Yellow Freight System, Inc. v. Reich, No. 93-3488 (6th Cir. June 24, 1994)
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 24
ELECTRONIC CITATION: 1994 FED App. 0227P (6th Cir.)
File Name: 94a0227p.06
No. 93-3488
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
YELLOW FREIGHT SYSTEM,
INC.,
Petitioner,
On Petition For Review
v. of an Order of the
Secretary of Labor
ROBERT B. REICH, Secretary
of Labor; and WILLIE W.
SMITH,
Respondents.
__________________
Decided and Filed June 24, 1994
__________________
Before: KENNEDY, NELSON, Circuit Judges; and LIVELY, Senior
Circuit Judge.
LIVELY, Senior Circuit Judge.
Yellow Freight petitions for review of a decision of the
Secretary of Labor finding that Yellow Freight violated section 405
of the Surface Transportation Assistance Act of 1982 (STAA), 49
U.S.C. App. 2305 (1988), by discharging over-the-road driver
Willie Smith for making
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unscheduled rest stops when fatigued. Section 405(a) makes it
unlawful to discharge, discipline, or discriminate against an
employee because he or she files a complaint "relating to a
violation of a commercial motor vehicle safety rule [or] regulation
. . ." Section 405(b) prevents an employer from discharging,
disciplining, or discriminating against an employee "for refusing
to operate a vehicle when such operation constitutes a violation of
any Federal rules [or] regulations . . . applicable to commercial
motor vehicle safety. . . ."
In his decision the Secretary discussed the evidence and each
party's arguments and concluded that the administrative law judge
(ALJ) who conducted the hearing on Smith's complaint correctly
found that Yellow Freight violated section 405. We agree with this
conclusion. Accordingly, we affirm the Secretary's decision and
order.
I.
Willie W. Smith, a truck driver with 26 years' experience, was
hired as an "extra board" driver by Yellow Freight on February 6,
1988. An extra board driver has no scheduled route, but is
dispatched to drive various routes on a day to day basis. Yellow
Freight terminated Smith on November 6, 1989, following a
disciplinary hearing, allegedly because of a poor work record
evidenced by several reported incidents occurring between February
17, 1989, and November 1, 1989.
The three most controversial incidents involved Smith's
refusal to drive while fatigued. The first of these occurred on
August 2, 1989, when Smith pulled over shortly past midnight to
take an hour and fifteen minute nap. Smith claimed that he had
been driving for almost nine hours when he felt tired and stopped.
He did not inform the dispatcher of this break, as is required by
company work rules, but did note the stop in his travel log.
Yellow Freight issued Smith a warning letter for "delayed freight,"
which threatened more severe disciplinary action if "a like offense
occurs in the future." Smith filed a grievance letter with the
company, arguing that his actions were protected
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by 49 C.F.R. 392.3, which prevents a driver from operating a truck
when his or her ability or alertness is so impaired by reason of
illness or fatigue as to make it unsafe to begin or continue to
operate a commercial vehicle. Yellow Freight did not respond to
Smith's protest.
Yellow Freight sent a similar warning letter to Smith after he
stopped to nap for forty-five minutes at 1:00 a.m. on the morning
of September 23, 1989. Smith had been up for twenty hours and
driving for eight when he stopped. He again failed to inform the
dispatcher of this break, and again protested Yellow Freight's
letter under 49 C.F.R. 392.3.
Yellow Freight also reprimanded Smith after he refused a
dispatch on October 17, 1989, because he was too tired to drive.
Smith called in that day for a dispatch at 3 o'clock in the
morning. He waited the entire day, and called in twice more.
However, Yellow Freight did not get back to Smith until 8:00 p.m.,
after he had been awake for seventeen hours. Smith testified that
he was too fatigued to accept a dispatch and knew he would be
disciplined if he drove that day and had to make a stop for
fatigue. On October 18, Yellow Freight issued Smith a warning
letter for refusing work. Smith again protested, arguing that
Yellow Freight was coercing him to drive while fatigued in
violation of Department of Transportation (DOT) safety regulations.
Smith received several other warnings from Yellow Freight
related to his duties as a union steward, which required time
consuming counseling sessions with fellow drivers. In his capacity
as a steward, Smith was known to encourage fellow drivers to file
grievances against Yellow Freight when they felt it had violated
federal regulations. Although Yellow Freight permitted union
activities at company terminals, it suspected that Smith was
logging work hours improperly when performing union functions.
Smith allegedly was logging 45 minutes for DOT mandated safety
checks, a procedure that normally takes 15-30 minutes. Yellow
Freight surmised that Smith was using the
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additional 15 minutes to talk about union issues with fellow
drivers, and asked Smith to discuss company regulations with one of
its managers. When Smith refused, the company issued a
disciplinary notice. Similarly, Smith received a warning letter
for "log falsification" after Yellow Freight accused him of logging
15 minutes too much driving time when he was actually talking to
drivers, not working.
Yellow Freight issued two more "delay of freight" warnings
when, after receiving a dispatch, Smith stayed in the terminal
counseling drivers on union issues. Smith responded by filing a
grievance for harassment based on his race (African-American) and
union status with the state grievance committee. The committee
ruled in Smith's favor, finding that union stewards are allowed to
conduct business in the terminal for an unlimited amount of time.
Later that year, Smith and two other drivers received an
"excessive absenteeism" warning for spending a week away from work
while participating in a union sponsored event at Yellow Freight's
Columbus terminal. The union failed to follow company rules, which
require it to provide written notice forty-eight hours before a
driver's absence for union activities. After top union officials
contacted Yellow Freight, it agreed to rescind Smith's co-worker's
warning letters. Yellow Freight did not revoke Smith's letter,
however.
Yellow Freight sent various other warning letters to Smith.
He received one for not eating lunch while exchanging trailers at a
designated post and stopping for lunch two hours later instead.
Yellow Freight sent two more letters when Smith's beeper was broken
and Yellow Freight could not reach him for dispatch. Smith
received a disciplinary "coaching session" after hitting a mailbox
when leaving an Ohio terminal. Smith repaired the mailbox and
there was no damage to Yellow Freight's truck and no expense to the
company.
Yellow Freight discharged Smith after he received a speeding
ticket in West Virginia in June, 1989. Smith was
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traveling 76 miles per hour in a 65 mile per hour zone. After
refusing to sign the ticket because he thought it was an admission
of guilt, Smith was taken to the police station and his truck was
impounded. Smith eventually pled guilty to traveling 74 miles per
hour, and paid a $5 fine; Yellow Freight had to pay a $75 towing
fee to get the truck out of the impounding lot. Yellow Freight
investigated the matter because its truck engines are governed to
run at a maximum of 62 miles per hour. The company concluded that
to go 76 miles per hour, Smith had either to take the truck out of
gear while going down hill, or allow the weight of the truck to
push it past the governed speed. Smith filed a grievance
protesting his discharge and the Ohio Joint State Committee, after
a hearing, reduced the discharge to a three week suspension without
pay.
II.
On November 3, 1989, Yellow Freight held a formal disciplinary
hearing where it reviewed all of the disciplinary actions taken
against Smith and decided to discharge him. On April 27, 1990,
Smith filed a complaint with the Secretary of Labor alleging that
Yellow Freight violated sections 405(a) and (b) of the STAA.
A.
The matter was referred to an ALJ who conducted hearings in
which both parties presented witnesses and documentary evidence.
In his "Partial Recommended Decision" the ALJ concluded that Smith
had made out a prima facie case of violations, that Yellow Freight
had offered non-discriminatory reasons for discharging Smith, and
that on the whole record Smith had demonstrated by a preponderance
of the evidence that Yellow Freight violated 405 by discharging
him for exercising his right to take breaks from driving when
fatigued and in retaliation for counseling fellow employees about
their rights under various laws and regulations.
The ALJ reviewed Smith's entire work record as shown by
exhibits and testimony. He concluded that Yellow
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Freight would not have fired Smith for the damaged mailbox, the
broken beeper, or the episodes in which he acted for the union.
Rather, the ALJ found that Yellow Freight discharged Smith because
of fatigue-related stops and refusal to accept a dispatch.
The ALJ, in a clear credibility finding, rejected Yellow
Freight's claim that it discharged Smith for violating a company
rule requiring drivers to report delays at the first opportunity.
Smith admittedly did not report the late-night stops for naps on
August 2 and September 23, 1989, though he did enter the stops in
his driver's log. Yellow Freight sent warning letters to Smith on
August 7 and September 26 stating that Smith "delayed freight" by
taking extra breaks on August 2 and September 23. Neither letter
referred to Smith's failure to call the dispatcher; instead, both
warned Smith that he would be subjected to more severe disciplinary
action for "delaying freight and equipment" in the future.
In its October 18, 1989, warning letter to Smith Yellow
Freight recited that Smith had declined to accept a dispatch on
October 17 because he was too fatigued to come to work and
requested "to be taken off the board." Without referring to any
work rule unrelated to safety, the letter warned that any "future
incidents of this nature" would result in disciplinary action, even
discharge.
The ALJ found that Yellow Freight disciplined Smith on each of
these occasions for exercising his right not to drive while
suffering from fatigue. In addition to the three letters that
mentioned only delay of freight and equipment, the ALJ considered
other evidence indicating that Yellow Freight referred to specific
work rules on other occasions when warning employees, including
Smith, for infractions of such rules.
The ALJ also considered the possibility that Yellow Freight
dismissed Smith for more than one reason. In such a "mixed motive"
case, the employer has the burden of demonstrating that it would
have taken the disciplinary action on the basis of a legitimate
reason even if it had not
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also acted for illegal reasons. The ALJ concluded on the whole
record that Yellow Freight did not carry this burden. After the
ALJ's decision, by agreement of the parties, Yellow Freight
reinstated Smith and guaranteed back pay if Smith should win on
final appeal.
B.
Even though the Secretary wrote a full opinion, we have set
forth the ALJ's findings and conclusions in some detail because the
Secretary adopted most of the ALJ's critical findings on motivation
and causation. The Secretary concluded that while Yellow Freight
may have "tolerated" brief coffee stops, it refused to permit
longer delays necessitated by severe driver fatigue regardless of
whether the resting driver notified a dispatcher or not. The
Secretary felt that Smith's refusal to work on October 17 was
largely responsible for Yellow Freight's decision to terminate him.
The warning letter of October 18 was the only one that told Smith
he might be discharged for future violations. The Secretary found
that, in view of the long time that Smith was waiting to be
dispatched on October 16, his refusal was clearly related to a
safety factor.
The Secretary also held that Smith's complaints and protests
raised issues under both subdivisions of section 405 and were
"related to" safety regulations. In addition, the Secretary found
that the complaints of both safety regulations violations and
retaliation for counseling other employees were timely. Finally,
to the extent that this might be found to be a mixed motives case,
Yellow Freight produced no evidence that it would have discharged
Smith if there had been no safety-related incidents. In fact, the
Secretary noted evidence that Yellow Freight did not discipline
employees for violating similar non-safety-related rules.
III.
The Supreme Court succinctly described the effect and purpose
of section 405 of the STAA in Brock v. Roadway Express, Inc., 481
U.S. 252 (1987):
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Section 405 of the Surface Transportation Assistance
Act of 1982, 96 Stat. 2157, 49 U. S. C. App. 2305,
protects employees in the commercial motor transportation
industry from being discharged in retaliation for
refusing to operate a motor vehicle that does not comply
with applicable state and federal safety regulations or
for filing complaints alleging such noncompliance.
Id. at 255.
Section 405 was enacted in 1983 to encourage
employee reporting of noncompliance with safety
regulations governing commercial motor vehicles.
Congress recognized that employees in the transportation
industry are often best able to detect safety violations
and yet, because they may be threatened with discharge
for cooperating with enforcement agencies, they need
express protection against retaliation for reporting
these violations. See, e. g., 128 Cong. Rec. 32698
(1982) (remarks of Sen. Percy); id., at 32509-32510
(remarks of Sen. Danforth). Section 405 protects
employee "whistle-blowers" by forbidding discharge,
discipline, or other forms of discrimination by the
employer in response to an employee's complaining about
or refusing to operate motor vehicles that do not meet
the applicable safety standards. 49 U. S. C. App.
2305(a), (b).
Id. at 258.
In Moon v. Transport Drivers, Inc., 836 F.2d 226 (6th Cir.
1987), this court discussed the requirements for an employee to
make out a prima facie case of a section 405 violation. The court
described a prima facie case as "one which raises an inference that
protected activity was the likely reason for the adverse action . .
. ." Id. at 229. An employee establishes a prima facie case by
proving three elements: (1) that his employment engages him in
protected activity; (2) that his employer took adverse employment
action against him; and (3) that a "causal link"
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exists between his protected activity and the employer's adverse
action. Id.
Once an employee establishes a prima facie case, the court
makes its determination of liability by adapting the familiar Title
VII McDonnell Douglas burden-shifting rules to the STAA. At this
point, "the burden of production shifts to the defendant to
articulate a legitimate, nondiscriminatory reason for its
employment decision. If the defendant is successful in rebutting
the inference of retaliation, the plaintiff bears the ultimate
burden of demonstrating by a preponderance of the evidence that the
legitimate reasons were a pretext for discrimination." Id.
In Moon, 836 F.2d at 229, we noted that we review the
Secretary's decisions under the STAA applying a substantial
evidence standard. A reviewing court must uphold the Secretary's
legal conclusions "unless they are arbitrary, capricious, involve
an abuse of discretion, or otherwise are not in accordance with
law." Yellow Freight System, Inc. v. Martin, 954 F.2d 353, 357
(6th Cir. 1992); 5 U.S.C. 706(2). Finally, we accord deference to
the Secretary's interpretations of the STAA, and will uphold such
interpretations if "reasonable, consistent with the statutory
mandate, and persuasive." Id. (citations omitted).
IV.
We summarize the parties' arguments.
A.
Yellow Freight makes three main arguments on appeal. First,
it contends that the Secretary failed to apply the proper standard
of review, adopted the ALJ's "faulty analysis of the facts," and
substituted his business judgment for Yellow Freight's. Second,
Yellow Freight asserts that the Secretary violated its due process
rights by failing to notify it that Smith was charging a violation
of section 405(a) as well as section 405(b). Third, Yellow Freight
maintains that Smith's claim was barred by the STAA's
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180 day limitations period and, consequently, that its motion to
dismiss should have been granted.
B.
Smith responds that the Secretary correctly held that he
established a prima facie case and correctly applied the McDonnell
Douglas analysis in finding that Yellow Freight violated section
405. The ALJ's treatment of the facts is supported by substantial
evidence, and is not "faulty," according to Smith. Furthermore,
Smith rejects Yellow Freight's contention that the Secretary
substituted his own business judgment for that of the employer. In
Yellow Freight's view, the Secretary held that implementation of
the work rule requiring drivers to report safety breaks was a per
se violation of section 405. A truer reading of the Secretary's
decision, Smith says, reveals that the Secretary merely rejected
Yellow Freight's contention that violation of the work rule was the
"true reason" for Smith's discharge.
Smith responds to Yellow Freight's due process argument by
asserting that the record fully supports the Secretary's finding
that Yellow Freight had adequate notice well before the hearing
that Smith claimed violations of section 405(a) as well as 405(b).
As to the statute of limitations argument, Smith relies on the fact
that he filed the complaint 172 days after his discharge. He
maintains that limitations began to run from the date of the
discharge on November 6, not from the dates of the three earlier
disciplinary actions (August 7, September 26, and October 18
warning letters).
V.
A.
Yellow Freight's brief contains a lengthy discussion of the
recent Supreme Court decision in St. Mary's Honor Center v. Hicks,
___ U.S.___, 113 S.Ct. 2742 (1993), where the Court clarified the
effect of a finding that an employer's proffered reasons for
disciplining an employee
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No. 93-3488
are pretextual. The Court held that a trial court that reaches
this conclusion in a McDonnell Douglas analysis may not
automatically find illegal discrimination based on this finding
alone. An employer's articulation of legal reasons for
disciplining an employee satisfies its burden of production, id. at
2747, and the employee must then satisfy his or her burden of
proving that the employer discriminated against the employee on a
forbidden basis. The finding that an employer's proffered reasons
for an adverse action are pretextual does not, standing alone,
compel a finding in favor of the employee. Id. at 2749.
We have no quarrel with Yellow Freight's interpretation of St.
Mary's. The problem is that the St. Mary's rule does not come into
play in this case. Neither the ALJ nor the Secretary held that
Smith was entitled to a judgment solely on the basis that Yellow
Freight's claimed reason for discharging Smith was not the "true
reason" for his termination. Instead, the Secretary, after
rejecting Yellow Freight's proffered reason, continued with the
required analysis and found that Smith proved that Yellow Freight
intentionally discriminated against him for exercising his own
rights under section 405 and in retaliation for assisting other
employees to complain of safety-related violations. We agree with
the Secretary's treatment of the factual record and conclude that
his decision is supported by substantial evidence.
Further, we find no support for Yellow Freight's contention
that the Secretary substituted his business judgment for that of
Yellow Freight with respect to work rules. The Secretary did not
criticize the rule requiring drivers to report delays promptly,
much less hold that enforcement of that rule is a per se violation
of section 405. Rather, the Secretary found that the warning
letters' references to delaying freight and equipment exposed the
real reason for disciplining Smith. That reason was taking rest
stops, not the failure to report those stops. The letters did not
mention failure to report or refer to the work rule that required
reporting. Far from questioning Yellow Freight's business judgment
in requiring its drivers to
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report en route delays, the Secretary merely held Yellow Freight to
the language it used in warning Smith.
The Secretary also held that even if Yellow Freight discharged
Smith both for taking safety breaks and for failing to report them
promptly, Yellow Freight had the burden of proving that it would
have fired Smith for failing to report even if it could not legally
discharge him for taking the breaks. The Supreme Court held in
Price Waterhouse v. Hopkins, 490 U.S. 228, 244-45 (1989), that when
a Title VII plaintiff proves that a prohibited consideration such
as gender played a "motivating part" in an unfavorable employment
decision, the defendant "may avoid a finding of liability only by
proving that it would have made the same decision even if it had
not allowed gender to play such a role." (footnote omitted). We
have applied this analysis in several recent "mixed motive" cases.
See, e.g., Simpson v. Diversitech General, Inc., 945 F.2d 156, 159
(6th Cir. 1991), cert. dismissed, 112 S.Ct. 1072 (1992); Terbovitz
v. Fiscal Court of Adair County, Ky., 825 F.2d 111, 115 (6th Cir.
1987). The Supreme Court did not disturb its Price Waterhouse
treatment of mixed motives cases in St. Mary's. We conclude that
the Secretary did not commit error in his treatment of the mixed
motives issue.
B.
Yellow Freight relies on our opinion in Martin in support of
the argument that the Secretary violated its due process rights by
deciding that Yellow Freight had violated section 405(a) of the
STAA, when Yellow Freight had not received proper notice that Smith
was claiming a section 405(a) violation. Martin is readily
distinguishable from this case. In Martin the notice letter from
OSHA, which informed the employer that an employee driver had filed
a complaint, referred only to section 405(b) issues. Further, the
driver's actual complaint referred only to section 405(b), and
there were only small fragments of testimony in a large transcript
that could be considered related to section 405(a).
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In the present case, the letter from OSHA stated that the
"substance" of Smith's complaint was that he was forced to drive
while fatigued (a section 405(b) claim) but it did not refer to his
claim of retaliation. Nevertheless, Smith's complaint itself
clearly made a section 405(a) claim of retaliation for objecting to
the practice of forcing drivers to work while fatigued. Further,
in response to Yellow Freight's motion to dismiss, filed nine
months before the hearing, Smith filed a memorandum in which he
stated that his discharge was "a prima facie violation of section
405(a) STAA." During depositions prior to the hearing Smith stated
that he was fired for counseling other drivers concerning federal
regulations and exhorting them to stand up for their safety rights.
We emphasized in Martin that "[t]he fundamental elements of
procedural due process are notice and an opportunity to be heard."
954 F.2d at 357. We agree with the Secretary that Yellow Freight
had adequate notice of Smith's section 405(a) claim in sufficient
time to respond and defend against it. The transcript of the
hearing reveals that Yellow Freight was not taken by surprise, was
prepared to defend against both section 405(a) and (b) claims, and
did in fact do so.
One other comment about Martin. By the time that case was
ripe for decision, the section 405(b) claim had been dismissed and
only the section 405(a) claim remained. Thus, a finding that the
employer had failed to receive notice and an opportunity to be
heard on the section 405(a) claim required that the entire case be
dismissed. In the present case the Secretary found both section
405(a) and (b) violations. In this circumstance, even if the
section 405(a) claim had been dismissed under the due process
rationale, the STAA required that Smith be reinstated because of
the section 405(b) violation.
C.
Yellow Freight's contention that Smith's claim is time-barred
has no merit. The triggering act for limitations was Smith's
discharge. Smith filed his complaint less than 180 days after that
occurrence. Yellow Freight argues,
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however, that Smith's claims are based primarily on the August,
September and October warning letters, which Smith received more
than 180 days prior to filing his complaint. Because Smith did not
file complaints upon receiving the warning letters, Yellow Freight
avers that Smith could not rely on them to prove an unlawful
discharge. Under this theory, the Secretary was barred from
examining the legitimacy of the three fatigue incidents and Smith's
claims must subsequently fail. See Local Lodge No. 1424 v. NLRB,
362 U.S. 411, 415 (1960) (six month statute of limitations under
10(b) of the NLRA prevents attacking legitimacy of time-barred
violations); NLRB v. McCready and Sons, Inc., 482 F.2d 872, 875
(6th Cir. 1973) (same).
The present case is distinguishable from Local Lodge No. 1424
and cases following it. The Supreme Court noted in Local Lodge No.
1424 that its decision "has drawn on [the National Labor Relations
Act's] purpose and history, and we do not assert the universal
applicability of our resolution of the particular question
presented for decision." Id. at 424 n.15. In the present case the
Secretary adopted the ALJ's finding that:
Unlike the NLRA, which has the overall purpose of
securing industrial peace through the balance of
competing interests . . . the "whistleblower" provisions
of the Surface Transportation Assistance Act were enacted
specifically to encourage employee reporting of
noncompliance with safety regulations and to protect such
employees against retaliation for reporting these
violations. Moon v. Transport Drivers, Inc., 836 F.2d
226, 228 (6th Cir. 1987).
Thus the NLRA and STAA have different "purpose[s] and histor[ies],"
and there is no reason to believe that the Supreme Court intended
the rationale of Local Lodge No. 1424 to apply here.
More to the point are cases involving similar federal
whistleblower statutes. In a whistleblower case arising under the
Energy Reorganization Act, the Court of Appeals
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for the Fourth Circuit determined that the statute of limitations
begins to run only upon receipt of "final and unequivocal notice"
of discharge. English v. Whitfield, 858 F.2d 957, 961 (4th Cir.
1988). Until an employee is notified of termination "there is the
possibility that the discriminatory decision itself will be
revoked, and the contemplated action not taken, thereby preserving
the pre-decision status quo." Id. That comment describes the
situation in this case. Yellow Freight's argument would require
employees to file protective STAA complaints each time they are
disciplined, regardless of the nature of the discipline, or risk
being discharged 181 days later without recourse. The three
letters all advised of more severe discipline if Smith failed to
follow company rules; none even hinted that he would be discharged
for events that had already occurred.
Furthermore, the Secretary did not err by considering the
claims of section 405 violations that occurred outside the
limitations period. Such evidence may be considered to "shed light
on the true character of the matters occurring within the
limitations period." NLRB v. Oberle-Jordre Co., 777 F.2d 1119,
1120 (6th Cir. 1985) (quoting Local Lodge No. 1424, 362 U.S. at
416). The Secretary necessarily had to examine Yellow Freight's
disciplinary actions against Smith to determine the cause of his
discharge. Furthermore, Yellow Freight itself has attempted to
justify Smith's discharge by pointing to various disciplinary
actions it took against Smith prior to the 180 day limitations
period.
CONCLUSION
This case is similar in many details to Yellow Freight Systems
v. Reich, 8 F.3d 980 (4th Cir. 1993). Like the court in that case,
we conclude that the Secretary's decision here is supported by
substantial evidence and that the Secretary committed no errors of
law.
The petition for review and denial of enforcement is denied,
and the Secretary's decision is AFFIRMED.