This proceeding arises from a complaint filed by Ms. Stacey M. Platone against Atlantic Coast Airlines Holdings, Inc., alleging violations of the employee protection provisions in Section 806 of the Sarbanes-Oxley Act of 2002, codified in 18 U.S.C. § 1514A (hereinafter "the Act"). Enacted on July 30, 2002, the Act provides the right to bring a "civil action to protect against retaliation in fraud cases" under section 806. The Act affords protection from employment discrimination to employees of companies with a class of securities registered under section 12 of the Security Exchange Act of 1934 (15 U.S.C. 78l) and companies required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C 78o(d)). Specifically, the law protects so-called "whistleblower" employees from retaliatory or discriminatory actions by the employer, because the employee provided information to their employer or a federal agency or Congress relating to alleged violations of 18 U.S.C. §§ 1341, 1343, 1344 or 1348, or any provision of Federal law relating to fraud against shareholders. All actions brought under Section 806 of the Sarbanes-Oxley Act are governed by 49 U.S.C. § 42121(b). 18 USC § 1514A(b)(2)(B).
On April 2, 2003, the Complainant, Stacy M. Platone, filed a Sarbanes-Oxley whistleblower complaint with the Occupational Safety & Health Administration (OSHA), U.S. Department of Labor. After conducting an investigation, OSHA's regional director issued two letters dated July 18 and 22, 2003 advising the parties that Ms. Platone's complaint lacked merit. Subsequently, Ms. Platone filed her objections with the Office of Administrative Law Judges, U.S. Department of Labor. A formal hearing was held before me in Washington, D.C., on November 14, 17, 20, and December 16, 2003, at which times the parties were given the opportunity to offer testimony and documentary evidence, and to make oral argument. At the hearing, Complainant's Exhibits 1-5, 7-11, 13, 18, 20, 22, 28, 29, 32, 33, 37, 38, 40, 41, 44, 46, 47, 50, and 52-55, Respondent's Exhibits 1, 4-8, 15-17, and 19, and ALJ Exhibit 1 were admitted into evidence. The parties submitted post-hearing briefs pursuant to an Order Establishing Briefing Schedule dated January 15, 2004. I have reviewed and considered these briefs in making my determination in this matter.
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STATEMENT OF THE CASE
Atlantic Coast Airlines Holdings, Inc. is a publicly traded company incorporated in the state of Delaware with its executive offices located in Dulles, Virginia. Its stock is registered on the NASDAQ National Market under the symbol ACAI. Atlantic Coast Airlines Holdings, Inc.'s (hereinafter "ACAI") wholly-owned subsidiary, Atlantic Coast Airlines (hereinafter "ACA"), is a steadily growing regional airline carrier established in 1989 with over 5,000 employees, including almost 1,600 pilots. Atlantic Coast Airlines recently announced the creation of its new identity and low-fare airline, Independence Air, which will operate out of Washington Dulles International Airport beginning in early 2004.
ACA's senior management is comprised of over a dozen individuals, including a few who serve simultaneously on ACAI's board of directors: Mr. Kerry Skeen is the Chairman of the Board of ACAI and the Chairman & CEO of ACA; and Mr. Thomas Moore is a member of the Board of Directors of ACAI and President & COO of ACA. Mr. Moore is the direct supervisor of the labor relations department at ACA, who in turn reports directly to Mr. Skeen. Mr. Skeen has the authority to hire, fire, promote, or demote anyone within ACA's management.
Both parties introduced an assortment of documentary evidence in an attempt to illustrate the airline's precise corporate identity. Specifically, the record includes a multitude of various corporate manuals, press releases, SEC filings, Web pages, employment offer letters, and tax forms with either ACAI's or ACA's corporate logo and title generically affixed to the top or within the body of the document. The Respondent maintains that ACAI's logo and official title is used on most of its corporate letterhead in an effort to conveniently include the entire Atlantic Coast Airlines family of corporate entities under similar policies and directives.2 Complainant, however, alleges that the corporate logos for both ACA and ACAI are used interchangeably because there is no practical distinction between the two entities.
1 Citations to the record of this proceeding will be abbreviated as follows: "Tr." refers to the Hearing Transcript; "CX" refers to Complainant's Exhibits; and "RX" refers to Respondent's Exhibits.
2 In fact, ACAI has only one operating subsidiary, ACA.
3 Within ACA's corporate structure, Mr. Rodgers reports directly to Thomas Moore, who in turn reports directly to Kerry Skeen.
4 Mr. Rodgers did acknowledge that he helped Captain Swigart get into a training slot (Tr. 545).
5 In October of 2002, Justine Yingling was a Labor Relations Specialist. Since Ms. Platone's termination by ACA, Ms. Yingling has assumed the role of Manager of Labor Relations.
6 According to Ms. Platone, Ms. Yingling told her that Mr. Rodgers instructed her to spy on Ms. Platone, but when she confronted Mr. Rodgers, he denied it (Tr. 333).
7 According to Ms. Platone, a pilot gets the schedules in the middle of the month for the next month, and has to bid for trips. The schedules come out at the end of the month, with trips being given to the most senior pilots. Mr. Rops was a junior pilot (Tr. 252-253).
8 Ms. Schep is also known and referred to throughout the record as Jennifer Tripp.
9 Ms. Platone had previously spoken with Captain Thomas about a pilot who was removed from the schedule after picking up a trip on his day off, and she told him that was not "kosher" policy. In addition, Captain Thomas and Captain Rops had asked her to remove another pilot from the schedule, and she disagreed with them about whether that was appropriate. In connection with this issue, Ms. Platone consulted Captain Swigart, Captain Smith, and Captain Fox, who supported her interpretation (Tr. 282-283).
10 Indeed, although Captain Thomas had sent him an e-mail about flight pay loss the day before, and called him to discuss it, Mr. Rodgers could not recall the subject of flight pay loss coming up on this day (Tr. 568-570; CX 29).
11 In fact, Ms. Davis's notes of this meeting, produced for the first time at the hearing, refer to flight pay loss at least three times. They also indicate that Ms. Platone told them that Captain Thomas told Mr. Rodgers that he could not work with Ms. Platone (Tr. 689).
12 Kirk Taylor, a member of the aircraft mechanics union, testified that he had a poor working relationship with Ms. Platone during one particular grievance because Ms. Platone took a hard-line stance on behalf of ACA. Ms. Yingling and Ms. Schep had also complained about Ms. Platone to Mr. Rodgers regarding her performance and professionalism. All of the complaints were eventually resolved to Mr. Rodgers' satisfaction.
13 Mr. Rodgers testified that pilots' salaries contributed to over 50% of the company's total wages; coupled with flight attendants, ACA pilots' salaries amounted to $120,000,000 in 2003.
14 ACAI formerly owned a company called AC Jet, but this subsidiary is now defunct.
15 Of course, these were the only records that Ms. Platone had been able to assemble on her own; she was not provided with the records that she requested.
16 The statutes referred to in the Sarbanes-Oxley Act encompass mail, wire, bank, and securities fraud.
17 Mr. Rodgers testified that it was not possible to determine if the pilots involved were acting deliberately. However, given the information uncovered by the Complainant, as well as the potential loss involved, I find that the Complainant's concerns were reasonable, and deserved further investigation. Furthermore, the Complainant had concentrated her attention on instances where the union meetings were scheduled before "swap and drops" occurred, suggesting willful action on the part of the pilot.
18 On March 7, shortly after he told the Complainant that he did not want to send her draft letter, Mr. Rodgers told her to remove the union negotiating committee members from the flight schedule for the following week, which is when concessionary negotiations had been scheduled to begin. Captain Thomas called the Complainant the following Tuesday and demanded that these pilots be placed back on the flight schedule, stating that the union had nothing further to discuss with the company at this time. The negotiations were subsequently cancelled.