Whistleblower Law Blog
Topic: Energy Reorganization Act (ERA)
Although the Department of Labor’s Administrative Review Board affirmed the dismissal of James Speegle’s whistleblower retaliation complaint, his case cemented a new standard for employees to meet when they invoke the “same decision” defense. In previous posts on May 15, 2014, September 3, 2014, and January 13, 2015, we discussed the Speegle standard and the burden it places on employers. Under Speegle, when an employer uses the “same decision” defense (arguing that it would have taken the same adverse action against an employee in the absence of his protected activity), the administrative judge must examine the defense by excising both the protected activity and the entangled facts from consideration.
In Speegle, the complainant and other supervisors had expressed concerns about Stone & Webster’s use of apprentices to apply paint coatings in a nuclear plant. Stone & Webster fired Speegle, ostensibly for insubordination after his obscene outburst at a meeting. The case then moved back and forth between DOL’s Office of Administrative Law Judges (the ALJ), the ARB, and the Eleventh Circuit, eventually establishing the present standard.
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.
Dave Sanders, former assistant maintenance manager for the Energy Northwest Columbia Generating Station, filed suit on October 25, 2012 in the U.S. District Court for the Eastern District of Washington under the whistleblower provision of the Energy Reorganization Act of 1978 (ERA). Sanders alleges that Energy Northwest retaliated against him for questioning the nuclear power plant’s security clearance procedures and handling of security violations.
In early 2011, Sanders asked Security Force Supervisor Bruce Pease to increase security clearance standards for temporary employees being hired for maintenance outages. When Pease refused, Sanders worked through his own chain of command in order to obtain permission. Pease allegedly retaliated against Sanders by accusing him of wrongfully authorizing a per diem for his daughter’s boyfriend Ricky Hayes, who Sanders had recommended for a temporary position. Hayes received a per diem because he claimed to be a South Carolina resident, but he then moved to a local residence. Energy Northwest revoked Sanders’s credentials and terminated his employment two weeks later.
GE-Hitachi Nuclear Plant Employee Files Whistleblower Lawsuit in Federal Court after Being Threatened and Demoted for Raising Safety Concerns
Harry Knight, an employee of Global Nuclear Fuel-Americas, LLC (GNF-A) a subsidiary of GE-Hitachi Nuclear Energy Americas, LLC, last month filed a federal whistleblower lawsuit under the Energy Reorganization Act of 1974 (ERA) against GE-Hitachi in the U.S. District Court for the Eastern District of North Carolina.
Knight, who has worked for GE for twelve years, alleges that the company retaliated against him in 2009 when it removed him from his position as Primary Emergency Director and Environmental Health and Safety Manager. Knight alleges that the facility manager and Senior Executive of GM Nuclear Fuel Cycle, Lisa Price, asked him to handle fire alarm activations at GNF-A’s Nuclear Power Plant in Wilmington, North Carolina in a way that did not follow the outlined federal licensing emergency plan guidelines. Knight refused to follow orders from Price, who instructed him to resolve alarm activation in a manner inconsistent with federal regulations. Knight claims that GE then placed him on a Performance Improvement Plan (PIP) because he disagreed with Price and raised safety concerns regarding protocol issues at the plant. Furthermore, Knight alleges that GE had a pattern of terminating and reassigning employees placed on PIPs, and that the company intended to terminate his employment after placing him on a PIP.
Knight is seeking punitive damages for wages, bonuses, and raises that he did not receive as a result of his demotion. He is also asking the court to order GE to reinstate his employment and terminate the individuals “directly involved in creating a chilled work environment.”
The Employment Law Group® law firm has an extensive nationwide whistleblower practice representing employees who have been victims of retaliation.
Department of Labor’s Administrative Review Board Reverses Administrative Law Judge’s Ruling in Favor of Nuclear Whistleblower and Client of The Employment Law Group®
The U.S. Department of Labor’s Administrative Review Board (ARB) recently issued a decision in favor of William Smith, a client of The Employment Law Group® law firm and whistleblower at a nuclear power facility in South Carolina. In the case, Smith v. Duke Energy Carolinas, LLC & Atlantic Group, d/b/a DZ Atlantic, Mr. Smith claimed that Duke Energy had terminated his employment because he reported a coworker’s alleged failure to comply with workplace safety regulations mandated by the Energy Reorganization Act (ERA).
The ARB’s decision reverses an earlier decision by an administrative law judge (ALJ) that held that Smith’s protective activity of bringing safety concerns in a nuclear plant to the attention of his supervisors was not the reason for his termination. In its recent decision, the ARB reversed the ALJ’s decision and remanded the case for further proceedings.
In early 2007, Mr. Smith began working for DZ Atlantic – a contractor to Duke Energy – as a security office at the Catawba nuclear power plant. As part of his duties, Smith performed routine fire inspections in the power plant and recorded his signed observations in a company log. In February 2008, Smith arrived to work approximately 1 hour prior to the beginning of his shift and saw that a co-worker, Chris Borders, had already signed the inspection sheet for an inspection that had not yet occurred.
Smith told Borders that if she would not alter the inspection log entry he would report the ostensibly falsified log entry to their supervisors. Borders responded to Smith by saying that if Smith reporter her, she would then file a sexual harassment complaint against him. Later that week, Borders filed a sexual harassment complaint against Smith and, during an investigative meeting with HR following the complaint, Smith reported Borders’ incorrect entry in the inspection log. While the company found no evidence backing Borders’ sexual harassment claims, Duke Energy eventually terminated both Smith and Borders, citing Borders falsification of the inspection log and Smith’s failure to report the false entry in a timely fashion after learning of it.
The ALJ previously held that while Smith had engaged in protected activity by reporting his coworker’s failure to follow ERA guidelines, his employer, Duke Energy, had demonstrated that the decision to terminate his employment had been motivated by the company’s wanting to punish a lack of trustworthiness by employees and not because of Smith’s whistleblowing. Accordingly, the ALJ held that Smith’s protected activity had not been a contributing factor in Duke Energy’s decision to terminate his employment.
The Administrative Review Board’s (ARB) Reversal and Remand
The central issue on appeal to the ARB was “whether Smith’s protected activity was a contributing factor in [Duke Energy’s] decision” to fire him. The ARB reversed the ALJ’s decision, citing Marano v. Dep’t of Justice, an appellate case involving a Drug Enforcement Agency (DEA) agent who reported misconduct his workplace which led the DEA to undergo a reorganization of his office. While the DEA agent was not found to have engaged in any wrongdoing, as a result of the office reorganization, he ultimately lost his job. The Federal Circuit held that but for the agent’s reporting of the misconduct he would not have been terminated and, therefore, the Court held that the agent’s protected activity was indeed a contributing factor in his termination.
In this case, the ARB found the Marano case to be analogous to Smith, holding that Smith’s blowing the whistle on the inspection log entry was a contributing factor to his termination because Duke Energy would never have fired Smith had it not known that Smith failed to make his report in a timely manner. The ARB held that Smith’s report was “inextricably intertwined” with the investigatory process that led to his termination and that his protected activity was a contributing factor in his termination. With this reversal of the ALJ’s decision, the ARB remanded the case for further proceedings and held that the burden of proof will now fall on Duke Energy to prove that it would still have terminated Smith even in the absence of Smith’s protected activity.
Significance for Whistleblowers
The ARB’s decision in Smith is important for whistleblowers because its holding supports the proposition that when an employer admits that the reason it took action against an employee is that individual’s protected activity, this is sufficient to demonstrate causation without further analysis.
The ARB’s decision should also put employers on notice that when management decides to make a so-called ‘clean sweep’ – terminating all employees who might be tainted with wrongdoing – that it cannot terminate the employee who disclosed the wrongdoing, as this would constitute terminating the employee because of his or her protected disclosure.
The Employment Law Group® law firm has substantial experience representing employees and whistleblowers in the nuclear industry in proceedings before the Department of Labor (DOL) and Nuclear Regulatory Commission (NRC).
- Sarbanes-Oxley Compliance Journal Publishes Article by The Employment Law Group Managing Principal, R. Scott Oswald (employmentlawgroupblog.com)
- Law360 Quotes R. Scott Oswald, Managing Principal of The Employment Law Group on Recent Pro-Whistleblower Decision from the Department of Labor’s Administrative Review Board (ARB) (employmentlawgroupblog.com)
In Vinnett v. Mitsubishi Power Systems, the Department of Labor Administrate Review Board held that employees who report nuclear safety concerns engage in protected conduct under Section 211 of the Energy Reorganization Act (ERA) regardless of whether they are blowing the whistle in the course of performing their job duties. The ARB states:
[T]here is nothing in the language of the ERA that carves out an exception limiting whistleblower protection based on an employee’s job duties. To the contrary, the statute protects “any employee” who engages in protected activity. Congress passed the ERA in 1974 as part of its continuing effort to regulate the production, use, and control of nuclear energy. An employee protection provision was added in 1978 to protect employees who assist or participate in any proceeding to administer or enforce the requirements of the ERA or the Atomic Energy Act of 1954. Nuclear safety is encouraged by protecting workers from retaliation because they report safety concerns. “The whistleblower provision in the [ERA] is modeled on, and serves an identical purpose to, the provision in the Mine Health and Safety Act [sic]. They share a broad, remedial purpose of protecting workers from retaliation based on their concerns for safety and quality.” As the court in Mackowiak observed, “The [Secretary’s] ruling simply forbids discrimination based on competent and aggressive inspection work. In other words, contractors regulated by [the ERA] may not discharge quality control inspectors because they do their jobs too well.” Congress amended the ERA in 1992 to expand its whistleblower protection to workers who report safety violations to their employers. Because the ALJ erroneously concluded that Vinnett had not engaged in protected activity because he was just doing his job, the ALJ committed reversible error.
This is a significant rejection of the “duty speech” defense and likely applies to all whistleblower protection actions litigated before DOL.