DATE: June 1, 1994
CASE NO. 85-CAA-1
IN THE MATTER OF
DONALD J. WILLY,
COMPLAINANT,
v.
THE COASTAL CORPORATION AND
COASTAL STATES MANAGEMENT CORPORATION,
RESPONDENT.
BEFORE: THE SECRETARY OF LABOR
FINAL DECISION AND ORDER
Respondent [1] fired Complainant as one of its in-house
attorneys in October 1984 for failing to report a telephone call
to a state agency and lying about it when asked by his
supervisor. R- (Respondent's Exhibit) 9. The Administrative Law
Judge (ALJ) found after a hearing that Respondent fired
Complainant both because of his lie about the phone call and
because of Complainant's internal memorandum on Respondent's
violations of the environmental laws. Because Respondent did not
prove it would have fired Complainant "solely for lying about the
phone call had he not engaged in protected activity,"
Recommended Decision and Order (R. D. and O.) at 26, the ALJ
found that discharging Complainant was an act of retaliation
prohibited by the employee protection provisions of the Clean Air
Act, 42 U.S.C. § 7622 (1988), the Water Pollution Control
Act, 33 U.S.C. § 1367 (1988), the Safe Drinking Water Act,
42 U.S.C. § 300j-9(i) (1988), the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. § 6971 (1988), the Toxic Substances
Control Act, 15 U.S.C. § 2622 (1988), and the Comprehensive
Environmental Response, Compensation and Liability Act of 1980,
42 U.S.C. § 9610 (1988). However, the ALJ recommended against
providing
[PAGE 2]
any relief to Complainant because he lied during the hearing
about obtaining a job in 1988 which paid more than he had been
earning at the time he was fired by Respondent. R. D. and O. at
28.
Respondent excepted to the R. D. and O. on a number of
grounds and Complainant excepted to the denial of all relief.
For the reasons discussed below, Respondent's exceptions are
denied and Complainant's exception is granted in part.
I- Background
Respondent hired Complainant as an environmental attorney in
May 1981 principally to provide legal advice on Respondent's
compliance with federal and state environmental laws. T.
(Transcript of hearing) 44; 57. [2] Respondent, its
subsidiaries and affiliated companies are engaged in "a
diversified energy business [including] oil refining, the sale of
oil and gasoline, the transportation of hydrocarbons by barge,
and natural gas transmission by pipeline." R. D. and O. at 3.
In January or February 1984, Clinton Fawcett, Complainant's
supervisor in Respondent's legal department, requested
Complainant, attorney Troy Webb, and regulatory analyst Keith
Pardue to conduct an "environmental audit" of the Florida oil
storage and supply facilities of Respondent's subsidiary, the
Belcher Oil Company. T. 139-42. Mr. Webb and Mr. Pardue
conducted on site reviews of Belcher's Florida facilities and
provided their findings to Complainant, T. 144; C-79, who drafted
a report to the President of Belcher, Albin Smith, on March 22,
1984. See C-81 and 84.
Complainant's "Belcher report" makes numerous findings of
inadequate or nonexistent environmental protection activities at
Belcher facilities, repeated failure to obtain required permits
or allowing permits to expire without applying for renewal, and
making discharges of pollutants into the air and water without
required permits. At several points, the Belcher report states
directly that "Belcher [is in] violation of the Clean Water Act,"
id. at 13, or strongly implies that some of its activities
are illegal, e.g., "to maintain legal status of the [Cape
Canaveral] facility, [a] permit must be obtained," id. at
11; "Pensacola has no . . . permit and has discharged water
directly into the bay. A permit must be obtained." Id.
at 15.
Copies of Complainant's draft of the Belcher report were
provided to, among others, Mr. Smith, Mr. Fawcett, Mr. Pardue,
and Troy Dalton, the engineer in charge of environmental matters
at Belcher. Complainant's Exhibit 84 is a copy of the draft
Belcher report with Mr. Fawcett's comments, changes and deletions
in which Mr. Fawcett proposed to delete substantial portions of
the report, including all the language which stated or implied
that Belcher was in violation of the environmental laws.
[PAGE 3]
Mr. Dalton and Mr. Pardue severely criticized many portions of
the report, C-81, also suggesting deletion of language implying
Belcher violated the environmental laws. For example, next to a
statement that the Environmental Protection Agency was
considering enforcement action against Belcher for "continued
operation in violation of permits [and] groundwater
contamination," Mr. Dalton and Mr. Pardue commented "overkill[,]
way too strong." Id. at p.5. They struck out the
sentence "Belcher's compliance with the legal and environmental
requirements may be summarized as poor," commenting that this was
"OVER KILL[,] [sic] Conclusion based on?" Id. at
p.8. Many of the factual findings of the report were disputed by
Dalton and Pardue with comments like "No," or "Not
correct,"[sic], id. at 9, or "Not true." Id.
at 10. Their response to the statement that certain actions of
the Port Everglades facility were "totally illegal" was
"overkill[,] sets company up for lawsuit." Id. at 11.
Mr. Webb and Complainant had had disagreements about
compliance with EPA requirements before the Belcher audit, T. 97-
99; 565, and Mr. Webb disagreed with Complainant's assessment of
the seriousness of the problems at the Belcher facilities in
Florida. C-78 and 85; T. 476-77. [3] Mr. Webb wrote a
memorandum to Mr. Smith, the President of Belcher, without
informing Complainant, in which he summarized the conclusion of
the audit as finding "the facilities to be generally in good
shape environmentally." C-78, p.2; T. 493. Mr. Fawcett,
Complainant's supervisor at the time of the Belcher report, and
Mr. Brundrette, Respondent's General Counsel, both believed the
Belcher report needed to be revised to change its "tone."
T. 742; R-65 (Brundrette deposition), p. 32.
Mr. Pardue conceded at the hearing that Belcher was not
meeting its environmental reporting and permitting
responsibilities because it did not have the staff, that Belcher
had committed some unpermitted discharges of polluted water,
T. 468-71, and that the Belcher report was factually accurate.
Id. at 490. While he agreed that the situation at Belcher
was serious, id. at 478, that additional reporting on the
problems there to EPA and state agencies was required, id.
at 479, and that at least one facility could be the subject of a
lawsuit, id. at 491, Mr. Pardue characterized the
violations as technical, id. at 475, and thought
Complainant's draft Belcher report was "inflammatory."
Id. at 496. Mr. Pardue felt that the disagreement between
Complainant and Mr. Webb over the significance of the findings in
the draft Belcher report, Mr. Webb's memorandum to Mr. Smith sent
without Complainant's knowledge, and Complainant's direction to
Mr. Smith to ignore Mr. Webb's memorandum, were a "fiasco." T. 516.
[PAGE 4]
William Dunker, who had been a colleague of Complainant on
the legal department staff, became Complainant's immediate
supervisor in June 1984, as well as Mr. Webb's supervisor.
T. 538. Mr. Fawcett transferred to another position with
Respondent, and Mr. Dunker reported to George Brundrette, a
senior vice president, general counsel and member of the board of
directors of Respondent, who supervised the entire legal
department.
In the summer of 1984, Mr. Dunker gained the impression that
Complainant was making derogatory comments about Mr. Webb to
other employees of Respondent and prepared a written reprimand of
Complainant. T. 546; R-6. Before he delivered the reprimand,
Mr. Dunker decided to have a meeting with Complainant, which
Mr. Dunker characterized as a "hearing [on what] was wrong.
. . . [S]omething was going on in my department, and I wanted to
find out what it was." T. 547. At the meeting on September 25,
1984, Mr. Dunker decided not to give Complainant the reprimand
because one of Mr. Webb's chief complaints against Complainant
was not confirmed by Mr. Webb's source during a phone call at the
meeting. T. 550. Mr. Webb had asserted that Complainant had
called an employee of the Texas Department of Water Resources
(TDWR) to discuss matters concerning the Corpus Christi refinery,
that Complainant had been told by the TDWR employee that the
agency planned to sue Respondent, and that Complainant had not
told Mr. Webb about the call. R-18B, p. 6; T. 431-32.
Complainant said at the September 25 meeting "I never talked to
TDWR . . . . not [regarding] Corpus Christi [pause] as far as I
remember." R-18B, p. 6. Mr. Dunker reluctantly reassigned
Complainant "to handle all Refining and Environmental
responsibilities . . . for the Corpus [Christi] Refinery . . .
due solely to a request by [Corpus Christi Refinery Manager] Bob
Johnston." R-7.
After the September 25 meeting, Mr. Dunker called the TDWR
employee who told Mr. Dunker he had spoken with Complainant
during the summer of 1984. T. 553-55. This confirmed
Mr. Dunker's belief that Complainant had lied about the phone
call and about "backstabbing" Mr. Webb, and on that basis
Mr. Dunker decided to fire Complainant. T. 556; 672-73.
Mr. Dunker met with Complainant again on October 1, 1984, to give
Complainant "another chance to disprove [that he had lied about
the phone call to TDWR]." T. 556. He called the TDWR employee
with Complainant in his office, listened on the speaker phone as
the agency employee told Complainant he had spoken to him that
summer about "financial assurance," and Complainant said he did
not remember the call. R-18B, p.28. Mr. Dunker fired
Complainant because three or four times at the September 25
meeting Complainant "unequivocably" denied calling the TDWR,
id.[PAGE 5]
at p.30, and Mr. Dunker "couldn't trust him." Id; T. 556.
II- Respondent's Exceptions
A- Respondent excepted to the admission in evidence of
annotated copies of Complainant's Belcher report, C-81 and 84,
arguing that introduction of those exhibits was prohibited by
Respondent's claim of attorney-client privilege. These documents
were at the heart of Complainant's case and by admitting them in
evidence, Respondent argues, the ALJ not only sanctioned the
violation of the privilege but placed Respondent at an unfair
disadvantage. Complainant was able to present his case through
use of the exhibits, but Respondent could not rebut it through
other privileged documents or by permitting its employees to
answer questions about the exhibits without having waived the
privilege.
Supreme Court Standard 503-Lawyer Client Privilege provides
that "[a] client has a privilege to refuse to disclose and to
prevent any other person from disclosing confidential
communications made for the purpose of . . . professional legal
services to the client . . . ." However, "[t]here is no
privilege under [the] rule . . . [a]s to a communication relevant
to an issue of breach of duty by the lawyer to his client or by
the client to his lawyer . . . ." Standard 503(d)(3), reprinted
in Weinstein's Evidence, 503-1 to 2 (1992). Weinstein's Evidence
explains that this rule codifies the "generally accepted view
that when the attorney and client become opponents in a
subsequent controversy, the attorney may, to the extent necessary
to defend his rights, reveal any communication or advice given."
Id. at 503-123-24.
The Model Rules of Professional Conduct provide that "[a]
lawyer may reveal [confidential information] . . . to establish a
claim or defense on behalf of the lawyer in a controversy between
the lawyer and the client . . . ." Model Rules of Professional
Conduct Rule 1.6 (b)(2) (1983). Similarly, Disciplinary Rule
4-101 of Model the Code of Professional Responsibility prohibits
an attorney from revealing or using a confidence or secret of a
client for his own advantage, but provides an exception where
revelation of "confidences or secrets [is] necessary to establish
or collect [the attorney's] fee or to defend himself . . .
against an accusation of wrongful conduct." Model Code of
Professional Responsibilities DR 4-101(C)(4) (1980). Note 19 on
Rule 4-101(C)(4) explains that "'if it became necessary for the
attorney to bring an action against the client, the client's
privilege could not prevent the attorney from disclosing what was
essential as a means of defending or obtaining his own rights.'"
In addition, the Texas Disciplinary Rules of Professional Conduct
[4] provide that "a lawyer shall not knowingly . . . [r]eveal
[PAGE 6]
confidential information of a client," Rule 1.05(b)(1), but "[a]
lawyer may reveal confidential information . . . [t]o the extent
reasonably necessary to enforce a claim or establish a defense on
behalf of the lawyer in a controversy between the lawyer and the
client." Texas Disciplinary Rules of Professional Conduct Rule
1.05(c)(5) (1991). Comments on the rule note that the principle
of confidentiality also is given effect by the law of evidence
and of agency, and that exceptions to attorney-client privilege
"exist . . . where . . . issues have arisen as to breach of duty
by the lawyer or by the client to the other." Comment on Rule
1.05, ¶ 3.
The Fifth Circuit recognized this the exception to the rule
against revealing confidences of a client in a case analogous to
this. Former house counsel for a corporation who had provided
legal advice on that corporation's benefit plan sued the
corporation and administrators of its benefit plan for benefits
allegedly due him and sought to act as class representative and
attorney for a class of other employee beneficiaries of the plan.
Doe v. A Corp., 709 F.2d 1043 (5th Cir. 1983). The court
held that Doe was prohibited by the Canons of Ethics from
representing the class of employees either as class
representative or attorney. But a former client's need to
maintain confidentiality does not automatically take precedence
over a lawyer's assertion of his personal rights. 709 F.2d at
1048. Disciplinary Rule 4-101(c) provides that a lawyer may reveal
confidential information when it is necessary for him to do so to
prevent the client from committing a crime, to collect a fee, or to
defend himself against an accusation of wrongful conduct because, as
explained in the notes, "'[i]t would be a manifest injustice to
allow the client to take advantage of the rule of exclusion as to
professional confidence to the prejudice of his attorney, or that
it should be carried to the extent of depriving the attorney of
the means of obtaining or defending his own rights.' ABA Opinion
250 (1943)." Id. at 1049.
The court in Doe v. A Corp. held that "[a] lawyer . .
. does not forfeit his rights simply because to prove them he
must utilize confidential information." Id. at 1050.
Recognizing the client's interest in confidentiality,
nevertheless the court held
[t]here is no social interest in
allowing the corporation to conceal
wrongdoing, if in fact any has
occurred. Nor is there any social
interest in allowing it to deny Doe
pension rights or insurance
benefits if they are legally due
him. But that would be the effect
of our refusing to allow Doe to
prosecute his individual lawsuit."
Id.
It was not error, therefore, for the ALJ to admit in
evidence annotated copies of Complainant's draft Belcher
[PAGE 7]
report. [5] Respondent was in the same position as any client
in litigation with its former attorney, being obliged to waive
its privilege to defend itself or pursue its rights. [6]
B- Respondent excepted on the basis of attorney-client
privilege to placing the ALJ's Recommended Decision and Order and
the Secretary's final decision on the public record. As the
Secretary has noted several times in whistleblower cases, the
"Freedom of Information Act . . . requires Federal agencies to
disclose requested records unless the records are exempt from
disclosure under that Act." Daily v. Portland Gen. Elec.
Co., Case No. 88-ERA-40, Sec. Dec. March 1, 1990, slip op. at
1 n.1. There is no authority in the statutes involved in this
case for an ALJ or the Secretary to seal either the record or
their decisions, or providing an exception to the FOIA to
restrict public access to any documents filed in this case. I
note that the Department of Labor has promulgated regulations
providing specific procedures for submitters of information to
protect their rights under the exemptions in the FOIA.
See 29 C.F.R. § 70.26 (1992).
C- Respondent asserts it was error for the ALJ to credit any
of Complainant's testimony because Complainant was not truthful
about his employment after Respondent fired him, and Complainant
"falsely den[ied]" calling the TDWR employee. Respondent does
not identify, however, specific parts of Complainant's testimony
that were relied on by the ALJ, were not supported by other parts
of the record, and led the ALJ to erroneous conclusions. As
discussed more fully below, the ALJ's conclusion, which I adopt,
that Respondent was motivated by retaliation when it fired
Complainant, is based largely, if not entirely, on documentary
evidence, the testimony of Respondent's witnesses, and the taped
meetings between Complainant and Mr. Dunker.
D- Respondent raises again the argument that Complainant's
internal complaints of violations of the environmental laws are
not protected activities under the Fifth Circuit's decision in
Brown & Root, Inc. v. Donovan, 747 F.2d 1029 (5th
Cir. 1984). The Secretary already has decided this issue in this
case, Willy v. The Coastal Corporation, Case No. 85-CAA-1,
Sec. Dec. Jun. 4, 1987, slip op. at 3-8. In addition, Brown &
Root is applicable only to the ERA and did not purport to
interpret the environmental whistleblower laws at issue in this
case. [7]
There is a potential alternative basis for coverage in this
case, Complainant's telephone call to the TDWR, which would be
protected activity even under Brown & Root. The ALJ held
that the call was not protected because Complainant denied making
it and there was not enough information in the record about "the
substance of such contact to support a finding that it
constituted protected activity." R. D. and O. at 22. However,
[PAGE 8]
the focus should be on Respondent's perception of Complainant's
activity and whether Respondent was motivated by its belief that
Complainant had contacted a state agency.
Although it is clear Mr. Dunker believed Complainant did
make the call to the TDWR, it is difficult to separate out his
motivation with respect to the call. Mr. Dunker asserted he was
upset by the fact that Complainant made the call because
Complainant did not tell Mr. Webb about it or inform anyone else
in the legal department that the TDWR employee had raised the
possibility of a lawsuit against Respondent. T. 688; 693.
However, Mr. Dunker also could have been angry simply because
Complainant contacted a state agency concerning one of
Respondent's facilities for which Mr. Dunker believed Complainant
had no responsibility. T. 688. The first reason for
Mr. Dunker's reaction, failure to keep colleagues informed about
significant information related to their responsibilities, would
not be protected activity, but the second reason, the call to the
state agency by itself, would. On this record, I cannot find
whether the protected aspects of Complainant's phone call
motivated Respondent. Therefore, coverage must be based on the
internal Belcher report.
E- Attorneys occupy a special position under the
whistleblower laws, Respondent argues, because 1) they owe
special ethical obligations to their clients, 2) the statutes
were not intended to apply to attorneys, and 3) any disagreement
between a client and an attorney would be protected
whistleblowing under the ALJ's decision, impermissibly extending
the scope of the acts far beyond their intent. In addition,
Respondent suggests that if these statutes cover the termination
of an attorney they are unconstitutional.
I rejected Respondent's first argument based on ethical
considerations in the discussion in Part II A above. Similarly,
the Secretary rejected Respondent's argument that the statutes
were not intended to cover attorneys in the June 4, 1987 decision
which held that "[t]here is nothing in any of the statutes or
their legislative histories to indicate an intention on the part
of Congress to place any limitation on the meaning of the word
'employee.'" Willy v. The Coastal Corporation, slip op.
at 8. The consequences of Respondent's position would be
startling: a covered employer could fire an attorney who files a
formal complaint with EPA or appears as a witness at an EPA
proceeding, or even appears as a witness in a Department of Labor
hearing on a whistleblower complaint filed by a nonlawyer. I
note that other statutes regulating the employer-employee
relationship, including retaliatory discharge laws, have been
held to apply to attorneys, both as employees of corporations and
of law firms. See, e.g., Hishon v. King &
Spalding, 467 U.S. 69 (1984)
[PAGE 9]
(application of Title VII of Civil Rights Act of 1964 in sex
discrimination suit against law firm does not violate firm's
First Amendment rights); Rand v. CF Industries, Inc., 797
F. Supp. 643, 645 (N.D. Ill. 1992) (denying motion to dismiss Age
Discrimination in Employment Act claim by in-house attorney for
lack of coverage of attorneys). [8]
F- Complainant established a prima facie, case under
the prescription for allocation of burdens of proof and burdens
of production in Dartey v. Zack Co. of Chicago, Case No.
82-ERA-2, Sec. Dec. Apr. 25, 1983, slip op. at 6-9, by showing
that he engaged in protected activity of which Respondent,
obviously, was aware, and he was discharged within six months of
writing the Belcher report and at a time when the report
continued to be controversial among Respondent's managers.
SeeCouty v. Dole, 886 F.2d 147, 148 (8th Cir.
1989) (temporal proximity sufficient as matter of law to raise
inference of retaliatory motive); Goldstein v. Ebasco
Constructors, Inc., Case No. 86-ERA-36, Sec. Dec. Apr. 7,
1992, slip op. at 11-12, (causation established where seven or
eight months elapsed between protected activity and adverse
action) rev'd on other grounds,sub nomEbasco
Constuctors v. Martin, No. 92-4576 (4th Cir. Feb. 19, 1993).
Respondent articulated a legitimate reason for firing
Complainant, his lie about the phone call to the TDWR.
I find the record amply supports the ALJ's conclusion that
retaliation for the protected activity of writing the Belcher
report, which the ALJ characterized as ""hostility generated by
the Belcher report," R. D. and O. at 26, was a motivating factor
in Complainant's discharge. See discussion in R. D. and
O. at 24-26. Assuming Complainant did not prove Respondent's
stated reason for discharge, his lie about the phone call to the
TDWR, was pretextual, I agree with the ALJ that Respondent did
not carry its burden of proving that Complainant "would have been
fired solely for lying about the phone call had he not engaged in
protected activity [writing the Belcher report]." Id. at
26. SeeDartey v. Zack Co., slip op. at 9. [9]
Respondent's exception 6 is denied for the reasons discussed
below and those set forth in the R. D. and O. at 23-26.
Mr. Dunker called the September 25, 1984 meeting, he said,
as a kind of "hearing" to find out what was "wrong," that is, why
two attorneys on his staff were "back stabbing" and "cat
fighting." T. 547, 616. But Mr. Dunker never told Complainant
he stood in the position of an accused party, did not tell
Complainant he was recording the meeting, and had prepared a
reprimand in advance finding Complainant guilty of a "course of
behavior [that] has detracted from the overall functioning of"
Mr. Dunker's staff. R-6. The reprimand referred to a discussion
"in detail earlier today [about] certain of your [Complainant's]
[PAGE 10]
activities [that] have resulted in severe disruptions in [Legal]
Department personnel relations and have hindered the effective
and efficient functioning of the [Legal] Department," and denied
Complainant's merit pay increase for 1984, although when
Mr. Dunker wrote the reprimand, the discussion had not yet taken
place. Id. Mr. Dunker had never asked Complainant his
version of the facts, and Mr. Dunker conceded that before the
September 25 meeting he was "predisposed to disbelieve
[Complainant] and to believe Mr. Webb," T. 627, but he insisted
that the September 25 meeting was a "mini-hearing," T. 624, to
give him an opportunity to hear both sides, i.e., Complainant's
and Mr. Webb's. T. 627. Mr. Dunker decided not to deliver
the reprimand to Complainant when Mr. Hall, one of Respondent's
employee's at the Corpus Christi refinery, did not confirm the
allegation that an employee of the TDWR had told Complainant the
TDWR was about to file a law suit against Respondent. Mr. Hall
thought the TDWR employee actually had told this to Mr. Webb, not
Complainant. R-18B, p. 6. In response to Mr. Dunker's statement
"to summarize . . . you [Mr. Hall] seem to be saying that both of them
[Mr. Webb and Complainant] have made disparaging comments about
the other," Mr. Hall said "I would say that is true." Id.
at 7. Mr. Dunker also persistently asserted Complainant had
flatly denied several times ever calling the TDWR, but the
transcript of the September 25 meeting shows that Complainant's
response, in the context of the whole discussion on that issue
with Mr. Dunker, was not the unequivocal denial charged by Mr. Dunker.
Id. at 4. [10] In addition, Mr. Dunker accused
Complainant of calling the TDWR based on Martin Hall's reported
statement that Complainant had done so, but at that point Mr.
Dunker had not himself spoken to Martin Hall, but was relying on
what Mr. Webb and Mr. Pardue had told him, two employees whom Mr.
Dunker knew strongly disagreed with Complainant's Belcher report.
When Mr. Dunker pressed Mr. Pardue for examples of Mr. Webb making
disparaging remarks about Complainant, Mr. Pardue referred to
"the deal we had over Belcher," id. at 10, and Mr. Dunker
cited the disagreement between Complainant and Mr. Webb over the
Belcher report as an example of improper fighting and poor
judgment on both their parts. T. 613. Only a few minutes later,
Mr. Hall denied that he told Mr. Webb and Mr. Pardue that the
TDWR employee had told him he had spoken to Complainant about a
possible law suit; indeed, Mr. Hall thought the TDWR employee had
said he had told Mr. Webb about a possible law suit. R-18B,
p. 6.
When Mr. Dunker called the TDWR employee with Complainant in
his office on October 1, 1984, the agency employee said he did
remember talking with Complainant about financial assurance for
the Corpus Christi refinery, but Complainant said he did not
[PAGE 11]
remember the conversation. Mr. Dunker cut off the telephone call
at that point without asking the TDWR employee whether he had
commented to Complainant about a possible law suit against
Respondent. Mr. Dunker had called the agency employee several
days before the October 1 call, but on cross examination he
couldn't recall if he asked the employee what he and Complainant
had discussed or whether the employee had told Complainant the
TDWR might sue Respondent. T. 655.
When Mr. Dunker fired Complainant on October 1, 1984,
Complainant maintained he did not remember the phone call and
asked Mr. Dunker why it was relevant. Mr. Dunker said "the
relevance is . . . I asked you very specifically three or four
times whether or not you had talked to him. You said no,
unequivocably [sic] no. No, you have never talked to anybody
down there. . . . I can't trust you." R-18B, p.30. At the
hearing, however, Mr. Dunker said the importance of the phone
call was that Complainant "was going behind another attorney's
back, working on something he shouldn't have been working on,
found out . . . what I believe [is] a very important piece of
information, and didn't tell the attorney about it." T. 688.
The important piece of information was "[t]he threat about the
[law] suit." Id. Mr. Dunker conceded that if the TDWR
employee never made such a threat, Mr. Dunker would have been
mistaken in his view of the significance of the telephone call.
Id. It should be noted again that Mr. Dunker never
directly asked the TDWR employee if he had made such a threat,
but relied on Mr. Webb's and Mr. Pardue's report of what they had
been told by Mr. Hall, who denied their report of his conversation
with them.
Thus, Mr. Dunker's suspicions about Complainant were not
borne out at the September 25 meeting, and there was as much
reason to believe that Mr. Webb had been undermining Complainant
because of the memorandum Mr. Webb had written to the President
of Belcher, C-78, without informing Complainant, and Mr. Hall's
comments that both Mr. Webb and Complainant had made disparaging
remarks about each other. Nevertheless, Mr. Dunker said at that
meeting "I get this feeling, and I can't substantiate it right
now, that you're causing a lot of goddamn problems. . . . I
don't believe some of the [expletive] you're putting out. . . .
I have an underlying disbelief." Id. at 15. Combined
with Mr. Dunker's comments about the Belcher report cited by the ALJ,
R. D. and O. at 24-25, and the facts surrounding Complainant's
disputed phone call discussed above, this strongly supports the
ALJ's conclusion that Mr. Dunker was motivated both by the
Belcher report and what he perceived as Complainant's lie about
the phone call and Respondent did not prove it would have taken
the same action had Complainant not written the Belcher
report. [11]
[PAGE 12]
III- Complainant's Exception
Complainant excepted to the ALJ's recommendation that all
relief be denied because Complainant lied in his testimony about
his employment and income since the date of discharge by
Respondent. The ALJ held that
"[w]here a party has knowingly presented misleading
evidence, forfeiture of that party's remedy is required to
further the policy of the Act . . . [and] to safeguard the
integrity of the adjudicative process. . . . [A]s a result
of his attempted subversion of this proceeding, Complainant
has forfeited his right to damages . . . .
R. D. and O. at 28 (citations omitted.)
I do not agree with the ALJ's conclusion that misleading
testimony about mitigation of damages requires denial of all
relief. Implicit in the ALJ's conclusion is an assumption that
the Secretary has the authority under the environmental
whistleblower laws to deny all relief even where a violation has
been found. The Clean Air Act, which was the model for the
environmental whistleblower laws provides
If . . . the Secretary determines that a violation . . . has
occurred, the Secretary shall order the person who
committed such violation to (i) take affirmative action to
abate the violation, and (ii) reinstate the complainant [12]
to his former position together with the compensation
(including back pay), terms, conditions and privileges
of his employment . . . .
42 U.S.C. § 7622(b)(2)(B). (Emphasis added.) [13] Even if
the Secretary has some discretion under this section to deny or
limit back pay for reasons not directly related to the actual
amount of damages suffered by an employee, for the reasons
discussed below I find that denial of back pay would not be
appropriate here.
Respondent argues that the Secretary does have discretion to
deny relief because the Secretary has held that these acts "are
to be interpreted in a parallel manner" with the National Labor
Relations Act (NLRA), Willy v. The Coastal Corporation,
Sec. Dec. Jun. 4, 1987, slip op. at 4, and the courts have denied
relief in comparable circumstances under the NLRA. Even if the
Secretary has some discretion in these circumstances, however,
the NLRA cases draw a distinction between denial of reinstatement
where a complainant has lied to his employer or at the hearing,
and denial of an award of back pay.
Iowa Beef Packers, Inc. v. NLRB, 331 F.2d 176, 185
(8th Cir. 1964), held that a charging party who falsified part of
his charge and gave false testimony at the hearing forfeited his
remedy "to serve the policy of the Act." But the court focused
[PAGE 13]
on the reinstatement aspect of the NLRB order for reinstatement
with back pay, holding that "although an employee is wrongfully
discharged, his reinstatement is not always warranted where the
policies of the Act would not be effectuated by such
reinstatement." Id. Promotion of labor peace and the
collective bargaining process would not be served by forcing an
employer to rehire a deceitful employee because, as the court
held in NLRB v. Coca Cola Bottling Co., 333 F.2d 181, 185
(7th Cir. 1964), "to force [such an employee] upon the Company
under such circumstances would bring about an impossible
situation."
The Fifth Circuit has recognized a distinction between
reinstatement and back pay, because reinstatement would force the
parties to maintain the employment relationship against their
wishes, NLRB v. Brookshire Grocery Co., 919 F.2d 359, 364-
65 (5th Cir. 1990), but noting that orders for back pay alone in
similar situations have been affirmed. Id. at 364
n.5; NLRB v. Laredo Packing Co., 730 F.2d 405, 407
(5th Cir. 1984) (distinguishing order for back pay only from
reinstatement).
The central purpose of the environmental whistleblower laws,
to protect whistleblowers and in so doing to protect public
health and safety, would be frustrated if all relief were denied
even though the Secretary has found a violation. The remedial
provisions of these acts are, in this respect, more analogous to
the antiretaliation provisions of other statutes and other
antidiscrimination laws such as the Fair Labor Standards Act,
29 U.S.C. § 215(a)(3) (1988); Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000e-3 (1988), or the Age
Discrimination in Employment Act, 29 U.S.C. § 623(d) (1988).
For example, when a district court denied both reinstatement and
back pay to an employee who was discharged for reporting wage and
hour violations to the Department of Labor Wage and Hour Division
because the complainant was an incompetent, dishonest employee,
the Fifth Circuit reversed the denial of back pay relief in
Goldberg v. Bama Mfg. Corp., 302 F.2d 152 (5th Cir. 1962).
In circumstances such as this, competing policies must be
balanced, "one against condoning violations of the [Fair Labor
Standards Act] and the other against forcing an employer to keep
unfit employees." 302 F.2d at 156. The Fifth Circuit held that
both policies can be served, by denying reinstatement but
awarding back pay. "A damage award would tend to promote the
purpose of the Act by reassuring employees that their right to
seek statutory relief will be protected." Id. at 156-57.
Similarly, in Kneisley v. Hercules, Inc., 577 F.
Supp. 726 (D. Del. 1983), where the plaintiff had falsified
travel and expense reports for company trips, the court
distinguished the NLRA cases because "the principle focus of the
[Age Discrimination in Employment Act] is not to achieve
industrial
[PAGE 14]
peace or facilitate workers' relationships with their employers.
ADEA . . . has, as its goal, the elimination of age
discrimination . . .." 577 F. Supp. at 734. The court held that
[t]o bar assessment of a back pay award . . . because of
several alleged instances of falsified travel reports,
unknown in large part at the time of [defendant's] alleged
discriminatory action, would hinder, rather than further,
the goals of ADEA. . . . [I]t would eliminate the anti-
discrimination objectives of ADEA's back pay provision [and]
frustrate the compensation objectives of ADEA. . . . Were
plaintiff seeking reinstatement, his ability to function
effectively with his employer . . . might indeed preclude a
reinstatement order. . . . But considerations of employer-
employee compatibility are irrelevant to a back pay award.
Id. at 735 (footnotes and citations omitted).
In this case, denial of all back pay also would have the
effect of undermining the acts' antidiscrimination objectives,
particularly because Complainant's misconduct took place long
after he was employed by Respondent. Having violated the acts,
Respondent would in effect gain a windfall as a result of
Complainant's post employment deception, which could undermine
the confidence of other potential whistleblowers that they will
be protected because the Department of Labor "allowed the
employer to get away with it scot free." Goldberg v. Bama
Mfg. Corp., 302 F.2d at 156. While I share the ALJ's concern
that the integrity of the adjudicatory process is threatened when
witnesses lie under oath, balancing the considerations discussed
above, I find denial of back pay would not be appropriate in this
case. [14]
Of course, Complainant's back pay should be offset by any
interim earnings, and his right to back pay may have been cut off
by his actions after he was fired by Respondent, under principles
adopted by the Secretary in whistleblower and other
antidiscrimination cases. See, e.g., Williams v. TIW
Fabrication and Machining, Inc., Case No. 88-SWD-3, Sec. Dec.
Jun. 24, 1992, slip op. at 12-15; Office of Federal
Contract Compliance Programs v. Washington Metropolitan Area
Transit Authority, Case No. 84-OFC-8, Aug. 23, 1989, slip op.
at 3-4, 5-6, 8-9, rev'd on other grounds, Washington
Metro. Area Transit Auth. v. DeArment, 55 Empl. Prac. Dec.
(CCH) 40,507 (D.D.C. 1991); Nelson v. Walker Freight Lines,
Inc., Case No. 87-STA-24, Sec. Dec. Jan. 15, 1988, slip op.
at 4-5; Cram v. Pullman-Higgins Co., Case No. 84-ERA-17,
Sec. Dec. Jan. 14, 1985, slip op. at 2-3. This case, therefore,
will be remanded to the ALJ to calculate back pay based on the
difference between what Complainant would have earned if he had
continued to be employed by Respondent and the amount he earned
or with reasonable diligence could have earned from the date of
[PAGE 15]
discharge to the date of his discharge from Merichem Corporation.
Since Complainant did not leave Merichem because the work was not
comparable to the environmental work he was doing for Respondent,
but for "paying insufficient attention to his duties," R. D. and
O. at 26, I find that his right to back pay is cut off at the
time he stopped working for Merichem. SeeOFCCP v.
WMATA, slip op. at 8-9, and cases cited therein. In
addition, I reject the evidence offered by Complainant on his
projected loss of earnings over his entire working life as more
relevant to a wrongful death action than a retaliatory discharge
case such as this. This case is REMANDED to the ALJ for further
proceedings in accordance with this decision.
SO ORDERED.
ROBERT B. REICH
Secretary of Labor
Washington, D.C.
[ENDNOTES]
[1] Managers and employees of the party Respondents in this
case, the Coastal Corporation and Coastal States Management,
Inc., appear to treat them as one company, and this decision will
refer to them as Respondent.
[2] A detailed discussion of the facts is set forth in the R.
D. and O. at 2-16.
[3] Mr. Webb died in 1987. T. 466.
[4] Although application of a privilege is a matter of federal
law in a case such as this arising under the laws of the United
States, the discussion in the text demonstrates that my
conclusion on this exception would not be inconsistent with Texas
law. Cf.X Corp. v. John Doe, 1992 U.S. Dist.
LEXIS 13612, at *17 n.11 (E.D. Va. 1992) (choice of law in
diversity case favors state where plaintiff lives, where adverse
employment action occurred, and where disputed documents are
located and would be disclosed.)
[5] I also reject Respondent's exception to the failure of the
ALJ to "mention the surreptitious manner in which Complainant
secured" the annotated copies of the Belcher report.
Respondent's Exceptions at 2 n.1. The draft Belcher report was
prepared by Complainant, one of the annotated copies, C-81,
clearly was provided to him by Troy Dalton and the other
apparently was given to Complainant by Clint Fawcett, and there
is nothing in the record to indicate that Complainant improperly
had possession of these copies. SeeBreckinridge v.
Bristol-Myers Co., 624 F. Supp. 79, 83 (S.D. Ind. 1985)
("[T]here is an important distinction to draw between allegedly
confidential matters . . . reflected in one's own files and the
memoranda prepared by others and simply taken without regard to
the client's confidences.")
[6] I note that, just as Respondent believes it was hampered in
its ability to present its position and effectively cross-examine
Complainant, Complainant labored against similar obstacles
because several of Respondent's witnesses refused to answer
questions about the Belcher report on cross-examination, claiming
attorney-client privilege. See, e.g., T. 488; 586-
89; 736-38;
[7] The reference in the Secretary's June 4, 1987 decision to
the Supreme Court's denial of certiorari in Kansas Gas & Elec.
Co. v. Brock, 780 F.2d 1505 (10th Cir. 1985), cert.
denied, 478 U.S. 1011 (1986), simply noted that the Supreme
Court has not decided this issue, not that it has resolved the
intercircuit conflict.
[8] Although administrative agencies have no authority to rule
on the constitutionality of statutes, Oestereich v. Selective
Serv. System Local Bd., 393 U.S. 233, 242 (1968) (Harlan, J.,
concurring); Public Util. Com. v. United States, 355 U.S.
534, 539 (1958), I note that the statutes mentioned in the text
have been applied to attorneys apparently without infringing
their clients' constitutional rights.
[9] Respondent mischaracterizes the ALJ's statement of this
issue, arguing that the ALJ framed the issue as "whether Mr.
Dunker would have fired Complainant had he not lied about the
telephone call." Rather, as I just pointed out, the ALJ held the
issue was whether Respondent would have fired Complainant for
lying about the phone call if he had not written the Belcher
report. This statement of the issue is in complete accord with
the Secretary's exposition of dual motive analysis in Dartey
v. Zack Co., which was approved in Mackowiak v. University
Nuclear Sys., Inc., 735 F.2d 1159, 1164 (9th Cir. 1984), and
with Supreme Court decisions. SeeNLRB v.
Transportation Management, Inc., 462 U.S. 393, 403 (1983).
[10] Page 4 of the transcript of the September 25 meeting, R-
18B, contains the following exchange
BD [Mr. Dunker]: Don [Complainant], have you ever
called up TDWR?
DW [Complainant]: No. Down there.
BD: Well, according to Martin Hall you
have called up TDWR and . . .
DW: Well, that's wrong. I haven't ever
talked to them.
BD: Okay, so Martin Hall told us
something untrue?
DW: Well, I never talked to TDWR.
BD: Okay.
DW: Or you know, not Corpus Christi . .
. as far as I remember. I'd like
to know where that's coming from.
[11] The evidence also might have warranted a conclusion that
Respondent's articulated reason for firing Complainant was
pretextual. But because I find that the record supports the
ALJ's conclusion on the dual motive issue, I need not address the
pretext question.
[12] Complainant seeks only back pay, not reinstatement.
[13] All the other statutes involved in this case contain
comparable language.
[14] This matter could be referred to the appropriate United
States Attorney's Office or bar disciplinary committee.
