AFTER DISCOVERED EVIDENCE; EVIDENCE OF WRONGDOING BY COMPLAINANT MAY IMPACT ON REMEDY, BUT NOT ON QUESTION OF WRONGFUL RETALIATION
In Halloum v. Intel Corp., 2003-SOX-7 (ALJ Mar. 4, 2004), the Respondent discovered while preparing for hearing that the Complainant made a misrepresentation in relation to moving expenses. The ALJ found that such could not have been a reason for the adverse employment action as it was only discovered later. The ALJ wrote: "An employer's after-acquired evidence of wrongdoing that could have resulted in discharge does not bar an employee from prevailing in a retaliation case. McKennon v. Nashville Publishing Co., 513 U.S. 352, 358 (1995). The relocation misrepresentation would have limited the remedy had Complainant prevailed. Id.; see alsoO'Day v. McDonnell Douglas Helicopter Co., 79 F.3d 756, 760 (9th Cir. 1996)."
ADVERSE ACTION; MERE THREAT OF ADVERSE ACTION; PLAINTIFF'S PERCEPTION
In Bozeman v. Per-Se Technologies, Inc., 1:03-CV-3970 (N.D.Ga. Sept. 12, 2006), the Complainant had received his full entitlement to FMLA leave, and had been approved for return to his pre-leave position, but later decided not to return to work. His adverse action contention, therefore, hinged on an e-mail dating from the first day of the FMLA leave from one of the Defendant's officers instructing that the Plaintiff (as well as two other employees) be "riffed," and a claim that he was met with hostility at a meeting to discuss his return to work after the FMLA leave. Ultimately, the Plaintiff was not terminated. In finding a lack of adverse action, the court wrote:
[T]he mere threat of termination is not an adverse employment action. Van Der Meulen v. Brinker Int'l, 153 Fed.Appx. 649, 655 (11th Cir. 2005) (threat did not in fact cause any objective change in the plaintiff's employment where plaintiff worked for three weeks after the threatening statement); Pennington, 261 F.3d at 1267 (no adverse employment action where the employment decision is rescinded before the employee suffers a tangible harm); see also Israel v. Potter, 2004 WL 574668, at *4 (N.D. Ill. 2004) (No. 02-V-8006); Hitt v. Connell, 301 F.3d 240, 246 (5th Cir. 2002) ("neither the perception of a threat to one's job, nor fear of being fired, nor even the proposed notice of firing constitutes an actionable injury").
Slip op. at 170. The court found that the Plaintiff's constructive discharge claim failed as a matter of law because he had failed to allege an adverse employment action.
ADMINISTRATIVE LAW JUDGE DECISIONS
ADVERSE EMPLOYMENT ACTION; COMPLAINANT'S SUBJECTIVE BELIEF THAT HE WAS FIRED VERSUS OBJECTIVE VIEW OF SITUATION
In Harvey v. Safeway, Inc., 2004-SOX-21 (ALJ Feb. 11, 2005), the ALJ found that although the Complainant may have had a understandable subjective belief that he had been fired when he received a phone message indicating that he should not come into work because he was not on the schedule, this interpretation of the phone message was not objectively reasonable. The record showed that the Complainant was anticipating being fired; however, the objective facts showed otherwise. Among other factors, the message only passed on information that the Complainant was not on the schedule. The Complainant remained on the schedule for several shifts for another two weeks after the phone message. Although his manager may have been unhappy with him, the Complainant had received assurances from the Respondent's corporate counsel that he would not be terminated for raising his concerns.
EVIDENCE OF PRIOR ACTS, ALTHOUGH NOT ACTIONABLE IF BEYOND LIMITATIONS PERIOD, ARE RELEVANT TO ISSUES OF CONTINUING RETALIATORY AND HOSTILE WORK ENVIRONMENT
In McClendon v. Hewlett Packard, Inc., 2006-SOX-29 (ALJ Oct. 5, 2006), the Respondent moved to exclude evidence of any of the protected activities alleged in Complainant's earlier SOX complaint, which had been dismissed by both OSHA and the district court. Respondent argued that evidence of such activities, including allegations of co-employment, the falsification of financial records, and Respondent's alleged direction to destroy documents, were not causally related to the alleged adverse actions of Complainant's second complaint, taking place one year later, because there was no temporal proximity. In addition, Respondent argued that the listed protected activities were alleged in Complainant's prior complaint, which had been dismissed. Therefore, according to Respondent, it would be prejudicial to allow Complainant to introduce that evidence into his second SOX complaint. Complainant argued that the protected activities alleged in its first complaint were admissible because they belonged to a series of retaliatory events that included the events listed in Complainant's second complaint. The ALJ accepted Complainant's view of National Railroad v. Morgan, 536 U.S. 101, 113 (2002), in allowing Complainant to introduce evidence from its earlier (and dismissed) complaint as background evidence and as evidence of the alleged continuing retaliatory and hostile work environment. McClendon, slip op. at 4-5.
ADVERSE EMPLOYMENT ACTION; ALLEGED HARASSMENT OF FORMER EMPLOYEE MUST HAVE IMPACTED ON THE TERMS OR CONDITIONS OF EMPLOYMENT WITH RESPONDENT OR HAVE BEEN BLACKLISTING AFFECTING TERMS OR CONDITIONS WITH SUBSEQUENT EMPLOYER TO BE ACTIONABLE
In Harvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant had been fired. He subsequently filed grievances with a state bar association against a Home Depot attorney. In a response to the state bar, that attorney asserted that the Complainant's grievances were part of a campaign by the Complainant to harass Home Depot and its employees. The Complainant then filed a SOX whistleblower complaint with OSHA alleging that the attorney's response was in violation of the SOX. The ALJ dismissed the complaint because (1) the Complainant was not an employee of Home Depot at the time it allegedly harassed him, and the alleged harassment was not an adverse employment action that impacted on the terms and conditions of his employment with Home Depot, and (2) the Complainant had not presented any evidence of blacklisting resulting from the alleged harassment that adversely affected the terms or conditions of the Complainant's subsequent employment. The ALJ therefore concluded that the required element of a SOX complaint of an unfavorable personnel action was not met, and thus the complaint failed to state a cause of action under SOX. The ARB agreed with the ALJ's determination, and affirmed the dismissal of the complaint.
ADMINISTRATIVE LAW JUDGE DECISIONS
EMPLOYEE; ADVERSE ACTION; FILING OF ANTI-SLAPP SUIT
In Pittman v. Siemens AG, 2007-SOX-15 (ALJ July 26, 2007), the Complainant alleged that the Respondents engaged in adverse action when they filed an anti-SLAPP claim against the Complainant relating to a defamation suit in state court. The Complainant alleged that this suit was in retaliation for his filing of the SOX claim with OSHA. The ALJ, however, found that the Complainant had not been an employee of the Respondent for more than one and a half years prior to the filing of the anti-SLAPP motion. Since he was not an employee at time, and the anti-SLAPP suit was not blacklisting or interference with employment, the ALJ found that it was not adverse action under the whistleblower provision of the SOX.
EMPLOYEE; ADVERSE ACTION; SLANDEROUS RUMORS AGAINST FORMER EMPLOYEE
In Pittman v. Siemens AG, 2007-SOX-15 (ALJ July 26, 2007), the Complainant contended that a former co-worker had informed him that officers of the Respondent were spreading slanderous rumors about him. The ALJ noted that, except for blacklisting or interference with subsequent employment, the SOX only protects an employee from retaliation for his protected activity while the complainant is an employee of the respondent. Since the alleged slanders occured two years after the Complainant's employment with the Respondent had been terminated, he was not an employee at the time of the alleged adverse action and the claim was not covered under SOX.
ADVERSE EMPLOYMENT ACTION; FORMER EMPLOYEE
In Harvey v., The Home Depot, Inc., 2004-SOX-36 (ALJ May 28, 2004), the ALJ found that the Complainant had failed to state a claim upon which relief may be granted where the complaint alleged that the Respondent violated the whistleblower provision of the SOX because the Respondent had stated that the Complainant was harassing the Respondent's Board of Directors and Executives. Specifically, the Complainant had filed a professional responsibility complaint against the Respondent's attorney, and that attorney's representative had filed a response to the state committee stating that the Complainant's grievances were "part of an on-going campaign by Mr. Harvey to harass Home Dept and its employees." The Complainant was no longer employed by the Respondent when this statement was made.
The ALJ found that "with the exception of blacklisting or other active interference with subsequent employment, the SOX employee protection provisions essentially shelter an employee from employment discrimination in retaliation for his or her protected activities, while the complainant is an employee of the respondent." Slip op. at 4-5 (footnote omitted). Thus, the harassment comment was not an adverse personnel or employment action. Nor was there any evidence to support a finding that the harassment comment adversely affected the terms or conditions of any subsequent employment by the Complainant.
Reasonable Employee/Materially Adverse Standard (Burlington Northern)
"UNFAVORABLE PERSONNEL ACTION" IS GOVERNED BY BURLINGTON NORTHERN DEFINITION
In Allen v. Administrative Review Bd., USDOL, No. 06-60849, ___ F.3d ___, 2008 WL 171588 (5th Cir. Jan. 22, 2008) (case below ARB No. ARB No. 06-081, ALJ Nos. 2004-SOX-60 to 62), the Fifth Circuit Court of Appeals
held that the Burlington Northern & Santa Fe Railway Co. v. White, 126 S. Ct. 2405 (2006), definition of "unfavorable personnel action" applies to SOX whistleblower claims -- i.e., a plaintiff must show that a reasonable employee would have found the challenged action materially adverse, which in this context means it well might have dissuaded a reasonable worker from engaging in the protected activity.
"ADVERSE EMPLOYMENT ACTION" IS GOVERNED BY BURLINGTON NORTHERN DEFINITION
In Miles v. Wal-Mart Stores, Inc., No. 5:06-CV-05162, slip op. at n.4 and surrounding text (W.D.Ark. Jan. 25, 2008),
the court agreed with the ARB's conclusion that the Burlington Northern & Santa Fe Railway Co. v. White, 126 S. Ct. 2405 (2006), standard for demonstrating an adverse employment action
is appropriate in the adjudication of SOX whistleblower complaints, even though the standard was announced in connection with retaliation claims under Title VII. Specifically,
"[i]n order to show an adverse employment action, Plaintiff must demonstrate 'employer actions that would have been materially adverse to a reasonable employee . . .' and 'harmful to the point that they could well dissuade a reasonable worker from making or
supporting a charge of discrimination.'" Slip op. at 8.
ADMINISTRATIVE REVIEW BOARD DECISIONS
[ Editor's Note: Hirst is an AIR21 whistleblower case; however, since AIR21 burdens of proof and production apply to SOX
whistleblower cases, the ARB's adoption of Burlington Northern may be applicable to SOX cases. ]
ADVERSE ACTION; ADOPTION OF BURLINGTON NORTHERN "MATERIALLY ADVERSE" STANDARD; EMPLOYER'S IMMEDIATE RESCINDING OF DISCHARGE
In Hirst v. Southeast Airlines, Inc., ARB Nos. 04-116, 04-160, ALJ No. 2003-AIR-47 (ARB Jan. 31, 2007),
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the ARB found that it was bound to accept the ALJ's finding that the Complainant had been discharged because it was supported by substantial evidence.
Applying a recent Supreme Court Title VII decision to to STAA whistleblower provision, however,
the ARB held that the Complainant had not established that he suffered adverse employment action. See
Burlington Northern & Santa Fe Ry. Co. v. White, --- U.S. ----, 126 S. Ct. 2405 (June 22, 2006). The ARB cited
the Supreme Court's ruling that a Title VII plaintiff must show that a reasonable employee or job applicant would find
the employer's action "materially adverse," i.e., "the employer's actions must be harmful to the point that they could well
dissuade a reasonable worker from making or supporting a charge of discrimination." USDOL/OALJ Reporter at 10-11, quoting
126 S. Ct. at 2409.
In Hirst, the ARB found that a reasonable employee would have concluded that though the Respondent's
Director of Operations acted hastily and retaliated against the Complainant for refusing to pilot a flight,
the Respondent's officials, including the Director of Operations:
quickly recognized this mistake, promptly corrected
it, immediately informed Hirst that he was still employed, confirmed that fact in writing,
and made sure that Hirst suffered no economic loss. A reasonable worker would see that
SEAL [Southeast Airlines] corrected its mistake within two days and that Hirst, at most,
suffered only temporary unhappiness. In the wake of Malone's decision to discharge Hirst,
SEAL's actions certainly sent a message that management will respect and protect employees
who are concerned with safety. That, of course, is the right message. Therefore, based solely
on these particular facts, we find that a reasonable SEAL employee would not be afraid to make
management aware of safety concerns, or, in White terminology, would not be "dissuaded"
from engaging in protected activity.
USDOL/OALJ Reporter at 12.
ADMINISTRATIVE LAW JUDGE DECISIONS
ADVERSE ACTION; APPLICATION OF BURLINGTON NORTHERN; TRANSFERS
In McClendon v. Hewlett Packard, Inc., 2006-SOX-29 (ALJ Oct. 5, 2006), the ALJ relied on the U.S. Supreme Court's ruling in a Title VII retaliation action that, to prove an adverse action, a plaintiff "must show that a reasonable employee would have found the challenged action materially adverse, ‘which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.'" McClendon, slip op. at 76, citing to Burlington Northern & Santa Fe Railway Co. v. White, No. 05-259, 2006 WL 1698953 (U.S. 2006).
The ALJ ruled that Complainant's transfer to a different section and a change in his reporting structure was not an adverse action. Complainant was one of thirty people transferred to a new section as a result of a corporate restructuring. See McClendon, slip op. at 76. Based on past history, Complainant explained to management that he was reluctant to be supervised by the head of his newly assigned section. McClendon, slip op. at 76-77. He was assured that he would be reporting to a different project manager. Id. at 77. Complainant argued that this new arrangement was an adverse action since he was now reporting to a lower-level project manager and because he was excluded from section meetings and the section email list. Id. at 77. The ALJ ruled that because Complainant's transfer did not change his pay or interfere with his ability to work, and because Complainant was alerted of any news or events by his project manager, "a reasonable employee would not be dissuaded from whistleblowing based on the transfer and change in reporting structure." Id. at 77-78.
In contrast, the ALJ ruled that Complainant's transfer to an entirely new position was an adverse act. McClendon, slip op. at 80. The ALJ noted that Complainant had previously discussed with management a transfer to another department, however it was in the context of doing the same type of work he had already been enjoying and succeeding in. Id. at 79-80. Complainant had only one day to decide whether to accept the new position and faced placement on the lay-off list if he declined. Id. at 80. In addition, Complainant's workload decreased significantly, and the scope of Complainant's new position "varied unfavorably from the scope of the position when past employees filed it." Id. at 80. Thus, the ALJ ruled that the transfer of Complainant to the new position would dissuade a reasonable employee from engaging in protected activity, and it therefore constituted an adverse act under SOX. Id. at 79-80.
ADVERSE EMPLOYMENT ACTION; ACTION IS ADVERSE UNDER "WHISTLEBLOWER" LAWS IF THE ACTION IS LIKELY TO DETER PROTECTED DISCLOSURES
In his recommended decision in Halloum v. Intel Corp., 2003-SOX-7 (ALJ Mar. 4, 2004),the ALJ concluded that
An employment action is unfavorable if it is reasonably likely to deter employees from making protected disclosures. A complainant need not prove termination or suspension from the job, or a reduction in salary or responsibilities. Ray v. Henderson, 217 F.3d 1234, 1243 (9th Cir. 2000).18/ See also Daniel v. TIMCO Aviation Servs., Inc, 2002-AIR-26 (ALJ June 11, 2003)
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18/Title VII case law has traditionally guided the adjudication of whistle blower cases, including the determination of whether an employer discriminated against a protected employee. See Daniel v. TIMCO Aviation Servs., Inc, 2002-AIR-26 (ALJ June 11, 2003). Whistle blower statutes are meant to encourage workers to disclose illegal and questionable activities, so their tests for unfavorable employment action encompass more than the adverse economic actions Title VII plaintiffs must prove; any action that would reasonably discourage a worker from making disclosures qualifies here. Daniel, slip op. at 15.
In Halloum, the ALJ found that a Corrective Action Plan (CAP) imposed prior to the Complainant's protected activity was not unfavorable employment action under the SOX regulations, and that requiring him to meet the CAP goals later was also not unfavorable employment action. However, the ALJ also found that a later modification to the CAP that set up the Complainant for failure by assigning him unattainable tasks was an unfavorable employment action.
[Editor's note: CompareWhite v. Burlington Northern & Santa Fe Railway Co., 2004 Fed. App. 0101P (6th Cir. Apr. 14, 2004) (rejecting EEOC interpretation that "adverse employment action" in the context of a Title VII retaliation claim means "any adverse treatment that is based on a retaliatory motive and is reasonably likely to deter a charging party or others from engaging in protected activity.")]
ADVERSE ACTION; "TANGIBLE JOB CONSEQUENCES" AND "DETRIMENTAL EFFECT" TESTS
In Allen v. Stewart Enterprises, Inc., ARB No. 06-081, ALJ Nos. 2004-SOX-60 to 62 (ARB July 27, 2006), the ARB observed that the ALJ applied both a "tangible job consequences" and a "detrimental effect" test in determining whether the Respondent engaged in adverse employment action against the Complainants. The Board explained that:
A "tangible job consequence" is one that "constitutes a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing significant change in benefits." Under the "detrimental effect" test, an employment action is adverse if it is reasonably likely to deter employees from making protected disclosures.
Slip op. at 14. The ARB affirmed the ALJ's finding that the Respondent's use of monthly "contract error reports" was not adverse action where there were no tangible job consequences for the Complainants for charged errors, and the reports would not have deterred others from engaging in protected activity. The ARB also affirmed the ALJ's finding that a workspace relocation was not adverse action where the new conditions did not affect the Complainants' ability to perform their work and did not significantly change their employment status, and where the Complainants presented no evidence that the new locations would deter other employees from making protected disclosures.
In regard to the Complainants allegations of a hostile work environment based on "stonewalling" and "friction," the ARB observed that the evidence did not show that such circumstances were pervasive, humiliating or interfered with the Complainants' work performance. The Board wrote: "These ordinary tribulations of the workplace do not rise to the level of adverse actions because they do not result in tangible job consequences or deter employees from engaging in protected activity." Slip op. at 16.
ADMINISTRATIVE LAW JUDGE DECISIONS
ADVERSE EMPLOYMENT ACTION; TANGIBLE JOB CONSEQUENCE ANALYSIS VIS-A-VIS TITLE VII INTERPRETATIVE LAW IN CIRCUIT IN WHICH CASE AROSE; UNDER AN EXPANSIVE DEFINITION, PLACEMENT ON A LAY-OFF LIST IS ADVERSE ACTION, BUT NON-SEVERE AND NON-PERVASIVE ACTIONS ARE NOT
In Hendrix v. American Airlines, Inc., 2004-AIR-10, 2004-SOX-23 (ALJ Dec. 9, 2003), the ALJ thoroughly analyzed discordant administrative decisions relative to the meaning of "adverse action" under various whistleblower laws, and specifically the concept of tangible job consequence. She concluded that, although Title VII decisions are not binding precedent for purposes of a whistleblower claim, they provide helpful guidance. The ALJ also concluded that she should look to the law of circuit in which the claim arises. Because the instant case alleging violations of both the AIR21 and SOX whistleblower laws arose in the Tenth Circuit, she applied the expansive definition of adverse action found in Hillig v. Rumsfeld, 381 F.3d 1028 (10th Cir. 2004), in which the court held that the fact that unlawful personnel action turned out to be inconsequential goes to damages, not liability, although the standard does not encompass mere inconvenience or alteration of job responsibilities. In a footnote, the ALJ observed that the Sarbanes Oxley Act contains language, unlike other whistleblower laws, explicitly prohibiting threats and harassment -- acts which are not necessarily tangible and not ultimate employment actions.
Applying this standard, the ALJ found that the Complainant's placement on a lay-off list constitutes an adverse action, even though the Complainant suffered no tangible consequence as his name was removed before the lay-offs took effect. [Later in the decision, however, the ALJ found that there was no connection between protected activity and the placement on the lay-off list].
The Complainant also raised a hostile work environment claim. The ALJ initially parsed out which portions of the claim were timely raised. She found that claims of verbal abuse, assignment to a second shift, and denial of access to computer resources were timely raised. The ALJ, however, found these actions were not so severe and pervasive that they altered the terms of the Complainant's employment -- they were the kinds of inconvenience an employee should expect to endure in the normal workplace.
ADVERSE ACTION; BLACKLISTING; MERE EVIDENCE THAT COMPLAINANT WAS NOT HIRED INSUFFICIENT TO ESTABLISH CAUSE OF ACTION
In McIntyre v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 2003-SOX-23 (ALJ Jan. 16, 2004), the ALJ found that the continuing violation theory could not be invoked to establish a whistleblower complaint based on a blacklisting theory, where the Complainant's only evidence was that he had applied for work with several entities and not hired. In McIntyre, the Complainant's discharge had occurred prior to the effective date of the SOX whistleblower provision, and he was asserting the blacklisting claim in order to establish a claim that would not be barred as an impermissible retroactive application of the Sarbanes-Oxley Act. The ALJ observed that the Complainant, a stock broker, had introduced no evidence to tie any of the applications or subsequent refusals to hire with any protected activity or Complainant's U-5. A U-5 is a National Association of Securities Dealers' "Uniform Termination Notice." Complainant alleged that the U-5 listed false reasons for his discharge.
CONSTRUCTIVE DISCHARGE IN TITLE VII CASES; PLAINTIFF'S BURDEN OF PROOF; AVAILABILITY OF THE ELLERTH/FARAGHER AFFIRMATIVE DEFENSE
In Pennsylvania State Police v. Suders, __ U.S. __, No. 03-95 (June 14, 2004), the U.S. Supreme Court rejected a Third Circuit decision under Title VII that a constructive discharge, if proven, constitutes a tangible employment action that renders an employer strictly liable and precludes recourse to the Ellerth/Faragher affirmative defense. Justice Ginsburg wrote:
Plaintiff-respondent Nancy Drew Suders alleged sexually harassing conduct by her supervisors, officers of the Pennsylvania State Police (PSP), of such severity she was forced to resign. The question presented concerns the proof burdens parties bear when a sexual harassment/constructive discharge claim of that character is asserted under Title VII of the Civil Rights Act of 1964.
To establish hostile work environment, plaintiffs like Suders must show harassing behavior "sufficiently severe or pervasive to alter the conditions of [their] employment." Meritor Savings Bank, FSB v. Vinson, 477 U. S. 57, 67 (1986) (internal quotation marks omitted); see Harris v. Forklift Systems, Inc., 510 U. S. 17, 22 (1993) ("[T]he very fact that the discriminatory conduct was so severe or pervasive that it created a work environment abusive to employees because of their . . . gender . . . offends Title VII's broad rule of workplace equality."). Beyond that, we hold, to establish "constructive discharge," the plaintiff must make a further showing: She must show that the abusive working environment became so intolerable that her resignation qualified as a fitting response. An employer may defend against such a claim by showing both (1) that it had installed a readily accessible and effective policy for reporting and resolving complaints of sexual harassment, and (2) that the plaintiff unreasonably failed to avail herself of that employer-provided preventive or remedial apparatus. This affirmative defense will not be available to the employer, however, if the plaintiff quits in reasonable response to an employer-sanctioned adverse action officially changing her employment status or situation, for example, a humiliating demotion, extreme cut in pay, or transfer to a position in which she would face unbearable working conditions. In so ruling today, we follow the path marked by our 1998 decisions in Burlington Industries, Inc. v. Ellerth, 524 U. S. 742, and Faragher v. Boca Raton, 524 U.S. 775.
See alsoWilliams v. Administrative Review Board, USDOL,
__ F.3d __, No. 03-60028 (5th Cir. July 15, 2004), 5th Cir. decision on applicability of Ellerth/Faragher
hostile work environment analysis to ERA whistleblower complaints
ADMINISTRATIVE REVIEW BOARD DECISIONS
ADVERSE ACTION; FAILURE OF COMPLAINANT TO MAKE A PROFFER SUFFICIENT TO SURVIVE SUMMARY DECISION SHOWING WHY A PRESS RELEASE WAS ADVERSE
CONSTRUCTIVE DISCHARGE CLAIM NOT VIABLE WHERE COMPLAINANT HAD ALREADY ACCEPTED ANOTHER JOB PRIOR TO THE ALLEDGEDLY ADVERSE ACTION
In Gattegno v. Prospect Energy Corp., ARB No. 06-118, ALJ No. 2006-SOX-8 (ARB May 29, 2008), the former CFO wrote to the company and made general allegations of improprieties. The Complainant was appointed to serve as acting CFO and as the Chief Compliance Officer (CCO). The Complainant made a complaint about the manner in which the former CFO's allegations were being investigated. During an investigation of the Complainant's complaint, it was discovered that the Complainant had engaged in behavior inconsistent with her role as CCO, and -- based also on false statements and poor performance -- the decision was made to place the Complainant on administrative leave as acting CFO and CCO. The Complainant stated in deposition that she did not consider this action to be retaliatory – nor did she believe that she suffered any adverse consequence as a result. The Complainant was also informed that no evidence had supported her allegations of improprieties. The company then filed a Form 8-K Report with the SEC providing notice that a candidate for a new CFO had been identified and that the current CFO and CCO had been placed on administrative leave. A few weeks later the company filed another Form 8-K with a press release attached, announcing the appointment of a new CFO and a new CCO. The press release stated, inter alia, that investigation of the former CCO's (i.e., the Complainant's) allegations had not produced evidence of fraud or material deficiencies in the company's public disclosure practices. In deposition testimony, the Complainant indicated her belief that a diligent person or subsequent employer would be able to identify her as the complaining CCO; however, she did not consider the filing to be retaliatory or to have had adversely affected her.
In its next quarterly report, the company included as an exhibit a press release concerning the investigations. This time the Complainant's name was disclosed, as was the fact that the investigation had also looked into her performance. The Complainant subsequently filed her SOX whistleblower complaint with OSHA. OSHA found no reasonable cause for a finding of a violation and the matter went before an ALJ. The ALJ granted summary decision in favor of the Respondents, essentially on the ground that the Complainant had admitted that the first two filings were not retaliatory, and that she had failed to show that there was a material issue of fact regarding whether the final press release constituted an adverse employment action, having made no proffer of why the addition of her name as opposed to just her title, and the mention of review of her performance resulted in an adverse effect on her job prospect. The ALJ also rejected the Complainant's contention that the final press release was a constructive discharge because the Complainant had already accepted a new job before that release had been issued. Thus, the Complainant could not be discharged from a job from which she had already constructively resigned.
The ARB affirmed the ALJ on appeal, finding that although the Complainant had established that there were material differences between the earlier releases and the final press release, she had not established that those differences caused the final release to be adverse. The ARB observed that the ALJ had given the Complainant lengthy and precise instructions on what she needed to proffer in order to survive the Respondents' summary decision motion, but that the one witness she finally identified did not address the crucial issue. The ARB rejected the Complainant's argument that maligning a former employee is an adverse action on the ground that the press release had not maligned her (it merely reported information that had already been disclosed and did not comment on whether her performance had been found to be good or bad). The ARB also affirmed the ALJ's finding that there had been no constructive discharge, and found that the allegation – raised for the first time in the appellate brief – that the final press release was an actual discharge, was raised too late, and in any event would fail on the same grounds as the constructive discharge theory (i.e., that the Complainant had already constructively resigned by accepting other employment).
ADMINISTRATIVE LAW JUDGE DECISIONS
ADVERSE ACTION; CONSTRUCTIVE DISCHARGE
In Reines v. Venture Bank and Venture Financial Group, 2005-SOX-112 (ALJ Mar. 13, 2007), the Complainant alleged that adverse action was taken against her because, inter alia, she was constructively discharged due to a hostile work environment. Reines, slip op. at 49-56. The ALJ held that Complainant did not prove she was constructively discharged or the existence of a hostile work environment. Reines, slip op. at 56. The ALJ noted that although the removal of Complainant's IT duties was an adverse action, "Complainant did not remain with Respondent long enough to clarify the nature of the restriction imposed by [her supervisor] or to determine what effects it would have on her ability to perform her job." Id. at 56. He held that Complainant could have reasonably resolved the issue without having resigned. Id. Applying the standard set forth in Pennsylvania State Police v. Suders, 124 S.Ct. 2342 (2004), the ALJ held that Complainant did not establish that her "working conditions were rendered so difficult, unpleasant, and unattractive that a reasonable person would have felt compelled to resign, such that the resignation is effectively involuntary." Id. Furthermore, the ALJ concluded that Complainant did not show that the conduct she complained of was "serious and pervasive" enough to evoke a hostile work environment. Id.
CONSTRUTIVE DISCHARGE; SUPERVISOR'S CRITICISM OF E-MAIL COMMUNICATION STYLE AND STATEMENT THAT COMPLAINANT'S EMPLOYMENT STATUS WOULD BE CONSIDERED OVER THE WEEKEND; SUBJECTIVE STRESS VERSUS OBJECTIVE VIEW OF SITUATION
In Hughart v. Raymond James & Associates, Inc., 2004-SOX-9 (ALJ Dec. 17, 2004), the Complainant had determined that certain shares of limited partnerships were being improperly traded over-the-counter, and - to alert his supervisors - sent an e-mail outlining his concerns. The e-mail was titled "fraud alert." In a meeting, the Complainant's supervisor expressed her disagreement with the Complainant's determination but reserved judgment because of her observation that neither she nor the Complainant were experts in the subject; the Complainant adamantly disagreed. The supervisor then criticized the Complainant's use of the term "fraud alert," stating that it was inappropriate, that it was an example of his tendency to overstate and mis-communicate, and that she could not continue to permit him to communicate in such manner. She stated that she had to consider his employment status over the weekend and threatened to terminate him if he continued to mis-communicate. The Complainant did not understand the criticism and felt abandoned by his supervisor, misunderstood and the verge of being fired.
The ALJ found that the Complainant's responses and feeling at this end of this meeting were understandable, but that the meeting had not objectively created a work environment so completely hostile that he had no choice but to resign. The ALJ noted that rather than resign, the Complainant could have accepted the feedback and committed to changing his e-mail communication style. The ALJ also noted that the supervisor was apparently conflicted. The Complainant was recognized as a valuable employee, but had in her view significant problems with his communication style. When the Complainant returned to offer his resignation, the supervisor did not simply accept it but stated that she was not firing him and that he needed to think about what he was doing.
The ALJ recognized that the supervisor's statements may be considered a threat of termination, but observed that there was no evidence of a pattern of such threats or other abuse by the supervisor such that the Complainant was compelled to resign. The ALJ acknowledged that the Complainant's perception of stress may have been subjectively accurate, but viewed objectively, the supervisor's criticism did not rise to the level of abuse that justified resignation.
ADVERSE EMPLOYMENT ACTION; LOSS OF JOB RESPONSIBILITIES
In Willis v. Vie Financial Group, Inc., No. Civ.A. 04-0435 (E.D. Pa. Aug. 6, 2004) (available at 2004 WL 1774575), the defendant argued that a claim based on loss of job responsibilities should be dismissed because it is not one of the enumerated acts that constitute a violation of the SOX whistleblower provision. The court, however, held that the complaint sufficiently alleged a change in employment conditions within the meaning of the Act, citing Glanzman v. Metro. Mgmt. Corp., 290 F.Supp.2d 571, 582 (E.D. Pa. 2003) (recognizing that significantly diminished material responsibilities can constitute a materially adverse change in working conditions).
ADMINISTRATIVE LAW JUDGE DECISIONS
ADVERSE ACTION; DIMINUTION IN AUTHORITY AND RESPONSIBILITY
In Reines v. Venture Bank and Venture Financial Group, 2005-SOX-112 (ALJ Mar. 13, 2007), the Complainant alleged that adverse action was taken against her because, inter alia, she was removed from her IT responsibilities. Reines, slip op. at 49-56. The ALJ held that Respondent acted adversely under SOX by removing Complainant's sole authority over IT duties. Reines, slip op. at 55. The ALJ noted that whether Complainant's IT duties were "peripheral" rather than central to her role as CFO, as Respondent asserted, was immaterial. Id. at 54. The ALJ concluded that "the restriction imposed by [Complainant's supervisor], which represents a diminution in Complainant's authority and responsibility, is the type of action which is "reasonably likely to deter employees from engaging in protected activity." Id. at 55. Here, as in McClendon, the ALJ used the standard set by the Supreme Court in Burlington Northern: whether a reasonable employee would be dissuaded from whistleblowing based on the alleged adverse action. See id. at 55.
ADVERSE EMPLOYMENT ACTION; REMOVAL OF COMPLAINANT'S STATUS AS OFFICER OF THE COMPANY
In Bechtel v. Competitive Technologies, Inc., 2005-SOX-33 (ALJ Oct. 5, 2005), the ALJ, citing caselaw to the effect that an employment action must produce some tangible job consequence to be considered an "adverse action" within the context of the SOX, found that the Respondent had not engaged in adverse action when it removed the Complainant's status as an officer of the company. The Complainant had not even known that he was considered an officer until he asked to be relieved of the obligation to sign SOX disclosure statements. Further, there was no evidence that the change in status in any way deprived the Complainant of the ability to fully represent the company or hampered him in performance of his job duties. There was also no evidence that the Complainant lost salary or other privileges, or was otherwise adversely impacted in his employment.
ADVERSE ACTION; FAILURE TO PROMOTE; ABSENCE OF EVIDENCE THAT COMPLAINANT ACTUALLY APPLIED FOR POSITION
In Hughart v. Raymond James & Associates, Inc., 2004-SOX-9 (ALJ Dec. 17, 2004), the ALJ found that the Complainant did not establish an adverse action based on failure to promote where the Complainant did not present sufficient evidence to establish that he actually applied for a position for which he met the requisite qualifications.
HOSTILE WORK ENVIRONMENT; ORDINARY TRIBULATIONS OF THE WORKPLACE
In Allen v. Stewart Enterprises, Inc., ARB No. 06-081, ALJ Nos. 2004-SOX-60 to 62 (ARB July 27, 2006), the ARB observed that the ALJ applied both a "tangible job consequences" and a "detrimental effect" test in determining whether the Respondent engaged in adverse employment action against the Complainants. The Board explained that:
A "tangible job consequence" is one that "constitutes a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing significant change in benefits." Under the "detrimental effect" test, an employment action is adverse if it is reasonably likely to deter employees from making protected disclosures.
Slip op. at 14. The ARB affirmed the ALJ's finding that the Respondent's use of monthly "contract error reports" was not adverse action where there were no tangible job consequences for the Complainants for charged errors, and the reports would not have deterred others from engaging in protected activity. The ARB also affirmed the ALJ's finding that a workspace relocation was not adverse action where the new conditions did not affect the Complainants' ability to perform their work and did not significantly change their employment status, and where the Complainants presented no evidence that the new locations would deter other employees from making protected disclosures.
In regard to the Complainants allegations of a hostile work environment based on "stonewalling" and "friction," the ARB observed that the evidence did not show that such circumstances were pervasive, humiliating or interfered with the Complainants' work performance. The Board wrote: "These ordinary tribulations of the workplace do not rise to the level of adverse actions because they do not result in tangible job consequences or deter employees from engaging in protected activity." Slip op. at 16.
ADMINISTRATIVE LAW JUDGE DECISIONS
HOSTILE WORK ENVIRONMENT; ROUTINE WORKPLACE IRRITATIONS AND INCONVENIENCES
In Grove v. EMC Corp., 2006-SOX-99 (ALJ July 2, 20007), the ALJ found that the Complainant failed to establish the existence of a hostile work environment where, after being reinstated, the Complainant had problems with his company e-mail and Virtual Private Network. The Complainant did not report the problems to IT personnel because he "was not interested in tracking down technical support to figure out something that was terminated purposely by my management." Slip op. at 20 (quoting transcript). Neither did the Complainant inquire with his managers about the problems. The ALJ found that a reasonable person would have contacted technical support before assuming that the problems related to a sinister conspiracy. The ALJ found that the remainder of the acts related to routine workplace irritations and inconveniences typically experienced by new employees, without altering working conditions or detrimentally affecting a reasonable person (delay in getting a laptop and business cards; loss or mishandling of personnel documents).
ADVERSE ACTION; HOSTILE WORK ENVIRONMENT; DISTINCT EVENTS; DIFFERENT TREATMENT BY CO-WORKERS, STANDING ALONE, INSUFFICIENT TO ESTABLISH
In McClendon v. Hewlett Packard, Inc., 2006-SOX-29 (ALJ Oct. 5, 2006), the ALJ found that the Complainant failed to establish the existence of a hostile work environment. McClendon, slip op. at 80. The ALJ reiterated the standard set forth by the U.S. Supreme Court in Harris v. Forklift Sys., stating that to establish a hostile work environment, the conduct must be "‘sufficiently severe or pervasive to alter the conditions of . . . employment and create an abusive working environment.'" Id. at 80, citing to Harris, 510 U.S. 17, 21 (1993). The ALJ noted the difference "between a hostile work environment, which ‘involves repeated conduct' and discrete discriminatory acts, which ‘are easy to identify . . . [and] constitute a separate actionable ‘unlawful employment practice.'" Id. at 81, citing to Nat'l Railroad Passenger Corp. v. Morgan, 536 U.S. 101, 114-115 (2002). The ALJ observed that while Complainant referred to a hostile work environment, he never specifically alleged a hostile work environment claim. McClendon, slip op. at 80. Therefore, the ALJ considered the discriminatory acts alleged by Complainant in both of his SOX complaints. See id. at 81.
In regards to Complainant's first SOX claim, the ALJ ruled that the alleged events, including Complainant's receipt of a performance warning, a demotion from his position, and a pay decrease, did not involve repeated conduct and were easy to identify as separate acts. McClendon, slip op. at 81. Therefore, he ruled that these events were only admissible as background evidence and were not actionable as part of a hostile work environment claim. Id. at 81. Likewise, the ALJ held that the alleged events in Complainant's second SOX claim, including Complainant's transfer to a new section and changes in his reporting structure and position, were each "distinct and in response to changes within the work environment." Id. at 82. The ALJ noted that even though Complainant testified to receiving less favorable treatment from his co-workers following the filing of his SOX claims, "different treatment is not sufficiently severe to constitute a hostile work environment." Id. at 82.
HOSTILE WORK ENVIRONMENT; CRITIQUE OF MANNER OF COMMUNICATIONS AND TRANSFER OF ISSUES TO OTHER DEPARTMENTS FOR RESOLUTION
In Hughart v. Raymond James & Associates, Inc., 2004-SOX-9 (ALJ Dec. 17, 2004), the ALJ found that severe critique of the manner in which the Complainant handled inter-departmental communications, and the managerial decision to transfer an issue raised by the Complainant to another department, did not rise to the level of a hostile work environment. The ALJ found that although the Complainant was offended by the transfer, the decision to do so did not appear to be abusive because the Complainant's position was specifically to discover and research pending problems; once the source of a problem was found, the supervisors had discretion to transfer the matter to a department better suited, in their opinions, to resolve the issue. The Complainant had consistently received positive performance appraisals; the appraisals acknowledged the Complainant's value to the company, but also identified a tendency to be overzealous. The ALJ found that the supervisors were appropriately reacting to the situations created by the Complainant's methods and procedures.
ADVERSE ACTION; VERBAL ABUSE
In Reines v. Venture Bank and Venture Financial Group, 2005-SOX-112 (ALJ Mar. 13, 2007), the Complainant alleged that adverse action was taken against her because, inter alia, her authority was questioned by her supervisor during weekly management meetings, and she was "verbally abused" by her supervisor at a meeting in front of peers. Reines, slip op. at 49-56. The ALJ found that the Complainant's assertions that she was belittled, humiliated and questioned by her supervisor in weekly management meetings were not corroborated by any witnesses or supported by other evidence in the record. Id. at 49. Thus, the ALJ held that Complainant was not mistreated by her supervisor after she raised concerns about his proposed stock trade. Id. at 51. In addition, the Court ruled that even if the alleged adverse actions were established, they were not distinguishable from the supervisor's usual manner of "micro-management" which had been the cause of complaints from many employees during the course of Complainant's employment. Id. at 51. In regards to Complainant's allegation that she was verbally abused by her supervisor during a staff meeting, the ALJ found Complainant's testimony of the account to be inconsistent with the accounts of several other witnesses. Reines, slip op. at 53. The ALJ held that this, combined with the lack of other support in the record, failed to establish an adverse action under SOX. Id.
In Allen v. Stewart Enterprises, Inc., 2004-SOX-60, 61 and 62 (ALJ Feb. 15, 2005), the ALJ found that neither a higher error rate nor workspace reallocations had sufficiently tangible job consequences to constitute adverse employment action. Although several Complainants' bonuses were tied to low error rates, both employees continued to achieve good work evaluations and they did not show any tangible job consequence. Similarly, although several Complainants were unhappy with new workspace because it did not have some amenities of their old workspace, the new workspace did not compromise their ability to complete job tasks or negatively affect their employment. The ALJ also pointed out that none of the Complainants had been singled out in regard to the error rates or workspace allocations. The increased error rate standard applied to the entire division and the workspace reallocation applied to other workers besides the Complainants.
ADVERSE EMPLOYMENT ACTION; TANGIBLE JOB CONSEQUENCE ANALYSIS VIS-A-VIS TITLE VII INTERPRETATIVE LAW IN CIRCUIT IN WHICH CASE AROSE; UNDER AN EXPANSIVE DEFINITION, PLACEMENT ON A LAY-OFF LIST IS ADVERSE ACTION, BUT NON-SEVERE AND NON-PERVASIVE ACTIONS ARE NOT
In Hendrix v. American Airlines, Inc., 2004-AIR-10, 2004-SOX-23 (ALJ Dec. 9, 2004), the ALJ thoroughly analyzed discordant administrative decisions relative to the meaning of "adverse action" under various whistleblower laws, and specifically the concept of tangible job consequence. She concluded that, although Title VII decisions are not binding precedent for purposes of a whistleblower claim, they provide helpful guidance. The ALJ also concluded that she should look to the law of circuit in which the claim arises. Because the instant case alleging violations of both the AIR21 and SOX whistleblower laws arose in the Tenth Circuit, she applied the expansive definition of adverse action found in Hillig v. Rumsfeld, 381 F.3d 1028 (10th Cir. 2004), in which the court held that the fact that unlawful personnel action turned out to be inconsequential goes to damages, not liability, although the standard does not encompass mere inconvenience or alteration of job responsibilities. In a footnote, the ALJ observed that the Sarbanes Oxley Act contains language, unlike other whistleblower laws, explicitly prohibiting threats and harassment -- acts which are not necessarily tangible and not ultimate employment actions.
Applying this standard, the ALJ found that the Complainant's placement on a lay-off list constitutes an adverse action, even though the Complainant suffered no tangible consequence as his name was removed before the lay-offs took effect. [Later in the decision, however, the ALJ found that there was no connection between protected activity and the placement on the lay-off list].
The Complainant also raised a hostile work environment claim. The ALJ initially parsed out which portions of the claim were timely raised. She found that claims of verbal abuse, assignment to a second shift, and denial of access to computer resources were timely raised. The ALJ, however, found these actions were not so severe and pervasive that they altered the terms of the Complainant's employment -- they were the kinds of inconvenience an employee should expect to endure in the normal workplace.
ADVERSE ACTION; STATEMENTS OF COUNSEL DURING LITIGATION
In Levi v. Anheuser Busch Companies, Inc., ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant filed a SOX complaint on the ground that the Respondent's counsel allegedly made false statements in a motion to dismiss an earlier complaint filed by the Complainant. The Complainant alleged that the statements were designed to "derail" his SOX complaint, and blacklist him. The ARB agreed with the ALJ that the statements of the Respondent's counsel were not evidence, and that false statements would go to the party's credibility and not to whether it established an element of its case. The ARB found therefore that the statements did not constitute a separately actionable adverse action.
ADMINISTRATIVE LAW JUDGE DECISIONS
EMPLOYEE; ADVERSE ACTION; FILING OF ANTI-SLAPP SUIT
In Pittman v. Siemens AG, 2007-SOX-15 (ALJ July 26, 2007), the Complainant alleged that the Respondents engaged in adverse action when they filed an anti-SLAPP claim against the Complainant relating to a defamation suit in state court. The Complainant alleged that this suit was in retaliation for his filing of the SOX claim with OSHA. The ALJ, however, found that the Complainant had not been an employee of the Respondent for more than one and a half years prior to the filing of the anti-SLAPP motion. Since he was not an employee at time, and the anti-SLAPP suit was not blacklisting or interference with employment, the ALJ found that it was not adverse action under the whistleblower provision of the SOX.
ALLEGEDLY FALSE STATEMENTS OF COUNSEL IN PRIOR SOX CASE AS AN INDEPENDENT CAUSE OF ACTION
In Hunter v. Anheuser-Busch, 2006-SOX-108 (ALJ Oct. 18, 2006), the Complainant alleged that certain statements made by the Respondent's counsel in a motion to dismiss filed in an earlier SOX case, 2006-SOX-37, were false and retaliatory attempts to derail his SOX complaint and to avoid rehiring him and to blacklist him. The ALJ found that the allegedly false statements were objected to and were, in part, a basis for a pending appeal of the decision in the first case. Thus, the ALJ found that the Complainant's allegations were subsumed in the earlier action. The ALJ also found that the alleged false statements did not present an independent action under SOX because the earlier case had been dismissed as untimely, there had been no evidentiary development presented to the ALJ in the prior case, and therefore the fraud or perjury alleged did not arise in the first action.
ADVERSE EMPLOYMENT ACTION; LAWSUIT TO ENJOIN COMPLAINANT FROM VIOLATING CONFIDENTIALITY AGREEMENT
In Vodicka v. DOBI Medical International, Inc., 2005-SOX-111 (ALJ Dec. 23, 2005), the Complainant, who had been a member of the Respondent's board of directors, filed a SOX whistleblower complaint alleging violation of that law by the Respondent when it filed a lawsuit seeking injunctive relief in the state of New York against the Complainant on the ground that he had allegedly violated his confidentiality agreement with the Respondent. The ALJ observed that Section 806(a) of the Act prohibits retaliation against an employee in regard to the terms and conditions of employment, and that the implementing regulations at 29 C.F.R. § 1980.102 similarly provide that a company may not discrimination against any employee with respect to the employee's compensation, terms, conditions, or privileges of employment. The ALJ concluded: "Here the lawsuit sought to enforce the confidentiality agreement by compelling Complainant to return confidential documents to Respondent and requiring him not to disseminate confidential information to other persons. Complainant has provided no explanation as to how this lawsuit could affect his ability to obtain future employment or the terms or conditions of such employment, and I can think of none." The ALJ, therefore, granted summary decision in favor of the Respondent.
An issue in the case not reached by the ALJ was whether a member of a board of directors is a covered employee under Section 806(a).
Offering Severance Benefits in Return for a General Release
ADVERSE ACTION; OFFER OF SEVERANCE BENEFITS IN RETURN FOR COMPLAINANT'S GENERAL RELEASE AND AGREEMENT NOT TO REPORT ALLEGED UNLAWFUL CONDUCT
In Rzepiennik v. Archstone Smith, Inc., 2004-SOX-26 (ALJ Feb. 23, 2007), the Complainant had been employed by the Respondent, an apartment investments and operations company, as a Production Officer whose duties included reviewing and approving payment requisitions from general contractors. The Complainant was terminated, and did not timely file a SOX complaint about that action. Accordingly, his complaint had to be based on post-termination adverse action. Almost one year following the termination, the Complainant received a letter from the Respondent informing him that the Respondent was offering a bonus payment of $255,589 in consideration of the Complainant's efforts in reporting alleged unlawful conduct; however, the offer was contingent on the Complainant taking no further legal action against the Respondent or reporting the information to any other person or regulatory agency. Because the Complainant was not employed by the Respondent on the date of the offer, it was not offered under the Respondent's bonus program. The offer provided 21 days to accept. The Complainant declined and subsequently filed the instant SOX complaint.
Because the question of whether such an offer constituted adverse employment action was novel under the SOX, the ALJ reviewed authority under Title VII, and found that courts have ruled that (1) offering severance benefits in return for a general release is neither discriminatory nor retaliatory, and (2) Title VII complainants do not suffer adverse employment action when an employer fails to pay severance benefits to which the complainant was not otherwise entitled because the complainant refused to sign the agreement. Slip op. at 13-14, citing, inter alia, EEOC v. Sundance Rehabilitation Corp., 466 F.3d 490 (6th Cir. 2006). Applying this authority, and finding no facts set forth indicating that the Complainant was entitled to the bonus, the ALJ found that there had been no tangible consequence on the conditions of the Complainant's employment.
The ALJ distinguished Connecticut Light & Power v. Sec'y of U.S. Dept. of Labor, 85 F.3d 89 (2d Cir. 1996), an ERA whistleblower case, on the ground that (unlike this case) in that case the complainant was relying on a continuing violation theory, the court had found that tactics used to prolong settlement negotiations were in themselves adverse, and the negotiations had been broken off by the Respondent. In addition, in the Connecticut Light & Power case, the settlement arose out of litigation pending in another forum. The ALJ also observed that under the ERA, the NRC had adopted a regulation which explicitly forebade employers from conditioning severance packages on agreements not to provide information to the NRC (10 C.F.R. § 50.7(f) (1994)), and that although that regulation had been found inapplicable by the Second Circuit, it found the policy concerns underlying that rule of "special protection" relating to nuclear safety were persuasive. The ALJ found no legal authority expressing comparable concerns about settlement agreements under SOX. The ALJ also noted that, because of the novelty of the issue, she had invited amicus briefs from both the Assistant Secretary of Labor for OSHA and the SEC, see Rzepiennik v. Archstone Smith, Inc., 2004-SOX-26 (ALJ Nov. 7, 2006) (five page order requesting amicus briefs, which sets out the issue in detail), and both had declined to submit briefs, suggesting that the policy concerns behind the SOX are not the same as the policy concerns behind the ERA. The ALJ also interpreted the SEC's lack of response as indicating that the SEC had concluded that the confidentiality of a settlement agreement neither directly impacts federal securities law nor raises policy considerations of significance to the SEC.
ADVERSE ACTION; FAILURE TO CONDUCT PERFORMANCE EVALUATION
In Bechtel v. Competitive Technologies, Inc., 2005-SOX-33 (ALJ Oct. 5, 2005), the ALJ, found that no adverse action was implied by the Respondent's failure to conduct a review of Complainant's performance where the record did not show that this omission resulted in a loss of pay, raises, bonus, benefits, or negatively impacted Complainant's employment conditions in any way.
ADVERSE EMPLOYMENT ACTION; TANGIBLE JOB CONSEQUENCES MUST ACCOMPANY A NEGATIVE PERFORMANCE EVALUATION
In Dolan v. EMC Corp., 2004-SOX-1 (ALJ Mar. 24, 2004), the ALJ, in the course of considering the issue of whether the complaint was timely filed, ruled that although the Complainant had received a negative performance evaluation, he had not shown "that it resulted in a lower salary, directly jeopardized his job security, or caused any tangible job detriment." Citing ARB and Federal case law, the ALJ found that, in the absence of such a showing, the performance evaluation could not be considered an adverse employment action. Therefore, the Respondent's later refusal to remove the performance evaluation from the Complainant's file (the only discrete act within the limitations period for filing a SOX whistleblower complaint), was also not an adverse employment action, and therefore the Complainant failed to show that he had timely filed a complaint within 90 days of an adverse employment action.
ADVERSE EMPLOYMENT ACTION; REFUSAL TO ACCEPT CERTIFIED MAIL SENT BY THE COMPLAINANT
In Harvey v. The Home Depot, Inc., 2004-SOX-77 (ALJ Nov. 24, 2004), the Complainant filed a complaint alleging that the Home Depot vice president for legal matters violated the employee protection provision of the Sarbanes Oxley Act by refusing to accept delivery of the Complainant's certified, restricted delivery, mail to the vice president, containing legal matters. The Complainant's theory was that by refusing to accept his legal correspondence, the vice president endangered the company's interests and failed in his fiduciary duties, thereby perpetrating a fraud on the company and shareholders. The ALJ found that the complaint failed to state a claim for which relief can be granted because the vice president's act did not adversely impact on the terms or conditions of the Complainant's former employment with the Respondent, nor on his ability to obtain subsequent employment. Although the Complainant attempted to link the mail refusal to a claim of blacklisting, the ALJ found that the act of refusing mail is not blacklisting.
ADVERSE EMPLOYMENT ACTION; PRESENTATION OF COMPLAINANT WITH DOCUMENTS DESCRIBING "GROUND RULES" AND "HOPES AND FEARS" OF SUBORDINATES ABOUT THE COMPLAINANT'S RETURN TO WORK
In Halloum v. Intel Corp., ARB No. 04-068, 2003-SOX-7 (ARB Jan. 31, 2006), the Complainant was presented with documents entitled "Ground Rules" and "Hopes and Fears" upon his return to work from a medical leave of absence. During this leave, the Complainant had filed a complaint with the SEC and management alleging fraud against shareholders, and an investigation of the allegations was instituted. The ARB agreed with the ALJ that the "Ground Rules" document was only an agenda for the meeting and not discriminatory on its face. The "Hopes and Fears" document related discussions with the Complainant's subordinates about their feelings about the Complainant's return to work. The ARB agreed with the ALJ's finding that this document "was the result of a standard exercise [the Respondent] utilized to inform its employees that they would be protected from reprisal or intimidation after changes in management." Slip op. at 7. The ARB, therefore concluded that neither document constituted an unfavorable personnel action.
The ARB, however, also agreed with the ALJ that modifications to a Corrective Action Plan that were unreasonable and incapable of completion within the allotted time did constitute an unfavorable personnel action.
ADVERSE ACTION; APPLICATION OF BURLINGTON NORTHERN; TRANSFERS
In McClendon v. Hewlett Packard, Inc., 2006-SOX-29 (ALJ Oct. 5, 2006), the ALJ relied on the U.S. Supreme Court's ruling in a Title VII retaliation action that, to prove an adverse action, a plaintiff "must show that a reasonable employee would have found the challenged action materially adverse, ‘which in this context means it well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.'" McClendon, slip op. at 76, citing to Burlington Northern & Santa Fe Railway Co. v. White, No. 05-259, 2006 WL 1698953 (U.S. 2006).
The ALJ ruled that Complainant's transfer to a different section and a change in his reporting structure was not an adverse action. Complainant was one of thirty people transferred to a new section as a result of a corporate restructuring. See McClendon, slip op. at 76. Based on past history, Complainant explained to management that he was reluctant to be supervised by the head of his newly assigned section. McClendon, slip op. at 76-77. He was assured that he would be reporting to a different project manager. Id. at 77. Complainant argued that this new arrangement was an adverse action since he was now reporting to a lower-level project manager and because he was excluded from section meetings and the section email list. Id. at 77. The ALJ ruled that because Complainant's transfer did not change his pay or interfere with his ability to work, and because Complainant was alerted of any news or events by his project manager, "a reasonable employee would not be dissuaded from whistleblowing based on the transfer and change in reporting structure." Id. at 77-78.
In contrast, the ALJ ruled that Complainant's transfer to an entirely new position was an adverse act. McClendon, slip op. at 80. The ALJ noted that Complainant had previously discussed with management a transfer to another department, however it was in the context of doing the same type of work he had already been enjoying and succeeding in. Id. at 79-80. Complainant had only one day to decide whether to accept the new position and faced placement on the lay-off list if he declined. Id. at 80. In addition, Complainant's workload decreased significantly, and the scope of Complainant's new position "varied unfavorably from the scope of the position when past employees filed it." Id. at 80. Thus, the ALJ ruled that the transfer of Complainant to the new position would dissuade a reasonable employee from engaging in protected activity, and it therefore constituted an adverse act under SOX. Id. at 79-80.
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