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WHISTLEBLOWER NEWSLETTER

Office of Administrative Law Judges
United States Department of Labor


January 16, 1996


This newsletter covers the materials that became available during the period from November 28, 1995 to January 16, 1996.

ADVERSE ACTION; PROVISION OF ADVERSE RECOMMENDATION TO OPM
[N/E Digest XIII B 17]

Providing an adverse recommendation to the Office of Personnel Management is tantamount to having an adverse performance appraisal on file in an employer's personnel office, and is adverse employment action (that is discrimination with respect to compensation, terms, conditions, or privileges of employment). Leveille v. New York Air National Guard, 94-TSC-3 and 4 (Sec'y Dec. 11, 1995).

ADVERSE ACTION; HOSTILE WORK ENVIRONMENT/CONSTRUCTIVE DISCHARGE; REASONABLE STEPS TO RECTIFY; REQUIREMENT THAT ENVIRONMENT WOULD ACTUALLY COMPEL A REASONABLE PERSON TO RESIGN
[N/E Digest XIII C]

In Boudrie v. Commonwealth Edison Co., 95-ERA-15 (ALJ Dec. 11, 1995), the ALJ reviewed the law concerning what constitutes a hostile work environment in his recommended decision and order. Extending the discussion of the Secretary of Labor in English v. General Dynamics Corp., 85-ERA-2 (Sec'y Feb. 13, 1992), the ALJ noted that the United States Supreme Court has declared that evidence of an alleged hostile work environment must satisfy both an objective and subjective test in order to constitute discriminatory conduct. Harris v. Forklift Systems, Inc., 507 U.S. __, 114 S. Ct. 367 (1993). The ALJ also noted decisions listing factors to consider when determining the extent of possibly hostile activity. He noted that the Seventh Circuit has stated that if an employer takes reasonable steps to discover and rectify acts of harassment of its employees, its legal liability is discharged. Baskerville v. Culligan Int l Co., 50 F.3d 431 (1995). Moreover, the ALJ reviewed Fifth and Seventh Circuit decisions indicating that circumstances that might adequately establish a hostile work environment will not necessarily suffice to establish a constructive discharge; the severity and the pervasiveness of the harassment must be so great to compel the reasonable person to resign. See Landgraf v. USI Film Prod., Inc., 968 F.2d 427, 430 (5th Cir. 1990); Chambers v. American Trans. Air, Inc., 17 F.3d 998, 1005 (7th Cir. 19xx), cert. denied, 115 S. Ct. 512 (1994); Saxton v. American Tel. & Tel. Co., 10 F.3d 526, 536-37 (7th Cir. 1993).

AMENDMENT OF COMPLAINT; IDENTIFICATION OF SOURCE OF ADVERSE REFERENCE AFTER FILING OF COMPLAINT
[N/E Digest II B 1 b]

In Leveille v. New York Air National Guard, 94-TSC-3 and 4 (Sec'y Dec. 11, 1995), the Complainant obtained an employment information form pursuant to the Freedom of Information Act from the Office of Personnel Management. The form was redacted pursuant to the Privacy Act because a source requested confidentiality. The Secretary agreed with the ALJ that there was sufficient data in the form to permit an identification of the source as one of the Complainant's former supervisors only after the discrimination complaints were filed. Thus, the Secretary approved amendment of the complaints to include an alleged violation concerning the information supplied on the form.

ATTORNEY'S FEE REQUEST; ALJ NOT BOUND BY OBJECTIONS OF OPPOSING PARTY
[N/E Digest XVI E 2]

In Sprague v. American Nuclear Resources, Inc., 92- ERA-37 (ALJ Dec. 5, 1995), the Complainant maintained that the Respondent waived its right to object to an attorney fee request item because the objection was untimely. In his recommended order, the ALJ rejected this argument, finding that it is within the discretion of the ALJ to determine what is a reasonable fee, and that he was not bound by the objections of the opposing party in a review of the fee petition.

ATTORNEY'S FEES; WORK BEFORE CIRCUIT COURT WHERE JURISDICTION WAS DECLINED; DOL'S AUTHORITY OVER FEE REQUEST
[N/E Digest XVI E 4 c]

In Sprague v. American Nuclear Resources, Inc., 92- ERA-37 (ALJ Dec. 5, 1995), the ALJ recommended a finding that work done with respect to responding to the Respondent's appeal to the Sixth Circuit was work incurred in connection with bringing the complaint where the Sixth Circuit never accepted jurisdiction over the complaint because the Secretary had not yet issued a final appealable order.

ATTORNEY FEES UNDER THE EQUAL ACCESS TO JUSTICE ACT; ATTORNEY MISCONDUCT PROCEEDING
[N/E Digest XVI E 1]

In Rex v. Ebasco Services, Inc., 87-ERA-6 and 40 (ALJ Nov. 29, 1995), the ALJ recommended denial of a petition for an award of fees under the Equal Access to Justice Act (EAJA), 5 U.S.C. § 504 and its implementing DOL regulation at 29 C.F.R. § 16.101-16-308. The petition arose in connection with a disciplinary proceeding arising out the underlying whistleblower case. The ALJ found that the disciplinary proceeding was not a covered adversary adjudication within the meaning of the EAJA because an on- the-record 5 U.S.C. § 554 hearing is not statutorily or constitutionally required for such a disciplinary hearing.

ATTORNEY'S FEES AND COSTS; INTERIM ORDER
[N/E Digest XVI E 7]

In Gaballa v. The Atlantic Group, 94-ERA-9 (Sec'y Dec. 7, 1995)(interim order), the Secretary followed the precedent set in Varnadore v. Oak Ridge National Laboratory, 94-CAA-2 and 3 (Sec'y Sept. 11, 1995), that " where a complainant has prevailed after a hearing before an ALJ and a recommended decision issued, the Secretary shall, pursuant to § 5851(b)(2)(A) and (B), issue an interim order awarding to the complainant, an amount equal to the aggregate amount of all costs and expenses (including attorneys' and expert witness fees) which the Secretary determines to have been reasonably incurred for, or in connection with, bringing the complaint. If [a respondent] is successful in its appeal of the ALJ's recommended decision, it is anticipated that recoupment of the attorney's fees would not pose a substantial problem." Varnadore at 9-10; 29 C.F.R. § 18.36 (1994).

ATTORNEY'S FEES; LODESTAR METHOD
[N/E Digest XVI E 3 a]

In calculating attorney fees under the ERA, the Secretary uses the lodestar method, which requires multiplying the number of hours reasonably expended in pursuing the litigation by a reasonable hourly rate. Gaballa v. The Atlantic Group, 94-ERA-9 (Sec'y Dec. 7, 1995) (interim order).

ATTORNEY'S FEES; INCREASE IN RATE; REFERENCE TO PRIOR REQUESTS
[N/E Digest XVI E 3 d vi] [new section]

In Gaballa v. The Atlantic Group, 94-ERA-9 (Sec'y Dec. 7, 1995), the Secretary noted that he had determined an hourly rate of $190 to be reasonable in a 1994 case in which Gaballa's attorney had appeared. The Secretary found that a 5% increase in that attorney's hourly rate -- to $200 -- was appropriate. The attorney had requested a rate set at $225 per hour.

ATTORNEY'S FEES; BLACKLISTING CASE; FEES CANNOT INCLUDE HOURS RELATING TO PRIOR UNDERLYING DISCRIMINATION CASE
[N/E Digest XVI E 3 d ii]

In Gaballa v. The Atlantic Group, 94-ERA-9 (Sec'y Dec. 7, 1995), the attorney failed to distinguish between time spent pursuing an underlying discrimination case and the current blacklisting case. The Secretary held that the Complainant was only entitled in the instant proceeding to fees incurred in furtherance of his blacklisting litigation, and rejected claims for costs and expenses that could not be clearly attributed to the blacklisting case.

BACK PAY; PERIOD BEYOND ORIGINAL TERM OF EMPLOYMENT OF CONTRACT WORKER
[N/E Digest XVI C 2 b i]

In Doyle v. Hydro Nuclear Services, 89-ERA-22 (ALJ Nov. 7, 1995), the ALJ applied the analysis of Walker v. Ford Motor Co., 684 F.2d 1355 (11th Cir. 1982) in computing back pay for a contract employee. Walker indicates that in cases of fixed term contracts, a complainant must initially introduce some evidence showing that the economic injury resulting from the discharge extended beyond the employment term. Walker, 684 F.2d at 1362. This proof may consist of no more than a showing that the particular complainant's contract had been renewed in the past, that contracts of similarly situated employees had been renewed, or that the employer had made a promise of continued employment. In Doyle, the evidence failed to show that the Complainant would have been rehired at the facility he was working at; however, the evidence also showed that similarly situated employees found work at other facilities under contract and that the Complainant would have found such work except for the Respondent's denial of unescorted access to the Complainant (which in effect, was a blacklisting). The ALJ concluded that the Respondent was liable for back pay beyond the original term of employment.

BLACKLISTING; LACK OF ACTUAL INJURY DOES NOT SHIELD A RESPONDENT FROM LIABILITY
[N/E Digest XIII B 1]

The fact that a blacklisted complainant was not refused employment or did not suffer an actual employment injury does not shield a respondent from liability. Leveille v. New York Air National Guard, 94-TSC-3 and 4 (Sec'y Dec. 11, 1995). In the context of the facts in Leveille, blacklisting was simply marking an employee for avoidance in employment because she engaged in protected activity; communication of an adverse recommendation is evidence of the decision to blacklist the employee. The Secretary stated that "[b]lacklisting is the quintessential discrimination, i.e., distinguishing in the treatment of employees by marking them for avoidance." Although the conversation in which the Complainant's former supervisor made a negative employment recommendation was not a legitimate call from a prospective employer but from a employment reference checking service, the Secretary indicated that he would follow his finding in Earwood v. Dart Container Corp., 93-STA-16 (Sec'y Dec. 7, 1994) (STAA case), that "effective enforcement of the Act requires a prophylactic rule prohibiting improper references to an employee's protected activity whether or not the employee has suffered damages or loss of employment opportunities as a result."

COMPENSATORY DAMAGES; COMPARATIVE AWARD
[N/E Digest XVI D 4 a]

In Doyle v. Hydro Nuclear Services, 89-ERA-22 (ALJ Nov. 7, 1995), the ALJ reviewed other employment discrimination cases in which damages for emotional pain, emotional stress and anxiety, and damage to reputation, had been awarded, and recommended that under the facts of the case, an award of $40,000 was appropriate.

EVIDENCE; ELECTION NOT TO CALL REBUTTAL WITNESS; ADVERSE INFERENCE
[STAA Digest III J]

In Tanguay v. Westside Transport, Inc., 95-STA-28 (Sec'y Nov. 22, 1995), the Secretary noted with apparent approval the ALJ's drawing of an adverse inference from the respondent's election not to call its field representative as a rebuttal witness.

LEGITIMATE BUSINESS REASONS; CHAIN-OF-COMMAND REQUIREMENTS MAY UNDERMINE PUBLIC HEALTH AND SAFETY
[N/E Digest XI B 2 b 9]

In Leveille v. New York Air National Guard, 94-TSC-3 and 4 (Sec'y Dec. 11, 1995), the ALJ found that the Complainant's former supervisor gave negative employment references, not because of the Complainant's protected activity as an environmental protection specialist (the ALJ noting that the supervisor was himself concerned with environmental problems and had conveyed to the Complainant his intent to seek solutions and the existence of plans already put into motion), but rather the Complainant's unwillingness to accept the base's Major General's decision to work through the New York State Department of Environmental Conservation rather than involve the National Guard Bureau.

The Secretary rejected the ALJ's analysis, finding that it "would condone an employer mandate that all environmental complaints be handled internally with no recourse to any external regulatory agencies, depending upon what the 'person in charge' determined to be the 'correct route'." Slip op. at 15-16. The Secretary also rejected the ALJ's attempt distinguish other chain-of-command decisions. The Secretary wrote:

  • [A]n employer may not, with impunity, discipline an employee for failing to follow the chain-of-command, failing to conform to established channels, or circumventing a superior, when the employee raises an environmental health or safety issue.

  • * * *

  • Such restrictions on communication -- whether by the 'person in charge' or through adherence to the 'chain-of-command' -- would seriously undermine the purpose of the environmental whistleblower laws to protect public health and safety.
  • Slip op. at 16-17 (citations omitted).

    LEGITIMATE BUSINESS REASONS; REMOVAL OF COMPLAINANT IN EFFORT TO SATISFY NRC POLICY
    [N/E Digest XI B 2 c]

    In Talbert v. Washington Public Power Supply System, 93-ERA-35 (ALJ Oct. 20, 1995), the ALJ concluded that the Respondent's very existence depended on it making changes in personnel and the attitude of its employees in response to the NRC's finding the Respondent needed to change its "culture" of operating as though Emergency Operating Procedures (EOPs) were advisory only. The NRC considered the view that EOPs were advisory to be "blasphemy". The Complainant, a person with a reputation as a brilliant engineer, was viewed by at least some of the Respondent's executives as the principal protagonist of the belief that engineers and operators had the discretion to depart from EOPs if they thought best. The Complainant had expressed his view that following a certain EOP would be wrong and dangerous at a meeting in which Respondent's executives were explaining that company policy was that EOPs were "the law" and had to be followed rigidly, or changed through a procedure. The ALJ concluded that "the Respondent's need to satisfy the NRC was so compelling that it would have removed [the Complainant] . . . even if he had never raised the [issue of EOP safety at the EOP meeting] or later."

    MOTIVE FOR BLACKLISTING; MAY BE INFERRED FROM VEILED REFERENCES EVEN IF PROTECTED ACTIVITY IS NOT MENTIONED
    [N/E Digest XIII B 1]

    In Leveille v. New York Air National Guard, 94-TSC-3 and 4 (Sec'y Dec. 11, 1995), a Complainant's former supervisor gave a negative employment reference to a reference checking company. The former supervisor did not mention any of the Complainant's protected activity, but referred to that Complainant's spousal relationship, her being a combative and argumentative employee and her otherwise poor interpersonal skills, as being reasons he would not hire her. The Secretary noted that the former supervisor commented that the interpersonal skills were only part of the problem, and declining to comment further, told the reference checker that "I think you know how to listen between the lines." The Secretary found that the references to other, unstated reasons for his opinions suggest illicit motivation, especially since this conversation followed by several months a letter from the Complainant's attorney admonishing the former supervisor not to denigrate the Complainant because she had engaged in protected activity.

    REBUTTAL; COMPLAINANT'S ULTIMATE BURDEN TO ESTABLISH BOTH PRETEXT AND THE PRESENCE OF INTENTIONAL DISCRIMINATION
    [N/E Digest XI B 3]

    Once a respondent proffers a legitimate nondiscriminatory reason for taking adverse action and thus successfully rebuts the presumption of discrimination raised by the prima facie case, the complainant must prove that the respondent's reason was not the true reason for the adverse action and that the protected activity was. Cf. St. Mary's Honor Center v. Hicks, 113 S. Ct. 2742 (1993)(Title VII, Civil Rights Act of 1964). Proving only that the proffered reason was unbelievable does not compel a finding for the complainant. Rather, the trier of fact must find intentional discrimination in order for the complainant to prevail. Leveille v. New York Air National Guard, 94-TSC-3 and 4 slip op. at 7-8 (Sec'y Dec. 11, 1995).

    TESTIMONY; LACK OF CORROBORATING WITNESSES
    [N/E Digest X E]

    Where a Complainant testified that she had learned about certain instances in which a former supervisor had provided adverse references to her employers or to a prospective employer, but that testimony was not corroborated and the former supervisor denied speaking to that Complainant's co- workers or being aware that she worked for the respective employers, the Secretary found that the Complainant had failed to produce the witnesses necessary for substantiation of her blacklisting charge. Leveille v. New York Air National Guard, 94-TSC-3 and 4, slip op. at 9-10 (Sec'y Dec. 11, 1995).

    TIMELINESS; APPLICATION OF EQUITABLE PRINCIPLES; FRAUDULENT CONCEALMENT
    [N/E Digest IV B 2]

    In Hill v. United States Dept. of Labor, 65 F.3d 1331 (6th Cir. 1995), the court held that the limitations period in Section 210 of the Energy Reorganization Act (now Section 211), is not jurisdictional, and may be extended when fairness requires. Equitable principles may be applied when a defendant fraudulently conceals its actions, misleading the plaintiff respecting his or her cause of action. To establish a fraudulent concealment to avoid a statute of limitations, the plaintiff must prove (1) wrongful concealment by the defendants of their actions; (2) failure of the plaintiff to discover the operative facts that are the basis of the cause of action within the limitations period; and (3) the plaintiff's due diligence until discovery of the facts. The party relying on equitable tolling through fraudulent concealment has the burden of demonstrating its applicability; such an equitable remedy is narrowly applied because statutes of limitation are vital to society's welfare and are favored in the law.

    The court noted that a claim of fraudulent concealment is technically not for equitable tolling but of equitable estoppel.

    Concealment of motives versus concealment of actions

    In Hill, the Complainants asserted that, as a matter of law, equitable tolling applies where the defendant concealed the motives for its actions, even though the essential elements of a claim are known. The Secretary had concluded otherwise -- that equitable tolling applies only when a respondent concealed its actions giving rise to a cause of action, and not to concealment of motives. The court agreed with the Secretary, holding that "[a] deception regarding motive supports application of equitable tolling only where the deception conceals the very fact of discrimination. . . . Equitable tolling through fraudulent concealment is not warranted where a petitioner is aware of all the essential facts constituting discriminatory treatment but lacks direct knowledge or evidence of the defendant's subjective discriminatory motive." Hill, 65 F.3d at 1337 (citations omitted).

    Discovery of operative facts within limitations period.

    In Hill, the court found that the Complainants failed to establish that they had failed to discover the operative facts upon which they based their claim within the limitations period. The Complainants were employed by the Respondent (TVA) to investigate and report nuclear safety concerns. Thus, they knew they had been engaged in protected activity, that the Respondent was aware of the protected activity, and that the Respondent had taken adverse action against them in terminating their contract. The court held that this information alone was sufficient to cause a reasonable mind (much less an expert on § 210 which Complainants held themselves out to be), to suspect that the Respondent's adverse actions might be in retaliation for the protected activity. Additional factors, inter alia, were the circumstances surrounding the Respondent's employment of the Complainant's employer as an intermediary between the Respondent and the NRC (which included a concern that the Respondent might retaliate against employees for reporting safety concerns), the economic impact of Complainant's employers's reports of preventing the opening of Respondent's Watts Bar facility, and knowledge that the Respondent had complained about the Complainant's employer's reporting of safety concerns to Congress.

    The court repeated an earlier holding that "To hold that a tolling or suspension of the limitation of actions must continue unless or until proof positive existed of a wrong (which might never be established in fact) would abort the policy of the law of repose in statutes of limitations of diligence in the equitable principles permitting suspension of them."" Hill, 65 F.3d at 1338, quoting Pinney Dock & Transp. Co. v. Penn Central Corp., 838 F.2d 1445, 1478 (6th Cir. 19xx), cert. denied, 488 U.S. 880 (1988).

    Due diligence

    The court found that the Complainants failed to demonstrate due diligence, there being evidence that the Complainants were in fact, or should have been, suspicious of retaliatory motive. The court wrote that [i]n order for a fraudulent concealment claim to prevail, a plaintiff must prove that the defendant's attempts to mislead the plaintiff actually succeeded. Hill, 65 F.3d at 1338 (citation omitted).

    The Complainants argued that just because they disagreed with the Respondent's reasons for terminating their employer's contract does not mean they were aware that the reasons were pretextual. The court found that this argument missed the point: they had sufficient facts at the time to evaluate the propriety of the reasons, and had a legal duty to investigate whether the Respondent acted on illegal motivations.

    WHISTLEBLOWER PROTECTION EXTENDS TO SPOUSE OF PERSON ENGAGED IN PROTECTED ACTIVITY
    [N/E Digest XII A]

    In Leveille v. New York Air National Guard, 94-TSC-3 and 4, slip op. at 8 (Sec'y Dec. 11, 1995), the Secretary adopted the ALJ's finding that a spouse is protected against discrimination motivated by his or her spouse's protected activity under the environmental whistleblower provisions.


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