05-2404
________________________________
IN THE UNITED STATES
COURT OF APPEALS
FOR THE SECOND
CIRCUIT
________________________________
JOHN SCOTT
BECHTEL,
WILLIE JACQUES,
JR.,
Plaintiffs-Appellees,
UNITED STATES DEPARTMENT OF LABOR,
Intervenor-Plaintiff-Appellee,
v.
COMPETITIVE TECHNOLOGIES, INC.,
Defendant-Appellant
________________________________
On Appeal from the
United States District Court
for the District of
Connecticut
_________________________
BRIEF FOR THE
SECRETARY OF LABOR
__________________________
Respectfully submitted,
HOWARD M. RADZELY
Solicitor of Labor
STEVEN J. MANDEL
Associate Solicitor
ELLEN R. EDMOND
Senior Attorney
MEGAN E. GUENTHER
Attorney
U.S. Department of Labor
200 Constitution Avenue, N.W.
Suite N-2716
Washington, D.C. 20210
(202) 693-5561
TABLE OF CONTENTS
STATEMENT OF
JURISDICTION
STATEMENT
OF THE ISSUES
STATEMENT
OF THE CASE
A.
Statutory and Regulatory Background
B.
Procedural History and Statement of Facts
C. The
District Court's Decision
SUMMARY
OF THE ARGUMENT
STATEMENT
OF THE STANDARD OF REVIEW
ARGUMENT
I. THE DISTRICT
COURT CORRECTLY CONCLUDED THAT IT HAD JURISDICTION UNDER SECTION 806 OF SARBANES-OXLEY TO ENFORCE THE
SECRETARY'S PRELIMINARY REINSTATEMENT ORDER
A. The Plain
Language of the Statute Grants the District Court Jurisdiction to Enforce
Preliminary Reinstatement Orders
B. Any Other
Interpretation of AIR21 and Sarbanes-Oxley Would Undermine the Goals of the
Statutes and Negate Congressional Intent
II. THE
DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN COMPELLING CTI'S COMPLIANCE WITH
THE SECRETARY'S PRELIMINARY REINSTATEMENT ORDER
A. The
Secretary's Investigative and Adjudicatory Proceedings Afforded CTI its Full Due Process Rights
B. The
District Court Correctly Determined That Plaintiffs Were Entitled to Injunctive
Relief Without Demonstrating the Traditional Elements for Such Relief
CONCLUSION
CERTIFICATE
OF COMPLIANCE
CERTIFICATE
OF SERVICE
ADDENDUM
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TABLE OF AUTHORITIES
Cases:
Bechtel v. Competitive
Technologies, Inc., 369 F. Supp. 2d 233 (D. Conn. 2005)
Bechtel v. Competitive
Technologies, Inc., 2005-SOX-33 (June 10, 2005)
Brock v. Roadway
Express, 481 U.S. 252 (1987)
Cleveland Bd. of Educ. v.
Loudermill, 470 U.S. 532 (1985)
Commodity Futures Trading
Commission v. British American
Commodity Options, 560 F.2d 135 (2d Cir. 1977)
Federal Express Corp. v.
Federal Espresso, Inc., 201 F.3d 168 (2d Cir. 2000)
Green Party of New York State
v. New York State Board of
Elections, 389 F.3d 411 (2d Cir. 2004)
Hoffman v. Inn Credible
Caterers, Ltd., 247 F.3d 360 (2d Cir. 2001)
In re Sac & Fox Tribe of
Mississippi in Iowa/Meskawi Casino
Litigation, 340 F.3d 749 (8th Cir. 2003)
Isaacs v. Bowen, 865 F.2d 468 (2d
Cir. 1989)
Jacques v. Competitive
Technologies, Inc., 2005-SOX-34 (June
14, 2005)
Kraebel v. New York City Dep't
of Housing Preservation and
Dev., 959 F.2d 395 (2d Cir. 1992)
Martin v. Yellow Freight Sys.,
Inc., 983 F.2d 1201 (2d Cir. 1993)
Martin v. Yellow Freight Sys.,
Inc., 793 F. Supp. 461
(S.D. N.Y. 1992), aff'd, 983 F.2d 1201 (2d Cir. 1993)
Molloy v. Metropolitan Transp.
Auth., 94 F.3d 808 (2d.
Cir. 1996)
New Albany Concrete Serv.,
Inc. v. Herman, 2000 WL 33975408
(W.D.Ky. 2000)
Nicolau v. Horizon Media,
Inc., 402 F.3d 325 (2d
Cir. 2005)
Offshore Logistics, Inc. v.
Tallentire, 477 U.S. 207 (1986)
Roadway Express v.
Donovan, 603 F. Supp. 249 (N.D. Ga. 1985),
aff'd in part and rev'd sub. nom.,Brock v. Roadway Express,
481 U.S. 252 (1987)
Saks v. Franklin Covey
Co., 316 F.3d 337 (2d Cir. 2003)
Skidmore v. Swift &
Co., 323 U.S. 140 (1944)
Torres-Rosado v.
Rotger-Sabat, 335 F.3d 1 (1st Cir. 2003)
United States v.
Gayle, 342 F.3d 89 (2d Cir. 2004)
United States v.
Kennedy, 233 F.3d 157 (2d
Cir. 2000)
United States v. Mead
Corp., 533 U.S. 218 (2001)
United State v.
Pacheco, 225 F.3d 148 (2d
Cir. 2000), cert. denied,
533 U.S. 904 (2001)
United States v. State of
Washington, 459 F. Supp. 1020
(D. Wash. 1978)
Williams v. Taylor, 529 U.S. 362 (2000)
Statutes and Regulations:
28 U.S.C. 1292(a)(1)
National Labor Relations Act
29 U.S.C. 160(j)
Sarbanes-Oxley Corporate and
Criminal Fraud Accountability Act of 2002, Pub. L. 107-204, 116 Stat. § 802,
(July 30, 2002), 18 U.S.C. 1514A et seq.
18 U.S.C. 1514A(a)
18 U.S.C. 1514A(a)(1)
18 U.S.C. 1514A(a)(2)
18 U.S.C. 1514A(b)(1)(A)
18 U.S.C. 1514A(b)(1)(B)
18 U.S.C. 1514A(b)(2)(A)
18 U.S.C. 1514A(b)(2)(C)
18 U.S.C. 1514A(c)(2)(A)
18 U.S.C. 1341
18 U.S.C. 1343
18 U.S.C. 1344
18 U.S.C. 1348
Securities Exchange Act of
1934
15 U.S.C. 78l
15 U.S.C. 78o(d)
Surface Transportation Assistance
Act of 1978,
49 U.S.C. § 2305
Surface Transportation Assistance
Act
49 U.S.C. 31105
49 U.S.C. 31105(b)
49 U.S.C. 31105(b)(2)(A)
49 U.S.C. 31105(b)(2)(B)
49 U.S.C. 31105(d)
Wendell H. Ford Aviation
Investment and Reform Act for the 21st Century
49 U.S.C. 42121
49 U.S.C. 42121(b)
49 U.S.C. 42121(b)(1)
49 U.S.C. 42121(b)(1)(A)
49 U.S.C. 42121(b)(2)
49 U.S.C. 42121(b)(2)(A)
49 U.S.C. 42121(b)(3)
49 U.S.C. 42121(b)(3)(B)
49 U.S.C.
42121(b)(3)(B)(ii)
49 U.S.C. 42121(b)(4)(A)
49 U.S.C. 42121(b)(4)(B)
49 U.S.C. 42121(b)(5)
49 U.S.C. 42121(b)(6)
Code of Federal Regulations
29 C.F.R. 1980.103
29 C.F.R. 1980.104
29 C.F.R. 1980.104(a)
29 C.F.R. 1980.104(e)
29 C.F.R. 1980.105(a)
29 C.F.R. 1980.106(a)
29 C.F.R. 1980.106(b)(1)
29 C.F.R. 1980.113
Miscellaneous:
148 Cong. Rec. S7420 (daily ed. July 26, 2002)
Federal Rule of Civil
Procedure Rule 65(c)
H.R. Rep. 106-167(I), 106th
Cong., 1st Sess. (1999); 1999 WL 355951
Procedures for Handling
Discrimination Complaints Under Section 806 of the Corporate and Criminal Fraud
Accountability Act of 2002, Title VIII of the Sarbanes-Oxley Act;
Final Rule, 69 Fed. Reg. 52104 (Aug. 24, 2004)
Secretary's Order 5-2002,
67 Fed. Reg. 65008 (Oct. 22, 2002)
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IN THE UNITED STATES
COURT OF APPEALS
FOR THE SECOND
CIRCUIT
_______________________
No. 05-2404
_______________________
JOHN SCOTT
BECHTEL,
WILLIE JACQUES,
JR.,
Plaintiffs-Appellees,
UNITED STATES
DEPARTMENT OF LABOR,
Intervenor-Plaintiff-Appellee,
v.
COMPETITIVE
TECHNOLOGIES, INC.,
Defendant-Appellant
_________________________
On Appeal from the
United States District Court
for the District of
Connecticut
_________________________
BRIEF FOR THE
SECRETARY OF LABOR
__________________________
STATEMENT OF
JURISDICTION
This case arises under section 806, the
whistleblower protection provisions, of the Sarbanes-Oxley Corporate and
Criminal Fraud Accountability Act of 2002 ("Sarbanes-Oxley" or "the Act"),
Pub. L. 107-204, 116 Stat. 802 (July 30, 2002). Section 806, codified at
18 U.S.C. 1514A, authorizes the Secretary of Labor ("the Secretary") to
investigate whistleblower complaints and, if she finds reasonable cause to
believe that a violation has occurred, to issue findings and an order requiring
preliminary reinstatement. See 18 U.S.C. 1514A(b)(2)(A)
(incorporating 49 U.S.C. 42121(b)(2)(A)). Section 806 also authorizes
enforcement of the Secretary's preliminary reinstatement order in district court
by either the Secretary or the person on whose behalf the order was
issued. See 18 U.S.C. 1514A(b)(2)(A) (incorporating 49 U.S.C.
42121(b)(5) and (b)(6)). On February 2, 2005, the Secretary issued a
preliminary reinstatement order under section 806 requiring Defendant
Competitive Technologies, Inc. ("CTI") to immediately reinstate Plaintiffs
John Scott Bechtel and Willie Jacques, Jr. J.A. 129-31.
On May 13, 2005, the United States District Court for the
District of Connecticut granted Plaintiffs Bechtel and Jacques, and
Intervenor-Plaintiff, the United States Department of Labor, a preliminary
injunction requiring CTI to comply with the Secretary's preliminary
reinstatement order. See J.A. 174-82; Bechtel v. Competitive
Technologies, Inc., 369 F. Supp. 2d 233, 237 (D. Conn. 2005). CTI
filed a timely appeal. This Court has jurisdiction under 28 U.S.C.
1292(a)(1), which allows interlocutory appeals from district court orders
granting injunctions.
STATEMENT OF THE ISSUES
1. Whether the district court correctly concluded that it has
jurisdiction under section 806 of Sarbanes-Oxley to enforce a preliminary
reinstatement order issued by the Secretary.
2. Whether the district court abused its discretion in granting a
preliminary injunction requiring CTI to comply with the Secretary's preliminary
reinstatement order issued under section 806 of Sarbanes-Oxley.
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STATEMENT OF THE CASE A. Statutory and Regulatory Background
The Sarbanes-Oxley Act was enacted in the wake of
the Enron and WorldCom scandals to restore investor confidence in the nation's
financial markets by ensuring corporate responsibility, enhancing public
disclosure, and improving the quality and transparency of financial reporting
and auditing. See Procedures for Handling Discrimination
Complaints Under Section 806 of the Corporate and Criminal Fraud Accountability
Act of 2002, Title VIII of the Sarbanes-Oxley Act; Final Rule, 69 Fed. Reg.
52104 (Aug. 24, 2004). To further these purposes, section 806 of the Act
provides whistleblower protection to employees of publicly traded companies who
report corporate fraud.[1] See 148 Cong. Rec. S7420 (daily
ed. July 26, 2002) (statement of Senator Leahy) ("U.S. laws need to encourage
and protect those who report fraudulent activity that can damage innocent
investors in publicly traded companies").
Section 806 of the Act, together with the
Secretary's implementing regulations, provide that an employee who believes that
he or she has been subject to retaliation for lawful whistle blowing may file a
complaint with the Secretary. See 18 U.S.C. 1514A(b)(1)(A); 29
C.F.R. 1980.103. Proceedings under section 806 are governed by the rules
and procedures, as well as the burdens of proof, of the aviation safety
whistleblower provisions contained in the Wendell H. Ford Aviation Investment
and Reform Act for the 21st Century ("AIR21"), 49 U.S.C. 42121.
See 18 U.S.C. 1514A(b)(2)(A) and (b)(2)(C).[2]
Upon the filing of a complaint, the Secretary,
through the Occupational Safety and Health Administration ("OSHA"), will
notify the employer of the allegations contained in the complaint and the
substance of the evidence supporting the complaint. See 49 U.S.C.
42121(b)(1); 29 C.F.R. 1980.104(a).[3] OSHA then conducts an investigation to
determine whether reasonable cause exists to believe that a violation has
occurred. See 49 U.S.C. 42121(b)(2)(A); 29 C.F.R.
1980.104(e). If, on the basis of the information gathered, OSHA has reason
to believe that a violation has occurred, it will issue findings and a
preliminary order providing the relief prescribed under the statute, including
reinstatement of the employee. See 49 U.S.C. 42121(b)(2)(A); 18
U.S.C. 1514A(c)(2)(A); and 29 C.F.R. 1980.105(a).
Either the employer or the complainant may file
objections to OSHA's findings and preliminary order within 30 days and request a
hearing before a Department of Labor administrative law judge ("ALJ").
See 49 U.S.C. 42121(b)(2)(A); 29 C.F.R. 1980.106(b)(1). However,
the filing of such objections "shall not operate to stay any reinstatement
remedy contained in the preliminary order." 49 U.S.C.
42121(b)(1)(A). Section 806's implementing regulations similarly provide
that "[t]he portion of the preliminary order requiring reinstatement will be
effective immediately upon the [employer's] receipt of the findings and
preliminary order, regardless of any objections to the order." 29 C.F.R.
1980.106(b)(1).
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B. Procedural History and Statement of Facts
Defendant CTI is covered under the whistleblower
provisions of Sarbanes-Oxley because it is a company with "a class of
securities registered under section 12 of the Securities Exchange Act of 1934
(15 U.S.C. 78l), or that is required to file reports under section 15(d) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o(d))." 18 U.S.C.
1514A(a). Plaintiffs Bechtel and Jacques were vice presidents of CTI
employed to obtain licenses for the company. In September 2003, after they
were fired by John Nano, CTI's Chief Executive Officer, they filed complaints
with the Secretary under section 806 of Sarbanes-Oxley alleging that their
discharges were in retaliation for making internal complaints that certain oral
agreements between CTI and themselves, as well as between CTI and a number of
consultants, should be included in reports to the Securities and Exchange
Commission ("SEC"). See J.A. 129-30. Specifically, Bechtel
and Jacques alleged that these internal complaints were raised at three
quarterly disclosure meetings held to review the company's Form 10-Q reports
that had to be filed with the SEC. Expressing concern that without the
information about the oral agreements, the 10-Q reports would be inaccurate,
Bechtel and Jacques initially refused to sign the reports. Although they
agreed to sign the reports after Nano explained that their concerns would be
addressed by the next disclosure meeting, relations with Nano deteriorated and
they were fired soon thereafter. See
Id.
On June 24, 2004, pursuant to 29 C.F.R. 1980.104(e),
OSHA informed CTI that an initial investigation had found that reasonable cause
existed to believe that CTI violated Sarbanes-Oxley when it discharged Bechtel
and Jacques.[4] CTI was offered the opportunity to
present additional contrary evidence. J.A. 130. In response, CTI
submitted documentary evidence to OSHA on July 14, 2004 and November 15,
2004. Id.
On February 2, 2005, after reviewing
additional information from CTI, OSHA issued the Secretary's findings that
reasonable cause existed to believe that CTI had violated the Act. J.A.
129-31. The Secretary rejected as pretextual CTI's contentions that
Bechtel and Jacques were fired for poor performance and economic reasons.
J.A. 130. CTI was ordered to reinstate Bechtel and Jacques and to pay them
back wages and compensatory damages. J.A. 131.
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On February 11, 2005, CTI objected to the Secretary's
findings and requested a hearing before an ALJ. J.A. 133; see 29
C.F.R. 1980.106(a). Approximately three weeks later, CTI moved the ALJ for
a stay of the Secretary's preliminary reinstatement order. J.A. 133.[5] On March 29, 2005, the ALJ denied the
motion and ordered CTI to immediately reinstate Bechtel and Jacques. J.A.
141. Two weeks later, on April 11, 2005, instead of reinstating Bechtel
and Jacques, CTI moved the ALJ to reconsider her order. J.A. 43. The
ALJ denied CTI's motion to reconsider on April 25, 2005. Id.
The ALJ held a hearing on the merits from May 17 through
May 20, 2005. At the close of the evidence, CTI moved for judgment in its
favor. Before the ALJ rendered a decision on the motion, CTI and Jacques
informed the ALJ that they had entered into a "Memorandum of Understanding" to
comprehensively settle Jacques claims against the company.[6]
With respect to Bechtel, on June 10, 2005, the ALJ denied
CTI's motion for judgment in its favor having found "sufficient evidence to
conclude that Complainant engaged in protected activity, and experienced an
adverse employment action, giving rise to the jurisdiction of the Act."
Bechtel v. Competitive Technologies, Inc., 2005-SOX-33 (June 10,
2005)(attached as Addendum). Although the ALJ also found that CTI had
articulated non-discriminatory, legitimate reasons for terminating Bechtel's
employment, she determined that she could not render a judgment in CTI's favor
because of "inconsistencies in the record regarding management's knowledge of
[Bechtel's] protected activity." Id. In the interest of
expediting her consideration of the case, the ALJ informed the parties that the
information in the record was sufficient to enable her to render a decision
without the submission of post-hearing briefs. Id. CTI and
Bechtel nevertheless both indicated a desire to submit briefs, which they filed
on July 15, 2005.
In the meantime, on April 18, 2005, while CTI's
motion for reconsideration of its stay request was pending before the ALJ,
Bechtel and Jacques brought an action in district court seeking to enforce the
Secretary's preliminary reinstatement order. J.A. 8-12. The
Secretary, also seeking enforcement of her order, intervened on April 26,
2005. J.A. 124-128.
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On May 13, 2005, the district court granted the
preliminary injunction and ordered CTI to immediately reinstate Bechtel and
Jacques to their former positions and to pay them back wages due from the date
of the Secretary's February 2, 2005 preliminary reinstatement order. J.A.
182; Bechtel, 369 F. Supp. 2d at 237. On May 16, 2005, CTI appealed
the preliminary injunction to this Court and simultaneously moved for
reconsideration in district court. CTI also moved the district court for a
stay of its order or, alternatively, for a modification of its ruling to allow "economic" rather than actual reinstatement. J.A. 225-26. On May 23, 2005,
the court reconsidered its decision and issued an order denying all of CTI's
requested relief. J.A. 264.[7]
C. The District Court's Decision
In granting the preliminary injunction, the district
court concluded that it had jurisdiction to enforce the Secretary's preliminary
reinstatement order issued under section 806. Rejecting CTI's argument
that it lacked authority to enforce the Secretary's order because the order was
not final, the court stated that "the statute explicitly authorizes
jurisdiction in this court to enforce a preliminary order as if it were a final
order," and that any contrary conclusion "would negate the plain words of the
statute that preliminary orders of reinstatement may not be stayed pending an
appeal of the Secretary's order." J.A. 180; Bechtel, 369 F.
Supp. 2d at 236.
The court also rejected CTI's contention that
Bechtel, Jacques, and the Secretary had failed to establish the necessary
elements for injunctive relief. The court concluded that, under section
806, "the Secretary of Labor and not the court makes the determination of
whether an order of reinstatement is appropriate" and that Bechtel and Jacques
were entitled to an injunction "based exclusively on the Secretary's findings." J.A. 180-81; Bechtel, 369 F. Supp. 2d at 236.
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SUMMARY OF THE ARGUMENT The district court correctly concluded that it had
authority to enforce the Secretary's preliminary reinstatement order issued
under section 806, the whistleblower provisions, of Sarbanes-Oxley. The
plain language of AIR21 section 42121(b), incorporated by reference into
Sarbanes-Oxley, grants district courts jurisdiction to enforce preliminary
reinstatement orders. Moreover, the structure and legislative history of
49 U.S.C. 42121(b) demonstrate that Congress modeled the whistleblower
provisions of AIR21 on those of the Surface Transportation Assistance Act ("STAA"), which grants district courts jurisdiction to enforce preliminary
reinstatement orders. See 49 U.S.C. 31105. A contrary reading
of the statute would negate Congress's intent that preliminary reinstatement
orders issued under AIR21 and Sarbanes-Oxley not be stayed during the
administrative adjudication process.
The court also correctly found that CTI received due
process during OSHA's investigation and the subsequent post-deprivation review
process. In Brock v. Roadway Express, 481 U.S. 252, 264 (1987)
(plurality opinion), the Supreme Court held, under STAA's similar reinstatement
scheme, that due process is satisfied if prior to ordering preliminary
reinstatement, the Secretary provides the employer with "notice of the
employee's allegations, notice of the substance of the relevant supporting
evidence, an opportunity to submit a written response, and an opportunity to
meet with the investigator and present statements from rebuttal witnesses." The Secretary complied with Roadway Express's
requirements in this case.
Finally, the district court correctly concluded that the
Secretary and Bechtel were entitled to an injunction without establishing the
traditional injunction factors. The district court correctly interpreted
Roadway Express as allowing enforcement of the Secretary's order so long
as it complied with due process standards. Sarbanes-Oxley's and AIR21's
requirements that orders of preliminary reinstatement be issued upon OSHA's
finding of "reasonable cause," and not be stayed during the administrative
process, support enforcement of the Secretary's preliminary reinstatement order
without a searching inquiry into the merits of the underlying whistleblower
claim. The statutes provide instead for adjudication of the merits of the
whistleblower claim in administrative proceedings appealable to this
Court. Cf. Commodity Futures Trading Commission v. British
American Commodity Options, 560 F.2d 135 (2d Cir. 1977).
STATEMENT OF THE
STANDARD OF REVIEW The issue of whether the district court has jurisdiction to enforce the
Secretary's preliminary reinstatement order under the whistleblower provisions
of Sarbanes-Oxley presents a question of statutory interpretation subject to
de novo review. See United States v. Gayle,
342 F.3d 89, 91 (2d Cir. 2004). The district court's decision to grant a
preliminary injunction should be reviewed under the abuse of discretion
standard, which includes de novo review of legal issues. See
Green Party of New York State v. New York State Board of Elections, 389
F.3d 411, 418 (2d Cir. 2004) ("[W]e review a district court's grant of a
preliminary injunction for abuse of discretion, overturning its decision only if
it rested on an error of law or on a clearly erroneous factual finding.").
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ARGUMENT
I. THE DISTRICT COURT CORRECTLY CONCLUDED THAT IT HAD JURISDICTION UNDER SECTION 806 OF SARBANES-OXLEY TO
ENFORCE THE SECRETARY'S PRELIMINARY REINSTATEMENT ORDER
A. The
Plain Language of the Statute Grants the District Court Jurisdiction to Enforce Preliminary Reinstatement Orders.
The language of 49 U.S.C. 42121(b) plainly provides
the court with jurisdiction to enforce the Secretary's preliminary reinstatement
order issued under Sarbanes-Oxley's whistleblower provisions. See
Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 236 (1986) ("The
starting point in statutory construction is, of course, the language of the
statute itself.") (citation omitted). As the district court stated, "the
statute explicitly authorizes jurisdiction in this court to enforce a
preliminary [reinstatement] order as if it were a final order. See
49 U.S.C. § 42121(b)(2) ('the Secretary shall accompany the Secretary's findings
with a preliminary order providing the relief prescribed by paragraph (3)(B)
[i.e., the section governing final orders.]')." Bechtel, 396 F.
Supp. 2d at 236. See also 49 U.S.C. 42121(b)(5) and
(b)(6).[8]
Specifically, subsection (b)(3)(B)(ii) provides that
the Secretary shall order the person who has committed a violation to reinstate
the complainant to his or her former position. See 49 U.S.C.
42121(b)(3)(B)(ii). Subsection (b)(2)(A) instructs the Secretary to
accompany any reasonable cause finding that a violation occurred with a
preliminary order containing the relief prescribed under subsection (b)(3),
including reinstatement.[9] This subsection also declares that any
(b)(3)(B) relief of reinstatement contained in a preliminary order is not stayed
upon the filing of objections. See 49 U.S.C. 42121(b)(2)(A).
Thus, under the statute, enforceable orders issued under subsection (b)(3)
include preliminary orders that contain the relief of reinstatement prescribed
by subsection (b)(3)(B).
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B. Any
Other Interpretation of AIR21 and Sarbanes-Oxley Would Undermine the Goals of the Statutes and Negate Congressional Intent.
Notwithstanding this plain reading of
the statute, CTI contends that district courts only have jurisdiction under 49
U.S.C. 42121(b) to enforce final orders issued by the Secretary. CTI's
Brief ("Br.") 13-21. This argument lacks merit. Contrary to CTI's
contentions, reading 49 U.S.C. 42121(b) as providing district courts with
authority to enforce preliminary reinstatement orders comports with long-settled
cannons of statutory construction and fulfills Congress's intent that
preliminary reinstatement not be stayed during the pendency of an administrative
appeal.
CTI focuses only on the references in subsections (b)(5)
and (b)(6) to orders issued under "paragraph [b](3)." In doing so, CTI
ignores the rule of statutory construction that exhorts courts "to read a
section of a statute not 'in isolation from the context of the whole Act' but to
'look to the provisions of the whole law, and to its object and policy.'"
United State v. Pacheco, 225 F.3d 148, 154 (2d Cir. 2000); see
Gayle, 342 F.3d at 93, citing Saks v. Franklin Covey, 316
F.3d 337, 345 (2d Cir. 2003)("The text's plain meaning can best be understood
by looking to the statutory scheme as a whole and placing the particular
provision within the context of that statute"); United States v.
Kennedy, 233 F.3d 157, 162 (2d Cir. 2000)(in interpreting a statute, courts
are called upon to "construct an interpretation that comports with its primary
purpose. . ."). In addition, courts must "give effect, if possible, to
every clause and word of a statute." Williams v. Taylor, 529 U.S.
362, 404 (2000); see Nicolau v. Horizon Media, Inc., 402 F.3d 325,
329 (2d Cir. 2005). A reading of section 42121(b) that does not allow for
the enforcement of preliminary reinstatement orders in district court is
inconsistent with the legislative intent that these orders be effective
immediately upon issuance and, as the district court found, would negate the
plain words of the statute that preliminary orders of reinstatement are not
automatically stayed pending an appeal of the Secretary's order.
See J.A. 180; Bechtel, 369 F. Supp. 2d at 236.
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This Court came to the same conclusion in interpreting a
similar whistleblower provision under the Surface Transportation Assistance Act
("STAA"). Martin v. Yellow Freight Systems, Inc., 983 F.2d 1201,
1203 (2d Cir. 1993), involved an interim order of reinstatement issued by an ALJ
after an evidentiary hearing. Yellow Freight argued that the Secretary
could not enforce the interim reinstatement order in district court because the
STAA section providing the district court jurisdiction only referred to
preliminary orders (those issued after an investigation) and final orders (those
reviewed by the Secretary on appeal from an ALJ). Id.; see
49 U.S.C. 31105(b) and (d).[10] This Court held, however, that the
ALJ's order was enforceable, finding it reasonable and anticipated under the
statute that an ALJ vested with the authority of the Secretary would issue
orders of reinstatement. See Id. Moreover, the Court
noted "enforcement of an ALJ's reinstatement order is consistent with
congressional intent to protect whistle-blowers, and . . . failure to enforce
such an order undermines the goal of the legislation." Id.
Similarly, here, it is reasonable and anticipated that, facing an employer's
refusal to comply with a preliminary reinstatement order under AIR21 or
Sarbanes-Oxley, the Secretary or the complainant can seek to enforce the
preliminary reinstatement order in district court pursuant to 49 U.S.C.
42121(b)(5) or (b)(6). A contrary interpretation of the whistleblower
provisions in AIR21 and Sarbanes-Oxley would undermine the statutes' goals and
negate congressional intent that preliminary reinstatement not be stayed simply
by the filing of objections.
That Congress intended preliminary
reinstatement orders issued under AIR21's whistleblower provisions to be
enforceable also is evident from AIR21's legislative history, which reveals that
49 U.S.C. 42121(b) was modeled on the whistleblower provisions of STAA:
There are currently over a
dozen Federal laws protecting whistleblowers including laws protecting nuclear
plant workers, miners, truckers, and farm laborers when acting as
whistleblowers. For example, section 2305 of the Surface Transportation
Assistance Act of 1978, 49 U.S.C. § 2305, prohibits retaliation for
filing a complaint or instituting any proceeding relating to violations of motor
vehicle safety rules or refusing to operate an unsafe vehicle. There
are no laws specifically designed to protect airline employee whistleblowers.
H.R. Rep. 106-167(I), 106th Cong., 1st Sess. 1999, 1999 WL 355951, *85 (1999)
(emphasis added).
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CTI contends (Br. 21-22) that because this language refers
to several of the whistleblower statutes administered and enforced by the
Secretary, not all of which contain preliminary reinstatement authority, the
legislative history does not illustrate congressional intent to provide district
courts with jurisdiction to enforce preliminary reinstatement orders. This
argument fails to acknowledge, however, that, when AIR21 was passed, Congress
specifically referred to STAA as an example of an existing whistleblower
protection statute. Congress undoubtedly was aware that STAA alone,
among the many whistleblower statutes administered by the Department of Labor,
authorized the Secretary to issue orders of preliminary reinstatement upon a
finding of reasonable cause that are not stayed by the filing of objections.
The inclusion of the very similar preliminary reinstatement provisions in AIR21
indicates that Congress intended AIR21 to provide aviation employees with the
same protections that it previously had provided to employees operating motor
vehicles in STAA.
Based on the plain language of 49
U.S.C. 42121(b) and its legislative history, the Secretary has interpreted
section 42121(b) as providing district courts with the authority to enforce
preliminary reinstatement orders. The regulations implementing section 806
provide:
Whenever any person has
failed to comply with a preliminary order of reinstatement or a final order or
the terms of a settlement agreement, the Secretary or a person on whose behalf
the order was issued may file a civil action seeking enforcement of the order in
the United States district court for the district in which the violation was
found to have occurred.
29 C.F.R. 1980.113. The regulation reflects the Secretary's careful
consideration of the language and context of the statute. As Congress
chose to vest the Secretary with authority to administer the whistleblower
provisions under 49 U.S.C. 42121(b), the Secretary's interpretation of those
provisions is entitled to deference. See United States v. Mead
Corp., 533 U.S. 218, 234-35 (2001); Skidmore v. Swift & Co., 323
U.S. 140 (1944). See also Yellow Freight, 983 F.2d at
1203 (upholding the district court's authority to enforce an ALJ's reinstatement
order as provided for in the regulations).
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Finally, CTI relies (Br. 17) on the provision in section
806 of Sarbanes-Oxley that permits a complainant to bring a de
novo action in district court if the Secretary has not issued a final
decision within 180 days of the filing of the complaint, and the delay is not
due to the bad faith of the complainant. See 18 U.S.C.
1514A(b)(1)(B). CTI alleges that this provision establishes that Congress
did not intend preliminary reinstatement orders issued under Sarbanes-Oxley to
be enforceable in district court, but rather intended complainants to bring
de novo actions in district court as a remedy for an employer's
failure to comply with a preliminary reinstatement order.
CTI's reliance on this provision is entirely
misplaced. CTI ignores the fact that the procedural provisions of AIR21,
which are adopted wholesale by section 806 of Sarbanes-Oxley, do not include a
provision allowing complainants to file de novo actions in
district court. Thus, when enacting the enforcement provisions of AIR21,
which are at issue here, Congress could not have intended complainants to bring
de novo actions in district court in lieu of seeking enforcement
of a preliminary reinstatement order. Indeed, Congress most likely
included this provision in Sarbanes-Oxley to provide whistleblowers who report
corporate fraud with an additional remedy.
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II. THE DISTRICT COURT DID NOT ABUSE ITS DISCRETION IN COMPELLING
CTI'S COMPLIANCE WITH THE SECRETARY'S PRELIMINARY
REINSTATEMENT ORDER
CTI argues (Br. 24-36) that in granting a preliminary
injunction to enforce the Secretary's reinstatement order, the district court
abused its discretion by not determining that CTI was denied due process during
both OSHA's investigation and the post-deprivation review process, and by not
requiring Plaintiffs to meet the necessary elements for injunctive relief.
As discussed below, neither argument is persuasive.
A. The Secretary's
Investigative and Adjudicatory Proceedings Afforded CTI its Full Due Process Rights.
The district court correctly rejected CTI's
argument that it was denied due process during OSHA's investigation.
See J.A. 264; Bechtel, 369 F. Supp. 2d at 237. CTI's
allegation in this regard rests on its assertion (Br. 26-28) that it received
summaries of Bechtel's and Jacques's statements provided to OSHA during the
investigation rather than the complete and unredacted copies that it
requested. However, due process does not require that the Secretary
provide CTI with actual copies of witness statements. As the Supreme Court
held in Brock v. Roadway Express, 481 U.S. 252, 264 (1987) (plurality
opinion), involving STAA's similar preliminary reinstatement provisions, due
process only requires "notice of the employee's allegations, notice of the
substance of the relevant supporting evidence, an opportunity to submit a
written response, and an opportunity to meet with the investigator and present
statements from rebuttal witnesses." [11]
Here, CTI received the process that it was due.
OSHA notified CTI about Bechtel's and Jacques's
allegations when it received their complaints. On June 24, 2004, OSHA
provided CTI with the substance of the evidence that it had collected and
informed the company that, based on its initial investigation, there was
reasonable cause to believe that CTI had violated section 806 when it terminated
the employment of Bechtel and Jacques. J.A. 130. OSHA offered CTI an
opportunity to present additional contrary evidence and to meet with the
OSHA investigator.[12] Id. CTI submitted
additional evidence in response to OSHA's June 24, 2004 letter and in response
to another letter from OSHA dated November 3, 2004. Id. OSHA
considered this evidence and found it unpersuasive, as explained in its February
2, 2005 findings. Id. Accordingly, CTI's argument that it was
denied due process as a result of OSHA's investigation has no merit and was
properly rejected by the district court.
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CTI also makes much of the Secretary's regulation at
29 C.F.R. 1980.104(e), which expresses a preference that during an investigation
OSHA provide employers with actual witness statements, rather than summaries of
those statements. Br. 27-29. The preamble to 29 C.F.R. 1980.104
clarifies, however, that the purpose of this regulation is to ensure that
employers are provided the procedural protections they are due under Roadway
Express, i.e., the right to be notified of the substance of
the evidence. See 69 Fed. Reg. 52108. Because OSHA provided
CTI with the substance of Bechtel's and Jacques's statements, it was
provided with the necessary procedural protections. See
Torres-Rosado v. Rotger-Sabat, 335 F.3d 1, 10 (1st Cir. 2003) (Due
Process Clause does not incorporate the particular procedural structures
promulgated by state and local government agencies); cf. New Albany
Concrete Serv., Inc. v. Herman, 2000 WL 33975408, *6 (W.D.Ky. 2000)(in
action to enforce a STAA preliminary reinstatement order, employer does not show
constitutional denial of due process by Secretary's failure to follow statutory
time limits for administrative review).
In addition to arguing that it was denied due process
during OSHA's investigation, CTI contends that the Secretary's procedures for
assuring that it obtains an expeditious post-deprivation review are
insufficient. Br. 29-33. In this regard, CTI cites to the Supreme
Court's statement in Roadway Express that "[a]t some point, delay in
holding post reinstatement evidentiary hearings may become a constitutional
violation." 481 U.S. at 267. The facts establish, however, that to
the extent that CTI has suffered any deprivation, the Secretary's procedures
have provided CTI with a prompt, post-deprivation evidentiary hearing.
Had CTI immediately complied with the Secretary's
preliminary reinstatement order, the company would have become subject to a
temporary deprivation on February 2, 2005, when the Secretary ordered it to
reinstate Bechtel.[13]
Without complying with the Secretary's order, CTI objected to the Secretary's
findings on February 11, 2005, and moved to stay the reinstatement order on
March 3, 2005. J.A. 133. The ALJ considered CTI's concerns but
nevertheless denied CTI's stay request on March 29, 2005. J.A. 132.
On April 11, 2005, without having reinstated Bechtel and Jacques, CTI requested
reconsideration of the ALJ's order, this time presenting the ALJ with excerpts
of deposition testimony taken during the on-going discovery proceedings.
Two weeks later, the ALJ again denied CTI's stay request. J.A. 43.
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From May 17 through May 20, 2005, the ALJ held an
evidentiary hearing. This hearing took place only 95 days after CTI filed
its objections to the Secretary's findings and preliminary reinstatement
order. At the close of the evidence, CTI moved for judgment in its
favor. On June 10, 2005, or in less than 30 days, the ALJ issued a
decision denying CTI's motion, having found "sufficient evidence to conclude
that [Bechtel] engaged in protected activity, and experienced an adverse
employment action, giving rise to the jurisdiction of the Act."
Bechtel v. Competitive Technologies, Inc., 2005-SOX-33 (June 10,
2005). Although the ALJ also found that CTI had articulated
non-discriminatory, legitimate reasons for terminating Bechtel's employment, she
determined that she could not render a judgment in CTI's favor because of "inconsistencies in the record regarding management's knowledge of [Bechtel's]
protected activity." Id. The ALJ further stated that she had
enough information to render a final ruling on the merits of Bechtel's
whistleblower claim and suggested that, in the interest of expediting the
resolution of the case, the parties forego filing post-hearing briefs. CTI
nevertheless opted to file a post-hearing brief (as did Bechtel), which it
submitted on July 15, 2005. The ALJ's final decision on the merits is
likely to be issued in the near future.
In sum, the facts illustrate that CTI's due process rights
have not been violated by any delay in the Secretary's post-deprivation review
process. To the contrary, CTI has been afforded expeditious review.
See Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 547 (1985)
(holding a nine-month delay in adjudicating plaintiff's termination did not
violate due process); Isaacs v. Bowen, 865 F.2d 468, 477 (2d Cir. 1989)
(giving examples of delays ranging from nine months to two years that did not
violate due process). See also Kraebel v. New York City
Dep't of Housing Preservation and Dev., 959 F.2d 395, 405 (2d Cir. 1992) ("[N]o bright-line rule exists for determining when a delay is so burdensome as to
become unconstitutional").
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B. The District Court Correctly Determined That Plaintiffs
Were Entitled to Injunctive Relief Without Demonstrating the Traditional
Elements for Such Relief.
The Secretary is entitled to enforcement of her
preliminary reinstatement order without establishing the traditional factors for
preliminary injunctive relief. Generally, a plaintiff seeking a
preliminary injunction must show "(1) the likelihood of irreparable injury in
the absence of such an injunction, and (2) either (a) likelihood of success on
the merits or (b) sufficiently serious questions going to the merits to make
them a fair ground for litigation plus a balance of hardships tipping decidedly
toward the party requesting the preliminary relief." Federal Express
Corp. v. Federal Espresso Corp., 201 F.3d 168, 173 (2d Cir. 2000). The
district court correctly held here, however, that the Secretary is entitled to
enforcement of her reinstatement order without meeting these factors because "[t]he Sarbanes-Oxley Act makes clear that the Secretary of Labor and not the
court makes the determination of whether an order of reinstatement is
appropriate." J.A. 181; Bechtel, 369 F. Supp. 2d at 236.
The district court relied on Roadway Express, 481
U.S. at 259, in which "the Supreme Court observed that Congress could invest
the Secretary of Labor with the authority to order reinstatement on the basis of
an investigation, provided that the investigation met minimum due process
standards that are not at issue in this case." See J.A. 181;
Bechtel, 369 F. Supp. 2d at 237. Thus, in deciding whether to
enforce the preliminary reinstatement order, the district court correctly
examined whether the Secretary had issued a preliminary reinstatement order,
whether the reinstatement order comported with the requirements of due process,
and whether the employer had complied with the reinstatement order.[14]
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The district court's decision is in keeping with
this Court's precedent. In Commodity Futures Trading Commission v.
British American Commodity Options, 560 F.2d 135 (2d Cir. 1977), the Court
held that the Commodities Futures Trading Commission did not need to establish
the traditional injunction factors prior to enjoining British American, a "commodities trading advisor," from operating without a registration pending
administrative review of the agency's decision denying British American's
registration application. The fact that the statute vested the Commission
with authority to rule on registration applications played a key role in the
Court's decision:
As we see it, the material
question to be answered in this case is not whether the Commission was justified
in challenging British American's fitness for registration, or whether it had
adequate grounds for denying registration altogether. Adjudication of
those issues is clearly vested in the Commission. §§ 6n(7) and
12a(2). The material question here is simply whether the Commission made a
prima facie showing that British American was violating, and likely to continue
violating, the registration requirements of § 6m by using the mails or other
means or instrumentalities of interstate commerce in connection with its
business as a commodity trading advisor while unregistered.
British American Commodity Options, 560
F.2d at 142.
This Court also affirmed the district court's decision in
Martin v. Yellow Freight Sys., Inc., 793 F. Supp. 461 (S.D.N.Y. 1992),
aff'd, 983 F.2d 1201 (2d Cir. 1993). As discussed above, Yellow
Freight was an action brought by the Secretary to enforce an ALJ's interim
reinstatement order issued under STAA. The district court held that
stringent review of the facts of the whistleblower claim was not appropriate
because "this court may not undertake the review of the record that Congress
assigned to the circuit courts." 793 F. Supp. at 473. The district
court therefore concluded "that the task of this court is not to review the
evidence but to simply ascertain whether the procedures followed by the
Secretary in issuing the ALJ order satisfied due process." Id.
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As in Yellow Freight, the whistleblower provisions
of AIR21, incorporated into section 806 of Sarbanes-Oxley, support the
conclusion that the district court should enforce the Secretary's order without
a searching review of the underlying whistleblower claim. 49 U.S.C.
42121(b)(2)(A) provides that preliminary reinstatement orders shall be issued
upon OSHA's finding of "reasonable cause" and shall not be stayed during the
administrative process. In addition, like the similar reinstatement scheme
under STAA at issue in Yellow Freight, AIR21 clearly contemplates that
the Secretary will resolve the merits of a whistleblower's claim after a
hearing, with ultimate review by the courts of appeals. See 49
U.S.C. 42121(b)(4)(A). Thus, in this action to enforce OSHA's preliminary
reinstatement order that the employer has flouted, the district court properly
recognized that its role was limited. See 49 U.S.C. 42121(b)(4)(B)
("An order of the Secretary of Labor with respect to which review could have
been obtained [by the court of appeals] shall not be subject to judicial review
in any criminal or other civil proceeding.").
CTI argues (Br. 35-36) that Yellow Freight is
distinguishable from this case because it involved an ALJ's reinstatement order
issued after an evidentiary hearing, as opposed to an order issued by the
Secretary based on a reasonable cause finding. But, the Yellow
Freight district court did not rely on the fact that an evidentiary hearing
had been held. Rather, it expressly analogized an ALJ's authority to issue
a reinstatement order after a hearing to the Secretary's authority to issue such
an order "after merely a preliminary investigation." 793 F. Supp. at
469, quoted in Yellow Freight, 983 F.2d at 1203.
CTI also contends that the district court's reliance on
Roadway Express was misplaced, because in Roadway Express v.
Donovan, 603 F. Supp. 249 (N.D. Ga. 1985), aff'd in part and rev'd sub.
nom. Brock v. Roadway Express, 481 U.S. 252 (1987), the district
court required the plaintiff to meet the necessary factors for injunctive
relief. Br. 34-35. [15] This argument misconstrues Roadway
Express because, unlike the current case, where the Secretary is seeking to
enforce a preliminary reinstatement order, the employer in Roadway
Express was seeking to enjoin the Secretary from enforcing a preliminary
reinstatement order. This different procedural posture accounts for the
district court's more searching inquiry in Roadway Express. In sum,
CTI can find no support for its position in either Roadway Express or
Yellow Freight. Rather, both decisions and other precedent in this
Circuit support the district court's enforcement of the Secretary's preliminary
reinstatement order.[16]
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CONCLUSION
For the foregoing reasons, the
decision of the district court should be affirmed.
Respectfully
submitted,
HOWARD M.
RADZELY
Solicitor of
Labor
STEVEN J.
MANDEL
Associate
Solicitor
ELLEN R.
EDMOND
Senior
Attorney
______________________
MEGAN E.
GUENTHER
Attorney
U.S.
Department of Labor
200
Constitution Avenue, N.W.
Suite
N-2716
Washington,
D.C. 20210
(202)
693-5561
CERTIFICATE OF
COMPLIANCE
I hereby certify that:
- This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B) because this brief contains 7,578 words, excluding the parts of
the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
- This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type-style requirements of Fed. R. App. P. 32(a)(6) because
this brief has been prepared in a monospaced typeface using Microsoft Word
2003 with fewer than 10.5 characters per inch in courier new font.
August 25, 2005
_____________________________
Megan E. Guenther
Attorney
U.S. Department of Labor
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CERTIFICATE OF SERVICE
I certify that copies of the foregoing Brief for the Secretary of Labor were
served via Federal Express on the following individuals this 25th day of August
2005:
Robert Bauman, Esq.
Taylor S. Flanery, Esq.
Gambs, Mucker & Bauman
10 N. Fourth Street
Lafayette, Indiana 47901-1301
(765) 423-1001
Mary Pivec, Esq.
Sheppard, Mullin, Richter &
Hampton
1300 I Street, NW
Washington, DC 20005-3314
(202) 772-5310
David B. Zabel, Esq.
Cohen & Wolf
1115 Broad Street
Bridgeport, CT 06604
(203) 368-0211
Marc P. Mercier
Beck & Eldergill, P.C.
447 Center Street
Manchester, CT 06040
(860)
646-5606
__________________________________
Megan E.
Guenther
U.S.
Department of Labor
Office of the
Solicitor
200
Constitution Ave, NW
Suite
N-2716
Washington,
D.C. 20210
(202)
693-5561
ADDENDUM
Addendum not available
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________________________________
Footnotes:
[1] Section
806 prohibits publicly traded companies from "discharg[ing], demot[ing], suspend[ing], threaten[ing], harass[ing] or in any
other manner discriminat[ing] against an employee in the terms and conditions of
employment" because of any protected whistle blowing activity. 18 U.S.C.
1514A(a). Activities protected under the Act include providing to "a
person with supervisory authority over the employee" (among others) information
that an employee reasonably believes constitutes a violation of federal mail,
wire, bank or securities fraud statutes (18 U.S.C. 1341, 1343, 1344 and 1348),
or a violation of any securities rule or other provision of federal law relating
to fraud against shareholders. See 18 U.S.C. 1514A(a)(1) and
(a)(2).
[2] For ease of reference and to eliminate recurrent
cross-referencing, we refer throughout this brief to 49 U.S.C. 42121, although
this is a Sarbanes-Oxley case.
[3] The Secretary has delegated responsibility for
receiving and investigating whistleblower complaints under Sarbanes-Oxley to the
Assistant Secretary for Occupational Safety and Health ("OSHA").
See Secretary's Order 5-2002, 67 Fed. Reg. 65008 (Oct. 22, 2002).
References to the Secretary or Assistant Secretary for OSHA are used
interchangeably throughout this brief.
[4] 29 C.F.R. 1980.104(e) provides in pertinent part:
Prior to the issuance of findings and a preliminary order . . ., if the
Assistant Secretary has reasonable cause, on the basis of information gathered
under the procedures of this part, to believe that the [employer] has violated
the Act and that preliminary reinstatement is warranted, the Assistant Secretary
will again contact the [employer] to give notice of the substance of the
relevant evidence supporting the complainant's allegations as developed during
the course of the investigation.
[5] The regulations permit the employer to move
"the
Office of Administrative Law Judges for a stay of [the Secretary's] preliminary
order of reinstatement." 29 C.F.R. 1980.106(b)(1). The preamble to
the regulations explains that a stay of a preliminary reinstatement order is
appropriate only in the exceptional case. See 69 Fed. Reg. 52104,
52109 (Aug. 24, 2004).
[6] On June 14, 2005, the ALJ approved this settlement and
dismissed Jacques's claims with prejudice. See Jacques v.
Competitive Technologies, Inc., 2005-SOX-34, available at http://www.oalj.dol.gov/.
[7] After the district court issued its decision on
reconsideration, CTI moved this Court for a stay pending its appeal of the
preliminary injunction. This Court denied the stay on July 13, 2005.
[8] 49 U.S.C. 42121(b)(5) states:
Whenever any person has failed
to comply with an order issued under paragraph [b](3), the Secretary of Labor
may file a civil action in the United States district court for the district in
which the violation was found to occur to enforce such order. In actions brought
under this paragraph, the district courts shall have jurisdiction to grant all
appropriate relief including, but not limited to, injunctive relief and
compensatory damages.
Subsection (b)(6) similarly states:
A person on whose behalf an
order was issued under paragraph [b](3) may commence a civil action against the
person to whom such order was issued to require compliance with such
order. The appropriate United States district court shall have
jurisdiction, without regard to the amount in controversy or the citizenship of
the parties, to enforce such order.
[9] 49 U.S.C. 42121(b)(2)(A) (emphases added) states, in
pertinent part:
If the Secretary of Labor
concludes that there is a reasonable cause to believe that a violation of
subsection (a) has occurred, the Secretary shall accompany the Secretary's
findings with a preliminary order providing the relief prescribed by paragraph
(3)(B). Not later than 30 days after the date of notification of findings
under this paragraph, either the person alleged to have committed the violation
or the complainant may file objections to the findings or preliminary order, or
both, and request a hearing on the record. The filing of such objections
shall not operate to stay any reinstatement remedy contained in the preliminary
order.
[10] Using language strikingly similar to that found in AIR21,
49 U.S.C. 42121(b)(2)(A), the Surface Transportation Assistance Act ("STAA")
provides in pertinent part:
[T]he Secretary shall conduct
an investigation, decide whether it is reasonable to believe the complaint has
merit, and notify the complainant and the person alleged to have committed the
violation of the findings. If the Secretary decides it is reasonable to believe
a violation occurred, the Secretary shall include with the decision findings and
a preliminary order for the relief provided under paragraph (3) of this
subsection [which includes reinstatement].
49 U.S.C. 31105(b)(2)(A).
STAA also provides that the
complainant, the employer, or both may file objections to the Secretary's
findings and preliminary order within 30 days, but, as in AIR21, "The filing of objections does not stay a reinstatement
ordered in the preliminary order." 49 U.S.C. 31105(b)(2)(B) (emphasis
added). Under 49 U.S.C. 31105(d):
If a person fails to comply
with an order issued under subsection (b) of this section, the Secretary shall
bring a civil action to enforce the order in the district court of the United
States for the judicial district in which the violation occurred.
[11] In so holding, the Supreme Court recognized that:
The statute reflects a
careful balancing of the relative interests of Government, employee, and
employer. It evidences a legislative determination that the preliminary
investigation and finding of reasonable cause by the Secretary, if followed
"expeditiously" by a hearing on the record at the employer's request, provide
effective protection to the employee and ensure fair consideration of the
employer's interest . . . .
Id. at 259.
[12] CTI does not contest that even before providing CTI
with this notice and opportunity to present additional evidence, the OSHA
investigator went to CTI's offices for planned interviews with management
officials. At that time, the investigator was informed that John Nano,
CTI's CEO and the individual responsible for firing Bechtel and Jacques, was not
going to be available for an interview. After CTI received OSHA's initial
findings and was given an opportunity to respond further, Nano still did not
make himself available for an interview, but instead submitted an affidavit that
the investigator did not find persuasive. (See J.A. 130). Only then
did OSHA issue findings and an order of preliminary reinstatement.
[13] However, CTI did not reinstate Bechtel for approximately
five months after the Secretary ordered preliminary reinstatement. Thus,
CTI suffered no temporary deprivation during those months. By the time CTI
did reinstate Bechtel (after this Court denied its stay request) a hearing
already had been held. See Roadway Express, 481 U.S. at 268
(declining to consider post-deprivation delay claim because, inter
alia, due to the district court's injunction, the preliminary
reinstatement order never became effective).
Moreover, in complaining about the length of the post-deprivation review
process, CTI curiously includes the length of the Secretary's
investigation. However, under Roadway Express, CTI clearly was not
deprived of any property interest before the Secretary ordered the
company to reinstate Bechtel.
[14] CTI alleges (Br. 35-36) that the district court did
not review the Secretary's preliminary reinstatement order for compliance with
due process. We believe that the district court appropriately reviewed the
Secretary's preliminary reinstatement order for compliance with due process in
this case and concluded that CTI received the process it was due.
See J.A. 181; Bechtel, 369 F. Supp. 2d at 237 (stating that
minimum due process standards "are not at issue in this case"); see
also J.A. 264 (the district court granted reconsideration in response to
CTI's arguments that the court had not sufficiently evaluated the Secretary's
compliance with due process, but ultimately denied relief).
[15] Additionally, the traditional injunction factors are met
here. In particular, the Secretary and Bechtel would not need to
demonstrate irreparable injury. Congress already balanced the equities and
determined that an injunction is necessary. See In re Sac & Fox
Tribe of Mississippi in Iowa/Meskawi Casino Litigation, 340 F.3d 749, 759
(8th Cir. 2003); British American Options Corp., 560 F.2d at 141;
cf. Molloy v. Metropolitan Trasp. Auth., 94 F.3d 808, 811 (2d.
Cir. 1996)(stating that government action taken pursuant to statutory authority
is presumed to be in the public interest).
CTI also errs in suggesting (Br. 33-34) that because an injunction to compel
compliance with the Secretary's preliminary reinstatement order alters the
status quo, the Secretary's burden of establishing likelihood of
success on the merits would be heightened if she were required to show the
traditional injunction factors. An injunction requiring preliminary
reinstatement does not alter the status quo. Rather, it
serves to preserve the status quo as it was before the employer
illegally retaliated against the employee for his protected conduct.
See Hoffman v. Inn Credible Caterers, Ltd., 247 F.3d 360, 369 (2d
Cir. 2001) (involving section 10(j) of the National Labor Relations Act, under
which the NLRB seeks preliminary reinstatement of employees discharged in
violation of the Act).
[16] CTI's final argument (Br. 36-38) that the district
court's preliminary injunction must be reversed as infirm because the order did
not require a payment of security is specious. Federal Rule of Civil
Procedure 65(c) exempts the United States from the requirement to pay
security. Moreover, where the federal government is co-plaintiff with a
private party, courts generally do not require the private party to pay
security. See United States v. State of Washington, 459 F.
Supp. 1020, 1106 (D. Wash. 1978).
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