MOTION FOR SUMMARY DECISION CONCERNING TIMELINESS OF COMPLAINT; RESPONSE BY COMPLAINANT THAT CONTRADICTED EARLIER ADMISSIONS FOUND INSUFFICIENT TO RAISE GENUINE ISSUE OF MATERIAL FACT
In Salian v. Reedhycalog UK, ARB No. 07-080, ALJ No. 2007-SOX-20 (ARB Dec. 31, 2008), the Complainant failed to met his burden of raising a genuine issue of material fact sufficient to defeat the Respondent's motion for summary decision asserting that the complaint was not timely filed, where – although the Complainant denied receiving "unequivocal" notice of his termination – he had admitted that he had received a letter indicating that his position within the company had "become redundant" and that he was being given thirty days, and had admitted that he was escorted from the premises. The Board wrote: "In contradicting his own admissions, Salian's Response could be construed as a false or fraudulent affidavit, and as such, it would be insufficient to defeat ReedHycalog UK's motion for summary decision." USDOL/OALJ Reporter at 6 (footnote omitted).
TIMELINESS OF COMPLAINT
In Shelton v. Time Warner Cable, ARB No. 06-153, ALJ No. 2006-SOX-76 (ARB July 31, 2008), the ALJ properly dismissed the SOX complaint because it was filed more than 90 days after the adverse employment action. Earlier complaints to the Secretary of Labor and the Acting Assistant Secretary for OSHA presented claims pursuant to ERISA and Section 11(c) of the Occupational Safety and Health Act, but did not contain any allegation that the Respondent committed an act that constituted a violation of the SOX.
TIMELINESS OF COMPLAINT; FOCUS IS NOT ON WHEN THE COMPLAINT CONSTITUTING THE ALLEGED PROTECTED ACTIVITY OCCURRED, BUT WHEN THE COMPLAINT ABOUT THE RETALIATION OCCURRED
In Levi v. Anheuser Busch Companies, Inc., ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant had written a series of letters to government agencies making various complaints about the Respondent's behavior. After learning about SOX whistleblower protection, the Complainant wrote to the Secretary of Labor asking whether his previous letters had been considered to be SOX complaints. The ARB found that this letter, having been filed more than 90 days after the claim accrued, was not a timely SOX complaint.
Turning to the prior letters, the ARB found that complaints filed with government agencies about the Respondent's behavior, even assuming that they were SOX-related protected activity, do not present a cognizable SOX complaint where they occurred prior to the alleged retaliation taking place. In other words, to be cognizable, the Complainant must have filed a timely complaint after his discharge grounded in the allegation that his protected activity was a contributing factor in the adverse action taken by the Respondent.
TIMELINESS OF COMPLAINT; FILING BY E-MAIL; SUMMARY JUDGMENT STANDARD
The ALJ erred in granting summary judgment to the Respondent based on a finding that the complaint was not timely where OSHA did not receive the complaint until after the limitations period, but a handwritten note on the front of the complaint indicated that the complaint was "originally submitted via email" within the limitations period. Because SOX complaints may be filed by e-mail, 29 CFR § 1980.103(d), and viewing the evidence in the light most favorable to the non-moving party when deciding a motion for summary judgment, summary judgment should not have been granted. Reddy v. Medquist, Inc., ARB No. 04-123, ALJ No. 2004-SOX-35 (ARB Sept. 30, 2005).
ADMINISTRATIVE LAW JUDGE DECISIONS
TIMELINESS OF COMPLAINT; PRESENCE OF NEGATIVE WRITE-UP IN PERSONNEL FILE
In Pittman v. Siemens AG, 2007-SOX-15 (ALJ July 26, 2007), the Complainant argued that a negative write-up that had been placed in his personnel file prevents his being rehired, and that every day that it remains in the file triggers a new statute of limitations. The ALJ, assuming for purposes of argument that the write-up was an adverse employment action, found that the Complainant's almost two year later SOX filing was untimely, noting that the Complainant had not provided any evidence of any specific acts of blacklisting or refusal to rehire based on the alleged write-up.
TIMELINESS OF COMPLAINT; LETTERS TO DOL OFFICIALS MUST RAISE ISSUE OF VIOLATION OF SOX; AFTER THE FACT CHARACTERIZATION OF ISSUES RAISED FOUND NOT TO BE PERSUASIVE
In Shelton v. Time Warner Cable, 2006-SOX-76 (ALJ Aug. 31, 2006), the Complainant had sent a series of letter to the Secretary of Labor and other DOL officials. Almost a year after his termination, he wrote to the Secretary asking about the status of his SOX whistleblower complaint. This letter was referred to OSHA, which treated it as a SOX complaint. OSHA dismissed, finding that the complaint was untimely. Before the ALJ, the Complainant argued that his earlier letters were timely SOX complaints. The ALJ analyzed each of the letters, and found that only the status letter referred to SOX or SOX-related activity. The ALJ found that the earlier letters alleged a breach of fiduciary duties under ERISA and violations of the FLSA. Although the Complainant argued that he had raised these issues because he reasonably believed that such practices were used to mask the Respondent's operating costs, artificially inflate its revenues, shore up its bottom line and intentionally misstate or misrepresent its financial condition to defraud shareholders and investors, the ALJ found, upon reviewing the record, that she was not persuaded that the complaints registered by the Complainant "were made because of a belief that Respondent was trying to defraud its shareholders and investors." Slip op. at 6. Citing caselaw under the ERA and CAA, the ALJ found that a SOX complaint "must contain a full statement of the acts and omissions, with pertinent dates, which are believed to constitute the violations." Slip op. at 6. Since none of the earlier letters provided information necessary to establish a SOX complaint, and the final letter was untimely, the ALJ granted the Respondent's motion to dismiss.
TIMELINESS OF COMPLAINT; SWORN AFFIDAVIT INSUFFICIENT, STANDING ALONE, TO ESTABLISH TIMELY FILING
In Barker v. Perma-Fix of Dayton, Inc., 2006-SOX-1 (ALJ Jan. 11, 2006), the ALJ found that the complaint was untimely under the SOX whistleblower statute of limitations where the Complainant's only proof of date of mailing was her own affidavit. The only verifiable evidence of date of mailing was a postmark on an envelope received by OSHA, which was nine days beyond the limitations period. The ALJ noted that the SOX regulations expressly state that "the date of the postmark ... will be considered to be the date of filing." 29 C.F.R. § 1980.103(d). The Complainant argued that she should not be held accountable for the alleged mishandling of her letter by the regional OSHA office or the U.S. Postal Service. The ALJ rejected this argument, finding that it was her responsibility to make a timely submission, or provide proof that she attempted to make such a timely submission. The ALJ found that the affidavit was not sufficient proof of timely filing.
EVIDENCE; ADMISSIBILITY OF LETTER FROM SETTLEMENT NEGOTIATION WHEN USED IN ATTEMPT TO ESTABLISH TIMELY FILING OF COMPLAINT RATHER THAN TO PROVE LIABILITY OR DAMAGES
In Dolan v. EMC Corp., 2004-SOX-1 (ALJ Mar. 24, 2004), the Complainant proffered a letter from the Respondent's counsel in which Respondent refused to remove a negative performance evaluation in an attempt to show that an act of retaliation had occurred within the limitations period for filing a SOX whistleblower complaint. The letter was in response to a letter from Complainant's counsel asserting that the performance evaluation was false and defamatory and suggesting that the Respondent should settle the matter, inter alia. The Respondent argued that its letter was inadmissible under FRE 408 because it was made as part of settlement negotiations. The ALJ, however, found that the policy favoring exclusion of settlement documents was to prevent chilling of nonlitigious solutions to dispute, and that exclusion of such documents is not required where the evidence is offered for a purpose other than to prove liability or damages. Since in the instant case the letter was proffered to establish the final retaliatory act against the Complainant, it was admissible. The ALJ also found that was not, in fact, an offer of settlement or compromise.
Trigger Date; Final, Definitive and Unequivocal Notice
TIMELINESS OF COMPLAINT; LIMITATIONS PERIOD BEGINS WHEN EMPLOYEE RECEIVED FINAL, DEFINITIVE AND UNEQUIVOCAL NOTICE OF DISCHARGE OR OTHER DISCRIMINATORY ACT
The limitations period for filing a SOX whistleblower complaint under § 1514A(b)(2)(D) runs from the date an employee receives "final, definitive, and unequivocal notice" of a discharge or other discriminatory act. "The date that an employer communicates to the employee its intent to implement the discharge or other discriminatory act marks the occurrence of a violation, rather than the date the employee experiences the consequences." Corbett v. Energy East Corp., ARB No. 07-044, ALJ No. 2006-SOX-65, USDOL/OALJ Reporter at 4 (ARB Dec. 31, 2008) (citations omitted).
TIMELINESS OF COMPLAINT; NOTICE OF ADVERSE ACTION IS BASED ON OBJECTIVE, NOT SUBJECTIVE STANDARD; SUPREME COURT DECISIONS DO NOT REQUIRE THAT A DATE CERTAIN BE GIVEN IN THE NOTICE
In Sneed v. Radio One, Inc., ARB No. 07-072, ALJ No. 2007-SOX-18 (ARB Aug. 28, 2008), in opposing a motion for summary decision grounded in lack of timeliness of the SOX whistleblower complaint, it was not sufficient for the Complainant to merely show that there was a genuine issue of material fact as to whether she had a subjective belief that the notice she had received constituted a "final, definitive, and unequivocal notice" that the termination of her employment would be effective the following day. Rather, the ARB indicated that the ALJ correctly looked to whether such a belief was objectively reasonable. The ARB found that the notice she had been given in an e-mail that "tomorrow will be your last day," and that the separation would be announced to the company, was sufficient for a reasonably prudent person with regard for her rights to know that it was her employer's intent to take adverse action against her the following day. Moreover, even if the adverse action was not certain to occur the following day, the Complainant knew or should have known that her termination "was not in question and was imminent." The complaint had been filed on the 91st day following the e-mail that the ALJ and ARB found constituted notice of the adverse action.
The Complainant argued that under Chardon and Ricks, the employer is required not only to unequivocally notify the employee of the termination, but also to give a date certain for that termination to activate the limitations clock. The ARB held that these decisions did not stand for the proposition that such a definite date is a prerequisite to starting the limitations period, and that any such proposition would conflict with decisions of the 11th Circuit, in which circuit the case arose, the of the Board itself.
TIMELINESS OF COMPLAINT; DATE COMPLAINANT WAS PRESENTED WITH "CAREER DECISION DATE" CHOICES RATHER THAN LATER DATE
OF TERMINATION IS DATE THAT LIMITATIONS PERIOD BEGINS
In Rollins v. American Airlines, Inc., ARB No. 04-140, ALJ No. 2004-AIR-9 (ARB Apr. 3, 2007), a whistleblower complaint arising under
both AIR21 and SOX, the Respondent issued to the Complainant a "Career Decision Day Advisory Letter" providing three choices: (1)
commit to comply with the Respondent's rules and regulations (including satisfactory work performance and personal conduct) and accept
reassignment, (2) voluntarily resign with transitional benefits and agree not to file a grievance, or (3) accept termination with grievance options.
Five days later the Complainant informed the Respondent that he would not agree to any of the options, and on that same day the Complainant
was provided a letter of termination. The whistleblower complaint would be timely if measured from the date of the termination letter, but
untimely if measured from the date of the advisory letter. The ARB found that advisory letter provided final and unequivocal notice to the
Complainant that the Respondent had decided to terminate his employment. The ARB observed that under English v. Whitfield, 858
F.2d 957, 962 (4th Cir. 1988), rev'd on other grounds, 496 U.S. 72 (1990)
and Wagerle v. The Hosp. of the Univ. of Pa., 1993-ERA-1, slip op. at 3-6 (Sec'y Mar. 17, 1995), the possibility
that the Complainant could have avoided the effects of the advisory letter by resigning voluntarily or accepting employment in another division
did not negate the effect of the advisory letter's notification of intent to terminate the Complainant's employment. Thus, the complaint was
untimely.
TIMELINESS OF COMPLAINT; TRIGGER DATE OF LIMITATIONS PERIOD; EQUITABLE TOLLING; EQUITABLE ESTOPPEL
The ARB affirmed the ALJ's finding that the Complainant knew on the date of his suspension that he was going to be fired. The record, however, also contained an e-mail dated several weeks later to the Complainant from the General Counsel for the Respondent's parent company which suggested that a final decision had not been made on the Complainant's employment status. The ARB, therefore, found that the date that limitations period began to run was the date on which the Complainant was later informed verbally and in writing that he had been fired. Nonetheless, even using that later date the complaint was still untimely.
The Complainant alleged that he was entitled to equitable tolling because, among other reasons, he was unaware of the Respondent's unlawful motivation for his termination until within the limitations period. The Board rejected this argument, writing:
Neither the statute nor its implementing regulations indicate that a complainant must acquire evidence of retaliatory motive before proceeding with a complaint. Halpern's failure to acquire evidence of XL's motivation for his suspension and firing did not affect his rights or responsibilities for initiating a complaint pursuant to the SOX. See Wastak v. Lehigh Valley Health Network, 333 F.3d 120, 126 (3d Cir. 2003), citing Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1386 (3d Cir. 1994) ("a claim accrues in a federal cause of action upon awareness of actual injury, not upon awareness that this injury constitutes a legal wrong."). We therefore conclude that Halpern's failure to acquire such evidence does not constitute an extraordinary circumstance warranting tolling of the limitations period.
The Board also rejected the Complainant's argument that he was entitled to equitable estoppel based on the assertion that the Respondent misled him into believing that he would not be fired. The Board found no evidence that the Respondent misled the Complainant regarding his termination. Halpern v. XL Capital, Ltd., ARB No. 04-120, ALJ No. 2004-SOX-54 (ARB Aug. 31, 2005).
ADMINISTRATIVE LAW JUDGE DECISIONS
TIMELINESS OF COMPLAINT; UNEQUIVOCAL VERBAL NOTICE OF TERMINATION
In Salian v. Reedhycalog UK, 2007-SOX-20 (ALJ May 11, 2007), the ALJ granted summary decision against the Complainant where the Respondent asserted that the Complainant was informed of the decision to terminate him more than 90 days before the SOX complaint was filed, and the Complainant's only response was to contend that the limitations period did not start to run until the date that his termination became effective. The Complainant argued that the notice of termination had not been given to him in writing. The ALJ, however, found that the law does not require that a notice of termination be given in writing, and that since the Respondent had given the Complainant an unequivocal verbal notice of termination, the Complainant had adequate notice to trigger the running of the statute of limitations.
TIMELINESS OF COMPLAINT; UNEQUIVOCAL NOTICE OF TERMINATION; OBJECTIVE ASSESSMENT OF COMMUNICATION RATHER THAN COMPLAINANT'S SUBJECTIVE ASSESSMENT GOVERNS
In Sneed v. Radio One, Inc., 2007-SOX-18 (ALJ Apr. 16, 2007), the Respondent filed a motion for summary decision based on the complaint being not timely filed. The Respondent asserted that the adverse action triggering the limitations period was June 29, 2006, while the Complainant asserted that she did not receive unequivocal notice that she would be fired until June 30, 2006. If the notice was received on the earlier date, the complaint was untimely. The ALJ acknowledged that the Complainant may have been able to establish a genuine issue of fact as to whether she subjectively comprehended that the communications between her and the Respondent constituted a final, definitive and unequivocal notice of termination. However, the record contained e-mails dated June 29, 2006 that the ALJ found led to no reasonable objective conclusion other than the Complainant would be terminated on June 30, 2006. Although there may have been subjective confusion on the Complainant's part because of the negotiation of the terms of a severance package and the timing of public announcements, those negotiations did not relate to whether the Complainant would continue to be employed by the Respondent after June 30, 2006. The ALJ rejected the Complainant's argument that the clock should not have started because the termination notice did not state a date certain for termination, because "such a certain date is not required, as long as notice of an unequivocal decision to terminate was communicated." Slip op. at 5.
TIMELINESS OF COMPLAINT; LIMITATIONS PERIOD BEGINS UPON NOTICE OF ADVERSE ACTION, NOT UPON LEARNING OF THE MOTIVATION FOR THE ADVERSE ACTION
In Coppinger-Martin v. Nordstrom, Inc., 2007-SOX-19 (ALJ Apr. 4, 2007), the Complainant alleged that she believed that her position was being eliminated for budgetary reasons, and did not suspect that the Respondent's stated reasons for eliminating her position were untrue until she later learned from another employee that many of her job functions had been transferred to other employees. The Complainant argued that she did not have a basis for filing a SOX complaint until obtaining this information, and therefore the limitations period should run from that date rather than the date that she learned that she would be terminated or the date that she was actually terminated. The ALJ held that the ARB holding in Halpern v. XL Capital Ltd., 2004-SOX-54 (ARB Aug. 31, 2005), precluded application of equitable tolling or equitable estoppel in this case. The ALJ observed that in Halpern, the ARB held that "'[n]either [SOX] nor its implementing regulations indicate that a complainant must acquire evidence of retaliatory motive before proceeding with a complaint.' … The complainant's failure to acquire evidence of the employer's motivation for terminating him 'did not affect his rights or responsibilities for initiating a complaint pursuant to the SOX.'" Slip op. at 5, quoting Halpern (citations omitted). The ALJ held that "Complainant was required to file her claim within 90 days of receiving "final, definitive, and unequivocal notice" of her termination, regardless of whether she suspected that Respondent's stated reasons were pretextual, had evidence of Respondent's notice, or was aware that her termination constituted a legal wrong." Id.
TIMELINESS OF COMPLAINT; FINAL, DEFINITE AND UNEQUIVOCAL NOTICE; OFFER OF SEVERANCE
In Rzepiennik v. Archstone Smith, Inc., 2004-SOX-26 (ALJ Feb. 23, 2007), the ALJ found that a gag provision in a proposed severance agreement was not adverse employment action; however, assuming arguendo that it was, the complaint's timeliness was dependent on whether the limitations period commenced when the offer was made or when it expired. The Complainant argued that the offer itself did not create a tangible job consequence, whereas its expiration did. The ALJ observed that the Complainant had cited no authority that actually made this distinction, and rejected the argument. The Complainant argued that he was not given sufficient notice of an adverse action based on the contention that the severance agreement contained "legalese" and was subject to interpretation, and therefore was not final, definite and unequivocal. The ALJ rejected this contention, observing that it was not clear why the Complainant would not realize that an adverse action had occurred upon the offer with legalese, but be able to recognize such upon the offer's expiration. The ALJ also found that the offer was definite and unequivocal, that there was no allegation that the status of the offer was in doubt, nor had there been continuing negotiations over the offer. Finally, the Complainant argued that the Respondent's offer conflicted with the ADEA on the theory that it would contravene the purpose of the ADEA to count the required 21 day period for considering whether to waive an ADEA complaint against the limitations period in other federal administrative statutes, citing authority Title VII and ADA authority in which the court had invalidated severance agreements which would require an employee to file a discrimination suite before exhausting administrative remedies before the EEOC. The ALJ rejected this argument because the issue before her was not whether the severance agreement was valid, but whether the SOX limitations period had expired.
TIMELINESS OF FILING OF COMPLAINT; LIMITATIONS PERIOD BEGINS TO RUN WHEN THE COMPLAINT IS MADE AWARE OF DECISION TO TERMINATE HIS EMPLOYMENT RATHER THAN WHEN DISCUSSIONS ABOUT SEVERENCE COMPENSATION ARE CONCLUDED
In Carter v. Champion Bus, Inc., 2005-SOX-23 (ALJ Mar. 17, 2004), the ALJ held that the limitations period for filing a SOX complaint began to run when the Complainant was made aware of the decision to terminate him and not when talks about severance compensation ended or when the consequences of the adverse employment action became most painful. Because the complaint was filed untimely and there were no mitigating circumstances, the ALJ dismissed the complaint.
TIMELINESS OF COMPLAINT; DATE EMPLOYEE MADE AWARE OF DECISION TO TERMINATE IS TRIGGER DATE EVEN IF POSSIBLE THAT TERMINATION COULD BE AVOIDED
In Lawrence v. AT&T Labs, 2004-SOX-65 (ALJ Sept. 9, 2004), the ALJ found that the Complainant's SOX complaint was not timely filed. The Complainant had received a letter informing her that she had been selected for involuntary termination unless she was placed in another position with the Respondent by a date certain. Although additional correspondence subsequently followed between the Complainant or her attorney and the Respondent, the ALJ found that nothing happened after the original letter that would have been a reasonable basis for the Complainant to believe that the Respondent had withdrawn or altered its determination to discharge her. The ALJ wrote:
The fact that Complainant could have avoided termination if she found another job with Respondent does not prevent the statute of limitations from running. The statute of limitations begins to run when the employee is made aware of the employer's decision to terminate him or her even when there is a possibility that the termination could be avoided. English v. Whitfield, 858 F.2d 957 (4th Cir. 1988); Electrical Workers v. Robbins & Myers, Inc., 429 U.S. 229 (1976) (cited by Ricks, 449 U.S. at 261).
TIME LIMITATION FOR FILING OF COMPLAINT; COMMENCES WHEN EMPLOYEE MADE AWARE OF DECISION TO TERMINATE, EVEN IF POSSIBILITY REMAINS THAT TERMINATION COULD BE AVOIDED
"The statute of limitations begins to run when the employee is made aware of the employer's decision to terminate him or her even when there is a possibility that the termination could be avoided. English v. Whitfield, 858 F.2d 957 (4th Cir. 1988); Electrical Workers v. Robbins & Myers, Inc., 429 U.S. 229 (1976) (cited by Ricks, 449 U.S. at 261)." Lawrence v. AT&T Labs, 2004-SOX-65 (ALJ Sept. 9, 2004).
TIMELINESS OF COMPLAINT; DATE OF NOTICE OF DISCRIMINATORY DECISION COMMENCES TIME PERIOD FOR FILING COMPLAINT
In Flood v. Cedant Corp., 2004-SOX-16 (ALJ Feb. 23, 2004), the Complainant was notified by e-mail on June 12, 2003 that unless he found alternative employment with Respondent's business by June 23, 2003, his employment would be terminated on June 26, 2003. The Complainant replied to the e-mail. The notification was also sent to the Complainant by overnight delivery service. Before the ALJ, the Complainant contended that the time period for filing a SOX complaint commenced on June 26, 2003,the date of his termination; the Respondent contended that the time period commenced on June 12, 2003. The ALJ, applying 29 C.F.R. § 1980.103(d), found that the period commenced when the Complainant received notice. The ALJ cited Watson v. Eastman Kodak Co., 235 F.3d 851 (3d Cir. 2000).
TIMELINESS OF COMPLAINT; EVENT TENDING TO SHOW LINK BETWEEN PROTECTED ACTIVITY AND TERMINATION DID NOT EXTEND FILING PERIOD WHERE IT WAS NOT CREDIBLE TO BELIEVE THAT THE COMPLAINANT DID NOT ALREADY KNOW THAT THERE WAS A LINK
In Roulett v. American Capital Access, 2004-SOX-78 (ALJ Dec. 22, 2004), the Complainant argued that the time period for filing his SOX whistleblower complaint did not commence until the date that the Respondent filed for registration with the SEC, contending that it was not until that event that he realized that he had been terminated as part of a "housecleaning" effort so that the Respondent's IPO would not be jeopardized by employees with familiarity with alleged improper acts. The ALJ found that the registration may support the Complainant's belief that he was terminated for protected activity. The Complainant nonetheless had repeatedly advised the Respondent of his belief that certain of its practices were improper, if not illegal, and had not been given a reason for his termination. In view of that, the ALJ found it unreasonable to accept that it was the registration that triggered the Complainant's knowledge of the association between the protected activity and his termination.
TIMELINESS OF COMPLAINT; ALJ DECLINES TO HONOR PARTIES' PRIVATE TOLLING AGREEMENT
In Szymonik v. Tymetrix, Inc., 2006-SOX-50 (ALJ Mar. 8, 2006), the Complainant and the Respondent had entered into an agreement during settlement negotiations in which the Respondent agreed that it would not assert any statute of limitations defenses based on the Complainant's failure to assert a timely claim, to the extent that any delay resulted from the settlement negotiations. The Complainant later filed a SOX whistleblower complaint. OSHA found that it was untimely. The presiding ALJ ordered briefing on the threshold issue of timeliness. The Complainant argued that he was entitled to equitable tolling and equitable estoppel based on the tolling agreement. The Respondent did not take a position on timeliness, but argued that it was not a covered employer under SOX. The ALJ, noting that equitable tolling extends a statute of limitations until a complainant can gather information needed to articulate a claim, found that none of the usual bases for tolling applied. Noting that equitable estoppel focuses on actions taken by a respondent that prevent a complainant from filing a claim, the ALJ found that in the present case there was no indication that the Respondent attempted to lull the Complainant into inaction. The ALJ also noted public policy concerns. The ALJ wrote:
When the United States Congress passed the Sarbanes Oxley Act, its explicit intent was for a 90-day statute of limitations for whistleblower claims. 18 U.S.C. § 1514A(b)(2)(D); 29 C.F.R. § 1980.103(d). There is no suggestion in the language of the Act that Congress intended for private parties to enter into private, legally binding agreements to toll the statute of limitations. The purpose of the Act is "to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes." Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat 745. To allow private parties to contract at will out of the 90-day limitation would effectively thwart the explicit legislative intent of Congress regarding the applicable statute of limitations.
TIMELINESS OF COMPLAINT; ALTHOUGH THE PLAINTIFF'S COMPLAINT WAS UNTIMELY IN REGARD TO NOTICE OF HIS REMOVAL, THE COMPLAINT WAS TIMELY AS TO ADDITIONAL ACTIONS ALLEGEDLY CONSTITUTING ADVERSE EMPLOYMENT ACTION THAT OCCURRED ON OR AFTER THE DATE OF REMOVAL
In McClendon v. Hewlett-Packard Co., 2004 WL 1421395 (D.Idaho June 9, 2005) (case below ALJ No. 2005-SOX-3), the district court granted the Defendant's motion for summary judgment in regard to the lack of timeliness of the Plaintiff's administrative complaint under the SOX whistleblower provision insofar as the Plaintiff had not filed a complaint within 90 days of the date that he was informed that he would be removed as a project manager. The district court, however, found that under the 9th Circuit's expansive definition of what constitutes an adverse employment action, summary judgment could not be granted as to the timeliness of potentially separate and discrete adverse actions that occurred on or after the date the Complainant was actually removed as project manager: not being immediately reassigned another job; being left to sit in a conference room without an assignment; not being placed in a different job until several months later; and ultimate assignment to a job with a reduced pay range. The court made it clear that it was only ruling that the complaint was timely filed, and not associated issues such as whether these claims were actually included in the administrative complaint, whether they actually constituted adverse employment action, and whether the Plaintiff exhausted his administrative remedies.
ADMINISTRATIVE LAW JUDGE DECISIONS
TIMELINESS OF COMPLAINT; WHERE COMPLAINANT FAILED TO TIMELY FILE SOX COMPLAINT MEASURED FROM DATE OF NOTICE OF TERMINATION, PHONE CALL FROM H.R. DEPARTMENT TO INQUIRE WHETHER COMPLAINANT WOULD BE SIGNING A RELEASE/SEVERANCE FORM IS NOT A NEW ADVERSE ACTION
In Richardson v. JPMorgan Chase & Co., 2006-SOX-82 (ALJ July 7, 2006), the Complainant failed to file her SOX complaint within 90 days of notice of her termination. The only act by the Respondent within the 90 day limits period was a telephone call from a HR liaison inquiring into whether or not the Complainant would be signing a "Release Severance" form. The ALJ found that this phone call did not rise to the level of an adverse employment action; the Complainant was already fully aware that her termination was inevitable or, indeed, had already occurred.
TIMELINESS OF COMPLAINT; HOSTILE WORK ENVIRONMENT; AT LEAST ONE ACT MUST HAVE OCCURRED WITHIN 90-DAY LIMITATIONS PERIOD
In Grove v. EMC Corp., 2006-SOX-99 (ALJ July 2, 20007), the Complainant argued in a pre-trial conference that retaliatory conduct that occurred more than 90 days before the filing of his SOX complaint with OSHA were part of a "hostile work environment" and therefore would be actionable. The ALJ permitted the Complainant to amend his complaint accordingly, citing authority to the effect that an ALJ has some responsibility to assist a pro se litigant in clarifying pleadings. The ALJ found that allegations, such as non-payment of a commission and reassignment of accounts, were discrete adverse actions that were not actionable because they occurred outside the 90-day limitations period. He found that some other actions were not the type of discrete actions that would have been individually actionable and therefore subject to the 90-day limitations period; however, the only act that occurred within the 90-day limitations period was the Complainant's termination – which was a separate and discrete adverse employment action, and therefore not part of the same unlawful employment practice as the other actions that allegedly created a hostile work environment. The ALJ, therefore, found the hostile work environment claim was time-barred.
TIMELINESS OF COMPLAINT; ALJ DECLINES TO AMEND COMPLAINT TO INCLUDE NEW ALLEGATIONS OF DRASTICALLY DIFFERENT TYPE FROM THAT ALLEGED IN THE ORIGINAL, UNTIMELY FILED, COMPLAINT
In Kingoff v. Maxim Group LLC, 2004-SOX-57 (ALJ July 21, 2004), the ALJ found that the Complainant's constructive discharge complaint was clearly untimely under the SOX whistleblower provision. In an effort to render the action timely, the Complainant made allegations subsequent to his original complaint that the Respondent committed other acts against him that adversely affected his employment (forcing him to execute a promissory note, filing a NASD claim against him for arbitration, sending allegedly threatening or harassing correspondence, and other unspecified acts). The ALJ, however, concluded that the later allegations were of a drastically different type from those contained in the complaint before him, and could not -- consistent with due process -- be considered in the matter before the ALJ, citing Sasse v. Office of the U.S. Attorney, USDOJ, ARB No. 02-077, ALJ No. 1998-CAA-7 (ARB Jan. 30, 2004). The ALJ, however, forwarded to OSHA copies of the Complainant's letters containing his additional allegations of violations by the Respondent with a suggestion that OSHA should process those letters as SOX complaints.
ALJ's Authority to Raise Issue in Order to Show Cause
TIMELINESS OF COMPLAINT; ALJ HAS THE DISCRETION TO USE AN ORDER TO SHOW CAUSE TO RESOLVE THE ISSUE
An ALJ has the discretion to use an Order to Show Cause procedure to resolve the issue of whether the Complainant had filed a timely complaint. SeeHarvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006).
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING BASED ON FEAR OF RETALIATION; COMPLAINANT MUST ESTABLISH THAT ALLEGED FEAR WAS REASONABLE
In Farnham v. International Manufacturing Solutions, ARB No. 07-095, ALJ No. 2006-SOX-111 (ARB Feb. 6, 2009), the Complainant contended that he had not timely filed his SOX complaint because he feared retaliation from the Respondents if he filed a SOX complaint. The ARB, assuming arguendo that fear of retaliation would constitute an extraordinary event precluding timely filing for which equitable tolling should apply, agreed with the ALJ the Complainant failed to carry his burden of establishing that his alleged fear was reasonable.
The ARB stated that "[t]o establish duress sufficient to toll the running of the limitations period, Farnham must do more than simply allege a subjective fear that the Respondents might retaliate against him. Instead, he must show some act or threat by the Respondents that precluded him from exercising his free will and judgment and prevented him from exercising his legal rights." USDOL/OALJ Reporter at 11 (footnotes omitted). The ARB noted that the Complainant had not alleged that the Respondents made any specific threats against him either before or after he was constructively discharged. Moreover, the Respondent that the Complainant allegedly feared because of drug cartel associations and a criminal background, had not physically threatened the Complainant when he concluded that the Complainant had interfered with the Respondents' loan transactions and slandered that Respondent, but had simply filed a lawsuit to seek redress through the courts. The ARB also agreed with the ALJ that the Complainant's actions following the termination of his employment demonstrated that the Respondents did not deprive him of his free will and judgment or prevent him from seeking his legal rights. The Complainant had instigated an FBI investigation of the Respondents' business activities, discussed his plans to pursue the Respondents with former co-workers, filed a counter suit in response to the Respondents' lawsuit, and complained to a Congressman about the Respondents' business dealings.
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; FILING OF COMPLAINT WITH THE NLRB
In Corbett v. Energy East Corp., ARB No. 07-044, ALJ No. 2006-SOX-65 (ARB Dec. 31, 2008), the Complainant argued that his filing of a claim with the National Labor Relations Board (NLRB) on April 29, 2005 tolled SOX's limitations period. The ARB, however, agreed with the ALJ's finding that the Complainant was not entitled to equitable tolling because his filing with the NLRB "was not the precise statutory claim filed in the wrong forum because it was not a request for SOX relief based on accounting irregularities, but instead a request specifically directed to the NLRB based on negotiation and execution of a labor agreement, and requesting a remedy from the NLRB." USDOL/OALJ Reporter at 6.
TIMELINESS OF COMPLAINT; SERIOUSNESS OF COMPLAINT IS NOT GROUNDS FOR EQUITABLE TOLLING
In Ubinger v. CAE International, ARB No. 07-083, ALJ No. 2007-SOX-36 (ARB Aug. 27, 2008), the Complainant acknowledged that his complaint was not timely filed, but asked for a waiver of the time limits based the assertion that his complaints were serious, and based on lack of knowledge of "SOX 806." The ARB rejected the contention that a party should not be constrained by time limits if his or her complaints are serious, observing that such a rule would render limitations periods with no legal force. The ARB also stated that ignorance of the law will not generally support a finding of entitlement to equitable modification of a limitations period. The ARB rejected the contention that an FAA inspector who investigated one of the Complainant's allegations had an obligation to inform him that he could file a SOX complaint. The ARB was not persuaded to invoke equitable tolling based on the Complainant's allegation that he was detained by the Respondent on the final day of the limitations period while being pressured to sign a release. The ARB found that at best this would only merit tolling for the one day he was detained, but the Complainant had not filed his complaint until six months later.
FILING OF COMPLAINT; EQUITABLE TOLLING; FAILURE OF CONGRESSMAN TO DIRECT COMPLAINANT TO SOX
In Levi v. Anheuser Busch Companies, Inc., ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the ARB rejected the Complainant's contention that he was entitled to equitable tolling under SOX because he had written to Congressman Richard Gephardt, who had a duty to direct him to SOX. The ARB found that the failure of a Congressman to direct a complainant to SOX was not grounds for equitable tolling.
FILING OF COMPLAINT; EQUITABLE TOLLING; WRONG FORUM; FAILURE TO SPECIFY A SOX VIOLATION OR ALLEGE RETALIATION
In Levi v. Anheuser Busch Companies, Inc., ARB Nos. 06-102, 07-020, 08-006, ALJ Nos., 2006-SOX-27 and 108, 2007-SOX-55 (ARB Apr. 30, 2008), the Complainant argued that he was entitled to equitable tolling based the raising of the precise statutory claim in the wrong forum because he had written to the SEC about the Respondent's bad behavior and "arrogance" and stated that "[t]his is not accounting fraud, it is much worse." The Complainant's allegations, however, did not relate to mail fraud, bank fraud or securities fraud, or to violations of applicable SEC rules and regulations. Moreover, the letter was written prior to the date that the Complainant received notice of his termination. Thus, even if the letter was read to provide notice to the SEC of fraud or securities violations, it could not be read to state a claim for relief for an act of retaliation. The ARB therefore agreed with the ALJ that equitable tolling was not warranted.
EQUITABLE TOLLING; PRECISE CLAIM IN WRONG FORUM
In Harvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant did not timely file a SOX complaint with the Department of Labor, so the ARB considered whether the Complainant was entitled to equitable tolling based on letters he wrote to the Deputy Attorney General and to the SEC. For equitable tolling to apply, the Complainant must have shown that he filed the precise statutory claim in issue (a SOX whistleblower claim) but merely did so in the wrong forum. The letter to the Deputy Attorney General at the Justice Department alleged corporate malfeasance and bad and negligent corporate governance -- specifically violations of the Complainant's constitutional, civil, first amendment and Title VII rights allegedly condoned by the Board of Directors. The ARB found that such allegations were not SOX-protected activity because they did not relate, for example, to instances of misrepresentation of the Respondent's financial condition or fraud against its shareholders. The letters to the SEC were similar in content. The ARB wrote that although the Complainant made general, conclusive accusations of "corporate malfeasance" and "bad and negligent corporate governance," the specific context he provided for his accusations related only to unprotected allegations, and thus he did not state a cause of action under the SOX. Accordingly, the Complainant had not filed the precise statutory claim in the wrong forum and was not entitled to equitable tolling.
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; PRECISE COMPLAINT IN WRONG FORUM GROUND MUST BE SUPPORTED WITH AN EXPRESSION OF A REASONABLE BELIEF THAT THE RESPONDENT WAS DEFRAUDING SHAREHOLDERS OR VIOLATING SECURITY REGULATIONS
In Carter v. Champion Bus, Inc., ARB No. 05-076, ALJ No. 2005-SOX-23 (ARB Sept. 29, 2006), the Complainant alleged that his EEOC complaint and a filing with the Michigan Department of Civil Rights entitled him to equitable tolling for the filing of his SOX whistleblower complaint. The ARB held that "[t]o be considered the 'precise complaint in the wrong forum,' the EEOC complaint must demonstrate that Carter engaged in SOX-protected activity prior to his discharge. His complaints to Champion management must have provided information regarding Champion's conduct that Carter reasonably believed constituted mail, wire, radio, TV, bank, or securities fraud, or violated any rule or regulation of the SEC, or any provision of Federal law relating to fraud against shareholders." Reviewing the EEOC complaint, the ARB found that it did not contain an allegation of retaliation under SOX. The Michigan complaint contained a notation from the Complainant that he had been advised that the complaint would be more appropriate "under whistle blower protection laws." The ARB found, however, that the reference to whistleblower laws did not remedy the absence in the filing of an expression of a reasonable belief that the Respondent was defrauding shareholders or violating security regulations.
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; FILING WITH AGENCIES NOT RESPONSIBLE FOR ADMINISTRATION OF SOX WHISTLEBLOWER PROVISION
In Carter v. Champion Bus, Inc., ARB No. 05-076, ALJ No. 2005-SOX-23 (ARB Sept. 29, 2006), the Complainant argued on appeal that equitable tolling for the filing of his SOX complaint should be granted based on Doyle v. Alabama Power Co., 1987-ERA-43 (Sec'y Sept. 29, 1989), which he quoted as stating that when "there is a complicated administrative procedure, and an unrepresented, unsophisticated complainant receives information from a responsible government agency, a time limit may be tolled'." The Respondent pointed out that the Complainant had misquoted the Secretary's decision by omitting the critical word "misleading," i.e., "when . . . [a] complainant receives misleading information from a responsible government agency." The Complainant then argued that the limitations period should be tolled because the EEOC and a state agency had allegedly provided him with misleading information concerning the filing of his SOX complaint. The ARB noted that it would decline to consider an issue raised for the first time on appeal, but that even the argument was properly before it, it would reject it because neither the EEOC or the state agency was the responsible government agency, because given the generic allegations made in the EEOC complaint it was hardly surprising that EEOC did not recognize a SOX complaint, and because a similar argument had been rejected in School Dist. of Allentown v. Marshall, 657 F.2d 16 (3d Cir. 1981). Ultimately, ignorance of the law is not sufficient to invoke equitable tolling.
TIMELINESS OF COMPLAINT; EQUITABLE MODIFICATION OF LIMITATIONS PERIOD; SILENCE OF RESPONDENT FOUND NOT TO HAVE ACTIVELY MISLED COMPLAINANT; IGNORANCE OF ATTORNEY AND COMPLAINANT ABOUT EXISTENCE OF SOX NOT GROUNDS FOR EQUITABLE MODIFICATION
In Moldauer v. Canadaigua Wine Co., ARB No. 04-022, ALJ No. 2003-SOX-26 (ARB Dec. 30, 2005), the ARB granted summary judgment to the Respondent on the ground that the SOX complaint was not timely filed. The Complainant had been terminated by the Respondent. A severance agreement included the Complainant's release of any discrimination claims he might have against the Respondent under state and federal law. The Complainant's subsequent complaint filed with OSHA was untimely as a SOX complaint. The Complainant asserted that equitable modification of the limitations period should be applied because the Respondent actively misled him when it remained silent about its position that the release excluded SOX claims. The ARB, however, found that the Respondent's mere silence about SOX did not mislead the Complainant, especially since he was represented by counsel when he entered into the severance agreement.
The Complainant next claimed that his counsel's knowledge or lack of knowledge of SOX raised a genuine issue of material fact; the ARB, however, held that clients ultimately bear the consequences of the acts or omissions of a freely chosen attorney. Similarly, the ARB was not persuaded that the Complainant's own lack of awareness of SOX presented grounds for equitable modification of the limitations period.
ADMINISTRATIVE LAW JUDGE DECISIONS
TIMELINESS OF COMPLAINT; EQUITABLE ESTOPPEL; COMPLAINANT'S ALLEGED FEAR OF RESPONDENT'S ALLEGED CRIMINAL CONNECTIONS
In Farnham v. International Manufacturing Solutions, 2006-SOX-111 (ALJ June 18, 2007), the ALJ declined to apply equitable principles to permit the Complainant to proceed with his untimely filed SOX complaint, where the Complainant's actions undermined the credibility of his assertion that he was too afraid to file the SOX complaint because of fears that the Respondent was associated with a drug cartel. The ALJ noted that during the time that the Complainant delayed sending a letter to his congressman seeking protection as a corporate whistleblower (the letter being forwarded to OSHA, which treated it as a whistleblower complaint), the Complainant continued to work for the Respondent for a period of time, he contacted the FBI with more information than would have been needed to file a complaint with OSHA, he filed a counter-suit in a civil suit brought by the Respondents, and contacted current and former employees of the Respondent to discuss the Respondent's alleged fraudulent behavior. The ALJ found that the Respondent's actions did not cause the Complainant not to file his SOX complaint in a timely fashion.
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; MERE EVIDENCE OF PHYSICAL INJURY, WITHOUT EVIDENCE OF INABILITY TO COMMUNICATE, DOES NOT SUPPORT TOLLING
In Goode v. Marriott International, Inc., 2006-SOX-115 (ALJ Oct. 13, 2006), the ALJ rejected the contention that the Complainant was entitled to equitable tolling of the time period for filing a SOX whistleblower complaint based on the extraordinary circumstance of a severe leg and foot injury requiring extended recuperation and physical therapy. The ALJ found no evidence that the Complainant's mental abilities had been impaired or that he was unable to communicate. Rather, to the contrary, the Respondent presented 18 e-mails demonstrating that the Complainant was fully able to communicate during this time period.
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; RESPONDENT'S ACTIVELY MISLEADING CONDUCT
In Bulls v. Chevron/Texaco, Inc., 2006-SOX-117 (ALJ Oct. 13, 2006), the Complainant did not file his SOX complaint within 90 days of his termination, but argued in response to the Respondent's motion for summary decision that his post-termination participation in the Respondent's internal dispute resolution process ("STEPS") supported equitable tolling of the limitations period. First, the Complainant pointed to language in the STEPS documentation which read: "Employees do not give up any rights to seek other legal remedies if they are unable to resolve disputes using the STEPS process. The company, however, requires that employees do use STEPS before proceeding to litigation." In describing wrongful discharge and related claims and arbitration, the documentation stated: "If not satisfied with the arbitrator's decision, the employee is free at that time to pursue the matter through other legal opinions, including litigation." The Complainant argued that this language misled the Complainant into believing that he needed complete the STEPS program before taking legal action. The ALJ, however, found that this language was not a contractual waiver by the Respondents of their right to assert the issue of timeliness. The ALJ found that, in analyzing whether the Respondents "actively misled" the Complainant, the Respondents must have acted or communicated in such a way as to be objectively misleading, and the Complainant must have subjectively held a reasonable belief, based on the Respondent's misleading conduct, and acted on that belief.
The ALJ found that the STEPS documentation also indicated that use of STEPS was in consideration for continued employment, meaning that it was not binding on a former employee. The ALJ found that, although the Respondents offered incentives to use STEPS, it had no power to prevent the Complainant from timely filing a law suit. The ALJ found that the Complainant's counsel's belief that the Complainant was bound to complete STEPS before proceeding to litigation was not relevant, and that the Respondents were under no obligation to correct counsel's error, if they were aware of it. Although the Complainant alleged that his former counsel had assured him that the attorneys had agreed to toll the statute of limitations, and the ALJ acknowledged that parties are free to contract to toll the statute of limitations for federal causes of action, the Complainant had failed to provide an affidavit or sworn declaration by persons with personal knowledge of the actual communications. The ALJ found that the Complainant's affidavit, which only supported personal knowledge of a later account of the events in question, was not sufficient to raise a question of material fact.
TIMELINESS OF COMPLAINT; EQUITABLE ESTOPPEL AND EQUITABLE TOLLING
In Guy v. SBC Global Services, 2005-SOX-113 (ALJ Dec. 14, 2005), the complaint was untimely, and the Complainant sought to invoke equitable estoppel and equitable tolling to enable her to proceed.
The Complainant supported her equitable estoppel argument on the grounds that a promise had been made to her that she would not be retaliated against as a result of her cooperation with an internal investigation, the fact that she had a positive experience with the Respondent in regard to an earlier unrelated discrimination matter making her expect similar treatment with regard to her current complaint, and an alleged statement by the Respondent's attorney during a settlement negotiation that "HR is the proper place to start" The ALJ found that equitable estoppel did not apply because "there is simply nothing in Respondent's actions or statements that provide any reasonable basis upon which Complainant could have relied for not filing" a timely complaint.
In regard to equitable tolling, the ALJ found no evidence that the Respondent misled the Complainant regarding her cause of action, that there were any extraordinary circumstances that may have prevented her from timely asserting her rights under the Act, and that her merely speaking to an EEOC investigator within the 90 day limitations period without filing any kind of formal complaint could not constitute filing in the wrong forum.
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; IGNORANCE OF THE LAW
A party seeking to invoke equitable tolling for the filing of a SOX whistleblower complaint based on the professed ignorance of the applicability of the SOX to his or her situation must show that his or her ignorance of the limitations period was caused by circumstances beyond the party's control such as mental incapacity. SeeGuy v. SBC Global Services, 2005-SOX-113 (ALJ Dec. 14, 2005).
TIMELINESS OF COMPLAINT; EQUITABLE TOLLING; FAILURE TO SECURE COUNSEL
Failure to secure counsel in order to pursue a claim under the SOX whistleblower provision is an insufficient reason, in and of itself, to justify equitable tolling of the limitations period for filing a complaint. Barker v. Perma-Fix of Dayton, Inc., 2006-SOX-1 (ALJ Jan. 11, 2006).
TIMELINESS OF COMPLAINT; EQUITABLE ESTOPPEL
In Piles v. Lee Hecht Harrison, LLC, ALJ Nos. 2005-SOX-55 and 56 (ALJ Nov. 8, 2005), the Complainants filed their SOX whistleblower complaints approximately five months beyond the 180 day limitations period, but presented an argument that the complaints should be construed as timely because the Respondent purportedly used two ploys to lull them into a "wait and see" posture. The ALJ found that this was an "equitable estoppel" theory. Construing all of the Complainants' factual allegations as true for purposes of considering the Respondent's motion for summary decision, the ALJ found that, as a matter of law, equitable estoppel did not apply.
The Complainants had been told that their positions were being eliminated, although they would be eligible to work at other offices if work arose. The Complainants believed that their jobs were terminated for making too many inquiries about billing issues concerning a certain account. Following their termination one of the Complainants continued to communicate his concerns to the Respondent's management. He was told that his concerns would be investigated and that he would be contacted. Over the next several months, he had several contacts with officials and lawyers for the Respondent about the concerns. In addition, during the time the company investigated the complaints, the Complainants were under the impression that they remained "project eligible." The Complainant's passwords to the Respondent's intranet communications systems, for example, remained active so that they could monitor possible future assignments.
Reviewing relevant caselaw, the ALJ found that the Complainants could not "use their hope that Respondent's investigation would be timely completed in a manner favorable to their complaints as grounds for equitable relief from the Act's complaint filing deadline." Slip op. at 9. There was simply no evidence that the Respondent had pursued the investigation in bad faith as a stall tactic or had even suggested that the Complainants wait for the results of the investigation before voicing their complaints in another arena. The ALJ also found that there was no evidence that the "project eligible" status and continuing intranet access were designed as a tactic to delay the Complainants from filing a SOX whistleblower complaint. There was no evidence of affirmative misrepresentations by the Respondent or a deliberate plan to mislead the Complainants.
UNTIMELY FILING OF COMPLAINT; EQUITABLE ESTOPPEL; SEVERANCE AGREEMENT; MUST SHOW THAT COMPLAINANT WAS LULLED INTO INACTION
In Moldauer v. Canandaigua Wine Co., 2003-SOX-26 (ALJ Nov. 14, 2003), Complainant alleged that he was entitled to equitable estoppel to excuse an untimely filing of a SOX whistleblower complaint based on his signature of a severance agreement in which he agreed to release any discrimination claims he might have under federal and state law against Respondent in exchange for his severance package. The ALJ found the issue to be whether Respondent entered the severance agreement in order to prevent Complainant from asserting his rights under the Act. The ALJ found that equitable estoppel did not apply, writing:
Most importantly, the doctrine of equitable estoppel requires that the complainant reasonably rely on the respondent's conduct. Santa Monica, 202 F.3d at 1177. Despite the severance agreement, Mr. Moldauer filed a complaint with [the California Department of Fair Employment and Housing], met with the FBI to discuss Respondent's alleged accounting improprieties, and complained to the SEC about Respondent's accounting practices within one month of signing the severance agreement. Collectively, these actions indicate that Mr. Moldauer was not lulled into inaction by the severance agreement.
UNTIMELY COMPLAINT; EQUITABLE TOLLING; DEPARTURE FROM COUNTRY; WRONG FORUM; IGNORANCE OF THE LAW
In Moldauer v. Canandaigua Wine Co., 2003-SOX-26 (ALJ Nov. 14, 2003), Complainant alleged that he was entitled to equitable tolling to excuse an untimely filing of a SOX whistleblower complaint based on three grounds: (1) he was unable to conduct his affairs after he was terminated because he had to leave the United States, (2) he raised this claim with incorrect agencies within the statutory period, and (3) neither Complainant nor the attorney he retained in conjunction with the severance agreement were aware of the Act's whistleblower protection provisions. The ALJ observed that "[e]quitable tolling may be appropriate when the complainant demonstrates that extraordinary circumstances prevented him from ‘managing his affairs and thus from understanding his legal rights and acting upon them.' Hall v. EG&G Defense Materials, Inc., ARB Case No. 98-076 (ARB Sept. 30, 1998)." The ALJ observed that Complainant had an experienced attorney, that he registered complaints with a state agency, the FBI and the SEC prior to leaving the country, and that his departure was apparently voluntary – and therefore found that he was not entitled to equitable tolling on this ground. Equitable tolling for filing in the wrong forum was not warranted because the complaint Complainant filed with the state agency – although referencing "whistleblowing" – did not implicate activities covered by the Sarbanes-Oxley Act whistleblower provision, and because Complainant failed to produce a copy of the complaint he filed with the SEC. Moreover, because he was represented by an attorney Complainant is deemed to have had constructive notice of the SOX whistleblower complaint procedure and the agency with which such a complaint should have been filed. Finally, the ALJ found that lack of awareness that SOX contained a whistleblower provision did not warrant equitable tolling because a Complainant who has retained counsel is deemed to have had constructive notice of appropriate legal remedies and, even for unrepresented claimants there is no authority for tolling a statute of limitations based on ignorance of the law.
FILING OF SOX COMPLAINT; FILING DIRECTLY WITH SECRETARY RATHER THAN OSHA
Even though the regulations specify that SOX whistleblower complaints should be filed with the OSHA Area Director responsible for enforcement activitities in the geographical area where the complainant employee resides or was employed, or with any OSHA officer or employee, 29 C.F.R. § 1980.103(c), a complaint filed directly with the Secretary of Labor satisfies the filing requirements under the SOX. Harvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006).
Protected Activity Prior to Effective Date of SOX, But Adverse Action After Effective Date
EFFECTIVE DATE OF SOX; COVERAGE MAY BE ESTABLISHED EVEN THOUGH PROTECTED ACTIVITY OCCURRED BEFORE SOX WAS EFFECTIVE IF ADVERSE ACTION OCCURRED AFTER EFFECTIVE DATE
In Harvey v. Home Depot U.S.A., Inc., ARB Nos. 04-114 and 115, ALJ Nos. 2004-SOX-20 and 36 (ARB June 2, 2006), the Complainant's protected activity occurred prior to the effective date of the SOX whistleblower provision. The ARB noted, however, that it had implicitly recognized in prior cases that SOX whistleblower protection may apply so long as the complainant proves that the protected activity was a contributing factor and the adverse action occurred after the effective date of the SOX.
Whether the Respondent Must File an Answer to the Complaint
WHETHER THE RESPONDENT IS REQUIRED TO ANSWER THE COMPLAINT FILED WITH OSHA AND A COMPLAINANT'S OBJECTIONS TO THE OSHA FINDINGS/REQUEST FOR HEARING
In Brady v. Direct Mail Management, Inc., ARB No. 06-044, ALJ No. 2006-SOX-16 (ARB Mar. 26, 2008), it was undisputed that the complaint was not timely filed. Moreover, no grounds existed for equitable relief. The Complainant argued that the Respondent had waived its right to defend against the complaint because it had not answered the complaint filed with OSHA and had not responded to the Complainant's objections to the OSHA findings/request for hearing. The ARB affirmed the ALJ's grant of summary judgment against the Complainant, but clarified the analysis in regard to the waiver issue. The ARB held that the regulations make the filing of response to the complaint filed with OSHA, and to the objections/request for hearing, discretionary, not mandatory. See 29 C.F.R. §§ 1980.104(a), (c), 1980.106(a), (b). (The ALJ had held that OALJ's general rules of practice and the SOX procedural rules were inconsistent, and had not referenced the SOX rule about the filing of an answer to a complaint.) Finally, the ARB observed that OSHA had dismissed the complaint only eight days after it was filed on the ground of lack of timeliness, and held that "[w]here OSHA dismissed the complaint before the running of the time (20 days after notice) in which [the Respondent] would have had to respond to the complaint, [the Respondent] did not waive its right to defend against it." USDOL/OALJ Reporter at 7.
