Complainant, David Marshall
High (High), alleged that Respondents, Lockheed Martin Energy Systems, Inc. (Energy
Systems), Lockheed Martin Corporation (Lockheed Martin), Oak Ridge Operations Office
(ORO), and the United States Department of Energy (DOE), violated the whistleblower
provisions when Energy Systems made a settlement offer to High concerning an earlier
whistleblower complaint. In a Recommended Order of Dismissal (R. O. D.), the
Administrative Law Judge (ALJ) found that the complaint did not comply with the applicable
pleading requirements and did not state a claim upon which relief may be granted. We dismiss
the complaint on the second ground, for failure to state a claim under the whistleblower
provisions.
PROCEDURAL HISTORY
High I
High is employed by LMES and serves as the physical fitness
coordinator for all of the DOE facilities at Oak Ridge, Tennessee that are managed by LMES.
In December 1995, High filed a whistleblower complaint with the Department of Labor
alleging that he engaged in protected activity by identifying fraudulent or wasteful practices
within the physical fitness department and as a consequence was the victim of an adverse
employment action. While the complaint was pending investigation by the Department's Wage
and Hour Division, High made a settlement offer including, among other provisions, that
LMES pay $5000 in attorney's fees. LMES counteroffered that in exchange for dismissal of
the complaint, it would reimburse High's attorney for incurred fees and expenses up to $5000.
High declined the counteroffer. The Wage and Hour Administrator made a finding that High
had not engaged in any activity protected under the whistleblower provisions and High sought
a hearing before an ALJ, where the complaint is pending in Case No. 96-CAA-8.
This Complaint (High II)
On September 26, 1996, High filed this complaint (No. 97-CAA-3),
which states:
Re: Class Action re: Improper "offers" of Coercive Fees-Only
Settlements
[List of statutes under which complaint is brought omitted.]
This complaint is on behalf of Mr. David M. High, et al. We request
that DOL issue a class action certification of the issue. DOE lawyers
have given permission and encouragement to LMES to offer unethical
fees-only settlements to Oak Ridge whistleblowers, which
"settlements" unlawfully seek to bribe plaintiff lawyers,
undermine client confidence, and elicit whistleblowers to give up their rights to compensatory
damages under whistleblower statutes, in violation of the ERA and the environmental
whistleblower laws. LMES' discriminatory fees-only offer was made in this case and when
Mr. High refused to accept it, DOL refused to investigate. DOE, LMES and DOL all showed
contempt for Mr. High's basic human rights. See, e.g., Connecticut Light & Power Co.
v. Secretary of Labor , No. 95-4094 (2nd Cir. May 31, 1996) (available on WWW and
at 1996 U.S. App. LEXIS 12583), re: hardball employer anti-whistleblower coercion and
litigation tactics (e.g., finding a whistleblower violation tolling statute of limitations in the
employer's proposing a settlement agreement with an illegal "gag order" designed
to violate rights). Mr. High requests an independent investigation of this practice and
certification of a class action by DOL.
Id. Accordingly, the Wage and Hour Division did not conduct
an investigation into the High II complaint.
High requested a hearing before an ALJ and simultaneously submitted
to each of the Respondents interrogatories and a request for production of documents. The
Chief ALJ ordered the parties to show cause why the hearing request in High II
should not be consolidated with the request in High I . The Lockheed Martin
respondents indicated that consolidation was premature and asked that the High II
complaint be assigned to the same ALJ. The Chief ALJ assigned High II to the
ALJ who was handling High I . Jan. 7, 1997 Order.
The Lockheed Martin Respondents moved to dismiss Lockheed Martin
Corporation as a respondent, to dismiss the entire complaint for failure to state a cause of
action, and in the alternative, to deny certification of a class action. DOE asked the ALJ to
dismiss it as a respondent "because DOE is not Complainant's employer and the amount
of a settlement offer is not a proper basis for filing a whistleblower complaint. . . ."
Jan. 24, 1997 letter from Robert James to ALJ. The ALJ ordered High to show cause why
the complaint should not be dismissed for the reasons stated in the two motions "and for
failure to comply with 29 C.F.R. Part 24." Mar. 11, 1997 Order.
High submitted a response, to which DOE in turn submitted a response.
High moved to strike DOE's response as contrary to the applicable rules. The Lockheed
Martin Respondents sought leave to file a reply to High's response and tendered a reply.
The ALJ accepted both responses, found that the complaint does not
comply with the basic pleading requirements of 29 C.F.R. §24.3, and that "[t]he
monetary amount of a settlement offer is not a proper basis for the filing of a complaint under
any of the listed whistleblower statutes." R. O. D. at 2. Accordingly, the ALJ
recommended dismissing the complaint.
DISCUSSION
One basis for the ALJ's dismissal was that the complaint failed to state
a cause of action under the whistleblower statutes. None of the whistleblower provisions
specifically provides for dismissal of a complaint for failure to state a claim upon which relief
may be granted. Consequently, we look to the Federal Rules, specifically to Fed. R. Civ. P.
12(b)(6). Tyndall v. U.S. Environmental Protection Agency , Case Nos. 93-CAA-6
and 95-CAA-5, ARB Dec. and Rem. Ord., June 15, 1996, slip op. at 3. See 18
C.F.R. §18.1(a) (1997) ("The Rules of Civil Procedure for the District Courts of
the United States shall be applied in any situation not provided for or controlled by [the rules
of practice for proceedings before ALJs], or by any statute, executive order or
regulation.").
In considering dismissal for failure to state a claim, "all reasonable
inferences are made in favor of the non-moving party." Estelle v. Gamble,
429 U.S. 97 (1976); accord, Tyndall , slip op. at 3; Studer v. Flowers Baking
Co. of Tennessee, Inc ., Case No. 93-CAA-00011, Sec. Dec. and Remand Ord., June
19, 1995, slip op. at 2. We "must accept all factual allegations as true, Collins v.
Nable , 892 F.2d 489, 493 (6th Cir. 1989)," but "need not accept legal
conclusions or unwarranted factual inferences." Morgan v. Church's Fried
Chicken , 829 F.2d 10, 12 (6th Cir. 1987). "The claim should not be dismissed
unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim
which would entitle him to relief." Windsor v. The Tennessean, 719 F.2d
155, 158 (6th Cir. 1983); accord, Helmstetter v. Pacific Gas & Elec. Co ., Case
No. 91-TSC-1, Sec. Dec. and Rem. Ord., Jan. 13, 1993, slip op. at 4.
Assuming that the factual allegations of High's complaint are true, DOE
lawyers encouraged and gave permission to lawyers for Energy Systems to offer to High and
other, unnamed whistleblowers, a settlement under which the complainants' attorneys would
receive payment of legal fees and the whistleblowers themselves would not receive any other
relief available under the whistleblower provisions.
The remainder of the statements in High's complaint are legal
conclusions: that offering such a settlement is "unethical," constitutes a
"bribe of plaintiff lawyers," "undermine[s] client confidence," shows
"contempt for . . . basic human rights," and "elicit[s] whistleblowers to give
up their rights to compensatory damages under whistleblower statutes, in violation of the ERA
and the environmental whistleblower laws."
A complaint "must contain either direct or inferential allegations
respecting all the material elements to sustain a recovery under some viable legal
theory." Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434 (6th Cir.
1988), quoting Car Carriers, Inc. v. Ford Motor Co. , 745 F.2d 1101, 1106 (7th
Cir. 1984). High's complaint does not contain either a direct or an inferential allegation
concerning a material element of a whistleblower complaint: that the Respondents
discriminated against High with respect to the compensation, terms, conditions, or privileges
of employment. For example, under the Clean Air Act's whistleblower provision, a
respondent violates that Act if it:
discharge[s] or otherwise discriminate[s] against any employee with
respect to his compensation, terms, conditions, or privileges of
employment because the employee . . .
(1) commenced, caused to be commenced, or is about to commence or
cause to be commenced a proceeding under [the Clean Air Act] or a
proceeding for the administration or enforcement of any requirement
imposed under [the Clean Air Act] or under any applicable
implementation plan,
(2) testified or is about to testify in any such proceeding, or
(3) assisted or participated or is about to assist or participate in any
manner in such a proceeding to carry out the purposes of [the Clean Air
Act].
42 U.S.C. §7622(a) (emphasis added). The other whistleblower provisions are
substantially similar, although two contain the word "fire" in lieu of
"discharge." See 42 U.S.C. §9610(a) (CERCLA); 42 U.S.C.
§6971(a) (SWDA).
On one occasion, in a case that must be construed narrowly, the
Secretary found an ERA violation in specific "gag" provisions of a settlement
offer. In Delcore v. W.J. Barney Corp ., et al., Case No. 89-ERA-38, Sec. Final
Dec. and Ord., Apr. 19, 1995, aff'd sub nom. Connecticut Light & Power Co. v.
Reich , 85 F.3d 89 (2d Cir. 1996), a respondent offered the complainant a monetary
settlement of a court action in exchange for his agreement to restrict his participation in future
regulatory and judicial proceedings. The Second Circuit framed the question: "whether
proffering a settlement agreement, whereby an employer attempts to restrict an employee's
ability to cooperate with administrative and judicial bodies, violates Section 210 of the
ERA," 85 F.3d at 94, and found an ERA violation.2 As the court explained,
id. at 95: "[a]lthough the act of inducing an employee to relinquish his rights
as provided by the ERA through means of a settlement agreement is less obvious than a more
direct action, such as termination, it is certainly aimed at the same objective: keeping an
employee quiet."
There is no allegation that the settlement offer at issue here contained
a gag provision aimed at keeping High quiet. Absent an allegation that a settlement term
insisted upon by the Respondents would curtail High's rights under the whistleblower
provisions such that the Respondents discriminated against him with respect to the
compensation, terms, conditions, or privileges of his employment, High's complaint does not
allege a material element of a whistleblower violation. Accordingly, dismissal for failure to
state a claim is proper. In light of our finding that dismissal was correct on one ground, we
make no finding on the additional ground on which the ALJ relied, that the complaint did not
comply with the basic pleading requirements of 29 C.F.R. §24.3.3
The complaint is DISMISSED with prejudice.
SO ORDERED.
DAVID A. O'BRIEN
KARL J. SANDSTROM
JOYCE D. MILLER
[ENDNOTES]
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