MOTION FOR ORDER REQUIRING POSTING OF SUPERSEDEAS BOND; ARB DOES NOT HAVE THE AUTHORITY TO GRANT SUCH A REMEDY
In Kalkunte v. DVI Financial Services, Inc., ARB No. 05-139, ALJ No. 2004-SOX-56 (ARB Aug. 26, 2005), the ARB denied the Complainant's motion requesting that the Board issue an order requiring the Respondent to post a supersedeas bond, the Board finding that nothing in the delegation of authority to the Board from the Secretary nor in the SOX provided the Board with the authority to grant the requested relief. The Complainant had received a favorable ruling from the ALJ, but feared that because the Respondent was engaged in bankruptcy proceedings and was actively liquidating its assets, it would be unlikely to have any assets remaining by the time the Board issued its decision.
SUBPOENAS; REQUEST FOR SUBPOENAS WHILE CASE PENDING BEFORE THE ARB
In Reid v. Constellation Energy Group, Inc., ARB No. 04-107, ALJ No. 2004-ERA-8 (ARB Oct. 13, 2004), Halpern v. XL Capital, Ltd., ARB No. 04-120, ALJ No. 2004-SOX-54 (ARB Oct. 13, 2004) and Cummings v. USA Truck, Inc., ARB No. 04-043, ALJ No. 2003-STA-47 (ARB Sept. 15, 2004), the ARB denied the requests of pro se complainants to obtain subpoenas from the ARB. The Board observed in each case that the Board acts in an appellate capacity and its decision is based only on evidence considered by the ALJ in the initial hearing.
A blanket objection to of all of the ALJ's findings and conclusions does not satisfy the specificity requirement of 29 C.F.R. § 1980.110(a) for a petition for ARB review.
Brookman v. Levi Strauss & Co., ARB No. 07-074, ALJ No. 2006-SOX-36 (ALJ July 23, 2008).
BRIEFING OF ISSUES BEFORE THE ARB; PRO SE
STATUS OF COMPLAINANT DOES NOT NEGATE RESPONSIBILITY TO PROVIDE LEGAL ARGUMENT
WITH SUPPORTING AUTHORITY; MERE GENERAL ASSERTION OF ERROR BY ALJ IS A WAIVER
OF THE ISSUE ON APPEAL
In Nixon v. Stewart & Stevenson
Services, Inc., ARB No. 05-066, ALJ No. 2005-SOX-1 (ARB Sept. 28, 2007),
the Complainant was the environmental manager for a federal defense
contractor. He asserted that he engaged in protected activity when he reported
information to officers that showed violations of environmental laws, which he
reasonably believed would result in legal proceedings and financial penalties,
which, in turn, would invoke reporting requirements mandated by the SEC. On
appeal, the Complainant only made a general assertion that the ALJ’s finding in
this respect was in error, and did not make any supporting argument. Citing
authority to effect that even pro se litigants must provide some legal argument
with supporting authority, the ARB found the issue waived on appeal.
BRIEFS; LEAVE TO FILE SURREPLY
In Beck v. Citigroup, Inc., ARB 06-140, ALJ No. 2006-SOX-3 (ARB May 23, 2007), the ARB stated that it is guided by the Federal Rules of Appellate Procedure, Rule 28, in determining whether to permit the filing of a surreply. The ARB stated that a surreply may be filed to address new matters raised in a reply to which a party would otherwise be unable to respond, and that case law that is substantially new and decided after the respondent had filed its brief may provide grounds for a surreply brief. In the instant case, however, the ARB did not find that grounds had been demonstrated for leave to file a surreply (disparagement of the Respondent's law firm and citation of a new (and irrelevant) ARB decision).
DISMISSAL FOR CAUSE; FAILURE TO FILE APPELLATE BRIEF
In Stevenson v. Neighborhood House Charter School, ARB No. 05-156, ALJ No. 2005-SOX-87 (ARB Nov. 29, 2005), the Complainant filed a petition for review of the ALJ's decision granting summary decision in favor of the Respondent on the ground that it was not an employer covered under the whistleblower provision of SOX. The ARB issued a briefing schedule warning that failure to file a timely initial brief may result in dismissal of the appeal. The Complainant failed to file an opening brief. After the conclusion of the briefing schedule she filed a request for an extension of time, but failed to provide a persuasive explanation for why she had not filed a timely brief or a timely motion for an extension of time. Accordingly the ARB dismissed the appeal.
DISMISSAL FOR CAUSE; FAILURE TO FILE APPELLATE BRIEF WITH THE ARB
In Cunningham v. Washington Gas Light Co., ARB No. 04-078, ALJ No. 2004-SOX-14 (ARB Apr. 21, 2005), the ARB dismissed the Complainant's appeal where he failed to file a brief and failed to file a response to the Board's subsequent show cause order. The show cause order had given the Complainant the option of treating his petition for review as the brief, provided that it was served on the opposing party.
ARB BRIEFING REQUIREMENTS; REFERENCE TO FRAP TO EXCUSE UNTIMELY FILING OF AMICUS BRIEF
In Welch v. Cardinal Bankshares Corp., ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB May 19, 2005), the ARB referenced the FRAP 29(e) to determine that two petitioners' motions for leave to file amicus briefs were untimely, but nonetheless accepted the briefs for filing "for good cause shown."
TIMELINESS OF APPELLATE BRIEF
Where Complainant failed to file a timely brief or motion for enlargement of the briefing schedule based on good cause, the ARB dismissed the complaint based on failure to prosecute. The Board observed that although the Complainant was not personally responsible for the failure of his attorney to make a timely filing, he was accountable for the acts and omissions of his attorney. Steffenhagen v. Securitas Sverige, AR, ARB No. 03-139, ALJ No. 2003-SOX-24 (ARB Jan. 13, 2004).
CONSOLIDATION OF APPEALS ON REVIEW BEFORE ARB; COMMON LEGAL ISSUES AND EVIDENCE
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 ARB consolidated two appeals of the same Complainant against the same Respondent in view of the substantial identity of the legal issues and the commonality of much of the evidence, and in the interest of judicial and administrative economy.
PETITION FOR REVIEW; DECLINATION OF REVIEW BY ARB; ALJ'S DECISION BECOMES FINAL DECISION OF THE SECRETARY
In Walker v. Aramark Corp., ARB No. 04-006, ALJ No. 2003-SOX-22 (ARB Nov. 13, 2003), Complainant timely filed a petition for review of the ALJ's Decision and Order with the ARB. Noting that pursuant to 29 C.F.R. § 1980.110(b) the ALJ's decision becomes the final decision of the Secretary unless the ARB issues an order accepting the case for review, and that the ARB had not issued such an order, the ARB issued an order closing the case.
In Jordan v. Sprint Nextel Corp., ARB No. 06-105, ALJ No. 2006-SOX-41 (ARB June 19, 2008), the ALJ certified for interlocutory review the question of whether the Complainant could rely on statements and documents subject to the attorney-client privilege to prosecute his case. The Respondent had filed a motion to dismiss based on the Board's decision in Willy v. The Coastal Corp., ARB No. ARB No. 98-060, ALJ No. 1985-CAA-001 (ARB Feb. 27, 2004). That decision, however, had been called into question because the Fifth Circuit had reversed the ARB decision on privileged information in Willy v. Admin. Review Bd., 423 F.3d 483 (5th Cir. 2005). The ALJ found the Fifth Circuit's decision to be persuasive, but found it appropriate to certify the issue under the collateral appeal exception to the general rule disfavoring interlocutory review. The ARB, although disagreeing with some of the ALJ's analysis, agreed that the collateral appeal criterion for an interlocutory appeal had been meet because of the institutional benefits of allowing interlocutory review of attorney-client privilege claims. The ARB also concurred "in the ALJ's conclusion that once Jordan is allowed to rely on the communications, the issue whether they are subject to the privilege is effectively unreviewable because Sprint will suffer irreparable injury by the publication of the communications regardless whether the Board ultimately reverses the ALJ's decision permitting Jordan to rely on the communications." USDOL/OALJ Reporter at 6 (footnote omitted). The ARB recognized that that a party might be able to obtain relief from an ALJ's discovery order in federal district court, but that found that "given the administrative nature of the proceedings before the Labor Department in whistleblower cases, we believe that it is more appropriate for the Board to consider and dispose of these limited attorney-client discovery issues in the first instance, rather than forcing the parties into district court." Id. at 7. The ARB therefore accepted the petition for interlocutory review and set a briefing schedule for the parties.
INTERLOCUTORY APPEALS DISFAVORED
In Walton v. Nova Information, ARB No. 06-100, ALJ Nos. 2005-SOX-107, 2006-SOX-18 (ARB Sept. 29, 2006), the Respondent filed an appeal of the ALJ's order denying a motion to dismiss. The ARB issued an order to show cause why the Board should not dismiss its interlocutory appeal based on its strong policy against piecemeal appeals. The Respondent did not respond, and the ARB dismissed the interlocutory appeal.
INTERLOCUTORY APPEAL; "DEATH KNELL" THEORY GENERALLY WILL NOT SUPPORT INTERLOCUTORY REVIEW IN REGARD TO ALJ'S RULINGS ON DISCOVERY, VENUE AND SUMMARY JUDGMENT
In Johnson v. Siemens Building Technologies, Inc., ARB No. 07-010, ALJ No. 2005-SOX-15 (ARB Jan. 19, 2007), the ALJ granted a request by the Respondents to deny the Complainant further extensions of time to file a response to their motion for summary judgment. Before the ALJ ruled on the motion for summary judgment, the Complainant sought an interlocutory appeal with the ARB, arguing that the ALJ's ruling denying the filing of a response to the summary judgment motion constitutes a "death knell" to her litigation. The ARB observed that "death knell" theories are generally disapproved as grounds for an interlocutory order in regard to rulings on discovery, venue, and summary judgment. The Board found that the Complainant could appeal any adverse ruling, and that any error could be readily remedied should the Complainant prevail on such an appeal.
INTERLOCUTORY APPEAL; FAILURE TO REQUEST ALJ CERTIFICATION
In Powers v. Pinnacle Airlines, Inc., ARB No. 05-138, ALJ No. 2005-SOX-65 (ARB Oct. 31, 2005), the ARB stated that the proper procedure for obtaining an interlocutory appeal of an ALJ's orders is to request that the ALJ certify the issue in the same manner as a federal district court under 28 U.S.C.A. § 1292(b). Where the Complainant was aware of this procedure, having previously filed an interlocutory appeal in a prior case, but failed to follow that procedure, the ARB dismissed her interlocutory appeal. The ARB also found that even if the procedure had been followed, it would not exercise its discretion to consider the interlocutory appeal because the Complainant had failed to articulate sufficient grounds warranting departure from the Board's strong policy against piecemeal appeals.
APPEAL OF OALJ CASE ASSIGNMENT POLICIES
In Powers v. Pinnacle Airlines, Inc., ARB No. 05-138, ALJ No. 2005-SOX-65 (ARB Oct. 31, 2005), the Complainant requested in her interlocutory appeal that the Board order OALJ to reassign her case to a different OALJ office, purportedly so she could save money on postage and delivery time. The Board denied the motion because the Complainant had not previously requested OALJ to transfer her case on these grounds, so there was no decision for the Board to review. The Board also observed that "absent proof of grounds for recusal, or in the rare case, change of venue, the OALJ's case assignment policies are within its purview and are not subject to Board review." USDOL/OALJ Reporter at 8 (footnotes omitted).
INTERLOCUTORY APPEAL; ALJ ERROR IN PLACING NOTICE OF APPEAL RIGHTS ON MERITS DECISION IN BIFURCATED PROCEEDING WHERE DAMAGES WERE STILL TO BE LITIGATED
In Welch v. Cardinal Bankshares Corp., ARB No. 04-054, ALJ No. 2003-SOX-15 (ARB May 13, 2004), the ALJ had issued a Recommended Decision and Order on January 29, 2004 in favor of the Complainant on the merits of the complaint, but reserved for further adjudication the question of damages. Because the ALJ had inadvertently placed a Notice of Appeal Rights on the R D & O, he issued an erratum on February 3, 2004 stating that the R D & O had not been intended to be a final appealable order and ordering that the Notice of Appeal Rights be deleted from the R D & O. On February 3, 2004, the Respondent filed a petition for review with the Board, and the Board issued a Notice of Appeal on February 6, 2004. The Complainant filed a motion to dismiss the appeal as premature or to hold it in abeyance until a final judgment was issued by the ALJ. The Respondent opposed dismissal of the appeal.
The ARB held that because the ALJ had not yet fully disposed on the case, the appeal was interlocutory. The Respondent argued that a "decision of the administrative law judge" is subject to immediate review under 29 C.F.R. § 1980.110(a). The ARB, however, rejected this contention as ignoring section 1980.110(c), the ALJ's erratum, and ARB precedent about interlocutory appeals. The Respondent argued that the Board's Notice of Appeal cause the ALJ's decision to be irrevocably "vacated." The ARB, however, found no support for the assertion that it could not correct a premature acceptance of a petition for review, and noted that section 1980.110(b) only states that the ALJ's decision becomes "inoperative" and not vacated when the Board accepts the case.
The Board also rejected the Respondent's contention that it would be prejudiced if the ARB refused to hear the case now based on the regulatory 120-day period for ARB review -- the Board holding that the review period had not yet begun to run, and that that 120-day period was directory and not jurisdictional.
INTERLOCUTORY APPEAL; RECORD OF DENIAL OF INTERLOCUTORY APPEAL IS PART OF RECORD FOR LATER REVIEW
In Windhauser v. Trane, ARB No. 05-061, ALJ No. 2005-SOX-17 (ARB Aug. 31, 2005), the Respondent took an interlocutory appeal of the ALJ's order denying a stay of the Secretary's order of reinstatement. Subsequently the ALJ issued an order dismissing the case based on a settlement; the ALJ's order included a monetary sanction against the Respondent for its failure to reinstate the Complainant. The Respondent filed a timely petition for review of this order. The ARB then issued an order to show cause why the earlier interlocutory appeal should not be dismissed as moot. The Respondent, in response, agreed that the interlocutory appeal was moot, but stated that facts relating to the interlocutory appeal would likely be relevant to the appeal of the dismissal/sanctions order and requested that dismissal of the interlocutory appeal be without prejudice to its ability to present these facts in the appeal of the dismissal/sanctions order. The ARB ruled that the interlocutory review proceedings were part of the record for the Board's review on appeal of the sanctions order, and that the Respondent could present relevant facts in support of its petition for review of the sanctions order. The Board therefore dismissed the interlocutory appeal as moot.
ADMINISTRATIVE LAW JUDGE DECISIONS
INTERLOCUTORY APPEAL; CERTIFICATION OF ISSUE BY ALJ
In Jordan v. Sprint Nextel Corp., 2006-SOX-41 (ALJ Mar. 14, 2006), the ALJ held that the Complainant was not precluded from relying on statements or documents covered by the attorney-client privilege in pursuant of his SOX claim, and denied the Respondent's motion to dismiss. The Respondent requested that it be permitted to seek interlocutory review by the ARB based on (1) plainly substantial grounds for disagreement with the ALJ's ruling, (2) material advancement of the litigation, and (3) the special sensitivity presented by disclosure of privileged information. The ALJ reviewed ARB and court decisions relating to the collateral order exception to general principle of finality, and acknowledged that it was conceivable that the ARB or other courts might reach a different conclusion than he had on the attorney-client issue. The ALJ also noted that a decision on this issue would have significant implications for SOX complainants who are attorneys who, like the Complainant in the instant case, are under a legal duty to report perceived violations of securities laws. The ALJ observed that it would be difficult, if not impossible, to undo any potential harm to the Respondent if there were an improvident disclosure of confidential information should the ARB later rule that the Complainant may not rely on such information to prosecute his claim. The ALJ noted that if the ARB ruled that the Complainant could not rely on such information, it would be fatal to his claim. The ALJ concluded that interlocutory review would promote, rather than impede the litigation process, and therefore certified the issue to the ARB.
RECONSIDERATION; MUST BE FILED WITHIN A REASONABLE TIME, WHICH MUST BE WITHIN A SHORT TIME AFTER THE DECISION OR RAISE A RULE 60(b)-TYPE GROUND OR SHOW GOOD CAUSE FOR THE DELAY; 27 DAYS IS NOT A SHORT TIME; BOARD’S CASELAW ON RECONSIDERATION IS ADEQUATE TO ESTABLISH RECONSIDERATION PROCEDURE; LOSS OF SOX JURISDICTION UPON REMOVAL TO FEDERAL COURT DOES NOT NEGATE ARB’S JURISDICTION OVER OTHER WHISTLEBLOWER LAWS RAISED IN THE APPEAL
In Powers v. Paper, Allied-Industrial Chemical & Energy Workers Int'l Union (PACE), ARB No. 04-111, ALJ No. 2004-AIR-19 (ARB Dec. 21, 2007), the ARB applied its ruling in Henrich v.Ecolab, Inc., ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB May 30, 2007), that a motion for reconsideration must be filed within a "reasonable time." In applying this requirement, the motion must be filed within a "short time" after the decision, or, after a longer period if the petition raises Rule 60(b)-type grounds or showed "good cause" for the delay. In Powers, the Board found that 34-days for the filing of the Complainant’s motion for reconsideration was too long to be characterized as a "short time." In a footnote, the Board also suggested that the 27 days from the date that the Complainant alleged she received the Board’s decision was also not a short time, but did not reach the issue of whether the time frame begins upon issuance or receipt of the decision.
The Board found that the Complainant did not show good cause for the delay based on the absence of applicable procedures, the Board finding ample caselaw precedent for its "short time" requirement. It also found that it was under no obligation to inform the Complainant about the requirement and that a pro se litigant bears the risk of foregoing expert assistance. The case had been remanded, and the Complainant observed that the ALJ had not issued any orders on remand; but the Board found the ALJ’s schedule of communications to be irrelevant.
The Board then reviewed a series of other grounds raised by the Complainant for reconsideration, and found that only one of them raised a Rule 60(b)-type ground warranting a longer period for the filing of a motion to reconsider – namely, that the Complainant had removed her SOX complaint to federal district court prior to the ARB’s decision. The Board observed that it was not aware of the filing of the SOX complaint in federal court, but found that the issue of subject matter jurisdiction cannot be waived. The Board then screened the jurisdictional ground for reconsideration to determine whether there existed a reason to reconsider, and found that its assuming that it had jurisdiction over the SOX complaint when it actually did not constituted manifest error. The ARB, however, rejected the Complainant’s contention that the entire remand order was void, the ARB finding that it still had jurisdiction over the portions of the complaint raising AIR21 and various environmental whistleblower laws. Accordingly, the Board modified those portions of the remand order that referenced the SOX complaint, and reissued the order.
MOTION FOR RECONSIDERATION; AUTHORITY OF THE ARB TO RECONSIDER ITS DECISIONS UNDER THE SOX WHISTLEBLOWER PROVISION; SUCH A MOTION MUST BE FILED WITHIN A REASONABLE TIME TO BE TIMELY; SCREENING OF MOTIONS TO DETERMINE APPROPRIATENESS FOR RECONSIDERATION
In Henrich v. Ecolab, Inc., ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB May 30, 2007), the ARB ruled that it has the authority to reconsider a decision issued pursuant to the whistleblower provision of the Sarbanes-Oxley Act. The ARB stated that "unless some other standard applies to reconsideration of SOX decisions, or we or our predecessors have adopted a different standard for determining timeliness of reconsideration petitions, we must apply a 'reasonable time' standard when determining the timeliness of [such a] petition." USDOL/OALJ Reporter at 6. Reviewing the OALJ rules of practice and procedure, rules of procedure for federal district and circuit courts, and previous decisions of the ARB and its predecessors, the ARB found that it had not adopted a different standard, and therefore the "reasonable time" standard applied. In defining what constitutes a reasonable time, the ARB turned to a decision it had rendered in a Service Contract Act proceeding, Thomas & Sons Bldg. Contractors, Inc., ARB No. 98-164, ALJ No. 1996-DBA-33 (ARB June 8, 2001). The ARB concluded that in Thomas & Sons, and other decisions of the ARB and its predecessors, a three-part approach had been delineated:
In sum, the Board and its predecessors have presumed a petition timely when the petition was filed within a short time after the decision. The Board and its predecessors also have granted reconsideration where a petition, though filed after a longer period, raised Rule 60(b)-type grounds or showed "good cause" for the delay. Finally, the Board and its predecessors have rejected as untimely those petitions filed more than a short time after the decision, when such petitions have neither raised Rule 60(b)-type arguments nor shown good cause for delay.
USDOL/OALJ Reporter at 15. The Board then applied this test to the Complainant's motion for reconsideration. The Complainant's motion was filed on the 60th day after the ARB's decision. The ARB suggested that 14 to 30 days might be sufficiently short a time, but did not specifically so rule, holding only that 60 days was not a "short" time. The Board found that the Complainant's grounds for reconsideration presented rehearing-type arguments (which do not themselves justify a delay in filing a petition for reconsideration) rather than Rule 60(b)-type grounds. Finally, the Board held that the Complainant 's belief that he would not suffer penalty if he did not file within a short time, and his argument that the Respondent would not be prejudiced by a reconsideration, did not show good cause for the delay.
The ARB then stated even if the Complainant's motion had been timely, it would have been rejected as failing to demonstrate that the Board's decision should be reconsidered. The ARB observed that it is guided by federal court practice in applying standard screening hurtles in determining whether reconsideration is warranted. In the instant case, the Complainant's motion was based in part on portions of his deposition which were not in evidence. The ARB cited caselaw to the effect that "[a] party that has not presented known facts helpful to its cause when it had the opportunity cannot ordinarily avail itself of Rule 60(b) after it has received an adverse judgment." USDOL/OALJ Reporter at 20 (citations omitted). Finally, the ARB found that the Complainant's remaining arguments that it made errors in judgment in determining whether the ALJ's findings and credibility determinations were supported by substantial evidence were not supported by any demonstrations of materials errors of law, fact or process; or any changed circumstances warranting Rule 60(b) relief; or any other circumstance warranting reconsideration under ARB precedent.
MOTION FOR RECONSIDERATION OF ARB DECISION; ARB ADOPTS PRINCIPLES EMPLOYED BY FEDERAL COURTS
In Getman v. Southwest Securities, Inc., ARB No. 04-059, ALJ No. 2003-SOX-8 (ARB Mar. 7, 2006), the ARB reiterated that it has adopted principles employed by the federal courts in deciding requests for reconsideration, such as "(i) material differences in fact or law from that presented to a court of which the moving party could not have known through reasonable diligence, (ii) new material facts that occurred after the court's decision, (iii) a change in the law after the court's decision, and (iv) failure to consider material facts presented to the court before its decision. " Slip op. at 1-2 (citations omitted). In Getman, the Board denied reconsideration where the Complainant's motion for reconsideration merely reiterated points raised in the original appeal and rejected in the Board's final decision.
ARB STANDARD OF REVIEW; NOT ENOUGH TO SHOW THAT SUBSTANTIAL EVIDENCE SUPPORTS APPELLANT'S VIEW OF THE CASE; MUST SHOW THAT SUBSTANTIAL EVIDENCE DID NOT SUPPORT THE ALJ'S FINDINGS
"[A] party cannot prevail on appeal simply by demonstrating that substantial evidence supports his view. Rather, in order to convince us not to adopt an ALJ's recommendation a party must demonstrate that substantial evidence did not support the findings necessary to that recommendation." Henrich v. Ecolab, Inc., ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006), slip op. at 17-18.
-- ALJ Findings of Fact
STANDARD OF REVIEW; DEFERENCE TO ALJ'S FACTUAL FINDINGS
The ARB will defer to an ALJ's factual findings, especially where they are predicated on the ALJ's weighing and determining the credibility of conflicting witness testimony. Halloum v. Intel Corp., ARB No. 04-068, 2003-SOX-7 (ARB Jan. 31, 2006).
-- -ALJ Credibility Findings
CREDIBILITY DETERMINATIONS; DEMEANOR BASED CREDIBILITY DETERMINATIONS AFFORDED GREAT DEFERENCE, BUT NON-DEMEANOR BASED DETERMINATIONS ARE REVIEWED UNDER SUBSTANTIAL EVIDENCE STANDARD
ALJ credibility determinations that rest explicitly on demeanor are given great deference; but where the ALJ does not explicitly state that his credibility determination is based on witness demeanor the ARB does not accord the determination such great deference. In such a case, the ARB treats the determination as an ordinary finding of fact and reviews it under the substantial evidence standard. Henrich v. Ecolab, Inc., ARB No. 05-030, ALJ No. 2004-SOX-51 (ARB June 29, 2006).
ALJ'S CREDIBILITY DETERMINATIONS NOT BASED ON DEMEANOR; IN AIR21 AND SOX CASES, SUCH DETERMINATIONS ARE REVIEWED UNDER THE SUBSTANTIAL EVIDENCE STANDARD RATHER THAN DE NOVO
In Walker v. American Airlines, Inc., ARB No. 05-028, ALJ No. 2003-AIR-17 (ARB Mar. 30, 2007), the
Complainant argued on appeal that the ARB should overturn the ALJ's credibility determinations. According to the Complainant, because the
ALJ determination was not demeanor based it should be reviewed de novo. The ARB rejected the argument that de novo was the appropriate standard of review,
noting that the caselaw cited by the Complainant was all from environmental whistleblower cases. In contrast, in AIR21 and SOX cases the ARB is required to review an ALJ's fact determinations under the substantial evidence standard. Because the ALJ's credibility determinations were not explicitly based on demeanor, the Board would not afford those determinations the "great deference" that a demeanor-based determination would receive. Nonetheless, because they were factual findings, the ARB was required to uphold them if supported by substantial evidence.
-- New Evidence/Argument
NEW EVIDENCE SUPPORTING ASSERTION OF PROTECTED
ACTIVITY; FACT THAT STATE COMMISSION LATER ASSESSED A PENALTY AS THE
COMPLAINANT FEARED, WAS NOT MATERIAL; SUCH AN ASSESSMENT DOES NOT RETROACTIVELY
VALIDATE THE COMPLAINANT’S ACTIONS AS PROTECTED UNDER THE SOX
In Nixon v. Stewart & Stevenson
Services, Inc., ARB No. 05-066, ALJ No. 2005-SOX-1 (ARB Sept. 28, 2007),
the Complainant was the environmental manager for a federal defense
contractor. He asserted that he engaged in protected activity when he reported
information to officers that showed violations of environmental laws, which he
reasonably believed would result in legal proceedings and financial penalties,
which, in turn, would invoke reporting requirements mandated by the SEC. On
appeal to the ARB, the Complainant sought to have the ARB consider new evidence
in the form of an excerpt from a Texas commission showing that a penalty
against the Respondent was assessed, thus proving that legal proceedings
occurred. Before addressing the admissibility of the new evidence, the ARB had
found that the Complainant had not adequately briefed on appeal the ALJ’s
finding that there was no evidence of pending environmental litigation or a
known environmental proceeding contemplated by government officials that would
have triggered the Respondent’s duty to disclose under the SEC rule. Thus, the
ARB found any argument on this issue waived. Rather, the ARB found that the
only argument on appeal concerned whether the Respondent engaged in mail
fraud. The Board found that there was no evidence that the Complainant
communicated the allegation of mail fraud prior to the hearing before the
ALJ. Thus, the ARB, observing that it had found no protected activity, declined
to consider the new evidence, finding that it was not material because “[t]he fact
that what Nixon anticipated would happen did happen, namely that the Texas
Commission did assess a penalty against the Respondent for environmental
violations, does not retroactively make any activity Nixon engaged in prior to
his termination activity protected under the SOX.”
WAIVER OF ARGUMENTS NOT PRESENTED BEFORE THE ALJ
Where the Complainant had the opportunity to make her procedural due process arguments before the ALJ, but did not do so, the ARB found that she waived such arguments for appeal. Reddy v. Medquist, Inc., ARB No. 04-123, ALJ No. 2004-SOX-35 (ARB Sept. 30, 2005).
NEW EVIDENCE ON APPEAL; ARB RELIES ON OALJ RULES OF PRACTICE AND PROCEDURE FOR GUIDANCE
When considering whether to consider new evidence, the ARB ordinarily relies upon the standard found in the OALJ Rules of Practice and Procedure, which provides that "[o]nce the record is closed, no additional evidence shall be accepted into the record except upon a showing that new and material evidence has become available which was not readily available prior to the closing of the record." 29 C.F.R. § 18.34(c). 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).
SCOPE OF ARB REVIEW; ARB WILL NOT CONSIDER ARGUMENTS AND EVIDENCE RAISED FOR THE FIRST TIME ON APPEAL
The ARB will not consider arguments and evidence raised for the first time on appeal. Carter v. Champion Bus, Inc., ARB No. 05-076, ALJ No. 2005-SOX-23 (ARB Sept. 29, 2006).
REOPENING RECORD; SUBMITTER MUST ESTABLISH THAT NEWLY PROFFERED EVIDENCE IS RELEVANT AND MATERIAL AND WAS NOT AVAILABLE PRIOR TO CLOSING OF THE RECORD BEFORE THE ALJ
In Halloum v. Intel Corp., ARB No. 04-068, 2003-SOX-7 (ARB Jan. 31, 2006), the Complainant submitted to the ARB an affidavit that had not been in evidence before the ALJ. The ARB noted that its review was limited to the record made before the ALJ and the ALJ's recommended decision and order, but that it could order the ALJ to open the record where proffered evidence is relevant and material and was not available prior to the closing of the record. The ARB declined to do so in the instant case because the Complainant had failed to establish either requirement for reopening a record.
TIMELINESS OF PETITION FOR ARB REVIEW; TIMELY FILING WITH THE ALJ OF A MOTION FOR RECONSIDERATION TOLLS TIME PERIOD FOR REQUESTING ARB REVIEW
In Gattegno v. Prospect Energy Corp., ARB No. 06-118, ALJ No. 2006-SOX-8 (ARB May 29, 2008), the Respondents argued that the Complainant's appeal to the ARB was not timely because it was not filed within 10 days of the date the ALJ issued his decision. The Complainant had filed a motion for reconsideration, and did not file the ARB appeal until within 10 days after the ALJ ruled on the motion. The ARB held:
Although the SOX regulations do not provide for reconsideration by the Board of its own decisions, the Board has recently held in Henrich v. Ecolab, Inc. that its authority to reconsider its SOX decisions is inherent because the authority has not been limited by statute or regulation. The Seventh Circuit Court of Appeals has recently confirmed that the timely filing of a motion for reconsideration of a Board decision tolls the limitations period for filing a notice of appeal with the federal courts of appeals.
The Respondents have not pointed to any statute or regulation that limits an administrative law judge's reconsideration of his or her own decisions. Thus, guided by Henrich and the Seventh Circuit's decision in Saban, we find that Gattegno's motion for reconsideration, filed within ten business days of the date of the ALJ's R. D. & O., tolled the limitations period for filing her petition for review with the Board, and that her petition for review, filed within ten business days of the ALJ's Order denying reconsideration was timely filed.
USDOL/OALJ Reporter at 15 (footnotes omitted).
TIMELINESS OF PETITION FOR ARB REVIEW; EQUITABLE GROUNDS FOR RELIEF FROM TIME LIMITATION; NOTICE OF DECISION BY E-MAIL
In Flood v. Cendant Corp., ARB No. 04-069, ALJ No. 2004-SOX-16 (ARB Jan. 25, 2005), the Complainant was found to have failed to establish equitable grounds for excusing a failure to file a timely request for ARB review where the Complainant received notice of the ALJ's decision by e-mail (the ALJ having agreed to communicate by e-mail to accommodate the Complainant's travel in Europe), but had not filed his request for review within 10 days of that date.
TIMING OF APPEAL OF ALJ'S BIFURCATED DECISION ON THE MERITS AND DAMAGES
Where an ALJ issues a recommended decision on the merits of the case, reserving damages issues for further adjudication, and later issues a decision on damages, the ARB will consider the recommended resolution of the merits and damages claims to have merged into a single final decision, and will review both the merits and damages issues if an appeal is taken at that point. Welch v. Cardinal Bankshares Corp., ARB No. 05-064, ALJ No. 2003-SOX-15 (ARB Mar. 14, 2005). The Board had earlier found that the Respondent's appeal at the time of the merits decision was interlocutory.
PETITION FOR ARB REVIEW; EACH PARTY MUST FILE PETITION FOR REVIEW WITHIN 10 DAYS OF ALJ DECISION; SUBSEQUENT CROSS-PETITIONS ARE NOT PERMITTED
In Henrich v. Ecolab, Inc., ARB No. 05-036, ALJ No. 2004-SOX-51 (ARB Mar. 31, 2005), the ALJ had ruled that the Complainant had engaged in protected activity and that the Respondent was aware of at least some of that activity, but recommended dismissal of the complaint on the ground that the Complainant had failed to establish that protected activity was a contributing factor in the Respondent's decision to terminate the Complainant's employment. The SOX regulations require the filing of a petition for ARB review within 10 business days of the date of the ALJ's recommended decision and order. The Complainant timely filed a petition for ARB review. Several weeks later the Respondent filed a cross-petition for review.
The ARB noted that the SOX regulations do not provide for cross-petitions for appeal. The Board therefore considered the Respondent's petition to be untimely and looked to determine whether equitable grounds existed for tolling the time period for requesting review. The Respondent argued, essentially, that it would be inefficient to require that that a party file an unnecessary protective appeal in cases in which it would not choose to appeal unless the other party did, and that Congress could not have so intended. The Respondent cited as an example, FRAP 4(a)(3), which applies to appeals of right. The ARB observed that under FRAP 5(b), which governs appeals by permission (as in SOX cases), a party may have to file a protective appeal. The Board held that the SOX rules "do in fact require a party to file a protective appeal that ultimately may be unnecessary."
TIMELINESS OF REQUEST FOR BOARD REVIEW; OBLIGATION OF COMPLAINANT TO CAREFULLY READ ALJ'S NOTICE OF APPEAL RIGHTS
In Minkina v. Affiliated Physician's Group, ARB No. 05-074, ALJ No. 2005-SOX-19 (ARB July 29, 2005), equitable grounds for tolling the period for requesting Board review were not established based on the Complainant's inability to find an attorney nor her confusion over the appeal period because the ALJ's notice of appeal rights informed the Complainant of the process for perfecting an appeal and it was her obligation to read it carefully.
ARB REVIEW; TIME PERIOD FOR ARB REVIEW IS DIRECTORY AND NOT JURISDICTIONAL
In Welch v. Cardinal Bankshares Corp., ARB No. 04-054, ALJ No. 2003-SOX-15 (ARB May 13, 2004), the ARB held that the 120-day period stated in the regulations for it to issue a final decision was directory and not jurisdictional.
