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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®

July 09, 2012

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.

Background

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).