. . . "

  •     Complainant "was not made aware of the discriminatory decision of the Respondent until [he received]. . . the contest of unemployment [from] the State of Pennsylvania."

On June 2, 2004 Respondent filed a response to the Order to Show Cause in which it contends that the complaint should be dismissed because it is untimely. (ALJ 5) Respondent points out, inter alia, that in Complainant's e-mail message dated October 1, 2003, he stated: "I am now on suspension and presumably soon to be terminated, for something related to my work project . . . in Mobile, Ala." (ALJ 1: first attachment, p. 2; ALJ 5, Exhibit 2, p. 2)


[Page 3]

   The Department of Labor's discussion of § 1908.103 states:

[T]he alleged violation . . . is considered to be when the discriminatory decision has been both made and communicated to the complainant. (Citing Delaware State College v. Ricks, 449 U.S. 250, 258 (1980).) In other words, the limitations period [i.e., the 90 days] commences once the employee is aware or reasonably should be aware of the employer's decision. Equal Employment Opportunity Commission v. United Parcel Service, 249 F.3d 557, 561-62 (6th Cir. 2001) . . .

68 Fed. Reg. 31861 (5/28/03).

   I find that that in this case the 90-day limitations period began to run when Respondent initially informed Complainant that he would be terminated. Complainant concedes that this occurred on September 29, 2003, when Respondent advised him that he was suspended from work. It is also clear from the e-mail Complainant sent on October 1, 2003 that he knew at that time that he would be terminated. Moreover, as noted in the Order to Show Cause, even if Complainant had not been told that he was terminated until January 12, 2004, the April 15, 2004 complaint is untimely.

   I reject Complainant's contention that the 90-day limitations period should be tolled until he had knowledge of Respondent's alleged unlawful motivation for terminating his employment or during the period in which discussions were going on between him and Respondent concerning a severance or separation "package." English v. Whitfield, 858 F.2d 957 (4th Cir. 1988), citing Ricks.

   In English, a case under the Energy Reorganization Act, 42 U.S.C. § 5851, the Circuit Court relied on Ricks in holding that the statute of limitations "begins running on the date that the employee is given definite notice of the challenged employment decision, rather than the time that the effects of the decision are ultimately felt." 858 F.2d at 961. The Court rejected the contention of the employee, English, that the limitations period did not begin to run on May 15, 1984, when she received a disciplinary letter from the employer. This letter informed English that she was permanently removed from the laboratory where she had worked, barred from working in all other controlled areas, given a temporary 90-day employment assignment, but during that time was permitted to search for and bid on other positions in the facility. The letter also advised English that if she had not secured a suitable permanent position by the end of the 90 days she would be placed on layoff. English was removed from the payroll on July 30, 1984, and filed a complaint on August 24, 1984. She argued that the statute of limitations – which was only 30 days at that time – did not begin to run until she was laid off on July 30, 1984. The Court held that "final and unequivocal" notice of the adverse employment action occurred on May 15, 1984, stating:

The only uncertainty in the [May 15, 1984] notice related to a possibility of avoidance of the consequences of the decision by means unrelated to its revocation or reexamination by the employer. If English secured other suitable employment before the end of her temporary assignment, she would avoid the ultimate, and most harsh, effect of the May 15, 1984 decision. But the possibility that effect(s) of a challenged decision might be avoided by such means, does not render the decision equivocal for the purposes here at issue, at least where, as here, the effect can be avoided without negating the alleged discriminatory decision itself. Even had [the employer] "re-hired" English into a new suitable position, such an act would not have erased and made non-actionable the May 15, 1984, disciplinary action.

858 F.2d at 962.


[Page 4]

   Finally, there is no legal support for Complainant's contention that the 90-day statue of limitations in the Act does not start to run, or is tolled, until an employee has knowledge of the employer's unlawful motivation for its adverse employment action. As noted in the above-quoted Department of Labor discussion of 29 C.F.R. § 1908.103, the statute of limitations begins to run once the employee is aware or reasonably should be aware of the employer's decision.

   In light of the above, I find that complaint herein is barred by the statue of limitations in 18 U.S.C. § 1514A(b)(2)(D).

ORDER

   It is ORDERED that the complaint herein is dismissed. It is further ORDERED that the hearing scheduled for June 16, 2004 is cancelled.

       Robert D. Kaplan
      Administrative Law Judge

Cherry Hill, New Jersey

NOTICE OF APPEAL RIGHTS: This decision shall become the final order of the Secretary of Labor pursuant to 29 C.F.R. § 1980.110, unless a petition for review is timely filed with the Administrative Review Board ("Board"), US Department of Labor, Room S-4309, 200 Constitution Avenue, NW, Washington DC 20210, and within 30 days of the filing of the petition, the ARB issues an order notifying the parties that the case has been accepted for review. The petition for review must specifically identify the findings, conclusions or orders to which exception is taken. Any exception not specifically urged ordinarily shall be deemed to have been waived by the parties. To be effective, a petition must be filed within ten business days of the date of the decision of the administrative law judge. The date of the postmark, facsimile transmittal, or e-mail communication will be considered to be the date of filing; if the petition is filed in person, by hand-delivery or other means, the petition is considered filed upon receipt. The petition must be served on all parties and on the Chief Administrative Law Judge at the time it is filed with the Board. Copies of the petition for review and all briefs must be served on the Assistant Secretary, Occupational Safety and Health Administration, and on the Associate Solicitor, Division of Fair Labor Standards, U.S. Department of Labor, Washington, DC 20210. See 29 C.F.R. §§ 1980.109(c) and 1980.110(a) and (b), as found in OSHA, Procedures for the Handling of Discrimination Complaints Under Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act of 2002; Interim Rule, 68 Fed. Reg. 31860 (May 29, 2003).

[ENDNOTES]

1 The abbreviation "ALJ" denotes an exhibit so marked by the undersigned.



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