Monday, December 19, 2016

Congress Enhances Whistleblower Protections for Contractors and Military Service Members

Congress just passed two bills making significant improvements in whistleblower protections, one for government contractors and another for military service members.

In 2013, Congress included in that year’s National Defense Authorization Act (“NDAA”) a pilot program for whistleblower protection for employees of federal contractors. In mid-December 2016, the Senate made that pilot program permanent with additional provisions.

The original pilot program allowed whistleblowers to report retaliation to the Inspector General (IG) of the federal agency that issued the affected contract.  This plan has the advantage of assuring that the IGs would also learn about whatever the whistleblower blew the whistle on.

The IG could investigate and order relief for the whistleblower, including reinstatement, backpay, compensatory damages and attorney’s fees. 41 U.S.C. § 4712(c)(1). The various IGs reacted unevenly as they did not have adequate training or additional resources for this new responsibility. Whistleblowers who did not get a final order from the IG within 210 days could bring their claims to federal court.

Whistleblowers only had to show that their protected activity was a “contributing factor” in the adverse action. To defeat the claim, the employer would have to show, by “clear and convincing evidence,” that they would have taken the same adverse action even without the protected activity. 41 U.S.C. § 4712(c)(6). The pilot program utilized the same analysis as the Whistleblower Protection Enhancement Act (WPEA), 5 U.S.C. § 1221(e)(2), and dovetails with the False Claims Act, 31 U.S.C. § 3730(h), which allows direct access to federal court and double backpay, but does not explicitly provide for compensatory damages.

In S. 795, passed in December 2016, Congress made the pilot program permanent.  It also expanded coverage to include employees of subgrantees.  Previously, the Department of Education IG had taken the position that the 2013 coverage of “contractors, subcontractors and grantees” excluded coverage of subgrantees. That position is no longer viable.  Congress also added protection for whistleblowers employed through personal service contracts.

The 2017 NDAA, S. 2943, improves the Military Whistleblower Protection Act (MWPA), 10 U.S.C. § 1034. It is also waiting for President Obama’s signature. The MWPA has long been viewed as weak protection for service members who report wrongdoing.  It depends on the Defense Department’s IG (DoDIG) to conduct investigations and leaves service members at the mercy of their harassers during the long investigations.

Section 531 of the 2017 NDAA makes it unlawful to change a whistleblower’s duties to those that are “not commensurate with the member’s grade” or to launch an investigation against the whistleblower (a protection federal civilian employees do not have). In a novel addition, the bill requires superiors to respond to complaints of harassment and retaliation. Superior officers will thus be forced to protect whistleblowers under their command, or face sanctions themselves.

The new bill also permits the IG to make a preliminary determination that a retaliation complaint has merit, and report it to the Secretary for “appropriate” action. This may provide interim relief to whistleblowers who face immediate hardship. The IG will also have to make reports about the investigation every 180 days.

As before, service members can use IG findings of retaliation to seek corrections to military records, including discharges.

DoDIG will be required to establish standards for whistleblower investigations and training investigators. DoDIG may benefit from reading OSHA’s Whistleblower Investigations Manual.

Section 536 of the 2017 NDAA requires the Comptroller General of the United States to make a report on the effectiveness of the MWPA. The report will compare results under the MWPA with the civilian WPA and assess the effectiveness of the DoDIG. The report must also disclose incidents of retaliation against whistleblowers within the DoDIG. This last provision telegraphs that Congress has heard reports of such retaliation at DoDIG and is not happy about it.

While the 2017 NDAA does not fundamentally change the structure of decision-making for military whistleblowers (such as allowing jury trials in federal court), it does add provisions to expand the scope of protection, permit faster responses, and add layers of accountability and reporting. A future Congress could use this information to assess whether the whistleblower protection program can encourage service members to use official channels to raise their concerns. An increase in leaks to the media by military personnel would indicate a lack of trust in the military’s whistleblower protection program.


This blog is provided to our readers for informational purposes only.  It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Thursday, December 15, 2016

Trump’s non-disclosure agreements could violate the Whistleblower Protection Enhancement Act

Josh Marshall reported last week in Talking Points Memo that president-elect Trump has been requiring prospective transition team employees to sign “non-disclosure agreements” or NDAs. Mr. Marshall writes, “There are probably a number of reasons why such contracts would either violate federal law or be unenforceable. (Lawyers with relevant government experience, please chime in.)”

Indeed, the 2012 Whistleblower Protection Enhancement Act (WPEA) makes it unlawful for any federal employee who has authority to take, direct others to take, recommend, or approve any personnel action to:
implement or enforce any nondisclosure policy, form, or agreement, if such policy, form, or agreement does not contain the following statement:
“These provisions are consistent with and do not supersede, conflict with, or otherwise alter the employee obligations, rights, or liabilities created by existing statute or Executive order relating to (1) classified information, (2) communications to Congress, (3) the reporting to an Inspector General of a violation of any law, rule, or regulation, or mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety, or (4) any other whistleblower protection. The definitions, requirements, obligations, rights, sanctions, and liabilities created by controlling Executive orders and statutory provisions are incorporated into this agreement and are controlling.”
5 U.S.C. § 2302(b)(13)
If any transition official is already on the government payroll and is implementing or enforcing NDAs that omit the required text, that would be a violation. If the transition team is collecting NDAs now that omit the required text, then it would be unlawful for the Trump Administration to enforce them.

The Whistleblower Protection Act (WPA) already protects the rights of most federal employees to make lawful disclosures about:
(i) any violation of any law, rule, or regulation, or 
(ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety[.] 
5 U.S.C. § 2302(b)(8)(A)
Covered federal employees also have protection for:
(A) the exercise of any appeal, complaint, or grievance right granted by any law, rule, or regulation ***
(B) testifying for or otherwise lawfully assisting any individual ***;
(C) cooperating with or disclosing information to the Inspector General of an agency, or the Special Counsel, in accordance with applicable provisions of law; or
(D) for refusing to obey an order that would require the individual to violate a law;
5 U.S.C. § 2302(b)(9)
On this last point, the House of Representatives recently passed the Follow the Rules Act, HR 6186, which would also protect federal employees who refuse to violate any rule or regulation.  The bill was waiting for action by the Senate, but will now have to be re-introduced.

Congress intended the WPA to provide broad protection for federal employees who stand up to protect taxpayers, the environment, or the integrity of the law.  An administration interested in draining the swamp will depend on whistleblowers to finish the job.


This blog is provided to our readers for informational purposes only.  It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Monday, December 12, 2016

Federal Circuit finds strength in the “clear and convincing” protection for whistleblowers

Recently, the U.S. Court of Appeals for the Federal Circuit issued an important decision in the case of whistleblower Troy Miller. What is particularly notable about the new decision is that two judges were willing to look past the normal deferential standard of review on factual issues and hold that the government failed to show, by “clear and convincing” evidence, that the agency would have reassigned Mr. Miller even if he never made what all the judges agreed were protected disclosures.

Mr. Miller worked as the Superintendent of Industries at a federal prison in Beaumont, Texas (pictured). He oversaw a prison factory that produced ballistic helmets primarily for military use. His supervisor was the Warden, Jody Upton. Mr. Miller worked on the Warden’s Executive Staff, and he filled in as Associate Warden when Warden Upton was away.

On October 7, 2009, Mr. Miller disclosed to Warden Upton and other officials that he was concerned about mismanagement of funds. On December 15, 2009, agents from the Office of Inspector General (OIG) conducted a scheduled site visit. Warden Upton asked Mr. Miller to stay away from the prison that day. 

On December 16, 2009, Mr. Miller returned to the prison and discovered that the factory had shipped some helmets made with defective Kevlar. Mr. Miller said, “there’s a U.S. Marine’s life at the end of this helmet, period. And it is my responsibility as a superintendent of industries when I see anything that is wrong, to report it immediately and to stop production.” Mr. Miller asked that the factory be closed pending an investigation of potential sabotage.

Within hours of the Kevlar disclosure, Warden Upton reassigned Mr. Miller so that he would no longer serve as Superintendent of Industries. For the next four years, Mr. Miller monitored inmate phone calls, wiped tables, shredded documents and worked the night shift in the special housing unit (SHU). Needless to say, he no longer served on the Executive Staff or filled in for Warden Upton. After the helmet production ended, Mr. Miller’s job was to sit on a couch. That assignment lasted for eight months.

Warden Upton claimed that someone at OIG said that Mr. Miller would be a subject of the investigation and might interfere with it, but he could not remember who at OIG said this or when it was said. Warden Upton agreed that putting Mr. Miller in these positions was “absolutely” a waste of his talents.

Mr. Miller filed a complaint under the Whistleblower Protection Act (WPA) that covers federal employees. An administrative judge agreed that Mr. Miller’s disclosures about the financial misconduct and the sabotage were protected disclosures.  The judge further held that these disclosures contributed to Mr. Miller’s reassignment (the timing – within hours -- is hard to ignore). However, the judge also held that the agency proved by “clear and convincing evidence” that it would have reassigned Mr. Miller even if he had not made the protected disclosures. The Merit Systems Protection Board (MSPB) affirmed this decision.

In its decision on review of Mr. Miller’s appeal, the Federal Circuit panel reiterated what it said in Whitmore v. Dep’t of Labor, 680 F.3d 1353, 1367 (Fed. Cir. 2012):
“Clear and convincing evidence” is a high burden of proof for the Government to bear. It is intended as such for two reasons. First, this burden of proof comes into play only if the employee has established by a preponderance of the evidence that the whistleblowing was a contributing factor in the action—in other words, that the agency action was “tainted.” Second, this heightened burden of proof required of the agency also recognizes that when it comes to proving the basis for an agency’s decision, the agency controls most of the cards …. [I]t is entirely appropriate that the agency bear a heavy burden to justify its actions.
The Court could have noted that Congress found that too many whistleblowers were losing their cases and Congress needed a higher win rate to encourage whistleblowers to come forward. The high standard would require that prospective whistleblowers (and their advocates) could see in the public record that strong evidence is required to permit adverse actions against whistleblowers.

The court’s decision in Miller is more remarkable for its treatment of the standard governing its review of MSPB decisions. The law requires the court to affirm the MSPB if its decision is supported by “substantial evidence.”  Unlike “preponderant evidence,” which is defined as the degree of evidence sufficient to show that a contested fact is more likely true than not, “substantial evidence” is defined as the degree of evidence sufficient to show that a contested fact might be true, even if others would disagree. See 5 C.F.R. § 1201.56(c). “Substantial evidence” is normally a deferential standard that leads to affirming a large majority of agency decisions. However, the court here noted that the “clear and convincing” standard governing review of the evidence by the Board is interrelated with the “substantial evidence” the reviewing court must find.

In its key holding, the court majority stated, “We hold that no reasonable factfinder could find Warden Upton’s conclusory testimony about how OIG directed him to be strong evidence of independent causation.” The court added, “The Government’s evidence is weak, particularly when considered in light of the record evidence endorsing Mr. Miller’s character.”

The court considered that the IG investigation itself arose from Mr. Miller’s own disclosure, that the government had no corroboration for the Warden’s testimony, and that the government had no contemporaneous documentation to explain why it was reassigning Mr. Miller. The court emphasized that it was not altering the Board’s finding that the Warden’s testimony was credible, only that it was not the strong evidence required by the WPA. The court noted that retaliatory motive can be found in “agency officials who were involved in the decision,” not just the employee’s direct supervisor.

On the common issue of comparing the agency’s treatment of the whistleblower with its treatment of other employees, the court took a broad view. It would not limit this consideration to just the Beaumont, Texas, facility, but rather considered whether any other employees involved in IG investigations around the country were treated the same way. Yet again, the government provided no such evidence. “The burden lies with the Government[,]” the court correctly stated.

One judge wrote a concurring opinion suggesting that if one accepts the Warden’s testimony, then it was really the OIG that made the decision to reassign Mr. Miller. It was not Mr. Miller’s duty to show what was the OIG’s real motive.  Once he established that his whistleblowing was a “contributing factor,” it was the government’s burden to present “clear and convincing evidence.” Here, the government presented only the Warden’s testimony about what the OIG said, and that was not enough.

One judge dissented, claiming that the majority failed to “cite to a single piece of affirmative evidence that Mr. Miller was reassigned for whistleblowing.” This judge was apparently looking for an agency official to admit that the reassignment was because of the whistleblowing. However, as the majority noted, once the MSPB found that the whistleblowing was a “contributing factor” (a finding the government did not contest) the burden of coming forward with evidence to rebut that finding shifted to the government.  An absence of evidence cannot overcome that a disclosure was a “contributing factor.”

The dissenting judge concluded:
I have never heard of such an application of the substantial evidence standard that rejects uncontradicted, truthful testimony in favor of unfounded speculation about what might have happened or what more the agency should have done.
This conclusion fails to acknowledge that Mr. Miller had already established that his protected activities were a “contributing factor” for his reassignment. That is the standard Congress established in the WPA for whistleblowers to meet. The dissent apparently believes that as long as a supervisor can deny retaliation and there is no direct and contradictory evidence, the Agency has met its burden of supporting the adverse action against the whistleblower.  However, that is not the standard Congress set in the WPA.

This decision will be useful to federal employee whistleblowers, and also to other whistleblowers who have claims under any of a dozen federal laws that have copied the same “clear and convincing” standard imposed on disclosures that are a contributing factor in an employment action. These laws protect workers in the nuclear, transportation, corporate compliance, food, pipeline, consumer product and consumer finance industries, and employees raising concerns under the Affordable Care Act.

The case is Miller v. Dep't of Justice, No. 2015-3149, 2016 WL 7030359 (Fed. Cir. Dec. 2, 2016).


This blog is provided to our readers for informational purposes only.  It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Tuesday, December 6, 2016

Can Seeing A Therapist Block Your Security Clearance?

On November 16, 2016, National Intelligence Director James Clapper, issued Revised Instructions for Completing Question 21, Standard Form 86, “Questionnaire for National Security Positions,” ES 2013-00242.  Once the new Section 21 is made part of the SF-86, applicants for security clearances will face a different set of questions than in the past under Section 21 Psychological and Emotional Health.

The new Section 21, soon to be part of the SF-86, will comprise five questions.  They ask whether the applicant has:
  1. Been declared mentally incompetent by a court or administrative agency;
  2. Been ordered to consult with a mental health professional by a court or administrative agency;
  3.  Been hospitalized for a mental health condition;
  4. Been diagnosed by a physician or other health professional with specifically listed diagnoses; and/or
  5. A mental or other health condition that substantially adversely affects judgment, reliability or trustworthiness. 
The focus now is on the condition.  In the past, applicants were asked whether they had “consulted with a health care professional regarding an emotional or mental health condition.”  The mere act of consulting with a therapist or other mental health professional served as a stand-in for determining the existence of a mental health condition for purposes of the security clearance background investigation.  That question is now gone, replaced by questions asking for a diagnosis or conclusions reached by a court, or doctor, regarding a mental health condition.  DNI Clapper explains that, “These questions shift the focus from whether an individual has sought treatment to whether an individual has a condition that may affect his or her eligibility for access to classified information (security clearance) or for eligibility to hold a sensitive position.”  The change is intended to remove any concerns that applicants may have that seeking mental health treatment might “negatively impact their ability to receive a security clearance.”  DNI Clapper is emphatic,
I want to make clear that an individual’s decision to seek mental health treatment and/or counseling will not, in and of itself, adversely impact his or her ability to obtain or maintain a national security position, or alone form the basis for a denial or revocation of a security clearance.
The Preamble to the policy also states clearly, “Seeking or receiving mental health care for personal wellness and recovery may contribute favorably to decisions about your recovery.”  It remains to be seen whether seeking mental health care may now even become a “mitigating factor” in clearance decisions, as seeking therapy for alcohol addiction mitigates concerns regarding alcohol use.  See Adjudicative Guidelines ¶ 23(b-d).

Adjudicators are already admonished that “No negative inference concerning the standards in this Guideline may be raised solely on the basis of seeking mental health counseling.” (Adjudicative Guidelines, ¶ 27).  And see, EO 12968 ¶ 3.1(e) currently in effect:
No negative inference concerning the standards in this section may be raised solely on the basis of mental health counseling.  Such counseling can be a positive factor in eligibility determinations.  However, mental health counseling, where relevant to the adjudiction of access to classified information, may justify further inquiry to determine whether the (general eligibility criteria) are satisfied, and mental health may be considered where it directly relates to those standards.
The effort to ensure that security clearance adjudication proved no bar to clearance holders seeking mental-health treatment has been ongoing for some time before this most recent revision.

How the new questions will be used as part of the investigatory and adjudicatory process will not be clear for some time.  We will want to watch especially the last of the five new questions, which asks the applicant to self-assess whether a mental health condition “substantially adversely affects judgment, reliability or trustworthiness” and report only those that do rise to this “substantially adversely” standard.   The applicant’s self-assessment here would seem to create a mine-field of risks.  Except in extreme cases, how is an applicant to know whether his/her judgment, reliability or trustworthiness is “substantially adversely” affected by a mental health condition?  And what will be the penalty for misjudging this reporting standard?

Certainly, revisions to Section 21 make it no longer necessary for a person seeking counseling for a minor mental health problem to disclose that counseling on the SF-86.  But it is difficult to know now the risks to an applicant with some, but not substantial, mental health issues.   Just where will the line will be drawn – and how enforced, for the “substantially and adversely” standard for reporting mental health conditions on the SF-86?

This blog was written by Mary Kuntz.

This blog is provided to our readers for informational purposes only.  It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Monday, November 28, 2016

So, You’ve Decided to Hire a Lawyer: Attorney - Client Privilege

Welcome to the first post in KCNF’s new blog series, “So, You’ve Decided to Hire a Lawyer.”  Every few weeks, one of our attorneys will highlight an aspect of the attorney-client relationship and litigation process to help non-lawyers understand what can happen when they retain a lawyer. We start the series with an explanation of the cornerstone of your relationship with your lawyer: the attorney-client privilege.

When you hire an attorney, in most situations, she has to keep anything you tell her – and she tells you – confidential.  There are exceptions, of course – she may discuss your case with her law firm’s partners, she can call the police if you threaten to hurt yourself or plan to commit a crime in the future, and, if you sue her for malpractice, she can testify about your conversations and how that affected her representation of you.  Also, if you have retained an attorney to represent you in litigation, your attorney is expected to disclose the information that will help advance that litigation. The attorney can write the complaint or motion, or present information in settlement negotiations, to help achieve the goal of the representation.  Otherwise, unless you give your express permission, your attorney must take everything you tell her to her grave.  This solemn understanding is referred to as the attorney-client privilege and it is codified in every jurisdiction’s rules of professional responsibility.

As with any privilege, it can be pierced. The client holds the privilege, which means the client is the only one who can waive it.  A client can intentionally waive the privilege by telling his lawyer to share something, or unintentionally, by being careless and talking about his case with his lawyer in the presence of others.

If a judge decides that the attorney-client privilege has been waived because a third party knows of the contents of a communication, then the other side gets to learn what the opposing attorney and client discussed.  Depending on the information disclosed, these unintended disclosures can ruin a case and make any chance of prevailing very hard.

The worst case scenario, for example, might occur if a plaintiff emails her lawyer with some information about her case she just learned, and copies her adult son on the email.  In the email, she reveals a fact very harmful to her case.  Later, in litigation, the defendant discovers this email and that the son was a recipient.  The defendant argues to the judge that the plaintiff waived attorney-client privilege by intentionally letting a third party – her son – be privy to the conversation with counsel.  The judge agrees and orders the plaintiff to give the email to the defendant.  When the defendant gets the email, he sees that it contains a direct admission from the plaintiff of a fact harmful to her case.  He then tells the plaintiff that he knows how weak her case is and settlement becomes much less likely.

In order to avoid unintended disclosures, try to obtain as much privacy as possible when you speak with your lawyer on the phone and only exchange emails with your lawyer on a private account which only you can access. This means you should not call your lawyer on speakerphone from a coffee shop to ask him questions about your upcoming deposition and you should not email him from your work account.  Nor should you conference in your friends or family members on calls with your lawyer.  Your neighbor’s husband may have seen a lot of EEO cases during his twenty years in a corporate human resources department, but sharing the case theory you and your lawyer developed breaks the privilege (although the “work product” privilege is not waived by sharing the information with persons other than the opposing side).  You may have relied on close friends and relatives to be sounding boards in past times of trouble, but now that’s your lawyer’s job.  You have hired a professional to advise you – too many cooks in the kitchen can create a mess.  The attorney-client privilege is the most vital part of the professional relationship and it is both the attorney’s duty and the client’s responsibility to protect the confidentiality of their communications.

This blog is provided to our readers for informational purposes only.  It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice.

This blog was written by Sarah Martin.

Monday, November 14, 2016

The Deference Owed to an MSPB Administrative Judge’s Credibility Determinations

On October 4, 2016, in Purifoy v. Department of Veterans Affairs, the U.S. Court of Appeals for the Federal Circuit reaffirmed the level of deference owed by the Board when it reviews an administrative judge’s (AJ) credibility determinations. Significantly, the court held that an AJ’s credibility determinations extend beyond direct statements made regarding a witness’s demeanor to those credibility determinations that rely on demeanor by necessary implication.

Agencies taking an adverse action against an employee must prove that the charged conduct actually occurred, that it affected the efficiency of the service, and that the penalty imposed was reasonable in light of the relevant factors set forth in Douglas v. Department of the Navy. The Douglas factors are a non-exhaustive set of considerations that the Merit Systems Protection Board (“MSPB”) (first the AJ and the MSPB on review) must independently assess to determine whether the imposed penalty is reasonable.

In Purifoy, the employee (Mr. Purifoy) missed two days of work as a housekeeping aid in a VA medical center without authorization. Later the same week, he sought treatment for substance abuse from the VA facility where he worked. Although Mr. Purifoy informed his VA supervisor that he would miss work, he did not fill out leave paperwork. Moreover, he did not inform his parole officer that he would miss upcoming supervision visits. Thus, after Mr. Purifoy missed these visits, his parole officer issued a warrant for his arrest. As an alternative to revocation of his parole, Mr. Purifoy agreed to enter substance abuse treatment at the Milwaukee Secure Detention Facility (MSDF). Although he entered the program, Mr. Purifoy was terminated after an altercation with another inmate. Mr. Purifoy remained an inmate at MSDF for 38 more days. Following his release, Mr. Purifoy returned to work, but was removed shortly thereafter as a result of his unauthorized absences (two-day absence and six-month absence due to his incarceration at MSDF).

After a one-day hearing, at which Mr. Purifoy testified and, litigating the case pro-se, cross-examined the government’s four witnesses, the AJ sustained the agency’s first charge against Mr. Purifoy—the two-day absence—but only sustained in part the second charge—his absence while at MSDF. Specifically, with regard to the second charge, the AJ found that Mr. Purifoy’s absence was only unexcused for the 38 days following termination of his treatment program. In light of the mitigating factors set out in Douglas, the AJ determined removal to be an unreasonable penalty and reduced it to a 40-day suspension. In examining the Douglas factors, the AJ made the following assessments:
1. Mr. Purifoy’s duties “did not involve supervision or fiduciary duties, or place him in a prominent public role”;
2. His “work performance was rated as excellent and worthy of a performance award”;
3. He “was not on clear notice that his absence would result in severe discipline”;
4. His “potential for rehabilitation was high.” 
The Agency appealed the AJ’s decision to the MSPB. On review, the Board reversed the AJ’s reinstatement of the employee with a 40-day suspension, finding that “the penalty of removal was appropriate even if the second charge was proven only in part.” In analyzing the proper penalty, however, the Board analyzed some, but not all, of the Douglas factors. Specifically, the Board made the following assessments:
1. The Board disagreed with the AJ about the seriousness of the charge;
2. Mr. Purifoy’s absence weighed against mitigation despite his lack of prior discipline;
3. His “third-level supervisor sufficiently notified him that his absence would result in severe discipline”;
4. The agency’s “chosen penalty, which is entitled to deference, is also consistent with the table of penalties;”
5. Seeking treatment for a disabling condition “was not sufficiently mitigating as [Mr. Purifoy] was not fully pursuing rehabilitation for his problem.” 
The Board, however, found no reason to disturb the AJ’s findings “concerning [Mr. Purifoy’s] brief, but good work history.”

On appeal, the Federal Circuit vacated the Board’s decision because it failed to consider two relevant Douglas factors. Specifically, the Board (1) did not consider the adequacy and effectiveness of alternative sanctions to deter similar misconduct in the future and (2) erred in its analysis of the potential for the employee’s rehabilitation.

Although the Board need not consider all the Douglas factors, it must consider the relevant ones. Here, the Board was obligated to consider whether the AJ’s mitigated 40-day suspension would adequately punish Mr. Purifoy’s unexcused absences and deter similar conduct in the future. Regarding Mr. Purifoy’s potential for rehabilitation, the court held that the Board “erred by substituting its own finding for the AJ’s opposite one without adequate rationale.”

Significantly, Board case law
requires deference not only when an AJ’s credibility determinations explicitly rely on demeanor but also when they do so by necessary implication. Even if demeanor is not explicitly discussed, assessing a witness’s credibility involves consideration of various factors, including a witness’s demeanor. 
Applied in this case, the Board held that the “AJ’s findings about Mr. Purifoy’s propensity for rehabilitation are necessarily intertwined with issues of credibility and an analysis of his demeanor at trial, and they deserved deference from the Board.” The AJ made this determination after hearing Mr. Purifoy testify under oath that he attends Alcoholics Anonymous meetings three days a week and has not suffered a relapse since his removal. The AJ also observed Mr. Purifoy and his condition when he cross-examined witnesses, including his parole officer, his supervisor, and the VA Medical Center Director. Thus, the AJ concluded that Mr. Purifoy “cares about his job and had a good potential for rehabilitation.”

As recognized by the U.S. Supreme Court in Universal Camera v. National Labor Relations Board, “evidence supporting a conclusion may be less substantial when an impartial, experienced [administrative judge] who has observed the witnesses and lived with the case has drawn conclusions different from the Board’s . . .” Thus, the Board may not substitute its judgment for that of the AJ, where the AJ adjudicated the case and weighed all factors within their proper context.

Moreover, although the court found no legal error in the Board’s analysis of the nature and seriousness of Mr. Purifoy’s offense and whether Mr. Purifoy was on notice that his conduct could result in discipline, the court “encouraged the Board to revisit its analysis of these factors alongside all other relevant Douglas factors on remand.” This encouragement stresses the importance the court places on an AJ’s credibility determinations. In fact, six months before the court decided Purifoy, the court noted in Clipse v. Department of Homeland Security that an AJ’s credibility determinations “are virtually unreviewable on appeal.” Unless “inherently improbable or discredited by undisputed fact,” an appellate court cannot set aside an AJ’s credibility determinations. Purifoy reaffirms this principle.

This post was written by Aaron Herreras.

This blog is provided to our readers for informational purposes only.  It is not offered as legal advice. Communication of information through this blog does not create an attorney-client relationship. You should not rely upon information contained in this blog without first seeking professional legal advice. If you would like a telephone screening or consultation with a KCNF attorney, you are welcome to call 202-331-9260 to begin our intake process, or submit your legal issue at http://www.kcnlaw.com/Contact.shtml.

Wednesday, November 2, 2016

Trick or Treat: The Fourth Circuit Hands Down a Not-So-Sweet Halloween Decision in Sharif v. United Airlines, Inc.

Last year, KCNF partner Richard Renner blogged about Sharif v. United Airlines, Inc., a case that was on appeal to the United States Court of Appeals for the Fourth Circuit regarding Mr. Masoud Sharif’s allegation that United Airlines unlawfully retaliated against him in violation of the Family and Medical Leave Act (“FMLA”). This week, the Fourth Circuit decided that the “undisputed facts” compelled a finding for United Airlines.

Mr. Sharif was employed by United Airlines as a Service Director at the Dulles Airport in Virginia. From March 16 to April 4, 2014, Mr. Sharif and his wife—also a United Airlines employee—went on vacation in South Africa and Italy, during which he was able to request time off or find coverage for all but one single day—March 30, 2014, a date on which he had been assigned the customer service shift.

Mr. Sharif asked for FMLA leave on March 30, 2014, based on his previously diagnosed anxiety disorder, for which United Airlines had allowed him intermittent leave for panic attacks. (Mr. Sharif developed anxiety after the Iranian government imprisoned and tortured him in 1981.) However, the United Airlines Employee Resource Center noticed that the FMLA request fell in the midst of Mr. Sharif’s and his wife’s planned vacation time, and subsequently initiated an investigation into the request. The Fourth Circuit accepted United Airline’s version of the events, finding that Mr. Sharif was appropriately interviewed as part of the investigation and that he gave a “series of inconsistent answers” that ranged from failing to recall being scheduled for work or requesting FMLA leave at all to his later explanation that he had made multiple attempts to return for his shift, and as a result of his lack of success, experienced a legitimate panic attack. Following the interview, United Airlines suspended Mr. Sharif without pay and ultimately proposed to remove him for “fraudulent taking [of] FMLA leave” and “dishonest representations.” On June 9, 2014, Mr. Sharif chose to retire rather than be terminated.

On its face, the Fourth Circuit’s decision appears driven by legally sound principles: namely, an employee cannot commit fraud and expect to be protected by a statute’s anti-retaliation provisions. However, employees and their advocates have much to fear from how the Court arrived at its decision. The Metropolitan Washington Employment Lawyers Association and the National Employment Lawyers Association submitted an amicus brief in support of Mr. Sharif that addressed the significant factual disputes between the parties and raised the question of whether an employer may rely on an honest—even if mistaken—belief that an employee was the malfeasor as a defense to accusations of retaliation. Although the Fourth Circuit saw “no reason to address the ‘honest belief rule[,]’” it is apparent from the Court’s reliance on the foregoing “facts”—which were heavily disputed—that the Court nevertheless adopted United Airline’s belief that Mr. Sharif acted fraudulently.

For example, Mr. Sharif explained that he had every intention of returning for his shift, but due to a confluence of world events, was unable to secure timely flights back, and was forced to fly to Italy to stay with a family member until he could return. Thus, Mr. Sharif introduced evidence that his panic attack on March 30 was a genuine manifestation of an existing medical condition, and a reasonable inference is that his use of FMLA was necessary and proper. Given the divergent narratives, both supported by proof, whether Mr. Sharif or United Airlines was telling the truth should have been determined by a jury of his peers. Nevertheless, the Court truncated the trial process by concluding that there existed no reasonable interpretation of events where Mr. Sharif could prevail. In doing so, the Fourth Circuit inappropriately decided in favor of facts that were advantageous to the employer when those decisions properly belonged to the jury.

Written by Nina Ren

Wednesday, October 26, 2016

Does Title VII cover sexual orientation discrimination claims? An update

In July 2015, this blog discussed the decision of the Equal Employment Opportunity Commission (“EEOC” or “Commission”) in Baldwin v. Department of Transportation, in which the Commission held for the first time that under certain circumstances, Title VII of the Civil Rights Act of 1964 ("Title VII") covers claims of sex discrimination on the basis of sexual orientation. Specifically, in Baldwin, the EEOC held that a person could demonstrate sex discrimination on the basis of orientation as a violation of Title VII if the treatment at issue: (1) would not have occurred but for the individual's sex; (2) was based on the sex of the person(s) the individual associates with; and/or (3) was premised on the fundamental sex stereotype, norm, or expectation that individuals should be attracted only to those of the opposite sex. Because Baldwin was the result of an administrative complaint brought by a federal employee, it is technically applicable only to federal government employers. The subject of this blog is to analyze the extent to which Baldwin has been adopted by federal courts. The short answer is: not yet.

The Courts of Appeals have been confronted with this issue, but seem slow to go beyond their legal precedent when it comes to defining what constitutes "sex" discrimination under Title VII. In May 2016, the Fourth Circuit issued its decision in Hinton v. Virginia Union University, in which it refused to defer to the EEOC's Baldwin decision, proclaiming that, "[it] is explicitly the law of the Fourth Circuit that Title VII does not protect against discrimination based on sexual orientation." The Fourth Circuit rejected Hinton's argument that Baldwin displaced the Fourth Circuit's earlier decision in Wrightson v. Pizza Hut, in which the Fourth Circuit held that "Title VII does not afford a cause of action for discrimination based upon sexual orientation." The Fourth Circuit stated that EEOC interpretations of Title VII are entitled to deference only to the extent that they "have the power to persuade." To determine the persuasive effect of Baldwin, the Fourth Circuit noted that it had cited Wrightson approvingly, even after Baldwin was issued, in Murray v. N. Carolina Department of Public Safety (a 2-page unpublished decision, in which the court cited Wrightson in dicta, and in a footnote). In Hinton, the Fourth Circuit also looked at district court decisions which had followed Baldwin, but dismissed those decisions as unpersuasive because those decisions did not follow the law of their respective circuits. The court did not explain how, under this standard of review, it could ever defer to an administrative decision if there were legal precedent to the contrary.

More fundamentally, the Fourth Circuit appears to have strained to rely on Wrightson, which in fact is consistent with Baldwin. In Wrightson, in which a heterosexual male claimed he was sexually harassed by his homosexual supervisor and homosexual co-workers, the Fourth Circuit specifically held that “a claim under Title VII for same-sex ‘hostile work environment’ harassment may lie where the perpetrator of the sexual harassment is homosexual.” Indeed, the court emphasized that Wrightson:
[D]oes not allege that he was discriminated against because he is heterosexual. He specifically alleges in his complaint that he was discriminated against 'because of his sex, male…' [This allegation] is more than adequate when coupled with his allegations that the harassers were homosexual and that other males (and no females) were the targets of the harassment. Of course, even had Wrightson alleged that he was discriminated against both because he was heterosexual and because he was male, he would still state a claim under Rule 12(b)(6). As the Supreme Court recognized in Price Waterhouse v. Hopkins, a Title VII cause of action lies even though the discrimination against the employee is not 'solely' because of the employee's sex, as long as the employee's sex was a cause of the discrimination." In Price Waterhouse, the Supreme Court stated that, "we know that the words 'because of' [in Title VII] do not mean 'solely because of'; we also know that Title VII meant to condemn even those decisions based on a mixture of legitimate and illegitimate considerations." 
In other words, in Wrightson, the Fourth Circuit anticipated the EEOC’s pronouncement in Baldwin that a claim of sex discrimination based on sexual orientation will lie under Title VII. Yet, it dismissed Hinton's sex orientation discrimination claim because Hinton failed to also allege that he was discriminated against on the basis of his sex, not just his sexual orientation. Wrightson and Hinton reflect the Fourth Circuit’s determination to address claims of sexual orientation discrimination only if they are tied to a claim of sex discrimination in violation of Title VII. For whatever reason, Hinton did not allege sex discrimination in his complaint, and he may not have asked either the district court or the appeals court for leave to amend the complaint to add such a claim. That choice appears to have led to the adverse decision. In Hinton, the court went on to conclude that the reprimands issued to Hinton did not constitute “adverse employment actions” sufficient to invoke Title VII. That the court undertook this adverse employment action analysis in light of the “evolving state of the law" concerning sexual orientation discrimination claims may be a harbinger of more enlightened decisions from the Fourth Circuit.

Recent events at the Seventh Circuit suggest it may be evolving more rapidly than the other federal circuit Courts of Appeal. On October 11, 2016, it granted a petition to rehear en banc its July 28, 2016 decision in Hively v. Ivy Tech Community College. (See our September 22, 2016 blog, "Seventh Circuit Upends EEOC Decision on LGBT Coverage.") In its July 2016 panel decision, the Seventh Circuit reluctantly held that due to its precedent, an adjunct professor's claims of sexual orientation discrimination were not cognizable under Title VII. However, throughout the 42-page opinion, the court painstakingly outlined the quagmire of conflicting decisions which courts have issued on this topic. Citing the Price Waterhouse decision, which makes it illegal to discriminate on the basis of sex stereotypes, the Seventh Circuit panel observed that, "[i]t seems illogical to entertain gender non-conformity claims under Title VII where the non-conformity involves styles of dress or manner of speaking, but not when the gender non-conformity involves the sine que non of gender stereotypes-with whom a person engages in sexual relationships." The panel concluded its opinion by inviting the full Seventh Circuit to take another look at its precedent: "Perhaps the writing is on the wall…But writing on the wall is not enough. Until the writing comes in the form of a Supreme Court opinion or new legislation, we must adhere to the writing of our prior precedent…."

On October 11, 2016, the Seventh Circuit granted Hively's petition for a rehearing en banc. Oral arguments are scheduled for November 30, 2016. In support of the petition, five members of Congress submitted an amici curiae brief. These five members of Congress are all co-sponsors of the Equality Act of 2015. The Equality Act of 2015 expressly adds "sexual orientation" and "gender identity" to Title VII, and it defines "sex" to include "sexual orientation and gender identity." The Equality Act was referred to the Subcommittee on the Constitution and Civil Justice on September 8, 2015, but has gone nowhere since. As in many other areas of the law, if Congress is unable to act due to ideological paralysis, it may be up to the courts to fill the void. Given the EEOC’s leadership on this issue, the judicial remedy may come sooner than later.

Written by Valerie A. Chastain

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Monday, October 24, 2016

Dreadlocks and Title VII’s Definition of Race

Chastity Jones’ employment with the customer service company Catastrophe Management Solutions (CMS) ended before it began when she refused to remove her dreadlocks.   She charged discrimination based on race under Title VII, but the trial court dismissed the case under Fed.R.Civ.P. 12(b)(6).  Last month, the Eleventh Circuit affirmed that decision, issuing an opinion that broke no new ground as to grooming policies under Title VII, but which raised substantial questions as to when a grooming policy may implicate the protections of Title VII.

Grooming requirements, such as the one that CMS relied upon to reject Ms. Jones’ application, have generally been upheld as non-discriminatory under Title VII.   Title VII prohibits discrimination based on immutable characteristics such as race, color, sex and national origin.  However, as the Fifth Circuit explained over 40 years ago:

Equal employment opportunity may be secured only when employers are barred from discriminating against employees on the basis of immutable characteristics, such as race and national origin….But a hiring policy that distinguishes on some other ground, such as grooming codes or length of hair, is related more closely to the employer’s choice of how to run his business than to equality of employment opportunity…Hair length is not immutable and in the situation of employer vis a vis employee enjoys no constitutional protection.  If the employee objects to the grooming code he has the right to reject it by looking elsewhere for employment, or alternatively he may choose to subordinate his preference by accepting the code along with the job.

Willingham v Macon Tel. Pub. Co.  Relying on Willingham, the Eleventh Circuit in Catastrophe Management Solutions held that Ms. Jones’ dreadlocks, like hair-length, were not immutable and were not protected under Title VII.  

Before reaching this holding, however, the court paused to consider whether Ms. Jones’ dreadlocks might be considered as hair texture, because “[D]iscrimination on the basis of black hair texture (an immutable characteristic) is prohibited by Title VII, while adverse action on the basis of black hairstyle (a mutable characteristic) is not." The court cites in support two non-precedential cases.   The Seventh Circuit sitting en banc, recognized a claim for racial discrimination based on the plaintiff’s allegation that she was denied a promotion because she wore her hair in a “natural Afro.”   Jenkins v Blue Cross Mut. Hosp. Ins., Inc.  The court in Jenkins, however, does not discuss in any detail the distinction between hair texture and style.  The Eleventh Circuit also cited Rogers v. American Airlines, Inc., which considered the question of cornrows and noted that

Plaintiff may be correct that an employer’s policy prohibiting the “Afro/bush” style might offend Title VII and section 1981.  But if so, this chiefly would be because banning a natural hairstyle would implicate the policies underlying the prohibition of discrimination on the basis of immutable characteristics.

(Emphasis added.) Rogers, however, distinguished the corn-rows from a “natural hairstyle,” which it says would be protected under Title VII:

An all-braided hair style is an “easily changed characteristic,” and, even if socioculturally associated with a particular race or nationality, is not an impermissible basis for distinctions in the application of employment practices by an employer. 

Rogers also noted that multiple courts have upheld policies limiting male facial hair despite the fact that racially-linked differences made compliance with such policies more difficult for African Americans. 

In Catastrophe Management Solutions, the Eleventh Circuit raised the distinction between hair texture and hair style seemingly in order to consider whether dreadlocks were a “natural hairstyle” -- like the Afro in Rogers -- and so protected as a physically immutable marker of race. It observed, however, that the plaintiff “did not allege that dreadlocks themselves are an immutable characteristic of black persons," and concluded that the fact that “dreadlocks are a ‘natural outgrowth’ of the texture of black hair does not make them an immutable characteristic of race.” Accordingly, when CMS asked Ms. Jones to cut her dreadlocks, the court held, they did not intentionally discriminate against her based on race.

Without question, and as the court noted, “the distinction between immutable and mutable characteristics of race can sometimes be a fine (and difficult) [line].”  In the end the Eleventh Circuit returned a decision in Catastrophe Management Solutions that was consistent with previous rulings on Title VII and hair style.  Ms. Jones’ dreadlocks were mutable and, therefore, if she wanted to work at CMS she could choose “to subordinate [her]preference by accepting the [grooming] code along with the job.” Nevertheless, the court helpfully drew attention to a way forward for persons seeking Title VII protection for what are arguably “natural” hairstyles. 

This blog was written by Mary Kuntz.

Tuesday, October 18, 2016

OSHA issues a new policy on gag clauses in settlement agreements

The Department of Labor’s Occupational Safety and Health Administration (OSHA) recently issued a memorandum announcing its new policy against gag clauses in settlement agreements. OSHA’s memorandum restates the long-running policy against restraints on protected activity, but goes farther in assuring that whistleblowers preserve their right to receive awards that are intended to encourage them to report violations.

In the early years of the Department of Labor whistleblower protection program, nuclear power companies would offer substantial monetary settlements to whistleblowers in exchange for their agreements not to make any disclosures – including disclosures of nuclear safety problems -- to the Nuclear Regulatory Commission (NRC). After the 1979 Three Mile Island and 1986 Chernobyl incidents, the Department of Labor and the courts became more sensitive to the danger of “hush money” settlements. One court would not allow the Secretary of Labor to merely excise the gag clause from a settlement agreement. Macktal v. Secretary of Labor, 923 F.2d 1150, 1155-1156 (5th Cir. 1991). My December 31, 2013, blog post reviews the prior law on gag clauses in settlements.

In 1989, the NRC adopted its first policy to require licensees to maintain a culture of compliance. That policy has now evolved into the Safety Culture Policy Statement. It requires nuclear plants to actively encourage employees to report safety concerns and assure that they are timely and effectively remediated.  As a result, the number of whistleblower cases arising from the nuclear industry has declined significantly.

In 2010, the Dodd-Frank Act upped the stakes in corporate fraud whistleblower cases by creating a statutory right to an award for whistleblowers whose disclosures result in substantial SEC or CFTC recoveries. Congress was rightly concerned that the 2002 Sarbanes-Oxley Act had failed to prevent the 2008 mortgage fraud scandals that plunged us into the Great Recession. After Dodd-Frank, whistleblowers have received over $100 million in awards from the SEC for providing information that lead to over $500 million in recoveries by the SEC.

Some companies still have not adopted the culture of compliance and continue to look for ways to discourage employees from reporting known violations. Companies are now barred from adopting overly broad confidentiality policies or agreements that make employees think they cannot make reports to the government. Last year, the SEC fined KBR $130,000 for imposing such a gag clause on its employees.

In response, some companies began requiring departing employees to waive their right to any whistleblower award as a condition of receiving their severance. That requirement made clear that, rather than boosting compliance by encouraging employees to report misconduct, it exemplified a culture of suppression by discouraging employees from coming forward with information. It is also now illegal.

In August, 2016, the SEC fined Health Net $340,000 for including in a settlement agreement a provision that the employee waived any SEC whistleblower award. “Financial incentives in the form of whistleblower awards, as Congress recognized, are integral to promoting whistleblowing to the Commission,” said Antonia Chion, Associate Director of the SEC Enforcement Division.  “Health Net used its severance agreements with departing employees to strip away those financial incentives, directly targeting the Commission’s whistleblower program.” 

Seeking to extend this doctrine to the settlements reviewed by the Department of Labor, the Government Accountability Project petitioned for a new rule against approving Health Net-style settlements.  OSHA agreed and issued the memorandum to its regional offices. OSHA will now disapprove any settlement that:
  • Restricts protected activities, including reports of dangers to the government
  • Requires notice to the employer before making disclosures to the government (such a requirement has the effect of giving the crooks warning that the cops are in pursuit)
  • Makes the whistleblower promise that no disclosure has been made to the government (which undercuts the right to make a confidential disclosure to the government)
  • Waives any monetary award for whistleblowing
The policy also provides that OSHA will closely scrutinize liquidated damages provisions that are disproportionate or unaffordable. Where settlement agreements contain confidentiality clauses that apply “except as provided by law,” OSHA will propose the following clarification:

"Nothing in this Agreement is intended to or shall prevent, impede or interfere with complainant's non-waivable right, without prior notice to Respondent, to provide information to the government, participate in investigations, file a complaint, testify in proceedings regarding Respondent's past or future conduct, or engage in any future activities protected under the whistleblower statutes administered by OSHA, or to receive and fully retain a monetary award from a government-administered whistleblower award program for providing information directly to a government agency."

With this provision, employees will better understand their legal right to speak up, provide information about dangerous conditions and violations of the law, and apply for and receive whistleblower awards.

One of GAP’s attorneys issued this statement on the new policy:

De facto gag clauses undermine the operation and frustrate the intent of the whistleblower protection laws that DOL enforces by chilling or discouraging employees from disclosing to regulatory and enforcement agencies information about threats to public health and safety, financial fraud, consumer safety, food safety, nuclear safety, transportation safety, and other vital public concerns.

Employers have the opportunity to be proactive in assuring that their policies protect employees who raise compliance concerns, and that their personnel practices actually reward those who speak up. Particularly for employers regulated by the SEC, now is a good time to learn a lesson from the nuclear industry.

Tuesday, September 27, 2016

KCNF Partner Richard Renner Argues for Strong Whistleblower Protections

Last month, the Department of Labor’s Administrative Review Board (ARB) held a very rare event – it convened an en banc oral argument. The ARB hears appeals of cases arising under various worker protection laws. In most situations, three administrative appeals judges from the ARB decide a case on written briefs submitted by the employer and the worker’s attorneys. However, in the recent case of Palmer v. Canadian National Railway/Illinois Central Railroad Company, (ARB No. 16-035, ALJ No. 2014-FRS-154), the Chief Administrative Appeals Judge determined that the appeal should be decided en banc (meaning, all five judges on the ARB should decide the case) with supplemental briefing and oral argument. The ARB also invited simultaneous amicus briefs from interested third parties. KCNF Partner Richard Renner recognized the importance of the case and the questions presented on appeal and filed a brief in the matter.

Railway conductor Kenneth Palmer injured his arm while on the job. He reported the injury, per railway rules, even though his supervisor tried to talk him out of it. His supervisor then launched a formal investigation to see if Palmer violated any company rules when he got injured. His supervisor determined that a month before his injury, he had run through a switch. Even though other conductors had run through switches in the past without reprimand, and that it was undisputed that his mistake did not result in any damage or harm, the railway held a formal disciplinary hearing on the incident. In the days after the hearing, railway managers exchanged e-mails about Palmer and decided to terminate him. The e-mails revealed that company officials considered his injury report while making the decision to fire Palmer.

A trial was held in front of an administrative law judge (ALJ) who, after hearing the evidence presented by both sides, found that the railway terminated Palmer due to his reporting of his injury in contravention with a federal law called the Federal Railroad Safety Act (FRSA).

The railway appealed to the ARB and argued that the ALJ had applied the wrong burdens of proof. In a case under FRSA, an employee first needs to establish three elements: (i) that he or she engaged in a protected activity, like reporting an injury or safety concern; (ii) that he or she suffered an unfavorable personnel action, like termination; and (iii) that the protected activity was a ‘contributing factor’ to the unfavorable personnel action. 49 U.S.C. § 42121(b) (part of “AIR 21” which the FRSA incorporates). A contributing factor is any factor, either considered by itself or with other factors, that affects the outcome of the decision. Araujo v. N.J. Transit Rail Operations, Inc., 708 F.3d 152, 158 (3d Cir. 2013). An employee needs to prove these elements by a preponderance of the evidence, which means, in this situation, he must show that it is more likely than not that his report of injury was a contributing factor in the railway’s decision to terminate him.

After the employee shows this, the employer has the burden to prove by “clear and convincing evidence” that it would have taken the same unfavorable personnel action in the absence of the employee’s protected activity. 49 U.S.C. § 42121(b). The clear and convincing evidence standard is much harder to meet than the preponderance of the evidence standard. In short, the railway needed to show if Palmer never reported his injured arm, it was highly probable the railway would have still terminated him for the switch run-through.

The ARB asked the parties to file supplemental briefs addressing the extent to which an ALJ can consider an employer’s justification evidence – here, evidence regarding the switch run-through – in deciding the contributing factor element of an employee’s unlawful retaliation claim under the FRSA. The ARB also invited amicus curie, or “friend of the court” briefs from interested groups not directly associated with Palmer’s case.

When KCNF Partner Richard Renner heard about the case, he knew a reversal by the ARB would have far reaching and negative implications on whistleblowers’ rights. With this in mind, he filed a brief and received a timeslot to present his position at the oral argument. The KCNF brief notes how the text of the FRSA statute would permit the ARB to consider the employer’s evidence on causation at the contributing factor stage – but only if that evidence is clear and convincing. In other words, the ARB could permit an ALJ to consider the two stages in reverse order. However, the KCNF brief also noted that when the MSPB actually tried the same reversal of order in federal sector WPA cases, Congress amended the WPA to require the MSPB to consider the whistleblower’s evidence first. Other groups represented at the argument included three members of Congress, the U.S. Department of Labor, the railroad industry trade association, labor unions, and the National Employment Lawyers’ Association.

Only four of the five ARB judges are involved in deciding the case; the fifth judge recused himself due to a conflict of interest in the matter. The sitting judges peppered all the attorneys with difficult questions and did not make it clear to those in the courtroom which way they were leaning.

It is unclear when the ARB will issue its decision in this matter, but one thing is likely – the ARB’s holding will affect many more workplace whistleblowers than just Kenneth Palmer.

This blog was written by Sarah Martin.

(Photo of Richard Renner before the ARB.)

Thursday, September 22, 2016

Seventh Circuit Upends EEOC Decision on LGBT Coverage

On July 28, 2016, the Court of Appeals for the Seventh Circuit failed to follow the Equal Employment Opportunity Commission’s (“EEOC” or “Commission”) holding in Baldwin v. Department of Transportation: that sexual orientation discrimination is a form of sex discrimination, cognizable under Title VII. Like many courts since Baldwin, the Seventh Circuit held that the “writing on the wall is not enough” to overrule its prior precedent; the Commission’s position on what qualifies as sex discrimination under Title VII, the court’s abhorrence to “condone” discrimination “solely based on who [a person] date[s], love[s], or marr[ies],” and courts’ inconsistent applications of Title VII to claims of sexual orientation discrimination were not enough for the Seventh Circuit. As discussed infra, this decision represents a step in the wrong direction for safeguarding civil rights under Title VII.

On July 15, 2015, the EEOC issued a groundbreaking decision in Baldwin, finding that Title VII includes claims of sexual orientation discrimination. KCNF Associate Valerie Chastain analyzed this case in her July 22, 2015 blog post, The EEOC’s Evolution of Justice for LGBT Workers.

In Baldwin, complainant worked as a Supervisory Air Traffic Control Specialist and was not selected for a permanent position as a Front Line Manager because he was gay. Complainant’s supervisor, who was involved in the selection process for the permanent position, had made several negative comments about complainant’s sexual orientation, e.g., that complainant “was a distraction in the radar room” when he mentioned his male partner in conversations. On appeal of the Agency’s determination that the EEOC did not have jurisdiction over complainant’s sex discrimination claim (because the claim was based on complainant’s sexual orientation), the Commission concluded that, because sexual orientation is inherently a sex-based consideration, an allegation of discrimination based on sexual orientation states a cognizable claim under Title VII of the Civil Rights Act of 1964—the federal statute prohibiting discrimination against an employee on the basis of race, color, religion, sex, and national origin.

At its core, “Title VII’s prohibition of sex discrimination means that employers may not ‘rel[y] upon sex-based considerations’ or take gender into account when making employment decisions.” In Baldwin, the Commission went to great lengths to show that this protection applies equally in sex discrimination claims brought by lesbian, gay, and bisexual individuals. In describing the “inescapable link” between sexual orientation discrimination and sex discrimination, the Commission made the following comparisons:
First, sexual orientation discrimination “necessarily entails treating an employee less favorably because of the employee’s sex.” The question being: would the employee have been treated differently if the employee’s sex was different?

Second, sexual orientation discrimination “is associational discrimination on the basis of sex.” That is, the employer takes the employee’s sex into consideration by treating him or her differently for associating with a person of the same sex.

Third, sexual orientation discrimination “necessarily involves discrimination based on gender stereotypes.” Specifically, sexual orientation discrimination and harassment are “often, if not always, motivated by a desire to enforce heterosexually defined gender norms.”
Notwithstanding the Commission’s reasoning, courts have refused to stray from traditional notions of “sex” discrimination: excluding sexual orientation and sexual preference. As the Supreme Court held in Oncale v. Sundowner Offshore Services, Inc., however, “statutory prohibitions often go beyond the principal evil [they were passed to combat] to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.” (In Oncale, the Court ruled that same-sex harassment is actionable under Title VII). In fact, protecting against sexual orientation discrimination under Title VII would not create a new class of covered persons. For example, when the Court decided that Title VII protected persons discriminated against because of their employer’s gender stereotypes, it “did not thereby create a new protected class of ‘masculine women.’”  Courts should go where the principles of Title VII direct and the Commission held—applying existing Title VII principles to encompass sexual orientation discrimination.

Recently, the Seventh Circuit recognized the incongruity of denying sexual orientation claims while allowing gender non-conformity claims—which courts recognize as a form of sex-based discrimination under Title VII. In Hively, appellant worked as a part-time adjunct professor. Despite qualifying for full-time employment, the college refused to interview her for any of the six full-time positions for which she applied between 2009 and 2014 and did not renew her part-time employment contract in July 2014. Alleging that she had been blocked from full-time employment without good cause because of her sexual orientation, appellant filed a sexual orientation discrimination complaint with the EEOC. The college’s defense was that Title VII does not apply to claims of sexual orientation discrimination. Although the court made it clear that it does not condone discrimination in any form, it found itself constrained by its prior decisions—claiming that Congress had a very narrow understanding of the term “sex” when it passed Title VII—and dismissed Hively’s claim for failure to state a claim. Significantly, however, the court noted that it “would be remiss” not to cogitate on the EEOC’s recent decision in Baldwin, in which it concluded that sexual orientation is inherently a sex-based consideration.

Citing Baldwin, the court questioned whether there is any real distinction between gender non-conformity and sexual orientation discrimination, noting that, at most, the borders are imprecise.
Discrimination against gay, lesbian, and bisexual employees comes about because their behavior is seen as failing to comply with the quintessential gender stereotype about what men and women ought to do—for example, that men should have romantic and sexual relationships only with women, and women should have romantic and sexual relationships only with men. In this way, almost all discrimination on the basis of sexual orientation can be traced back to some form of discrimination on the basis of gender nonconformity.
Unsurprisingly, courts’ attempts to differentiate between sex discrimination and sexual orientation discrimination have resulted in “a jumble of inconsistent precedents.” One court flatly held that no line exists between sex discrimination and sexual orientation discrimination. Courts that try to draw a distinction between actions which constitute discrimination on the basis of sexual orientation and discrimination on the basis of gender non-conformity either:
1) Dismiss a gender-nonconformity claim outright if there is “any hint of a claim that the employer also engaged in sexual orientation discrimination.” This is the process followed by the Second, Third, Sixth, and Seventh Circuits, New York, Florida, Georgia, and New Jersey. The absurd result being that “the law protects effeminate men from employment discrimination, but only if they are (or are believed to be) heterosexuals.” Thus, when determining whether a claim for gender non-conformity can stand, “the critical fact under the circumstances is the actual sexual orientation of the harassed person.”

2) Try to “tease the two apart” and look “only at those portions of the claim that appear to address cognizable gender non-conformity discrimination.” This is the process followed by the Third and Fifth Circuits and Florida. Attempts to “identify behaviors that are uniquely attributable to gay men and lesbians[, however,] often lead to strange discussions of sexual orientation stereotypes.” For example, in Prowel v. Wise Business Forms, Inc., a factory worker who described himself as both gay and effeminate succeeded in having his case heard by producing just enough evidence of harassment based on gender stereotypes, as opposed to sexual orientation. Specifically, Prowel convinced the court that he displayed stereotypically feminine characteristics by testifying that “he had a high voice, did not curse, was well-groomed, neat, filed his nails, crossed his legs, talked about art and interior design, and pushed the buttons on his factory equipment ‘with pizzazz.’”
As shown by courts’ methods for addressing sex discrimination claims that include an element of sexual orientation discrimination, attempting to separate gender non-conformity claims from sexual orientation claims creates
an uncomfortable result in which the more visibly and stereotypically gay or lesbian a plaintiff is in mannerisms, appearance, and behavior, and the more the plaintiff exhibits those behaviors and mannerisms at work, the more likely a court is to recognize a claim of gender non-conformity which will be cognizable under Title VII as sex discrimination.
As it stands, Title VII protects gay, lesbian, and bisexual people only to the extent that they do not deviate from society’s stereotypical norms about how they should look or act, i.e., that gay men are effeminate and lesbian women are masculine. It is illogical “to entertain gender non-conformity claims under Title VII where the non-conformity involves style of dress and manner of speaking, but not when the gender non-conformity involves the sine qua non of gender stereotypes—with whom a person engages in sexual relationships.”

Furthermore, with the passage of the Defense of Marriage Act (“DOMA”), the conflicting case precedent creates the
paradoxical landscape in which a person can be married on a Saturday and then fired on Monday for just that act. For although federal law now guarantees anyone the right to marry another person of the same gender, Title VII, to the extent it does not reach sexual orientation discrimination, also allows employers to fire that employee for doing so.
To overturn circuit precedent, the Seventh Circuit required that a “compelling reason,” such as when
the rule has proven to be intolerable simply in defying practical workability . . . whether related principles of law have so far developed as to have left the old rule no more than a remnant of abandoned doctrine . . . or whether facts have so changed, or come to be seen so differently, as to have robbed the old rule of significant application or justification[.]
Given this requirement, it is perplexing that the court’s lengthy recitation of how current applications of Title VII have led (and continue to lead) to incompatible results and utter confusion was not enough for it to hold that Title VII, as currently applied, is “intolerable simply in defying practical workability.” Although the Seventh Circuit admitted that the EEOC’s interpretation of Title VII, as the enforcing agency, is entitled to some level of deference, citing Griggs v. Duke Power Co. (administrative interpretation is entitled to “great deference”)), the court failed to “delve into a discussion of the level of deference [] owe[d] to the EEOC’s rulings” because it ultimately concluded that Title VII does not reach sexual orientation discrimination.

The Seventh Circuit’s cursory treatment of the Commission’s position—that sexual orientation claims are cognizable under Title VII as a form of sex discrimination—is inconsistent with the Supreme Court’s holding in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. In Chevron, the Court stated that
considerable weight should be accorded to [an agency’s] construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations has been consistently followed by this Court whenever decision as to the meaning or reach of a statute has involved reconciling conflicting policies, and a full understanding of the force of the statutory policy in the given situation has depended upon more than ordinary knowledge respecting the matter subjected to agency regulations.
Where Congress “has not directly addressed the precise question at issue,” the “question for the court is [only] whether the agency’s answer is based on a permissible construction of the statute.” The court cannot substitute its own construction of a statutory provision for that of the agency. Thus, in the absence of a Supreme Court decision or a change in legislation to clarify “sex” discrimination as inclusive of sexual orientation discrimination, courts should defer to the Commission’s decision in Baldwin. That did not happen here.

In response to the Seventh Circuit’s refusal to acknowledge her claim for sexual orientation discrimination, Hively filed a petition for rehearing en banc “to secure and maintain uniformity of the law” on August 25, 2016.

On August 29, 2016, the EEOC filed an amicus brief in support of Hively’s Petition. In its brief, the Commission reaffirms its position that claims of sexual orientation discrimination are cognizable under Title VII as claims of sex discrimination because such claims “necessarily involve consideration of a plaintiff’s sex, gender-based associational discrimination, and sex stereotyping.” The Commission also argues that the jumble of inconsistent precedents set by the courts defies practical workability and is inconsistent with two Supreme Court decisions: Oncale v. Sundowner Offshore Services, Inc. (statutes must be interpreted as written even when the language goes beyond the principal evil Congress sought to address) and Price Waterhouse v. Hopkins (Title VII makes sex “irrelevant” in employment decisions). To date, the Seventh Circuit has not made a decision on whether it will revisit the issue.

Today’s society recognizes that people are heterosexual, homosexual, or bisexual. Consistent with this change in public policy, the EEOC and Supreme Court have recognized, as noted supra, that federal laws apply equally to all persons, regardless of sexual identity. Any interpretation of Title VII that fails to recognize this diversity of sexual identity fails to cover the reasonably comparable evils as violations of Title VII’s prohibition of “sex” discrimination and cannot stand.

This blog was written by Aaron Herreras.

(Photo is of Ms. Hively and her counsel.)