WHISTLEBLOWER NEWSLETTER

Office of Administrative Law Judges
United States Department of Labor

August 1, 1996

ADVERSE ACTION; AGENCY'S COMMUNICATION WITH OWCP UPON DISCOVERY THAT COMPLAINANT WAS IMPROPERLY RECEIVING DISABILITY BENEFITS UNDER FECA
[N/E Digest XIII B 2]

During an ERA whistleblower hearing, Complainant voluntarily disclosed that while collecting both total and partial disability FECA payments from TVA, he had returned to work but had not returned the disability checks. TVA had earlier become aware of that Complainant was improperly receiving both total and partial disability through a routine review by TVA of OWCP charges for benefits paid. After the matter was brought to the attention of OWCP, both of Complainant's disability payments were terminated. Complainant then filed an ERA whistleblower complaint asserting that TVA discriminatorily persuaded OWCP to terminate his FECA benefits.

TVA's communication with OWCP in an attempt to have Complainant's eligibility for FECA benefits reviewed was found not to violate the ERA because TVA's actions were specifically authorized by FECA regulations. See 20 C.F.R. § 10.140. The Board concluded that Complainant was "attempting to improperly circumvent the preclusive and binding effects of his adverse OWCP and ECAB rulings under the FECA through this separate and unauthorized action in a matter exclusively within the purview of the FECA. 5 U.S.C. §§ 8116(c) and 8128(b) (1988)." Slip op. at 13 (footnote and case citations omitted).

Billings v. Tennessee Valley Authority, 91-ERA-12 (ARB June 26, 1996).

AFTER ACQUIRED EVIDENCE; APPROPRIATE SANCTIONS ON RESPONDENT WHO UNDERTAKES INVESTIGATION OF COMPLAINANT
[N/E Digest XI F]

In James v. Ketchikan Pulp Co., 94-WPC-4 (ARB June 28, 1996), Complainant moved for reconsideration and rehearing based on evidence obtained after the close of the record, which he contended showed that Respondent's witnesses lied concerning Respondent's knowledge of his protected activities, and its investigation of Complainant. The Board found that the new evidence concerned an issue on which Complainant had prevailed before the Secretary, who explicitly found that Complainant was singled out for suspension because of his protected activities. The Board held:

Implicit in this finding is the recognition that James discriminatorily was targeted for investigation by KPC. Notwithstanding KPC's impermissible motive in investigating James, however, the company uncovered evidence that justified firing him. As the Supreme Court recognized in McKennon v. Nashville Banner Publishing Co., 115 S.Ct. 879, 1995 U.S. LEXIS 699 at *19: "Once an employer learns about employee wrongdoing that would lead to a legitimate discharge, we cannot require the employer to ignore the information, even if it is acquired during the course of discovery in a suit against the employer and even if the information might have gone undiscovered absent the suit."

Here, the Secretary followed the Supreme Court's guidance and did not require KPC to ignore the evidence it uncovered, even though KPC's motive for conducting the investigation was wrongful. The Supreme Court recognized in McKennon that an award of attorney's fees and, in appropriate cases, an additional sanction may be employed to diminish the willingness of employers to "undertake extensive discovery into an employee's background or performance to resist claims." Id. at *20. In this case, we believe that the Secretary's decision awarding attorney's fees and costs to James is a sufficient deterrent.

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

The lodestar method is employed in calculating attorney's fees under the environmental whistleblower statutes. This method requires multiplying the number of hours reasonably expended in pursuing the litigation by a reasonable hourly rate. Hensley v. Eckerhart, 461 U.S. 424 (1983).

A petition for attorney's fees must be based on records, indicating date, time and duration necessary to accomplish the specific activity. Each activity item should be detailed and clearly identifiable as pertaining to the case. All claimed costs should be specifically identified, and if possible, a receipt appended.

In Sutherland v. Spray Systems Environmental, 95-CAA-1 (ARB July 9, 1996), counsel's fee itemization provided the date and time spent for each element of activity associated with the appeal before the Secretary. The Board stated that it is not required that counsel share his work product with Respondent, and such elements were self-explanatory. The Board also stated that the actual time of day that the activity took place was inconsequential, and that counsel had provided all necessary information.

ATTORNEY'S FEES; REASONABLY INCURRED STANDARD; LATE BRIEF; ABSENCE OF OBJECTION
[N/E Digest XVI E 2]

The ERA requires a respondent to pay only those costs, including attorney's fees, reasonably incurred in bringing a complaint. 42 U.S.C. § 5851(b)(2)(B). Where Complainant's attorney prepared and filed a brief on review by the Secretary several months late, without seeking leave or providing any reason for the delay, a fee request for preparation of the brief was not reasonable, and was properly deducted by the ALJ from his recommendation on attorney's fees. The Board did not find persuasive Complainant's argument that Respondent waived any objection to hours claimed for preparing the brief when it did not oppose the earlier fee request.

Sprague v. American Nuclear Resources, Inc., 92-ERA-37 (ARB July 15, 1996).

ATTORNEY'S FEES; WORK BEFORE COURT OF APPEALS; SPILT IN CIRCUITS
[N/E Digest XVI E 4 c]

In cases arising in the Sixth Circuit, the Secretary and the Board are not authorized to award attorney's fees for appellate work before the court of appeals. DeFord v. Tennessee Valley Authority, 715 F.2d 231, 232-33 (6th Cir. 1983). In Fourth Circuit cases, however, the Secretary and Board are permitted to order the respondent to pay attorney fees for appellate work in the court of appeals. Blackburn v. Reich, 79 F.3d 1375 (4th Cir. 1996).

See Sprague v. American Nuclear Resources, Inc., 92-ERA-37 (ARB July 15, 1996).

DELIBERATIVE VIOLATION AS BAR TO SUIT UNDER CAA
[N/E Digest XIX]

In Dotson v. Anderson Heating & Cooling, Inc., 95-CAA-11 (ARB July 17, 1996), the Board adopted the ALJ's findings that Complainant was not protected by the Clean Air Act because he deliberately violated the Act by cheating on an EPA required examination, and that Respondent did not direct him to do so. 42 U.S.C. § 7622(g).

DISMISSAL FOR FAILURE TO RESPOND TO LAWFUL ORDER OF ALJ
[N/E Digest XVIII C 6]

In Billings v. Tennessee Valley Authority, 91-ERA-12 (ARB June 26, 1996), the ALJ issued an order to show cause why the case should not be dismissed due to the failure of Complainant to comply with an earlier prehearing order. Complainant's response avoided the issue, and did not contain a denial that he failed to comply with the ALJ's prehearing order. The Board held that the ALJ's dismissal of the complaint with prejudice was proper pursuant to 29 C.F.R. § 24.5(e)(4)(I)(B).

INTERNAL COMPLAINTS; INFORMALITY OF COMPLAINT
[N/E Digest XII B 1 d i and XII C 1]

In Hermanson v. Morrison Knudsen Corp., 94-CER-2 (ARB June 28, 1996), the Board found that the ALJ correctly recognized that internal complaints were protected under the whistleblower provisions of the pertinent environmental statutes. The Board, however, stated that it was reluctant to accept the ALJ's decision insofar as the ALJ at points suggested that he was reluctant to find Complainant's alleged complaints to be protected activity because they were both internal and informal.

The Board observed that an informal and internal safety complaint may constitute protected activity. Slip op. at 5, citing, Nichols v. Bechtel Construction, Inc., 87-ERA-44, slip op. at 10 (Sec'y Oct. 26, 1992) (employee's verbal questioning of foreman about safety procedures constituted protected activity), appeal dismissed, No. 92-5176 (11th Cir. Dec. 18, 1992); Dysert v. Westinghouse Electric Corp., 86-ERA-39, slip op. at 1, 3 (Sec'y Oct. 30, 1991) (employee's complaints to team leader protected).

The Board emphasized that "[i]nternal safety complaints are covered under the environmental whistleblower statutes in the Eighth Circuit, the Fifth Circuit and every other circuit. See Amendments to the ERA in the Comprehensive National Energy Policy Act of 1992 (CNEPA), Pub. L. No. 102-486, 106 Stat. 2776." The Board noted that "[t]he only current exception to this rule is for cases filed in the Fifth Circuit under the Energy Reorganization Act of 1974 (ERA), as amended, 42 U.S.C. § 5851 (1988), prior to October 24, 1992."

LEGITIMATE, NONDISCRIMINATORY REASON FOR ADVERSE ACTION; EVIDENCE OF DISCIPLINE OF OTHERS FOR SAME ACTIVITY IN PAST
[N/E Digest XI E 3]

In Hermanson v. Morrison Knudsen Corp., 94-CER-2 (ARB June 28, 1996), the Board indicated that evidence that Respondent had fired other employees in the past for the same failure to adhere to conduct and safety rules that Complainant was fired for, supported a finding that Respondent's decision to fire Complainant was for nondiscriminatory reasons.

PRELIMINARY ENFORCEMENT ORDERS UNDER ERA; POST-REINSTATEMENT PERFORMANCE EVALUATIONS AND REFERENCES
[N/E Digest XVI B 3 and XVI G 2 a]

In McNeice v. Northeast Nuclear Energy Co., 95-ERA-18 and 47 (ARB July 3, 1996), the Board clarified the Secretary's earlier Preliminary Order and Order of Remand, which directed Respondent to correct a 1994 performance evaluation relating to Complainant. The Board stated that the directive only affected that performance evaluation, and not any performance evaluations subsequent to Complainant's reinstatement in 1996. The Board noted, however, that post reinstatement evaluations must not reflect anything other than a fair and accurate evaluation of the Complainant's performance.

In addition, the Board noted that the preliminary order directing Respondent not to give a less than satisfactory reference regarding Complainant, only related to the period up to Complainant's 1996 reinstatement. The Board stated that if Complainant ceases to be employed by Respondent in the future, Respondent is expected to provide a fair and accurate reference of Complainant's performance subsequent to the 1996 reinstatement.

PRELIMINARY ENFORCEMENT ORDERS UNDER ERA; TYPES OF RELIEF ENFORCED
[N/E Digest XVI B 3 and XVI G 2 b]

In McCafferty v. Centerior Energy, 96-ERA-6 (ARB July 15, 1996), the ALJ issued a recommended decision and order in favor of Complainants. The Board issued a Preliminary Order directing Respondent to comply with various forms of relief recommended by the ALJ: reinstatement of Complainants in accordance with certain directives by the ALJ; payment of back pay with interest; removal of denial of access flags from the records of all Complainants. The Board indicated that it would supplement the Preliminary Order once the ALJ issued his recommended supplemental decision and order concerning costs and expenses, including attorney's fees.

The ALJ had ordered reinstatement of one Complainant -- who had been denied access to at least one of Respondent's facilities because of falsification of a self-disclosure questionnaire -- be conditioned on compliance with NRC regulations. The ALJ held that if NRC regulations mandated a professional assessment before reinstatement, that Complainant should be given the opportunity to pursue the assessment. McCafferty v. Centerior Energy, 96-ERA-6 (ALJ June 11, 1996).

PROTECTED ACTIVITY; GENERAL SAFETY COMPLAINTS
[N/E Digest XII D 1 a]

In Hermanson v. Morrison Knudsen Corp., 94-CER-2 (ARB June 28, 1996), the Board held that the ALJ had drawn too broad a conclusion by stating that "the whistleblower provisions of the various environmental statutes are intended to apply to the expression of environmental concerns rather than general safety concerns." Rather, the Board stated that "[u]nder the appropriate conditions a general safety concern stated by an employee can have an environmental impact such that it would be covered." Slip op. at 5 (citations omitted).

PROTECTED ACTIVITY; COMPLAINANT NEED NOT BE A SUBSTANTIAL SOURCE OF INFORMATION
[N/E Digest XII C 5]

In Hermanson v. Morrison Knudsen Corp., 94-CER-2 (ARB June 28, 1996), Complainant and other employees were emptying an aqueous waste tank when a drum of waste material fell and a portion of its contents were spilled. A shift engineer who investigated the incident talked to employees involved, including Complainant. Complainant testified:

. . . It was getting close toward the end of the day and Mr. Winchester came up to me and he said, "Dave, what are you talking about?" I said, "What do you mean? What are you talking about?" He said, "That spill." I Said, "You mean the one Friday?" And he says, "Was it a bucket, a gallon, or how much was it? How big of a spill was it?" I said, "Mr. Winchester, I can't tell you. There's a gag order and I can't speak to you. I'll have to refer you to my supervisors and management because my job is on the line." And he understood.

Slip op. at 3, quoting transcript of hearing. The ALJ held that Complainant was not a party to the investigation of the incident and therefore could not have engaged in protected activity. The Board, although agreeing that Complainant "did not provide substantial information concerning the incident, [concluded that] his statement to Winchester confirming that a spill had occurred was a clear indication that further investigation of the incident was necessary, and thus was protected.

RECUSAL; JUDGE WHO HAD PRESIDED OVER RELATED OR PRIOR PROCEEDINGS
[N/E Digest VIII A 5]

In Billings v. Tennessee Valley Authority, 91-ERA-12 (ARB June 26, 1996), Complainant sought recusal by the presiding ALJ, who had presided over earlier, related cases involving Complainant. The Board affirmed the ALJ's ruling denying recusal. See 29 C.F.R. § 18.31; 28 U.S.C. §§ 144, 455(a), 455(b)(1). An excerpt from the Board's discussion follows:

Under 28 U.S.C. § 144, a judge is presumed to be impartial, and a substantial burden is imposed on the requesting party to prove otherwise. . . .

Absent specific allegations of personal bias or prejudice, neither prior adverse rulings of a judge nor his participation in a related or prior proceeding are sufficient for recusal under 28 U.S.C. § 144. ... Adverse rulings in previous proceedings, whether correct or erroneous, involving the same judge and the party requesting recusal, are an insufficient basis for recusal. ...

Similarly, under 28 U.S.C. § 455(a), opinions held by judges as a result of what they learned in earlier proceedings are not bias or prejudice requiring recusal, and it is normal and proper for a judge to sit in the same case upon remand and successive trials involving the same defendant. The source of the appearance of partiality must arise from something other than the judge's mere involvement in previous cases concerning the parties in the present case.

Slip op. at 5-7 (citations omitted).

REMAND; ALLEGATION OF INADEQUATE WAGE AND HOUR INVESTIGATION
[N/E Digest V C]

In Billings v. Tennessee Valley Authority, 91-ERA-12 (ARB June 26, 1996), Complainant sought remand of the matter to the Wage and Hour Division for further investigation. The Board affirmed the ALJ's ruling denying remand because Complainant did not establish a legitimate reason for remand, but only attacked the merits of Wage-Hour's findings of nondiscrimination. The Board added that Wage-Hour's findings were not binding because the regulations accord complainants a right to de novo hearings on the merits of complaints. The Board wrote: "Accordingly, any arguable flaws in Wage-Hour's investigation or findings would not adversely affect litigation of his case before the ALJ." Slip op. at 8-9 (citations and footnote omitted).

REOPENING OF RECORD; NEW EVIDENCE MUST BE OUTCOME-DETERMINATIVE
[N/E Digest IX D 2]

In James v. Ketchikan Pulp Co., 94-WPC-4 (ARB June 28, 1996), the Board cited Timmons v. Mattingly Testing Services, 95-ERA-40 (ARB June 21, 1996), for the proposition that material evidence justifying reopening must be outcome-determinative. See also 29 C.F.R. § 18.54(c)(1995).

RES JUDICATA; PRIOR SUIT DISMISSED UNDER RULE 41(b) FOR FAILURE TO COMPLY WITH ALJ'S PREHEARING ORDERS
[N/E Digest XXI A]

The law of res judicata is applicable to administrative proceedings when an agency is acting in a judicial capacity. Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties based on the same cause of action. The judgment precludes the parties from relitigating issues that were or could have been raised in that action.

In Billings v. Tennessee Valley Authority, 91-ERA-12 (ARB June 26, 1996), the ALJ had issued prior decisions on complaints that raised the same issues vis-a-vis the Respondents named in the present proceeding. The Board held that even though the substance of these issues was not specifically litigated in the prior cases, the ALJ's recommended decision and order therein constituted a judgment on the merits for res judicata purposes. The ALJ's recommended decision and order was issued pursuant to Fed. R. Civ. P. 41(b) for failure to comply with the ALJ's prehearing orders, was subsequently affirmed by the Secretary, and the courts of appeals denied review.

The Board held that a dismissal order issued under Rule 41(b) operates as an adjudication on the merits unless the dismissal order specifies otherwise, and therefore the instant action was barred by the doctrine of res judicata. The Board noted that it was irrelevant under Rule 41(b) that the ALJ's orders in the earlier proceeding were issued sua sponte.

SETTLEMENT; DOLLAR AMOUNT MUST BE DISCLOSED TO DEPARTMENT; AMOUNT OF ATTORNEY FEES AGREED TO NEED NOT BE REVIEWED UNLESS A DISPUTE ARISES ABOUT THE APPROPRIATENESS OF THE AMOUNT
[N/E Digest XVII C 3]

In Klock v. Tennessee Valley Authority, 95-ERA-20 (ARB May 1, 1996), Biddy v. Alyeska Pipeline Service Co., 95-TSC-7 (ARB May 31, 1996), and Ezell v. Tennessee Valley Authority, 95-ERA-39 (ARB June 26, 1996), the parties submitted settlement agreements for approval by the Secretary. Those agreements, however, gave no indication as to the actual amount of money to be paid to the Complainant pursuant to the proposed settlement.

The Board, ordering a joint response from the parties in the cases, stated that it must know the amount Complainant will receive in order to determine if the settlement agreement is fair, adequate and reasonable. The Board stated in each order that: "This amount affects not only the Complainant's individual interest, but impacts on the public interest as well, because if the amount is not fair, adequate and reasonable, other employees may be discouraged from reporting safety violations." Citing Plumlee v. Alyeska Pipeline Service Co., 92-TSC-7 (Sec'y Aug. 6, 1993).

In Klock and Biddy, the record also failed to specify the amount of attorney's fees to be paid. The Board stated in those orders that "[a]s long as the parties are in agreement as to the amount of the attorney's fees to be paid, it is not necessary for the Secretary to review the amount with the specificity usually required by the lodestar method. Hensley v. Eckerhart, 461 U.S. 424 (1983). If a dispute arises between the parties with regard to the appropriateness of the amount of attorney's fees, a subsequent order requiring an itemization of such fees may be necessary."

SETTLEMENT MUST BE PRESENTED TO DEPARTMENT FOR APPROVAL
[N/E Digest XVII C 3]
[STAA Digest X A 3]

In Faust v. Chemical Leaman Tank Lines, Inc., 92-SWD-2 and 93-STA-15 (ARB June 13, 1996), the Secretary issued a remand order to the ALJ for a recommended order on damages. Respondent filed a request that the remand order be vacated because the parties had settled a couple months prior to issuance of the remand order. This was the first notice DOL had of the settlement. The Board declined to vacate the remand order, noting that until the settlement was approved it was not valid. The Board directed the ALJ to consider the proposed settlement, "or if either party so desires, for issuance of a recommended order on damages consistent with the [remand order]".

SUBSTITUTION OF REPRESENTATIVE DURING COURSE OF PROCEEDING
[N/E Digest IX M]

In Billings v. Tennessee Valley Authority, 91-ERA-12 (ARB June 26, 1996), Complainant's wife filed a motion to be substituted as the representative of her deceased husband. The Board granted this motion pursuant to Fed. R. Civ. P. 25(a) and 29 C.F.R. § 18.1(a).