DOL's ARB announces two new members and new briefing policy

Posted on August 24, 2010 by Richard Renner

The U.S. Department of Labor's Administrative Review Board (ARB) has issued a letter announcing the appointment of two new judges, and a new policy on briefing schedules. The two new judges are Joanne Royce and Luis Corchado. Royce previously worked for the Government Accountability Project (GAP) and a House committee. Corchado was Assistant Director of the Litigation Section for the City and County of Denver, Colorado. Previously, he was with Davis, Graham & Stubbs, a corporate law firm. The ARB now consists of four judges appointed by Secretary of Labor Hilda Solis (Chair Paul Igasaki, vice Chair E. Cooper Brown, Royce and Corchado) and one judge retained from the prior administration (Wayne Beyer).

The new ARB will have its work cut out for it if it is committed to restoring whistleblower law to the remedial purpose of providing protection to encourage employees to come forward. It also has a task of reducing the backlog that can keep cases pending for up to four years.  During the stakeholders meeting in June, the Board announced a goal of reducing the backlog so that cases would not pend for longer than two years. The appointment of new judges should help in that goal. It has been years since the ARB was fully staffed. At the June stakeholders meeting, the ARB also floated the idea of restricting extensions of time to cases where a party shows "exceptional circumstances." This would be a departure from the past practice of allowing almost all requests for extensions of time. Even with a backlog of two years, it is hard to see how extension of a month or two will delay the ARB in getting to and deciding the present case. Lawyers for whistleblowers and respondents urged the ARB in June to allow extensions for "good cause" to encourage attorneys to provide representation in whistleblower matters. Stephen M. Kohn, Executive Director of the National Whistleblowers Center (NWC), emphasized the difficulty of meeting deadlines as short as 30 days, and urged the ARB to maintain the current practice. Such pleas were to no avail. The ARB's letter announces that effective October 1, 2010, "extensions of time ... will only be granted upon a showing of exceptional circumstances." Time will tell how severe such circumstances must be to qualify as "exceptional" in the eyes of this new ARB. To add to the difficulty lawyers will have in whistleblower cases, the ARB will also require them to file not only their briefs, but also an "appendix" with copies of all the parts of the record cited in the brief. The appendix practice adds to the expense and difficulty of federal court appeals, and now the ARB wants to move in that same direction. The advantage for the ARB is that they will not have to wait for, or wade through, the record sent by the Administrative Law Judge (ALJ). Yet the ARB will still require the ALJ to forward the entire official record of the case. Startin with ALJ decisions issued on or after October 1, 2010, the new rules will require that parties be informed that their initial brief and appendix will be due within 30 days of filing their petition for review. While these new rules will make it more difficult for whistleblower lawyers to present cases to the ARB, and make it more difficult for whistleblowers to get attorneys, hopefully the content of decisions from the new ARB will improve the status of the remedial purpose of whistleblower protection laws and make such cases worth pursuing.

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Fourth Circuit leaves SOX whistleblower out in the cold

Posted on December 15, 2008 by Richard Renner

The Fourth Circuit U.S. Court of Appeals has affirmed an administrative appeal decision that leaves corporate whistleblower Stacy Platone out in the cold.  The December 3, 2008, opinion affirms a decision of the U.S. Department of Labor's Administrative Review Board that took away Platone's order from an Administrative Law Judge.  The Court held that under the Sarbanes-Oxley (SOX) employee protection, whistleblowers have to be specific about their allegations of fraud to be protected from retaliation.

 

In 2002, Atlantic Coast Airlines (ACA) lured Stacy Platone away from her career position with the Airline Pilots Association (ALPA) to become a labor relations manager.  Platone soon noticed that the company was not billing the union for flight-loss time.  Flight-loss time arises when pilots miss flying time to attend meetings on behalf of the union.  Platone discovered that the company continued to pay the pilots, even though they did not fly.  She raised the issue to her superior in the company and was promptly fired.

Platone filed a whistleblower complaint with the U.S. Department of Labor. The company claimed it was not aware of Platone's concern, but the notes of an assistant to the director confirmed that Platone had raised the flight-loss issue in a meeting shortly before she was fired. An administrative law judge (ALJ) issued a decision finding that Platone had a reasonable basis to believe that company officials were involved in a fraud.  The ALJ also found that the company's director was not credible, and that he clearly knew about Platone's concern when he fired her.  In 2004, the ALJ ordered ACA to pay backpay and attorney fees.

ACA appealed to the Department of Labor's Administrative Review Board (ARB). Meanwhile, ACA changed its name to Flyi, Inc., and then went out of business. In 2006, the ARB reversed the ALJ and held that Platone had not been specific enough in raising her concern about fraud. The ARB held that when Platone raised the flight-loss issue, she had not specifically informed her boss that the company had created to acquiesced in a scheme to provide improper payments to the union officers.  The ARB required whistleblowers to be specific in raising their concerns about fraud.

Even though the company was out of business, Platone and her lawyers did a favor for whistleblowers by asking the federal Fourth Circuit to overturn the ARB decision.  Sadly, though, the Fourth Circuit approved the ARB decision. The court defered to the ARB's conclusion the Platone had only alerted management to a billing issue, and had not "specifically and definitively" implicated any fraud when she reported the issue.

The "definite and specific" standard for SOX whistleblowing is not in the SOX law.  It is a creation of the ARB.  The ARB used the same rule to overturn another ALJ decision in the very first SOX case. The Fourth Circuit also affirmed that ARB decision. See Welch v. Chao, 536 F.3d 269, 275-76 (4th Cir. 2008). This special SOX rule is a departure from prior ARB decisions in environmental cases that only required employee concerns to touch on and relate to the issues protected by law.  Does the ARB really mean to encourage law-breakers to fire workers at the first sign of conscience and backbone, before that worker can put all the pieces together to make a specific report of a violation?  Apparently yes.

The outcome in the Platone case exemplifies the way that the current ARB has undercut what Congress made clear in passing SOX and other whistleblower protections.  Hopefully, President-elect Obama will move quickly to appoint new members to the ARB, and to the federal circuits courts of appeals, to protect working people and restore a sense of the law's true purpose.

 

DIGG this story here

 
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