Harley Marine Services, Inc. v. U.S. Department of Labor

Case: 15-14110 Date Filed: 01/26/2017 Page: 1 of 11
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14110
________________________
Agency Docket No. ARB 13-076
HARLEY MARINE SERVICES, INC.,
Petitioner,
versus
U.S. DEPARTMENT OF LABOR,
ADMINISTRATIVE REVIEW BOARD,
JOSEPH D. DADY, Captain,
Respondents.
________________________
Petition for Review of a Decision of the
Occupational Safety and Health Administration
________________________
(January 26, 2017)
Before WILSON and JULIE CARNES, Circuit Judges, and TREADWELL, *
District Judge.
*
Honorable Marc T. Treadwell, United States District Judge for the Middle District of
Georgia, sitting by designation.
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PER CURIAM:
Pursuant to 49 U.S.C. § 31105(d), Harley Marine Services, Inc. (Harley)
seeks review of the Secretary of Labor’s final order that Harley terminated the
employment of Captain Joseph Dady in violation of the Seaman’s Protection Act
(SPA), 46 U.S.C. § 2114. After thorough review and with the benefit of oral
argument, the Secretary’s determination is affirmed.
I.
Dady was a tug captain for Harley. 1 On October 12, 2010, Dady’s mate ran
the barge they were towing into a dock, an allision in maritime terminology, 2 while
Dady was asleep and off-watch. The mate, as well as the rest of Dady’s crew, then
failed to timely report the allision to Dady or Harley. When Dady later towed the
now oil-laden barge out to sea, the barge began to take on water due to a puncture
from the allision. This is when Dady first learned of the allision. Dady followed
procedure upon learning of the allision, and the barge was saved.
Harley sent an investigator, Captain Graham, to determine the reason the
allision had not been timely reported. Graham determined that even though Dady
was asleep and off-watch, he should be held responsible for the failure to report
and should be discharged, which Harley promptly did.
1
The facts are taken from the Administrative Law Judge’s decision. ALJ Decision, HMS App.
Vol. I. They are supported by substantial evidence.
2
An “allision” is “[t]he contact of a vessel with a stationary object such as an anchored vessel
or a pier.” Allision, Black’s Law Dictionary (10th ed. 2014).
2
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Dady filed a whistleblower complaint with the Occupational Safety and
Health Administration, alleging that he had been terminated in retaliation for
engaging in activities protected by the SPA. OSHA disagreed, and Dady filed an
objection and requested a hearing before an administrative law judge. After a
three-day evidentiary hearing, the ALJ agreed with Dady and ordered his
reinstatement. Harley appealed to the Administrative Review Board (ARB), which
affirmed.
On appeal, Harley argues that the ARB erred in concluding that: (1)
substantial evidence supported the ALJ’s finding that Harley knew that Dady
engaged in protected activity; (2) substantial evidence supported the ALJ’s finding
that protected activity contributed to the termination of Dady’s employment; (3)
substantial evidence supported the ALJ’s finding that Harley did not prove by clear
and convincing evidence that it would have fired Dady regardless of the protected
activity; and (4) that reinstatement was an appropriate remedy.
II.
Under the Administrative Procedure Act, we review whether the Secretary’s
“action[s], findings, and conclusions” are “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). On an
appeal following an evidentiary hearing, this means “[w]e conduct de novo review
of the Secretary of Labor’s legal conclusions, but we test the Secretary’s factual
findings for substantial evidence” in the agency record. Stone & Webster Const.,
Inc. v. U.S. Dep’t of Labor, 684 F.3d 1127, 1132 (11th Cir. 2012); see 5 U.S.C.
§ 706(2)(E); see also Atlanta Gas Light Co. v. FERC, 140 F.3d 1392, 1397 (11th
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Cir. 1998) (noting that the substantial evidence standard “is no more than a
recitation of the application of the ‘arbitrary and capricious’ standard to factual
findings” (quoting Md. People’s Counsel v. FERC, 761 F.2d 768, 774 (D.C. Cir.
1985))); Ass’n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors of the Fed.
Reserve Sys., 745 F.2d 677, 684 (D.C. Cir. 1984) (“The distinctive function of
paragraph (E)—what it achieves that paragraph (A) does not—is to require
substantial evidence to be found within the record of closed-record proceedings to
which it exclusively applies.”).
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.” Thus,
substantial evidence exists even when two inconsistent
conclusions can be drawn from the same evidence. The
substantial evidence standard limits the reviewing court
from “deciding the facts anew, making credibility
determinations, or re-weighing the evidence.”
Stone & Webster Const., Inc., 684 F.3d at 1133 (citations omitted).
III.
There are four elements to Dady’s SPA retaliation claim: (1) Dady engaged
in protected activity; (2) Harley knew of the protected activity; (3) Dady suffered
an adverse employment action; and (4) the protected activity contributed to the
adverse employment action. See 46 U.S.C. § 2114; 49 U.S.C. §§ 31105(b),
42121(b).3 An employer can defeat an SPA claim by demonstrating by clear and
3
In relevant part, 46 U.S.C. § 2114 provides:
A person may not discharge or in any manner discriminate
against a seaman because . . . the seaman in good faith has reported
or is about to report to the Coast Guard or other appropriate
Federal agency or department that the seaman believes that a
4
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convincing evidence that the employer would have taken the same personnel action
in the absence of the protected activity. Id.
IV.
A. Harley’s Stipulation of Protected Activity
Harley stipulated before the ALJ that Dady engaged in protected activity.
As the ALJ explained in his order:
[Harley] stipulated that it does not contest the issue of
protected activity. [Harley] listed, at RX 24 (Corrected),
the only protected activity it understood [Dady] to be
alleging: (1) [Dady]’s direct complaint in January 2009
to the U.S. Coast Guard that [Harley] dumped raw
sewerage in New York Harbor; (2) steering failure in
April 2010; (3) report regarding issues with QMs in May
2010; (4) and [Dady]’s request to a local union
representative to complain to the Coast Guard in Seattle
about inadequate crewing of [Harley]’s vessel. I accept
that the four activities above constitute protected activity.
[Dady] clarified, at the hearing, that the subject matter of
the fourth protected activity stipulated to—improper
violation of a maritime safety law or regulation prescribed under
that law or regulation has occurred[.]
....
A seaman alleging discharge or discrimination in violation of
subsection (a) of this section, or another person at the seaman's
request, may file a complaint with respect to such allegation in the
same manner as a complaint may be filed under subsection (b) of
section 31105 of title 49. Such complaint shall be subject to the
procedures, requirements, and rights described in that section,
including with respect to the right to file an objection, the right of a
person to file for a petition for review under subsection (c) of that
section, and the requirement to bring a civil action under
subsection (d) of that section.
46 U.S.C. § 2114(a)(1)(A), (b).
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crewing—includes both improper lookout and violations
of the 12-hour work rule. See Tr. at 215. [Harley’s New
York General Manager] testified that it was his
understanding that improper lookout is a subset of the
manning issue. Id. at 746.
ALJ Decision at 30, HMS App. Vol. I.
In its post-trial briefing, Harley appeared to back away from its stipulation of
protected activity, an effort the ALJ noted and rejected:
[Harley] repeatedly raises the question of whether the
protected activities actually took place (e.g., “Captain
Dady appeared to testify that he reported [the incident
related to sewage] to the Coast Guard at some unknown
time, but the record contains no other proof in this
regard.” Post-trial Brief at 10-12 (emphasis in original)).
However, since [Harley] stipulated to the protected
activities, they will be presumed to have taken place for
the purpose of analyzing employer knowledge.
Id. at 30 n.4.
Harley seems to resurrect this strategy on appeal, arguing in its briefs that it
“stipulated only that element (1) was satisfied – that [Dady] engaged in protected
activity,” but that “[w]ith respect to [Dady]’s allegations of protected activity,
[Harley] did not stipulate to any ‘assertions made therein.’” HMS Opening Brief at
14. Indeed, many of Harley’s arguments in its briefs and at oral argument weave
in assertions that Dady did not engage in the stipulated protected activities, subtly
challenging the ALJ’s interpretation of the stipulation. At oral argument, when
asked to explain its position on this issue, Harley maintained that the ALJ abused
his discretion when, for example, he concluded that Harley had stipulated that
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Dady’s protected activity included complaining to the Coast Guard about improper
or inadequate crewing on Harley’s boats. The Court disagrees.
In a letter dated February 20, 2013, Harley stipulated: “For purposes of this
matter only, . . . that element ‘(1) Protected Activity’ is satisfied, meaning that it
will not challenge that element (that the complainant engaged in protected
activity). By so stipulating [Harley] is not affirming that any of the alleged
protected activity was correct in any assertions made therein, or otherwise even
occurred for purposes outside this matter.” Stipulation Letter, HMS App. Vol. I
(emphasis added). Harley offered no clarification when it entered the stipulation
on the record at trial. See ALJ Tr. 14:13-19, HMS App. Vol. I.
The ALJ reasonably interpreted Harley’s stipulation. Indeed, no other
interpretation makes sense. Harley stipulated in “this matter” that Dady engaged in
protected activity, thus relieving Dady of his burden to prove that he had. Thus,
when the ALJ moved to the second element of Dady’s claim, employer knowledge,
the question the ALJ addressed was whether Harley had knowledge of the
stipulated protected activity. Under the interpretation of the stipulation urged by
Harley, Dady, to prove employer knowledge, would have to first prove that he had
engaged in the same protected activity that Harley had stipulated to for the purpose
of the first element of Dady’s claim. Clearly, this interpretation renders the
stipulation meaningless. In short, Harley’s stipulation that Dady engaged in his
“alleged protected activity” in “this matter” established exactly that.
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B. Employer Knowledge and Contributing Factor
Given that the ALJ properly interpreted Harley’s stipulation of protected
activity, the question of whether Dady established the remaining elements of his
claim is straightforward. Substantial evidence supports the Secretary’s conclusion
that Harley knew of Dady’s stipulated protected activities, most particularly,
Dady’s inadequate crewing complaints to the Transportation Safety Advisory
Committee. As noted by the ALJ, Dady made numerous internal complaints about
his inadequate crewing concerns and followed up on them internally. Much to
Harley’s chagrin, Dady even mentioned his inadequate lookout concerns to the
media.4 Harley’s management was aware of Dady’s previous official reporting of
sewage-runoff and steering-failure violations, and thus was aware of Dady’s
propensity to file official reports. Dady’s official-reporting propensity and
persistence in addressing his inadequate crewing concerns, internally and with the
public, is substantial circumstantial evidence that Harley decision-makers knew
that Dady had officially reported or would report the issues he had raised.
Similarly, substantial evidence supports the Secretary’s determination that
Dady’s protected activities were a contributing factor in Dady’s discharge. Dady
worked for Harley for a little over three years. Over the course of his employment,
4
Dady’s media contacts followed an incident that did not involve Harley’s boats, and were not
included in the stipulation of protected activity. But contrary to Harley’s argument, the ALJ did
not find that this constituted protected activity. Rather, the ALJ reasoned that Harley’s
dissatisfaction with Dady’s complaints to the media about inadequate lookouts in that situation
provided indirect evidence that Harley knew Dady was, as stipulated, reporting his concerns
about inadequate lookouts on Harley’s boats to the Coast Guard, which contributed to his
discharge. ALJ Decision at 35-36, 41, HMS App. Vol. I.
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he engaged in a course of protected activities, and these activities drew animus
from Harley officials. For example, the operations engineer for Harley’s New
York operation expressed displeasure that Dady had reported the steering failure to
the Coast Guard, referring to him as “a pain in the ass.” OSHA Tr. 46:15-24, HMS
App. Vol. III. Also, other employees who reported problems were labeled as being
“as bad as Dady.” Id. at 46:24-47:3.5
It appears that the “last straw” occurred shortly before the allision, when
Dady discussed his inadequate lookout concerns with the media. Substantial
evidence supports the ALJ’s finding that Harley Franco or his sister Deborah
Franco, Harley’s two top-ranking executives, near the end of September, 2010,
conveyed their displeasure and their desire to fire Dady regarding his discussions
with the media. The ALJ painstakingly details substantial evidence that the
allision investigation was a witch-hunt to support Dady’s predetermined
termination. Under these facts, the ALJ reasonably concluded that the allision, a
month after the threat to fire Dady for his media contacts, was simply the first
excuse Harley found to terminate Dady. Similarly, the ALJ reasonably concluded
that because Dady would not drop his crewing concerns (but rather was following
up on them internally, with the media, and through official reporting), Harley fired
him. While Dady’s going public with the concerns may have been the last straw,
5
Harley mischaracterizes the “as bad as Dady” quip as “a complete red herring” relating to the
“mechanic’s group teasing Capt. Dady for having equipment breakdowns,” “not whistleblowing
activity.” HMS Reply Brief at 16-17. The ALJ found that these statements related chiefly to
Dady’s reputation for reporting safety concerns (ALJ Decision at 50, HMS App. Vol. I), and this
finding is supported by the record (ALJ Tr. at 565:11-17, HMS Sup. App. to Reply Brief; OSHA
Tr. 46:13-47:7, HMS App. Vol. III).
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the ALJ reasonably concluded that Dady’s official reporting was another,
overlapping straw; in other words, it was a contributing factor.
Accordingly, substantial evidence supports the ALJ’s conclusion that Harley
knew that Dady was officially reporting his inadequate crewing concerns, and that
this knowledge was a contributing factor in Harley’s decision to fire Dady.
C. Harley’s Asserted Independent Nondiscriminatory Reasons
It follows that Harley did not show by clear and convincing evidence that it
would have fired Dady even if he had not engaged in the stipulated protected
activities. Aside from emphasizing the integrity of its own investigation in the face
of the numerous shortcomings detailed by the ALJ, Harley offers its internal
procedure manual and the termination of another tug captain, as a supposed
comparable employee scenario, to prove that it would have fired Dady regardless
of his protected activities. But substantial evidence supports the ALJ’s finding that
Harley’s internal manual did not unambiguously require Dady’s termination. And
the termination of the other tug captain is easily distinguishable: that captain
actually caused a collision and then lied about it in his report; Dady, on the other
hand, did not cause the allision and truthfully reported as soon as he knew about it.
D. The Order of Reinstatement
Harley argues that the ALJ and ARB erred in ordering Dady’s reinstatement.
The ALJ reasoned that reinstatement is a presumptive remedy under applicable
regulations and found that the evidence presented at trial did not overcome that
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presumption. 6 Because the remedy is presumptive and automatic, we reject
Harley’s contention that a party waives his right to reinstatement when he requests,
as Dady did, front pay instead of reinstatement. Similarly, we reject Harley’s due-
process argument; because reinstatement is the presumptive remedy, Harley was
on notice that it had to overcome this presumption to prevent Dady’s reinstatement.
V.
In conclusion, Harley has failed to demonstrate that the Secretary’s
determination—that Harley terminated Dady in violation of the SPA and that Dady
should be reinstated—was “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law” or “unsupported by substantial evidence.”
AFFIRMED.
6
The ALJ relied on regulations that were promulgated under the Surface Transportation
Assistance Act (STAA), apparently as applicable under 46 U.S.C. § 2114(b)’s incorporation of
“procedures, requirements, and rights described in” designated sections of the STAA. ALJ
Decision at 45, HMS App. Vol. I. The ARB, on the other hand, relied on the new SPA
counterpart regulation—29 C.F.R. § 1986.109—promulgated as an interim rule in early 2013.
ARB Decision at 5, HMS App. Vol. I; see also Procedures for the Handling of Retaliation
Complaints under the Employee Protection Provision of the Seaman’s Protection Act (SPA), as
Amended, 78 FR 8390 (February 6, 2013). The ARB decision did not recognize that 29 C.F.R.
§ 1986.109 was not relied on by the ALJ and was not promulgated until after Dady filed his
complaint. Regardless, Harley did not challenge on appeal that, under these regulations,
reinstatement was Dady’s presumptive remedy in this action, and even cites 29 C.F.R.
§ 1986.109(d) as controlling, arguing that under these facts, reinstatement is not “appropriate”
within the meaning of the regulations. See HMS Opening Brief at 30; HMS Reply Brief at 28-29.
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