DeKalb County v. U.S. Department of Labor , 812 F.3d 1015 ( 2016 )

Case: 14-15435 Date Filed: 02/08/2016 Page: 1 of 14
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 14-15435
________________________
Agency No. 12-064
DEKALB COUNTY,
Petitioner,
versus
U.S. DEPARTMENT OF LABOR,
RYAN PETTY,
DAISY ABDUR-RAHMAN,
Respondents.
________________________
Petition for Review of a Decision
of the Department of Labor
________________________
(February 8, 2016)
Before TJOFLAT and MARTIN, Circuit Judges, and ROSENTHAL,∗ District
Judge.
∗
Honorable Lee H. Rosenthal, United States District Judge for the Southern District of
Texas, sitting by designation.
Case: 14-15435 Date Filed: 02/08/2016 Page: 2 of 14
ROSENTHAL, District Judge:
This petition for review asks us to clarify the standard the Department of
Labor’s Administrative Review Board applies to an appeal from an Administrative
Law Judge’s findings and conclusions in a proceeding under the Federal Water
Pollution Control Act, 33 U.S.C. § 1367. The petitioner asks us to vacate the
Board’s ruling reversing the ALJ because the Board applied de novo rather than
substantial-evidence scrutiny to the ALJ’s factual findings. The parties agree that
the Board applied the incorrect standard. We conclude, however, that reviewing
for substantial evidence would not have changed the result because the Board
reversed the ALJ on matters of law, not fact. We therefore deny the petition for
review. 1
I. BACKGROUND
Daisy Abdur-Rahman and Ryan Petty filed complaints after they were
terminated from their jobs with the DeKalb County, Georgia Department of Public
Works. The ALJ held a 13-day hearing on their claims that they were fired in
retaliation for whistleblower activity protected under the Federal Water Pollution
Control Act (“FWPCA”).
1
The parties have petitioned and cross-petitioned for review of related orders on
attorney’s fees and costs. See No. 15-12407; No. 15-15376. Those petitions were consolidated
and have been stayed pending resolution of this case.
2
Case: 14-15435 Date Filed: 02/08/2016 Page: 3 of 14
Abdur-Rahman and Petty worked as compliance inspectors on a program to
reduce sewer overflows caused by restaurants improperly disposing of fats, oils,
and grease. The County requires restaurants—there are around 5,000 in the
County—to have grease traps to collect this type of solid waste. If the traps are
missing or fail, fats, oils, and grease accumulate in sewer lines and can cause the
lines to burst or overflow, releasing raw, untreated sewage that can seep into
surrounding waters. The County’s compliance inspectors monitor the traps,
process and respond to complaints, and investigate discharges. The Department
also assigned Abdur-Rahman and Petty to a committee updating the County’s
ordinances and procedures regulating this type of solid-waste disposal.
For the first six months after the County hired them in mid-2004, Abdur-
Rahman and Petty were probationary employees who could be fired at will. Their
immediate supervisor was Chester Gudewicz, the County’s Compliance Section
Supervisor. Gudewicz, in turn, reported to John Walker.
The probationary period was marked by conflict between Gudewicz and
Abdur-Rahman and Petty. All three, and Walker, testified about the conflicts
before the ALJ. Problems began when Abdur-Rahman and Petty asked Gudewicz
for historical records of sewer spills in the County. They wanted the records for
their committee and compliance work so they could identify “hot spots” where
sewers had frequently overflowed and use that information to facilitate future
3
Case: 14-15435 Date Filed: 02/08/2016 Page: 4 of 14
enforcement. When Gudewicz failed to produce the records, Abdur-Rahman and
Petty persisted, asking for them on a weekly basis. By late 2004, Gudewicz was
actively discouraging the search, telling Abdur-Rahman and Petty that they were
“ruffling too many feathers” and “rocking the boat.” Gudewicz became
increasingly frustrated and impatient with their questions, and with them. He
viewed their questions as “insubordination” and would walk away to avoid them.
Walker also resisted the efforts to find the records, telling Abdur-Rahman and
Petty that they did not need the data and were being “too thorough or scientific.”
This opposition led Abdur-Rahman and Petty to suspect that the County had
something to hide. They told coworkers and supervisors that “the County could
get in trouble” with the State for failing to properly document and report spills.
They also came to believe that Gudewicz was unqualified for his position and
concerned with preserving the status quo and his job, rather than the program.
They raised their concerns about the County’s lack of compliance and enforcement
with increasing frequency. Tensions spiked in January 2005, when, according to
Gudewicz’s testimony, he overheard Abdur-Rahman call him “incompetent” and
“a liar.”
Abdur-Rahman’s and Petty’s suspicions turned out to be unfounded. The
records they sought were available in a nearby office, and the County was
investigated by Georgia’s Environmental Protection Division, which concluded
4
Case: 14-15435 Date Filed: 02/08/2016 Page: 5 of 14
that the County had reported spills as required by state law. In the meantime,
however, Gudewicz concluded that Abdur-Rahman’s and Petty’s behavior was
disruptive and harmful to workplace morale. In January 2005, Gudewicz sent
Walker two memoranda, one recommending firing Petty, and the other reporting
Abdur-Rahman for “argumentative” behavior. The County fired both in early
March 2005.
One month later, Abdur-Rahman and Petty each filed a complaint with the
Occupational Safety and Health Administration (“OSHA”), asserting that the
County had fired them in retaliation for voicing their concerns and complaints.
OSHA found no violation of the FWPCA’s antiretaliation provision. A number of
witnesses testified at the evidentiary hearing held before the ALJ between
September 2006 and March 2007. The testimony frequently conflicted. The ALJ
had to, and did, make credibility judgments in resolving the factual inconsistencies.
The ALJ found and concluded that Abdur-Rahman and Petty had engaged in
activity that the FWPCA protects, but that this activity was not the motivating
factor behind the decision to terminate their employment. The ALJ found and
concluded that the County showed that it would have terminated Abdur-Rahman
and Petty “even had they not engaged in protected activity because managing them
was above their supervisor’s [Gudewicz’s] means and they did not fit the peculiar
5
Case: 14-15435 Date Filed: 02/08/2016 Page: 6 of 14
culture [of their workplace].” The ALJ dismissed Abdur-Rahman’s and Petty’s
complaints.
On appeal, the Administrative Review Board reviewed the ALJ’s findings
and conclusions de novo and reversed. The Board agreed with the ALJ’s finding
that Abdur-Rahman and Petty had engaged in protected activity by pressing for the
records and by voicing concerns about the County’s regulatory compliance and
enforcement when they met resistance. But the Board found that this activity was
a motivating factor—not the motivating factor, as the ALJ had incorrectly stated—
in the County’s decision to fire them. The Board also agreed with the ALJ’s
factual findings that the County had both legitimate and retaliatory reasons for its
termination decision and that the reasons arose from the same protected activity.
The Board rejected the ALJ’s legal analysis, however, “arriv[ing] at [the] different
legal conclusion” that the County’s legal and illegal motives could not be separated
and the County had not shown that it would have fired Abdur-Rahman and Petty
absent their protected activity. The Board remanded to the ALJ to decide the
remedy for the retaliatory terminations. 2 The Board affirmed the ALJ’s post-
2
On remand, the ALJ asked the parties whether it needed to reopen the record to decide
the remedies issue. In a June 2011 letter to the ALJ, the County asked the ALJ not to reopen the
record. The County argues in this appeal that although on remand it had urged the ALJ to keep
the record closed, the ALJ’s limited reopening of the record denied the County an opportunity to
present evidence showing a failure to mitigate damages. The County did not raise this lost-
opportunity issue until its June 2012 appeal to the Board, not to the ALJ. The County cannot
complain on appeal about an alleged error it invited. Yellow Pages Photos, Inc. v. Ziplocal, LP,
795 F.3d 1255, 1283 (11th Cir. 2015).
6
Case: 14-15435 Date Filed: 02/08/2016 Page: 7 of 14
remand decisions, including the reinstatement and back-pay awards, and the
County petitioned this court for review. We have jurisdiction under 33 U.S.C. §
1367(b) and 33 U.S.C. § 1369, and we deny the petition.
II. THE STANDARD OF REVIEW
An appellate court “must review the [Administrative Review Board’s]
decision pursuant to the standard of review outlined in the Administrative
Procedure Act.” Stone & Webster Constr., Inc. v. U.S. Dep’t of Labor (“Stone &
Webster II”), 684 F.3d 1127, 1132 (11th Cir. 2012). Legal conclusions are
reviewed de novo, keeping in mind that agencies often receive deference in
construing the statutes they administer. Chevron, U.S.A., Inc. v. Natural Res. Def.
Council, 467 U.S. 837, 104 S. Ct. 2778 (1984). The Board’s factual findings are
reversed only if “unsupported by substantial evidence” on the record as a whole. 5
U.S.C. § 706(2)(E) (APA standard for formal adjudications); Stone & Webster II,
684 F.3d at 1132.
“The substantial evidence standard limits the reviewing court from deciding
the facts anew, making credibility determinations, or re-weighing the evidence.”
Stone & Webster II, 684 F.3d at 1133 (quotation marks omitted). When “we
review administrative findings of fact under the substantial-evidence test, [we] will
reverse such findings only when the record compels a reversal; the mere fact that
the record may support a contrary conclusion is not enough . . . .” Indrawati v.
7
Case: 14-15435 Date Filed: 02/08/2016 Page: 8 of 14
U.S. Att’y Gen., 779 F.3d 1284, 1304 (11th Cir. 2015) (quotation marks omitted).
Substantial evidence is “more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.”
Richardson v. Perales, 402 U.S. 389, 401, 91 S. Ct. 1420, 1427 (1971) (quotation
marks omitted).
Since 2007, these same standards have applied to the Board’s review of the
ALJ’s findings and conclusions in an FWPCA claim. “[I]n 2007, the Secretary of
Labor revised the [Board’s] standard of review of an ALJ’s factual findings . . .
from de novo review to substantial evidence review.” Stone & Webster, 684 F.3d
at 1132; see also 29 C.F.R. § 24.110(b) (“The [Board] will review the factual
findings of the ALJ under the substantial evidence standard.”). The parties agree
that the Board incorrectly reviewed the ALJ’s factual findings de novo. The issue
is the effect of that error.
III. DISCUSSION
The elements of an FWPCA retaliation claim are that (1) the employee
engaged in protected activity, (2) the employee suffered an adverse action, and (3)
the protected activity was a motivating factor in the adverse action. Kaufman v.
Perez, 745 F.3d 521, 527 (D.C. Cir. 2014). The parties agree that Abdur-Rahman
and Petty suffered an adverse action. The County challenges the Board’s
8
Case: 14-15435 Date Filed: 02/08/2016 Page: 9 of 14
determinations that they engaged in activity the FWPCA protects and that their
protected activity was a motivating factor in the decision to fire them.
A. Protected Activity
The FWPCA makes it unlawful to “fire, or in any other way discriminate
against . . . any employee . . . by reason of the fact that such employee . . . has
filed, instituted, or caused to be filed or instituted any proceeding under this
chapter . . . .” 33 U.S.C. § 1367(a). The Secretary has interpreted “proceeding” to
shield from retaliation employees who make “informal” or “internal” complaints to
supervisors and coworkers, even if those complaints ultimately lack merit. Stone
& Webster Eng’g Corp. v. Herman (“Stone & Webster I”), 115 F.3d 1568, 1575
(11th Cir. 1997), superseded in part by regulation on other grounds, 29 C.F.R. §
24.110(b); Bechtel Constr. Co. v. Sec’y of Labor, 50 F.3d 926, 931–33 (11th Cir.
1995). The County does not challenge the Secretary’s interpretation.
Substantial evidence in the record shows that, as the ALJ found and the
Board agreed, Abdur-Rahman and Petty engaged in protected activity. They
repeatedly sought the County’s historical records of sewer spills, believing that the
records would be helpful to the County’s enforcement and compliance work. The
requests were rebuffed, and they were discouraged from pursuing the records. The
ALJ found, and the Board affirmed, that Abdur-Rahman and Petty “came to
suspect the County might be hiding the information.” They told coworkers and
9
Case: 14-15435 Date Filed: 02/08/2016 Page: 10 of 14
supervisors that “the County could get in trouble” with the State as a result, and
Abdur-Rahman confronted Gudewicz about why hot spots continued to exist.
Although the suspicions turned out to be unfounded, the record shows a good-faith
basis for voicing them. The FWPCA protects activity undertaken with a
reasonable, good-faith basis, even if it is incorrect. Stone & Webster I, 115 F.3d at
1575; Passaic Valley Sewerage Comm’rs v. U.S. Dep’t of Labor, 992 F.2d 474,
478–79 (3d Cir. 1993). The record shows ample support for the ALJ’s and the
Board’s finding and conclusion that Abdur-Rahman and Petty engaged in protected
activity. 3
B. Motivating Factor
The Secretary interprets the FWPCA to incorporate the burden-shifting
framework used in mixed-motive employment-discrimination cases. See 76 Fed.
Reg. 2808-01, 2811 (Jan. 18, 2011) (citing Price Waterhouse v. Hopkins, 490 U.S.
228, 109 S. Ct. 1775 (1989); Mt. Healthy City Sch. Dist. Bd. of Educ. v. Doyle, 429
U.S. 274, 97 S. Ct. 568 (1977)). The employee has the burden to show “by a
preponderance of the evidence that the protected activity caused or was a
motivating factor in the adverse action alleged in the complaint.” 29 C.F.R. §
24.109(b)(2). A motivating factor is “a substantial factor.” Mt. Healthy, 429 U.S.
3We need not—and do not—address whether Abdur-Rahman and Petty also engaged in
protected activity at other times during their brief employment.
10
Case: 14-15435 Date Filed: 02/08/2016 Page: 11 of 14
at 287, 97 S. Ct. at 576. “In saying that [the protected activity] played a motivating
part in an employment decision, we mean that, if we asked the employer at the
moment of the decision what its reasons were and if we received a truthful
response, one of those reasons would be that the . . . employee [engaged in
protected activity].” Price Waterhouse, 490 U.S. at 250, 109 S. Ct. at 1790(plurality opinion).
“If the [employee] has demonstrated by a preponderance of the evidence that
the protected activity caused or was a motivating factor in the adverse action
alleged in the complaint,” the burden shifts to the employer. 29 C.F.R. §
24.109(b)(2). “[R]elief may not be ordered if the [employer] demonstrates by a
preponderance of the evidence that it would have taken the same adverse action in
the absence of the protected activity.” Id.; see also Mt. Healthy, 429 U.S. at 287,
97 S. Ct. at 576. The employer must “separate its legitimate rationale from its
prohibited rationale . . . [to] prove its decision would have been the same absent
[the employee’s protected activity].” Passaic, 992 F.2d at 482. “It is not enough
that the evidence prove[s] that the [employer] could have in retrospect made its
employment decision on legitimate grounds.” Id. “The risk that the illegal and
legal motives behind employee termination merge and become inseparable is
placed on the employer.” Id. (citing NLRB v. Transp. Mgmt. Corp., 462 U.S. 393,
11
Case: 14-15435 Date Filed: 02/08/2016 Page: 12 of 14
103 S. Ct. 2469 (1983)).4 The County has not challenged the Secretary’s
interpretation.
Applying this interpretation, the Board identified errors in the ALJ’s legal
analysis. The ALJ asked whether Abdur-Rahman and Petty had shown that their
protected activity was the motivating factor—rather than a motivating factor—in
the decision to fire them. The Board concluded that Abdur-Rahman and Petty had
shown that their protected activity met the proper causation test. Although the
Board described its review of the ALJ’s factual findings as de novo, substantial
evidence—evidence that the ALJ also relied on—supports this conclusion. The
Board correctly applied de novo review in rejecting the ALJ’s legal conclusion that
the record had to show that the protected activity was the motivating factor in the
County’s decision.
The ALJ also erred in failing to put the burden on the County to show that it
would have made the same decision absent the protected activity. The Board
accepted the ALJ’s factual findings, including that Gudewicz’s poor management
4
This analysis differs from McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct.
1817 (1973), and its progeny, under which the burden of persuasion “at all times” remains with
the employee, Tex. Dep’t of Cmty. Affairs v. Burdine, 450 U.S. 248, 253, 101 S. Ct. 1089, 1093
(1981). See generally Watson v. Se. Pa. Transp. Auth., 207 F.3d 207, 215–16 (3d Cir. 2000)
(Alito, J.) (“[T]he Price Waterhouse shift in the burden of persuasion does not apply to ‘pretext’
cases, in which plaintiffs prove intentional discrimination indirectly through the burden-shifting
paradigm set forth in McDonnell Douglas . . . .” (citing Price Waterhouse, 490 U.S. at 277–78,
109 S. Ct. at 1805 (O’Connor, J., concurring))); cf. Pulliam v. Tallapoosa Cty. Jail, 185 F.3d
1182, 1186–88 (11th Cir. 1999) (distinguishing a pretextual-discrimination claim from a mixed-
motive discrimination claim).
12
Case: 14-15435 Date Filed: 02/08/2016 Page: 13 of 14
and supervisory skills were a factor in his decision to recommend firing Abdur-
Rahman and Petty. These findings were supported by substantial record evidence.
The Board rejected the ALJ’s legal analysis because the County had not met its
burden to separate the retaliatory from the nonretaliatory motives for deciding to
fire the employees. The Board reversed the ALJ’s legal conclusion because, given
the intertwined nature of the legitimate and retaliatory reasons, the County had not
met its burden to show that it would have reached the same decision absent the
protected activity.
The parties agree that the Board incorrectly reviewed the ALJ’s factual
findings de novo. Ordinarily, “a court of appeals should remand a case to an
agency for decision of a matter that statutes place primarily in agency hands.” INS
v. Ventura, 537 U.S. 12, 16, 123 S. Ct. 353, 355 (2002) (per curiam). In Stone &
Webster II, 684 F.3d at 1133, we remanded because the Board “acknowledged that
it was bound by the substantial evidence standard” but, in effect, reviewed the
ALJ’s factual findings de novo, “show[ing] little deference to the ALJ’s findings
with which it disagreed, and . . . disregard[ing] the ALJ’s conclusions supported by
substantial evidence in the record.” Here, in contrast to Stone & Webster II, “the
. . . issue is legal, not factual.” Calle v. U.S. Att’y Gen., 504 F.3d 1324, 1330 (11th
Cir. 2007). Remand to the agency is unnecessary because “the agency would reach
13
Case: 14-15435 Date Filed: 02/08/2016 Page: 14 of 14
the same result upon a reconsideration cleansed of errors.” Lin v. U.S. Dep’t of
Justice, 453 F.3d 99, 107 (2d Cir. 2006).
The Board properly reviewed the ALJ’s legal conclusions de novo and held
that the ALJ incorrectly applied the motivating-factor and the Mt. Healthy/Price
Waterhouse burden-shifting framework. The Board’s decision would have been
the same had it reviewed the ALJ’s factual findings for substantial evidence rather
than de novo. We therefore need not remand.
IV. CONCLUSION
We deny the County’s petition for review.
PETITION DENIED.
14