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).


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1 comment:

Vaughn Standley said...

Richard: Great review, timely, and very useful to my case. I also found the discussion of evidence and causation intriguing to me as a physicist. vhs