The Department’s Top Judges will Decide the “Burden of Proof” Whistleblower Must Meet to Prevail in Sarbanes-Oxley and Dodd-Frank Whistleblower Cases

The Department of Labor Administrative Review Board (ARB) will hold oral arguments in the case of Powers v. Union Pacific Railroad Company, ARB Case No. 13-034 on Wednesday, January 14 at 2pm.  This case will decide the burden of proof that whistleblowers must meet in order to prevail in retaliation cases filed under the key corporate whistleblower laws, including the Sarbanes-Oxley Act, the Dodd-Frank Act’s Consumer Safety laws, transportation safety laws, the Atomic Energy Act and the Affordable Care Act, among others.

National Whistleblower Center Executive Director Stephen M. Kohn will be one of the attorneys arguing the case on behalf of the whistleblowers.  Kohn called the Powers case “monumental.”  The case is being heard en banc by all of the top Labor Department appeals court judges who have the authority to decide whistleblower cases. 
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In a long-overdue decision issued on October 9, 2014, the Department of Labor Administrative Review Board (ARB) finally clarified the standard of proof for employees to establish the “contributing factor” test in whistleblower retaliation cases arising under the Sarbanes-Oxley Act  (SOX) and other whistleblower statutes.  In a 2-to-1 panel decision in Fordham v. Fannie Mae, ARB No. 12-061, the ARB reversed and vacated an Administrative Law Judge’s recommended decision that had improperly weighed Fannie Mae’s defenses in determining whether the employee had demonstrated her whistleblowing was a contributing factor in her termination.

The majority opinion noted that Congress had created the “contributing factor” test to lower the standard of proof needed in whistleblower cases, and that once a “contributing factor” is shown the burden of proof shifts to the employer to prove by “clear and convincing” evidence that it would have taken the same action in the absence of the employee’s whistleblowing.
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In a January 15, 2013 press release, the U.S. Department of Labor announced that OSHA and BNSF Railway Co. had reached an agreement for the company to revise personnel policies that violate the whistleblowers provisions of the Federal Railroad Safety Act and discouraged employees from reporting work-related injuries.
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Today, the U.S. Department of Labor issued a summary of the September 2012 decisions of its Administrative Review Board (ARB).  The twelve decisions issued in September cover important procedural issues involving the time limits for filing complaints and petitions for review to the ARB, considering motions for summary decision, and approving settlement agreements. Read more about these decision in the continuation of this blog post.


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On October 5, 2012, the Third Circuit U.S. Court of Appeals conducted oral arguments in Wiest v. Lynch, a case that tests the scope of protection for whistleblowers under the 2002 Sarbanes Oxley Act (SOX). Harrisburg, Pennsylvania, attorney Richard Angino argued the case for Jeffrey Wiest.  He generously shared his time with attorney Stephen M. Kohn, Executive Director of the National Whistleblowers Center (NWC). The panel of three judges consisted of Chief Judge Theodore A. McKee, Judge Kent A. Jordan and Judge Thomas I. Vanaskie. In the earlier arguments that day, Judge Jordan was the most active questioner of lawyers on both sides of each case.  The Court was running late as the questioning exceeded the time allotted for all the attorneys.

You can read the continuation of this blog post for a more detailed report of the judge’s questions and the issues that arose.  However, I want to emphasize a moment at the end of Stephen Kohn’s rebuttal argument.  Judge Jordan had been questioning all the attorneys on whether any whistleblower protection can protect disclosures employees make as part of their official duties.  Stephen Kohn answered that many frauds and violations are discovered by employees performing their duties and raising a concern to their supervisor. Therefore, whistleblower laws would lose much of their effectiveness if they did not protect this most common form of raising concerns. He cited the nuclear whistleblower case, Mackowiak v. University Nuclear Systems, Inc., 735 F. 2d 1159, 1163 (9th Cir. 1984) (employers may not discharge employees engaged in quality control because they do their jobs too well). He got Judge Jordan to agree that establishing protected activity is "a low bar." Stephen Kohn emphasized how the Department of Labor opinion in Sylvester v. Parexel International LLC, ARB No. 07-123, ALJ Nos. 2007-SOX-39 and 42 (ARB May 25, 2011), is entitled to deference, and how the legislative history showed that in enacting SOX, Congress relied on the Third Circuit’s decision in Passaic Valley Sewerage Comm. v. U.S. Department of Labor, 992 F.2d 474, 478-79 (3d Cir. 1993). Past the official time limit, he even pointed to the roots of protecting employee communications to supervisors in the old Mine Safety Act cases, Phillips v. Interior Bd. of Mine Operations Appeals, 500 F.2d 772, 778 (D.C. Cir. 1974), cert. denied, 420 U.S. 938 (1975), and Munsey v. Federal Mine Safety and Health Review Comm’n, 595 F.2d 735, 741 (D.C. Cir. 1978). Finally, Judge Jordan said, "I gotcha" and the argument concluded. To me, the persistence of the argument, Stephen Kohn’s determination to draw on all the available authority, and his keen understanding of the practicalities of whistleblower protection, made it possible for us to believe that all three judges might agree to reinstate Jeffrey Wiest’s case. It will probably be months before we get the Court’s opinion, but I am already convinced that this oral argument had a positive effect on the outcome of this case and on the state of the law.  Bravo!


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We are pleased to repost, with permission, this blog entry by Charlie Goetsch from trainlawblog.com, announcing a favorable and precedent-setting decision by the Department of Labor’s Administrative Review Board (ARB). Congratulations to Charlie Goetsch for obtaining the outstanding result for his client, and for ending the era of railroad interference in the medical care of its workers.

By Charlie Goetsch:

In a decision that will send shock waves reverberating throughout the railroad industry, railroad medical departments now are prohibited from doing anything that directly or indirectly interferes with the treatment prescribed by an injured worker’s treating doctor for the entire period of medical treatment, not just immediately after an injury. Once again, thanks to the Federal Rail Safety Act, the balance of power is shifting from management to rail labor, and railroad medical departments will never be the same.

Here’s the context. When a chair at his Metro North Railroad work place collapsed as he sat down, my client Anthony Santiago suffered an injury to his low back. Metro North ordered him to go to its Medical Department, which confirmed he had an occupational back injury and advised him to see an orthopedic physician. For two months Metro North followed its policy of paying the medical bills for occupational injuries. However, when a MRI scan confirmed Santiago had a herniated disc and his doctor prescribed treatment for the disc, Metro North’s Medical Department immediately reclassified Santiago’s occupational back injury as “non-occupational” and refused to pay for the treatment. As a result, Santiago suffered a four month delay in his prescribed treatment and was forced to pay $16,520 in medical expenses out of his own pocket.


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The Department of Labor today issued final regulations for handling whistleblower complaints under the Consumer Product Safety Improvement Act (CPSIA), 15 U.S.C. § 2087. On behalf of the National Whistleblowers Center (NWC), I submitted comments on the proposed regulations in 2010.  Today, DOL adopts some of my recommendations, and adopts a change in response to another recommendation.  DOL also added a new change that was not in the interim regulations, and is worthy of objection.  Specifically, DOL is making explicit that Administrative Law Judges (ALJs) may limit discovery to expedite a whistleblower case. 29 CFR § 1983.107(b). This provision could be used to deny whistleblowers the full opportunity to obtain the discovery that would win their cases. In cases where discovery is necessary, for example, to show that the employer’s stated reasons are pretextual, the whistleblower would likely waive the time limits for adjudication so that discovery can be completed. It is unfortunate that DOL is adding this unnecessary line that would work a disservice to the whistleblowers who have a hard enough time proving their cases.

Helpfully, DOL now provides in 29 CFR § 1983.104(c) that complaints or their attorneys should receive employer submissions (except for material protected by confidentiality laws), and should have an opportunity to respond. At page 40497 of the summary, OSHA states that it agrees with the comments about the importance of keeping the complainant informed and giving the complainant an opportunity to help the investigation. On page 40498, OSHA states that it, “anticipates that the vast majority of respondent submissions will not be subject to confidentiality laws.” It also links to the OSHA Whistleblower Investigations Manual where OSHA provides a list of the applicable confidentiality laws. See pages 1-19 to 1-21 for the discussion on confidentiality laws.


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On Monday, July 16, 2012, the National Whistleblowers Center will host a 2-hour training seminar that covers new whistleblower laws and the special Department of Labor litigation process. These new laws cover millions of employees who blow the whistle on a wide variety of issues, so this training is absolutely essential for attorneys, journalists, community