NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted December 22, 2010*
Decided December 27, 2010
Before
WILLIAM J. BAUER, Circuit Judge
JOHN DANIEL TINDER, Circuit Judge
DAVID F. HAMILTON, Circuit Judge
No. 10‐1587
BEVERLY E. ROBINSON, Petition for Review of an Order of the
Petitioner, Administrative Review Board.
v. No. 07‐070
UNITED STATES DEPARTMENT OF
LABOR,
Respondent,
and
MORGAN STANLEY, et al.,
Intervening‐Respondents.
O R D E R
Discover Financial Services, a wholly owned subsidiary of Morgan Stanley, fired
Beverly Robinson six months after she submitted a memo to its President and Chief
*
After examining the briefs and the record, we have concluded that oral argument is
unnecessary. Thus, the appeal is submitted on the briefs and the record. See FED. R. APP. P.
34(a)(2)(C).
No. 10‐1587 Page 2
Financial Officer reporting improper business practices. Robinson claims that Discover
violated the Sarbanes‐Oxley Act by discharging her in retaliation for her protected activity
of reporting corporate fraud. See 18 U.S.C. § 1514A. After a ten‐day hearing, an
Administrative Law Judge determined that Discover fired her for poor performance. The
Administrative Review Board affirmed the ALJ’s decision and dismissed her complaint.
Because substantial evidence supports the Board’s determination that Discover did not
terminate her as a result of any protected activity, we deny the petition for review.
Robinson began working as a senior auditor for Discover in 2000. During her first
year of work, her supervisors complained on four separate occasions that she was abrasive,
unable to accept feedback, and needed to improve her communication skills. And in the
overall evaluation of Robinson’s first year of work, one supervisor reported that although
she was an experienced auditor, she had difficulty meeting deadlines and interacting with
clients and coworkers.
A year after Robinson joined Discover, she found what she thought to be an
improper accounting practice: Discover was not “charging off” its customer bankruptcies
within the required 60 days of receiving notice of the bankruptcy. Robinson believed that
this practice improperly inflated Discover’s assets. She discussed her concerns with an
attorney at Discover and her supervisors, and recorded those concerns in her audit report.
One year later, in response to Robinson’s poor first‐year evaluation citing missed
deadlines, combativeness, and inability to accept criticism, her supervisor began the first
step in Discover’s progressive disciplinary process. He placed Robinson on a performance‐
action plan to address “her adversarial stance toward colleagues and clients” and her
inability to accept feedback. Robinson’s attitude and productivity improved briefly, but in
early 2003 several supervisors met with her to discuss continued reports of her poor
interaction with coworkers and clients. Later that year, one supervisor reported to Anthony
DeLuca, the global head of the internal audit department for Morgan Stanley, that Robinson
was one of his worst employees. When Robinson’s performance still did not improve,
Discover placed her on another action plan and denied her a raise. Her supervisor then
initiated a “360 Review” of her work, a process that involved gathering written evaluations
about Robinson from some of her past and present coworkers and supervisors.
On February 5, 2004, before her 360 Review was completed, Robinson submitted a
memo to Discover’s President and its Chief Financial Officer, reporting what she perceived
as thirteen “financial, operational, regulatory, and legal risks” that Discover faced. These
risks included personal use of company cell phones by employees, wasteful technology
expenditures, delayed audit reporting, and lack of computer security. She also repeated her
No. 10‐1587 Page 3
contention from three years earlier that Discover was impermissibly delaying charging off
bankruptcies.
Discover immediately launched an investigation into her accusations and hired an
outside audit firm to investigate her claims. Three months after Robinson submitted her
memo, the results of the investigation revealed that some of Robinson’s claims had merit,
but that she contributed to some of the problems she identified, such as delayed audits. The
audit firm found no evidence of intentional misconduct or fraud and determined that
Discover’s charging off practices complied with the law. It shared these results with
Robinson.
Meanwhile, one month after Robinson wrote her memo, a human‐resources
representative prepared a report of the feedback from Robinson’s 360 Review and presented
it to Robinson. The feedback largely echoed the previous, longstanding complaints that she
was difficult to work with, unwilling to accept criticism, and did not meet her deadlines. In
June 2004, Robinson’s new supervisor, Vesela Zlateva, observed that Robinson largely
ignored the feedback from the 360 Review. She then placed Robinson on yet another action
plan—this time warning her that failure to improve could result in termination. In another
attempt to strengthen Robinson’s professional development, Discover hired an executive
coach to work with her on the weaknesses identified in her action plans.
But in late July 2004, Zlateva complained that Robinson was still missing deadlines.
She then implemented the next step in Discover’s discipline process and gave Robinson a
“Job in Jeopardy” letter, which alerted Robinson that she had 15 days to demonstrate an
improvement in her performance, or she would face termination. But Robinson continued
to miss deadlines, and Zlateva prepared a termination letter two weeks later. DeLuca, who
was kept apprised of the problems with Robinson, gave final approval for this decision, and
Discover fired Robinson by the end of August.
To prevail under Sarbanes‐Oxley, Robinson must prove by a preponderance of the
evidence that (1) she engaged in protected activity; (2) Discover knew about this activity; (3)
she suffered an unfavorable employment action; and (4) the protected activity was a
contributing factor in the unfavorable action. Harp v. Charter Commc’ns, Inc.,
558 F.3d 722,
723 (7th Cir. 2009). To establish that she engaged in protected activity, Robinson must show
that she had an objectively reasonable belief that the conduct that she complained of
constituted fraud as described in 18 U.S.C. § 1514A(a)(1). Welch v. Chao,
536 F.3d 269, 275
(4th Cir. 2008).
The ALJ determined that Robinson had engaged in protected activity—limited to the
portion of her 2004 memo that discussed Discover’s policy of charging off bankruptcies.
No. 10‐1587 Page 4
But the ALJ found that Robinson could not prove that her protected activity contributed to
her discharge. Even though DeLuca knew about Robinson’s protected activity, the ALJ
credited his testimony that Robinson’s poor performance evaluations and personnel record,
not her 2004 memo, motivated his decision to approve her discharge. The ALJ also credited
Zlateva’s testimony that she did not even know any details about Robinson’s protected
activity when she decided to request her discharge, so that activity could not have
influenced her actions. The ALJ acknowledged that the timing of Robinson’s
termination—six months after her 2004 memo—provided circumstantial evidence of
retaliation. But the ALJ determined that Robinson’s poor performance, which began shortly
after she started working for Discover and was never remedied, led to her discharge.
Because these performance problems preceded her protected activity, the ALJ concluded
that the protected activity was not a contributing factor to her discharge.
On administrative review, the Board agreed that Robinson’s 2004 memo included
protected activity, but added that her original report in 2001 about the charging off practices
also was protected. Still, the Board agreed that Robinson could not prove by a
preponderance of the evidence that her protected activity contributed to her termination.
We will uphold the Board’s decision unless it was “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706(2)(A). Its findings of
fact must be supported by substantial evidence.
Id. § 706(2)(E); Roadway Express, Inc. v. U.S.
Dep’t of Labor,
612 F.3d 660, 664 (7th Cir. 2010). For purposes of this appeal, we assume that
Robinson engaged in protected activity beginning in 2001 and focus on whether substantial
evidence supports the Board’s view that the activity did not contribute to her discharge.
Robinson argues that the Board incorrectly concluded that Zlateva, not DeLuca,
decided to fire her. The testimony from Zlateva and DeLuca, however, provided the ALJ
with a substantial basis for finding that even though DeLuca approved Zlateva’s decision, it
was Zlateva who was the actual decision‐maker. In any case, the ALJ also permissibly
credited their testimony that Robinson’s accusations about Discover’s practices did not
influence their disciplinary decisions. Robinson disputes these credibility determinations,
along with several other of the ALJ’s credibility determinations. But nothing in the record
suggests that these rulings are arbitrary, and we will defer to the ALJ’s findings because
they are supported by substantial evidence. Roadway Express,
612 F.3d at 664.
Robinson also raises numerous evidentiary challenges. She maintains that the ALJ
should have compelled the Department of Labor to produce its response to her OSHA
complaint and that the ALJ should have allowed her to present certain testimony from her
witnesses. She also contends that the ALJ should not have considered the 360 Review
because, she argues, it is hearsay. But as with her credibility challenges, Robinson has not
No. 10‐1587 Page 5
shown these rulings to be arbitrary or capricious, and so we again defer to the ALJ’s
findings. Roadway Express,
612 F.3d at 664.
Next Robinson contends that she missed several deadlines after February 2004
because she was busy compiling paperwork for the investigation of her fraud allegations.
These missed deadlines, she continues, were related to her protected activity, and Discover
should not have factored them into the decision to fire her. But Discover relied on the
pattern of missed deadlines throughout her four years at Discover, not just during the four‐
month fraud investigation. The pattern remained unacceptable, even apart from the
investigation. In fact, between June—after the investigation ended—and her discharge
three months later, Robinson missed 22 deadlines. And Discover said that it fired her
because of other serious deficiencies as well, which Robinson failed to resolve despite offers
of assistance from her supervisors. Specifically, from the time that she arrived at Discover
in 2001, Robinson’s performance evaluations consistently criticized her belligerent
demeanor and her refusal to accept feedback. Her supervisors offered to help her rectify
these failings, providing her with three action plans, a 360 Review, an executive coach, and
a Job‐in‐Jeopardy letter. But after Discover allowed her four years to correct her chronic
shortcomings, she never showed the necessary improvement. Because a mountain of
evidence demonstrates Robinson’s history of unabated poor performance, the Board’s
ruling that Robinson’s fraud memo did not contribute to her discharge was not arbitrary or
capricious.
Finally, Robinson questions the wisdom of the entire statutory scheme for review of
whistleblower complaints. She laments the strikingly low success rate of these claims and
attributes it, in part, to what she considers the bias of OSHA, ALJs, and the Board. But our
review is limited to ensuring that the administrative record adequately supports the
agency’s decision. Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc.,
435 U.S.
519, 549 (1978); Fleszar v. U.S. Dep’t of Labor,
598 F.3d 912, 914‐15 (7th Cir. 2010). Evaluating
the effectiveness of the procedures themselves is beyond our purview.
The petition for review is DENIED.
