Whistleblower Alert: DOL Publishes Interim Final Rule Implementing Amendments to the STAA Whistleblower Provisions Contained in the 9/11 Commission Act of 2007

Date: Sep 02, 2010

On August 31, 2010, the U.S. Department of Labor, Occupational Health and Safety Administration ("OSHA") published an interim final rule ("IFR") and request for comments implementing changes in the whistleblower provisions of the Surface Transportation Assistance Act of 1982 ("STAA") contained in the 9/11 Commission Act of 2007 (hereafter "2007 amendments").[1] The IFR was effective upon publication. The purpose of this Alert is to describe the key provisions of the IFR, their impact upon employers, and recommended action.

Expansion of the Definition of STAA Protected Activity and Prohibited Retaliation

Previously, the STAA prohibited discrimination against employees for refusing to operate a vehicle in violation of a regulation, standard or order related to commercial motor vehicle ("CMV') safety or health, and refusing to operate a vehicle because he or she had a reasonable apprehension of serious injury to himself, herself or the public because of the vehicle's unsafe condition. The IFR incorporates the provisions of the 2007 amendments that prohibit retaliation against a driver for refusing to drive a CMV based on a reasonable apprehension that doing so would violate a regulation, standard or order relating to security or would pose a risk of serious injury to the driver or the public because of the vehicle's hazardous security condition. Additionally, the IFR incorporates the following added forms of prohibited retaliation contained in the 2007 amendments: (1) a perception that the individual has filed or is about to file a complaint or proceedings concerning a violation of a commercial motor vehicle safety or security regulation, standard or order; (2) the individual's cooperation with a safety or security investigation conducted by the Secretary of Transportation ("DOT"), the Secretary of Homeland Security ("DHS") or the National Transportation Safety Board ("NTSB"); (3) accurately reports hours on duty for purposes of 49 U.S.C. chapter 315; and (4) the real or perceived furnishing of information to DOT, DHS or NTSB or any federal, state or local regulatory or law enforcement agency about the facts concerning any accident or incident resulting in injury or death or an individual or damage to property occurring in connection with a commercial motor vehicle transportation.

Impact: The 2007 amendments to the definition of protected activity greatly expands the scope of protections offered to covered workers, encourages accurate reporting of hours under the DOT safety rules, and encourages worker cooperation with federal, state and local law enforcement and regulatory authorities involved in the investigation of accidents or incidents involving commercial motor vehicle transportation by shielding them from retaliation based on such activity. Prohibited forms of discrimination include harassment, hire, fire, discipline, discharge, demotion, layoff, compensation, benefits, or any other term or condition of employment.

Recommended Action: Covered employers should modify their written whistleblower policies to reflect the scope of activity now subject to protection under the STAA and should offer training to supervisors regarding these changes. The existence of a written anti-retaliation policy, effective supervisor safety, security and whistleblower training, and a record of prompt and effective resolution of internal safety and security complaints have been shown to diminish the likelihood of formal OSHA complaints and investigations and otherwise help to rebut allegations of discriminatory motive in STAA proceedings.

Modification of the Order and Burdens of Proof

The 2007 amendments change the order and burdens of proof in a STAA whistleblower retaliation case to those contained in the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century Act ("AIR21"). Previously, a STAA complainant need only show that he or she engaged in protected activity that was known to the employer, that he suffered an adverse employment action, and that there was a causal connection between the activity and the adverse action. Once a complainant made this showing, an inference of retaliation arose and the burden shifted to the employer to produce evidence of legitimate, non-retaliatory reasons for the adverse action. The complainant could nevertheless prevail if he or she could demonstrate that the employer's articulated reason was a pretext for unlawful retaliation or that the employer acted out of mixed motives. In the latter case, the employer was required to demonstrate, by a preponderance of the evidence, that it would have taken the adverse employment action in the absence of the employee's protected activity.

Henceforth, OSHA need not conduct even an investigation unless a STAA complainant makes a prima facie showing that a protected activity was a contributing factor in the adverse employment action described in the complaint and the employer fails to demonstrate by clear and convincing evidence that it would have taken the same adverse action in the absence of the protected conduct. If the complainant fails to make the required prima facie showing, the complaint must be dismissed; alternatively, if the employer submits preliminary proof that it would have taken the action notwithstanding the protected activity, the investigation must be discontinued and the complaint dismissed. Assuming these gatekeeper requirements are met and OSHA undertakes an investigation, the complainant must demonstrate that protected activity was a contributing factor in the adverse action and the employer fails to demonstrate by clear and convincing evidence that it would have taken the same adverse action in the absence of protected activity.

Impact: Although the IFR empowers OSHA to dismiss STAA whistleblower complaints without investigation, it remains to be seen whether that will actually happen. Experience teaches that the threshold for stating a prima facie case of retaliation before OSHA in a STAA case is relatively low, and the likelihood of an employer's being able to convince OSHA to dismiss a complaint without investigation is equally low or lower.

Expansion of Remedies

Under prior law, a prevailing STAA complainant was entitled solely to reinstatement and compensatory damages, including back pay. As a result of the 2007 amendments, a prevailing complainant may also obtain interest on back pay as well as special damages sustained as a result of the unlawful discrimination, including litigation costs, expert witness fees, reasonable attorney fees and punitive damage awards of up to $250,000.

Impact: The authorization for awards of special damages, punitive damages and attorney's fees is troubling because it greatly increases the monetary incentives for filing STAA complaints. Given these increased financial risks, employers would be well advised to seek legal representation at the OSHA investigative stage.

Right to De Novo Judicial Review and Jury Trial

Previously, DOL had exclusive jurisdiction over STAA complaints and the role of the federal courts was limited to enforcement of preliminary and final agency orders issue under the STAA. As a result of the 2007 amendments, United States district courts have de novo jurisdiction over STAA retaliation claims filed by complainants without regard to the amount in controversy, provided there is no final agency order within 210 days of the filing of the administrative complaint and the delay is not due to the complainant's bad faith. Either party may request a jury trial. The Secretary has taken the position that once a final decision issues, the kick-out provision is moot and the complainant has no right to file a de novo lawsuit in federal court -- even if the decision issues after the 210 day period has run.

Impact: Given the growing backlogs in OSHA processing of whistleblower complaints, not to mention further lengthy delays in the DOL hearing and appeal process, it is likely that many STAA complaints will qualify for de novo review and jury trial.

Recommended Action: Unfortunately, there is little employers can do to speed up the process to meet the 210 day deadline. Thus, every STAA complaint should be viewed as having the potential to make it to a jury and the employer should manage its defense with that prospect in mind. The employer's written statement of position should be thorough and accurate, without the appearance of animus, and properly documented and supported. Dealings with OSHA investigators must also be properly managed and courteous inasmuch as evidence of contrary conduct could damage the employer's image with a jury.

No Preemption Defense or Waiver

In the past, employers have argued that the administrative remedies provided under the STAA are exclusive, precluding relief under any other state or federal cause of action or collective bargaining agreement. The 2007 amendments clarify that not to be the case. Further, STAA rights may not be waived by any agreement, policy, form or condition of employment. Presumably, this clause was intended to defeat any attempt to subject STAA claims to binding arbitration.

Impact: The unfortunate impact of the prohibition on pre-emption and waiver is that an employer may be called to defend itself in multiple forums (administrative, judicial and grievance arbitration) based on the same set of facts.

Recommended Action: Proactively defending the OSHA investigation is not only essential for preventing a reasonable cause violation finding and the issuance of a preliminary order of back pay and reinstatement, it may also serve to bar the complainant from re-litigating the issues in other forums should he or she abandon his DOL complaint. See our 8-30-10 Whistleblower Alert covering Murray v. Alaska Airlines, Inc., No. S162570 (CA Aug. 23, 2010).

New Definitions

Commercial Motor Carrier ("CMC")

The IFR replaces the existing definition of CMC (i.e., a person who satisfied the definition of "motor carrier" "motor private carrier" under 49 U.S.C. §§10102 (13) and (16)) with the following more expansive definition: "CMC means any person engaged in a business affecting commerce between States or between a State and a place outside thereof who owns or leases a commercial motor vehicle in connection with that business, or assigns employees to operate such a vehicle."

Expanded Definition of "Employee"

The 9/11 Commission Act added a definition of the term "employee" to the STAA whistleblower provision, borrowed from 49 U.S. C. 311101 (i.e., a driver of a CMV – including an independent contractor when personally operating a CMV – a mechanic, a freight handler, or an individual not an employer who (i) directly affects CMV safety in the course of employment by a CMC and (ii) is not an employee of the federal, state or local government acting in the course of employment) and expanded the definition to include employees who directly affect CMV security in the course of employment by a CMC.

Impact: Notwithstanding the statutory change, DOL historically has applied expansive definitions of CMC, CMV and "employee" in the interests of maximizing whistleblower protections.

Recommended Action: Persons and entities that previously erroneously considered themselves exempt from coverage under the STAA whistleblower provisions because they did not meet the definition of a CMC under Title 49 of the U.S. Code, or because they did not directly employ individuals involved in CMV safety operations regulated by the Department of Transportation, now have clear notice that they are covered and cannot discriminate directly or indirectly against an individual who engages in protected activity. Accordingly, such persons or entities are advised to promulgate a whistleblower anti-retaliation compliance program, including supervisor training and procedures for filing and resolving internal complaints. Additionally, they would be prudent to consult counsel prior to taking any adverse employment action implicating the STAA.

Preliminary Reinstatement Provisions

From the outset, the STAA authorized the Secretary of Labor to order preliminary reinstatement and back pay if OSHA finds reasonable cause that the complainant was discharged in violation of the STAA whistleblower provisions. For obvious reasons, the employer generally does not want to take the employee back while the employer prosecutes its appeal, but the employer does not have a statutory right to choose to pay the employee his or her regular pay and benefits in lieu of reinstatement. However, the Secretary has discretion to authorize economic reinstatement if the agency concludes that reinstatement is not advisable pending the outcome of the case.

Under the IFR, an employer has 30 days to file objections challenging the preliminary order, waiver of which could potentially bar the employer from challenging the order in court. The filing of objections does not stay the duty to comply, however.

Comment: In the preamble to the IFR, DOL boldly proclaims that should the employer ultimately prevail in the case, there is no statutory basis for allowing the employer to recover its payments to the complainant in compliance with the Secretary's preliminary order. However, it is just as true that there is nothing in the statute or legislative history authorizing an employee to retain the benefits of economic reinstatement should the employee fail to prevail in the action. In such cases, the employer may have a state law cause of action for unjust enrichment.

Recommended Action: Should an employer receive a preliminary order directing reinstatement and back pay, it should consult counsel immediately regarding the employer's rights and obligations.

Changes in STAA Case Processing

According to the IFR, the Secretary's decision to proceed with investigation a STAA whistleblower complaint or to dismiss it without investigation is discretionary and not subject to de novo review by an administrative law judge ("ALJ'). Further, the IFR eliminates the right to automatic review of all administrative law judge decisions in STAA cases and limits review by the Administrative Review Board ("ARB") to cases in which one of the parties files a petition for review within 10 days following the issuance of decision by the ALJ setting forth all issues, conclusions and orders to which the party objects (waiver applies to those not challenged), and henceforth the ARB has discretion to accept or reject the petition, just as in any other whistleblower action over which DOL has jurisdiction. If no party petitions for review, or if the ARB denies review, the decision of the ALJ becomes the final decision of the agency. The IFR also clarifies that the substantial evidence standard applies with respect to ARB review of the ALJ's findings of fact, contrary to the contention of whistleblower advocates who argue that the ARB should apply a de novo standard to factual findings.

Impact: The foregoing procedural changes are necessary to reducing the chronic backlog of STAA cases and meeting legislative intent for expedited review.

Comment Period

Comments on the IFR must be submitted on or before October 30, 2010, and must include the agency name and OSHA docket number, OSHA-2008-0026.


Keller and Heckman's Whistleblower Defense Team offers advice and assistance in compliance programming, supervisor training, internal investigations and documentation, analysis of employee claims and personnel actions, government investigations, and litigation defense. For more information regarding these services, contact Jacki Thompson, thompson@khlaw.com for information regarding these services.

Keller and Heckman's Transportation Team advises clients regarding compliance with laws and regulations impacting the Transportation Industry generally. The Transportation Team works closely with the Whistleblower Team in defending employers charged with violations of the STAA and related laws. For more information regarding the services offered by the Transportation Team, contact Michael Morrone, morrone@khlaw.com.

[1] Currently, the OSHA Office of the Whistleblower Protection Program is responsible for enforcing the whistleblower provisions of 19 federal statutes dealing with employee health and safety, environmental and nuclear protection, corporate financial fraud and security, and consumer protection. The STAA is one of those 19 statutes.