Image of What is the employer's burden in a Sarbanes-Oxley whistleblower retaliation case?

What is the employer’s burden in a Sarbanes-Oxley whistleblower retaliation case?

The whistleblower provisions of SOX, the Energy Reorganization Act (“ERA”) and several other whistleblower protection statutes enforced by OSHA employ a burden-shifting framework that is favorable to whistleblowers.

Under the burden-shifting framework, once the complainant has demonstrated by a preponderance of the evidence that his or her protected conduct was a contributing factor in the adverse action, the employer can avoid liability only by demonstrating, by clear and convincing evidence, that it would have taken the same adverse action in the absence of any protected activity. See Menendez v. Halliburton, Inc., ARB Case Nos. 09-002, 09-003, 2011 WL 4915750, at 6 (Sept. 13, 2011).

In 2014, the ARB issued a critical decision defining the burden an employer must meet to establish the same-action affirmative defense. In comparison to the burden-shifting framework of most other anti-discrimination laws, the ARB’s explanation of the “clear and convincing evidence” standard in Speegle v. Stone & Webster Construction places an onerous burden on employers. See Speegle v. Stone & Webster Construction, Inc., ARB Case No. 13-074, 2014 WL 1758321 (ARB Apr. 25, 2014).

James Speegle worked as a journeyman painter for Stone & Webster (“S&W”), repairing the paint at a nuclear power plant in Alabama. Speegle complained that many of the other employees hired by S&W for journeyman paintwork were inexperienced apprentice painters and that using apprentice painters was a safety risk and violated federal regulations. S&W ignored Speegle’s concerns, leading to a heated confrontation between Speegle and his supervisor. Two days after the confrontation, S&W terminated Speegle’s employment allegedly for insubordination.

Speegle filed a complaint with OSHA, alleging that he was fired in retaliation for raising nuclear safety concerns. In a roundabout manner[3] the claim arrived at the ARB, which issued a decision establishing a three-part framework that ALJs must apply in determining whether an employer can establish the same-action affirmative defense: (1) whether the employer’s evidence meets the plain meaning of “clear” and “convincing”; (2) whether the employer’s evidence indicates subjectively that the employer “would have” taken the same adverse action; and (3) whether facts that the employer relies on would change in the absence of the protected activity. Id. at 7.

In the first prong of the analysis, the employer must present (1) an unambiguous explanation for the adverse action in question and (2) evidence demonstrating that a proposed fact is “highly probable.” Id. at 8. Adopting a 1984 Supreme Court definition of “clear and convincing evidence,” the ARB found that evidence is clear and convincing only if it “‘immediately tilts’ the evidentiary scales in one direction.” Id. at 6.

In the second prong of the Speegle framework, an employer must prove that it would have taken the same action, as opposed to proving just that it could have taken the same action. Id. at 8. For S&W, that meant proving that it would have in fact fired Speegle due solely to the one heated confrontation, as opposed to proving merely that a heated exchange could justify termination.[5]

Finally, the ARB analyzed what is required for an employer to show that it would have acted similarly “in the absence of” the protected activity. Id. The ARB held that in assessing what would have happened in the absence of protected activity, the ALJ should consider how the facts would have been different in the absence of the that activity. Id. For example, Speegle’s repeated internal disclosures that using apprentice painters was unsafe engendered tension with management; therefore, the ALJ erred by considering these tensions as evidence supporting the same-action defense.

To learn more about Sarbanes-Oxley whistleblower protections, click here, and call us at 202-262-8959 to schedule a preliminary consultation.

Under the anti-retaliation provision of the Sarbanes-Oxley Act the employee can prevail merely by showing by preponderance of the evidence that their protected activity was a contributing factor in the adverse employment action. Once the employee has met that fairly low burden, the employer can avoid liability only if it can show by clear and convincing evidence a very elevated burden that it would’ve taken the same adverse employment action in the absence of the employee having blown the whistle.

Avatar of Jason Zuckerman

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.