Roadway Express, Inc v. LABR ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-1873
ROADWAY EXPRESS, INC.,
Petitioner,
v.
UNITED STATES DEPARTMENT OF LABOR,
ADMINISTRATIVE REVIEW BOARD,
Respondent,
and
PETER CEFALU,
Intervenor.
____________
On Petition for Review of a Final Order
of the Administrative Review Board.
ARB Case Nos. 04-103 and 04-161.
____________
ARGUED DECEMBER 6, 2006—DECIDED JULY 25, 2007
____________
Before POSNER, RIPPLE, and WOOD, Circuit Judges.
WOOD, Circuit Judge. Peter Cefalu was terminated
from his position as a truck driver with Roadway Express,
Inc. (“Roadway”) on February 21, 2002. That happened to
be the same day on which he provided testimony in
support of a fellow employee’s grievance hearing against
Roadway. On August 19, 2002, Cefalu filed a complaint
with the Occupational Safety and Health Administration
(“OSHA”), an agency within the Department of Labor
2 No. 06-1873
(“DOL”), alleging that he had been fired in retaliation for
his support of his co-worker in the grievance hearing and
that this activity was protected under the Surface Trans-
portation Assistance Act of 1982 (“STAA”), 49 U.S.C.
§ 31105.
Roadway responded that Cefalu’s termination had
nothing to do with his testimony. Instead, the company
asserted, he was fired because he had lied on his em-
ployment application when he failed to report previous
serious truck driving accidents and the fact that he had
lost his earlier job after those accidents. For reasons that
are unclear, however, Roadway refused to comply with
discovery orders in the DOL proceedings; one of the
orders it flouted asked who first alerted the company to
Cefalu’s driving history. As a sanction, the DOL Adminis-
trative Law Judge (“ALJ”) ruled that Roadway could not
present evidence that it had learned from its undisclosed
informant. This sanction prevented Roadway from defend-
ing the termination of Cefalu by using his driving record.
The Administrative Review Board approved the ALJ’s
ultimate decision in Cefalu’s favor. In its petition to this
court, Roadway contests the discovery sanction as well
as the substantive ruling in Cefalu’s favor.
I
In 1982, Congress enacted the STAA to combat the
“increasing number of deaths, injuries and property
damage” resulting from commercial trucking accidents.
Brock v. Roadway Express, Inc., 481 U.S. 252, 258 (1987)
(quoting 128 Cong. Rec. 32509, 32510 (1982)). One mea-
sure the statute adopted to further its goals was a provi-
sion forbidding an employer from discharging or discrimi-
nating against an employee for taking actions such as
filing a complaint or testifying in a safety-related proceed-
No. 06-1873 3
ing that point out an employer’s safety violations. 49
U.S.C. § 31105(a)(1).
Cefalu worked as a commercial truck driver for Roadway
from November 22, 1999, to February 21, 2002. He be-
longed to Teamsters’ Local 200, as did Jonathan Gomaz,
another Roadway driver. After Roadway discharged Gomaz
for allegedly falsifying his driving log, Gomaz filed a
grievance. In the ensuing proceedings, Cefalu provided a
written, notarized statement asserting that a Roadway
supervisor had asked Cefalu to falsify his driving log. The
grievance panel reinstated Gomaz.
Thomas Forrest, Roadway’s manager for labor rela-
tions, attended the grievance hearing. After it was over, he
telephoned Robert Schauer, the assistant terminal man-
ager at Roadway’s Milwaukee facility, to inform him of the
reinstatement. Forrest claimed that he did not tell Schauer
about Cefalu’s statements. Later that same afternoon,
February 21, however, Schauer participated in a confer-
ence call with Phillip Stanoch, Roadway’s vice-president
for labor relations, and Mike Jones, Roadway’s relay
manager. After the call, Jones called in a union represen-
tative, telephoned Cefalu, and then fired Cefalu for
falsifying his employment application. Cefalu filed a
complaint with OSHA on August 19, 2002, alleging that
Roadway had violated the STAA when it discharged him.
After OSHA dismissed his complaint for lack of merit,
Cefalu appealed and his case was assigned to an ALJ.
At that point, Cefalu served interrogatories on Roadway,
including one asking the company to identify all persons
who provided information relevant to his discharge.
Roadway refused to furnish the name of the confidential
source who first informed the company about Cefalu’s
driving record. Roadway claimed that revealing its
source would put the informant at risk of retaliation
and hurt its business operations. The ALJ rejected this
4 No. 06-1873
argument and granted Cefalu’s motion to compel the
information. The judge noted that Roadway had not
invoked any recognized privilege for withholding the
information, and that it had even acknowledged that its
stance warranted a sanction. Cefalu requested an entry of
default judgment, but the ALJ instead chose the lesser
sanction of precluding Roadway from presenting any
evidence that arose from the confidential source.
As a practical matter, this sanction spelled the end to
Roadway’s defense, since Roadway had no other independ-
ent evidence indicating that the termination was not
retaliatory. The ALJ therefore concluded that Cefalu had
proved by a preponderance of the evidence that he was
fired for engaging in the protected activity of providing
testimony at the Gomaz grievance hearing. The Board
affirmed the ALJ’s decision.
II
Roadway has petitioned for review of the Board’s order
requiring reinstatement (an automatic remedy for an
STAA violation), back pay, and attorney’s fees and ex-
penses for Cefalu. It argues first that the ALJ deprived it
of its “fundamental right to due process” by imposing the
evidentiary sanction; on the merits, it argues that Cefalu’s
discharge did not violate the STAA; and finally, it urges
that it would violate public policy to reinstate Cefalu.
We find it preferable first to take up Roadway’s argu-
ment that Cefalu failed to make out a prima facie case
that the company’s discharge of Cefalu violated the STAA.
If this were correct, we would not need to evaluate the
discovery sanction imposed on Roadway because its
effect did not come into play until the point at which
Roadway was obliged to offer a legitimate reason for the
adverse action against the employee.
No. 06-1873 5
A
This circuit allows a wide variety of retaliation claims to
be approached for purposes of summary judgment mo-
tions either through a direct or an indirect approach.
Rogers v. City of Chicago, 320 F.3d 748, 753-54 (7th Cir.
2003). The parties seem confused about which was used
here, but the dispute is beside the point. In this case, as
in any in which the decisionmaker ruled on the ultimate
question, the taxonomy loses its importance. We review
the method that the ALJ seems to have used only to
highlight the questions he was asking. It was similar to
the familiar one launched by McDonnell Douglas Corp. v.
Green, 411 U.S. 792, 802 (1973). The employee has the
initial burden of showing “1) that he engaged in protected
activity under the STAA; 2) that he was the subject of
adverse employment action; and 3) that there was a causal
link between his protected activity and the adverse action
of his employer.” Moon v. Transport Drivers, Inc., 836 F.2d
226, 229 (6th Cir. 1987). Once he has done so, the burden
shifts to the employer to articulate a legitimate, nondis-
criminatory reason for the employee’s rejection. Then the
employee has an opportunity to show that the employer’s
stated reason for the adverse action was pretextual and
that intentional discrimination was at work. Buie v.
Quad/Graphics, Inc., 366 F.3d 496, 503 (7th Cir. 2004). In
retaliation cases, this court has observed that “[t]he fact
that the defendant may be able to produce evidence that
the plaintiff was fired for a lawful reason just creates an
issue of fact: what was the true cause of the discharge.”
Stone v. City of Indianapolis, 281 F.3d 640, 643 (7th Cir.
2002).
But, as we said earlier, the burden-shifting tests are
normally used to decide whether summary judgment is
proper. Here, the ALJ reached a final decision on the
merits of Cefalu’s claim. We thus look at the various
steps along the way to the judge’s result only for what-
ever light they throw on the ultimate conclusion.
6 No. 06-1873
B
Roadway contends that the Gomaz hearing was not an
activity protected under the STAA because it was not a
“proceeding relating to a violation of a commercial motor
vehicle safety rule, regulation, standard, or order.” 49
U.S.C. § 2305(a) (STAA). Roadway is therefore arguing
that the alleged falsification of driving logs, the miscon-
duct Gomaz had allegedly committed, is unrelated to
vehicle safety. DOL sees matters differently: it takes the
position that “driving logs serve important safety pur-
poses of ascertaining whether a driver has reached his
maximum hours.”
Even apart from any deference we might owe to the
Department’s views, DOL has the better of this argument.
At least two of our fellow circuits have characterized
driving logs as a measure of safety compliance, and
driving-log rules as safety regulations. See United States
v. Anderson, 339 F.3d 720, 723 (8th Cir. 2003) (labeling “an
incomplete driving log” as a “violation of . . . [a] safety
regulation[]”); Darrell Andrews Trucking, Inc. v. Fed.
Motor Carrier Safety Admin., 296 F.3d 1120, 1123 (D.C.
Cir. 2002) (identifying the underlying purpose of manda-
tory driving logs as “ensur[ing] that truck drivers are
awake and alert on the road”). The same message is
conveyed by the applicable transportation regulations,
which describe driving logs as
the primary regulatory tool used by the Federal
government, State governments, drivers, and commer-
cial motor carriers to determine a driver’s compliance
with the maximum hours of service limitations . . . .
[They are] used to place drivers out of service when
they are in violation of the maximum limitations at
the time of inspection . . . [and to] determin[e] a motor
carrier’s overall safety compliance status in controlling
excess on duty hours, a major contributory factor in
fatigue induced accidents.
No. 06-1873 7
47 Fed. Reg. 53383-01. We see no reason to disagree with
the views of our sister circuits and the DOL; indeed, we
would come to the same conclusion writing on a clean
slate. If, as Cefalu testified, a Roadway manager ordered
Gomaz to falsify his driving logs, that would have been
a violation of federal vehicle safety regulations. Cefalu’s
testimony is therefore protected under the STAA.
C
Roadway next claims that it could not have retaliated
against Cefalu because its decisionmaker did not know
about Cefalu’s protected activity. The ALJ, however, found
otherwise after he assessed the credibility of the wit-
nesses. Although Forrest testified that he did not tell
Schauer about Cefalu’s testimony at Gomaz’s hearing,
when he telephoned Schauer to report the outcome of the
hearing, the ALJ did not believe him. Instead, the Board
credited the ALJ’s findings that Forrest told Schauer, and
then that someone informed Stanoch, the vice president
for labor relations. The Board expressly found that
“Stanoch knew about Cefalu’s protected activity when
he discharged him.”
The Board was “obligated by regulation to treat the
ALJ’s findings as conclusive if supported by substantial
evidence.” See Brink’s, Inc. v. Herman, 148 F.3d 175, 178
(2d Cir. 1998) (citing 29 C.F.R. § 1978.109(c)(3)). Review-
ing courts must also sustain an ALJ’s findings of fact
“ ‘unless they are ‘unsupported by substantial evidence’ in
the record as a whole.’ ” Brink’s, 148 F.3d at 178 (quoting
5 U.S.C. § 706(2)(A)). “Substantial evidence means
such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.” Brink’s, 148 F.3d
at 179 (internal quotation marks omitted).
We find substantial evidence to support the ALJ’s
credibility determination. Roadway’s contention that
8 No. 06-1873
Stanoch lacked knowledge of Cefalu’s testimony depended
entirely on the believability of Forrest’s testimony. Once
the ALJ and the Board rejected Forrest’s version of the
exchange, they were free to draw the inference that
Stanoch knew about Cefalu’s role at the Gomaz hearing.
This also permitted the ALJ to infer that there was a
basis in the record “to conclude that Forrest [may] have
deviated from his usual practice of not reporting to
Schauer the details of grievance hearings” and that
Schauer passed along the information in his conversation
with supervisor Stanoch not more than a couple of hours
later. Given the seriousness of Cefalu’s allegations, the
ALJ was also entitled to conclude that it was more likely
than not that his testimony would be reported up the
chain of command. Combined with the timing of Cefalu’s
STAA activity and Roadway’s adverse action in this case,
there is substantial evidence to support the administrative
result.
III
This takes us to Roadway’s challenge to the discovery
sanction. Roadway argues both that the sanction had the
effect of depriving it of its fundamental right to due
process, and that it “was wholly disproportionate to
Roadway’s isolated and non-prejudicial discovery viola-
tion.” We consider these points in turn.
A
Roadway spends some time arguing that it was entitled
to due process in this hearing, because it had a protected
interest in its ability to discharge an employee for cause,
citing Brock, 481 U.S. at 261. But no one contests this
proposition. The question is rather whether the procedures
the ALJ followed were consistent with the statute and
No. 06-1873 9
regulations, and if so, whether anything the judge did
violated the Fifth Amendment’s Due Process Clause.
Roadway also argues that the result of the sanction was
that the ALJ rendered a decision “on an issue that was not
fully and fairly litigated at an administrative hearing,”
citing Yellow Freight Sys. v. Reich, 8 F.3d 980, 987 (4th
Cir. 1993), which in turn relied on Yellow Freight Sys. v.
Martin, 954 F.2d 353, 358 (6th Cir. 1992). This is but
another route to the same due process claim.
The agency’s rules unambiguously permit the ALJ to
impose, as a discovery sanction, an order excluding
evidence that a non-complying party wishes to introduce in
support of its claim. See 29 C.F.R. § 18.6(d)(2)(iii). This
is undoubtedly why Roadway has turned to the Constitu-
tion for relief. But nothing in the Due Process Clause
forbids an adjudicator (either a court or an administrative
body) from imposing reasonable rules to structure the
proceedings before it. The logic of Roadway’s position is
that even something like FED. R. CIV. P. 37(b)(2)(B), which
allows a court to punish noncompliance with an order
requiring discovery by “[a]n order . . . prohibiting [the
disobedient party] from introducing designated matters
in evidence,” is unconstitutional. Such a conclusion
would be flatly inconsistent with the Supreme Court’s
holdings in Insurance Corp. of Ireland, Ltd. v. Compagnie
des Bauxites de Guinee, 456 U.S. 694, 706-07 (1982),
upholding the use of Rule 37(b)(2)(A) to regard the critical
fact of personal jurisdiction as established, and National
Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S.
639, 643 (1976), finding no abuse of discretion in the
imposition of the extreme sanction of dismissal under Rule
37(b)(2)(C) for a discovery violation. If Roadway had
chosen to obey the ALJ’s order and provide the informa-
tion requested in the interrogatories, it would have been
free to use the information in any way it wanted.
10 No. 06-1873
Roadway knew that its non-compliance with the discov-
ery order could lead to significant sanctions. Yet even after
the ALJ gave Roadway three more days to comply while
refraining from ruling on Cefalu’s motion for default
judgment, Roadway decided not to disclose the identity of
its confidential informant. Again, the ALJ noted that
Roadway “alleged [no] recognized privilege that would
protect the source’s identity from discovery.” To this day,
Roadway has not challenged that assessment. There is
no due process violation on these facts.
B
Roadway next argues that the ALJ chose a dispropor-
tionately harsh sanction. We review the agency’s choice of
a sanction for abuse of discretion, so long as the sanction
is “within [the] statutory limits” imposed on the agency.
Chapman v. U.S. Commodity Futures Trading Comm’n,
788 F.2d 408, 411 (7th Cir. 1986). The Department of
Labor has issued regulations that govern an ALJ’s sanc-
tions for a party’s failure to comply with an order of court.
29 C.F.R. § 18.6(d)(2). One of them permits an ALJ to
“[r]ule that the non-complying party may not introduce
into evidence or otherwise rely upon testimony by such
party, officer or agent, or the documents or other evidence,
in support of or in opposition to any claim or defense.” 29
C.F.R. § 18.6(d)(2)(iii). This allowance is prefaced by
language giving the ALJ some flexibility in how he admin-
isters the sanctions regime, under which, “for the purpose
of permitting resolution of the relevant issues and disposi-
tion of the proceeding without unnecessary delay despite
such failure, [he] may take such action in regard thereto
as is just . . . .” 29 C.F.R. § 18.6(d)(2) (emphasis added).
To determine whether a judge has abused his discretion
by sanctioning a party, we too look at the proportionality
of the sanction to the discovery violation, but only to ask
No. 06-1873 11
whether the judge’s decision was a reasonable one—not to
decide whether we might have done the same in the
judge’s place. See Marrocco v. Gen. Motors Corp., 966 F.2d
220, 223 (7th Cir. 1992).
In the DOL proceedings, Roadway failed to provide a
complete answer to an interrogatory that sought informa-
tion critical to Cefalu’s case. Recall that Roadway was
defending its discharge of Cefalu on the ground that he
lied on his employment application. Cefalu’s only hope
was to show that any such lies were not the true reason
why Roadway acted as it did. In order to prove pretext,
Cefalu was entitled to know the source of the information
that allegedly led to his discharge. The source’s identity
would likely help Cefalu show when and how Roadway
had learned of the inaccuracies on his job application. If,
for example, Roadway had known of the discrepancy for
months or years, Cefalu would have had significant
circumstantial evidence of pretext.
Roadway’s non-compliance made it impossible for Cefalu
to present his theory of the case and for the ALJ to re-
solve the claim on the merits. The ALJ’s response was to
level the playing field as well as he could through a
sanction. If Roadway had evidence from other sources, it
could have introduced it. Although we recognize that
the sanction as a practical matter may have had an
enormous impact on Roadway’s case, the ALJ did not
select an impermissibly disproportionate sanction for
Roadway’s noncompliance with his orders. We cannot
conclude that the ALJ abused his discretion.
IV
We next consider Roadway’s challenge to the Board’s
remedial order. The STAA states that if DOL concludes
that an employer terminated an employee in retaliation for
12 No. 06-1873
STAA-protected activity, “the Secretary shall order the
[employer] to . . . reinstate the complainant to the former
position with the same pay and terms and privileges of
employment.” 49 U.S.C. § 31105(b)(3)(A). Although this
requirement is apparently absolute, we recognize that
there must be practical limits to it. If, for example, Cefalu
were now blind, we would not require Roadway to rein-
state him as a truck driver. If Roadway no longer existed,
we would not force it to reincorporate for the purposes of
reinstating Cefalu. In short, if the premise behind the
statutory remedy, that the status quo ante can be restored,
fails, then the Board is entitled to adopt a remedy that
is the functional equivalent of the one prescribed by the
statute.
The Supreme Court has noted the problem with a
“reinstatement” remedy—that in some instances it could
obligate an employer to reinstate an incompetent or
unqualified employee. Mt. Healthy City Sch. Dist. Bd. of
Educ. v. Doyle, 429 U.S. 274 (1977). There, addressing a
First Amendment claim, the Court wrote that
[t]he constitutional principle at stake is sufficiently
vindicated if such an employee is placed in no worse a
position than if he had not engaged in the conduct. A
borderline or marginal candidate should not have the
employment question resolved against him because of
constitutionally protected conduct. But that same
candidate ought not to be able, by engaging in such
conduct, to prevent his employer from assessing his
performance record and reaching a decision not to
rehire on the basis of that record, simply because the
protected conduct makes the employer more certain
of the correctness of its decision.
Id. at 285-86. In that “mixed motive” case, the Court
concluded that after the complaining party showed that his
protected conduct was a substantial or motivating factor
behind the adverse action, the burden should shift to the
No. 06-1873 13
other party (there, a school district) to show that it
would have reached the same decision even in the absence
of the protected conduct. Id. at 287.
The same general approach applies to a case like
Cefalu’s. He has proven, as the Board found, that his
protected conduct was a substantial or motivating factor
behind his termination. For purposes of the STAA, that
is enough to show that Roadway violated the law. But it
is not necessarily the case that Cefalu is entitled to
reinstatement, if after appropriate proceedings Roadway
can show that it would have terminated him even in the
absence of his protected conduct. On the question of
remedy, Roadway was entitled to show that Cefalu in-
deed dissembled in his employment application to the
company. Cefalu wrote that he “resigned” from his previ-
ous position. In fact, according to the minutes of the Motor
Carrier Labor Advisory Council meeting on September 1,
1998, at which Cefalu unsuccessfully contested his termi-
nation, he was laid off because of his “recklessness result-
ing in a serious accident while on duty . . . [when he] fell
asleep and struck a guardrail.” Cefalu, in turn, should
have the opportunity to show that Roadway does not
terminate everyone with such a record, perhaps if the
person has had a clean record for a certain number of
years in the interim, or other extenuating circumstances
exist.
The ALJ’s evidentiary sanction may have been necessary
to address Roadway’s noncompliance with the discovery
order for the merits phase of the case, because Roadway’s
stonewalling deprived Cefalu of his ability to present his
defense. No such effect, however, was present at the
remedial stage. Roadway’s withholding of the identity of
its informant in no way prevented Cefalu from contesting
Roadway’s claim that reinstatement was an inappropriate
remedy because of public safety. Nothing about how, why,
or when Roadway learned about Cefalu’s misstatements
14 No. 06-1873
is pertinent to Cefalu’s effort to keep his job despite his
conceded earlier problems. If the facts are as Roadway
contends, then public-safety concerns, or even regulatory
rules, may make it impossible for Roadway to reinstate
Cefalu. Roadway therefore should have been permitted
to refer to Cefalu’s earlier driving record during the
remedial stage. The Board abused its discretion in disal-
lowing Roadway’s public-safety argument against the
reinstatement remedy. We therefore remand the case to
the Board for further proceedings on remedy.
V
Last, we consider Cefalu’s motion asking this court to
strike Roadway’s brief and part of Roadway’s Supplemen-
tal Appendix. We criticized the use of motions to strike for
this purpose in Redwood v. Dobson, 476 F.3d 462, 470-71
(7th Cir. 2007). What Cefalu probably wanted was either
summary affirmance or dismissal of the petition, either of
which would be a proper sanction in an appropriate case.
That said, we read the statement of facts in Roadway’s
brief with some concern. Much of what Roadway states as
fact, using citations to the record, is based only on the offer
of proof that Roadway’s attorney presented to the ALJ
rather than any actual proof. Particularly troublesome
is Roadway’s statement that “[t]he reasons Cefalu con-
cealed [his driving history from Roadway] . . . was that he
knew divulging it would eliminate any chance of Roadway
hiring him.” Roadway’s record citation for this “fact” is its
counsel’s characterization of Cefalu’s action as such to the
ALJ. This does not satisfy Seventh Circuit Rule 28(c),
which states that “[n]o fact shall be stated in this part of
the brief unless it is supported by a reference to the page
or pages of the record or the appendix where that fact
appears.”
No. 06-1873 15
Whether by deceit or laziness, Roadway’s failure to
comply with Circuit Rule 28 is inexcusable. Although we
decline to impose more than a warning on Roadway and its
counsel at this time, we will not hesitate to go further
if similar violations recur.
VI
In summary, we DENY Roadway’s petition for review to
the extent that it challenges the Board’s decision that it
violated the STAA and the Board’s affirmance of the
sanction that the ALJ imposed during the merits stage. We
GRANT the petition to the extent that it challenges the use
of the sanction in the remedy stage of the proceedings. We
REMAND the case to the Board for reconsideration of the
appropriate remedy for the violation.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-25-07