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Sixth Circuit Rules that Job Applicants not Covered by Whistleblower Statutes

The U.S. Court of Appeals for the Sixth Circuit recently ruled that federal statutes do not protect a job applicant from retaliation by a prospective employer based on whistleblowing at a previous employer. The decision puts the Court at odds with long-standing agency interpretation of the Energy Reorganization Act (ERA) by the Department of Labor (DOL), as well as assumptions underlying decisions in several other federal circuit Courts of Appeals. Gary Vander Boegh worked for the Department of Energy (DOE) for many years as landfill manager at the Paducha Gaseous Diffusion Plant (PDGP) under WESKEM, LLC, a subcontractor to Bechtel Jacobs Company (BJC). While working for WESKEM, Vander Boegh engaged in a range of protected whistleblowing, including reporting environmental violations. In 2005, DOE awarded the PGDP contract to Paducah Remediation Services, LLC (PRS). EnergySolutions subcontracted with PRS to provide waste management services. Vander Boegh applied to EnergySolutions to remain the landfill manager, but EnergySolutions hired another candidate. Vander Boegh filed a complaint against BJC, PRS, and EnergySolutions with DOL, alleging retaliation for prior protected conduct in violation of six federal statutes.

After the Sixth Circuit remanded a previous appeal by Vander Boegh, the district court again granted summary judgment to the one remaining defendant, EnergySolutions, holding that Vander Boegh lacked standing because he was an applicant and not an employee of EnergySolutions. On appeal, the Sixth Circuit affirmed, finding that Vander Boegh lacked standing under the ERA and the False Claims Act (FCA), and that the court thus did not have subject matter jurisdiction over Vander Boegh’s claims under four other federal environmental statutes: The Safe Drinking Water Act (SDWA), 42 U.S.C. § 300j-9(i); the Clean Water Act (CWA), 33 U.S.C. § 1367; the Toxic Substances Control Act (TSCA), 15 U.S.C. § 2622; and the Solid Waste Disposal Act (SWDA), 42 U.S.C. § 6971.

In its opinion filed on November 18, 2014, the Sixth Circuit noted that the Third Circuit had “assumed, without deciding, that applicants are employees under the ERA,” but declined to follow the Third Circuit’s reasoning. Vander Boegh argued that the term “employee” is ambiguous and the Court should thus apply Chevron deference to DOL’s interpretation of the term in the ERA and adopt the agency’s long-standing interpretation. But the Court reasoned that since the term “employer,” but not “employee,” was defined in the statute, it should be guided by the dictionary definition of “employee.” With that reasoning, the Court endorsed the following definitions of “employee” under the ERA: “[s]omeone who works in the service of another person (the employer) under an express or implied contract of hire, under which the employer has the right to control the details of work performance,” and “[a] person working for another person or a business firm for pay.”

The Court concluded that, by these definitions, Vander Boegh was not an employee because he never worked for EnergySolutions. It added that Congress had included, in its ERA definition of employer, “applicants” for Nuclear Regulatory Commission licenses, indicating that had it intended to include applicants within the definition of “employee,” it would have. The Court added that courts should “presume Congress intended a term to have its settled, common-law definition” absent a contrary indication in the statute.

But the Court did not address two other viable theories of statutory interpretation. The first is that Congress simply failed to define the term “employee” in the ERA, thus creating a statute with ambiguous language. The accepted doctrine of Chevron deference to agency interpretation in such instances would carry no weight if Congress intended Courts to defer to dictionary or common law definitions when faced with unintended ambiguity. The second possibility – that Congress knowingly left the term undefined, expecting the agency to use its discretion in defining it – even more strongly supports Chevron deference.

The Court also failed to engage DOL’s reasoning for including applicants within the definition of “employees.” In Samodurov v. General Physics Corporation, the DOL Office of Administrative Appeals stated, “It is well established that the ERA covers applicants for employment.” The DOL reasoned that “[a] broad interpretation of ‘employee’ is necessary to give full effect to the purpose of the employee protection provision, which is to encourage reporting of safety deficiencies in the nuclear industry.” In Vander Boegh, the Sixth Circuit did not address either the DOL’s long-standing and settled interpretation of employee under the ERA, or DOL’s reasoning based on the congressional intent underlying the statue.

Finally, in addition to the Third Circuit opinion cited but not followed by the Court, other circuits have assumed that applicants are protected under the anti-retaliation provision of the ERA. The Fifth Circuit applied a three-part test to decide whether job applicants were protected under the ERA in Williams v. Administrative Review Board. In Hasan v. Department of Labor, the Tenth Circuit upheld the dismissal of an applicant’s claim under the whistleblower provision of the ERA, but not because the plaintiff was an applicant. Like the Fifth Circuit in Williams, the Tenth Circuit laid out the elements the applicant needed to show to sustain a claim under the act. At least three other circuits have thus deferred to DOL’s determination that applicants are within the definition of employee under the ERA.

For these reasons, the Sixth Circuit’s limited reading of “employee” under the ERA (and, by extension, other federal whistleblowing statutes) to exclude applicants is unlikely to be followed by other circuits.

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