Retaliation and whistle-blower claims are on the rise, including those based on the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century ("AIR21"), which prohibits carriers from discriminating against those who report alleged violations of the FARs or other aviation safety standards. Cases involving interpretation of AIR21, or of other statutes such as the Sarbanes-Oxley Act ("SOX") that incorporate AIR21's elements and burdens of proof, have started to make their way to the Circuit Courts of Appeals, providing us with insight on how such claims will be analyzed. In a recent decision arising under SOX, the Second Circuit expressed its view on these issues for the first time. Bechtel v. ARB, 2013 U.S. App. LEXIS 4539 (2d Cir. March 5, 2013).
Showing how long these cases can take to get resolved, Bechtel filed his SOX claim almost 10 years ago, after he was terminated by his employer, CTI. The case had a checkered procedural history, including a decision in CTI's favor by the Administrative Law Judge ("ALJ"); a remand by the Administrative Review Board ("ARB") because of legal errors by the ALJ related to the applicable burdens of proof; and a second decision in CTI's favor by the ALJ that was affirmed by the ARB even though it found that decision "not easily deciphered." The ARB found that errors the ALJ had made in the second decision regarding the burden-shifting requirements under SOX (and thus under AIR21) were harmless because the ALJ's evidentiary findings established that Bechtel had failed to prove that his protected activity was a contributing factor in his termination. The Second Circuit affirmed the ARB's ruling, finding that the ARB did not act arbitrarily or capriciously, or abuse its discretion, in affirming the ALJ's dismissal of the complaint.
In discussing the relevant burdens of proof under AIR21, which apply to SOX, the court concluded that, to prevail, the claimant must prove by a preponderance of the evidence that: (1) he or she engaged in protected activity; (2) the employer knew that the claimant engaged in the protected activity; (3) the claimant suffered an unfavorable personnel action; and (4) the protected activity was a contributing factor in the unfavorable action. The court observed that this four-part framework applies both when deciding whether the allegations are legally sufficient to justify further investigation and when an ALJ determines whether the claimant has satisfied his or her evidentiary burden. At the evidentiary stage, however, the fourth element requires that the claimant prove by a preponderance of the evidence that the protected activity contributed to the adverse action, not just that the circumstances were sufficient to raise the inference that the protected activity was a contributing factor. Even if the claimant can establish each of these four elements, the employer still may avoid liability if it can prove, by clear and convincing evidence, that it would have taken the same unfavorable personnel action in the absence of the protected activity.
Bechtel is just the latest effort by the courts – as well as the ALJs and ARB – to explain how the AIR21 burdens of proof work. These decisions are not always easily harmonized. Compare Ameristar Airways, Inc. v. ARB, 650 F.3d 562, 566-67 (5th Cir. 2011) (evaluating AIR21 claim under McDonnell Douglas burden-shifting framework; once claimant adduces evidence of pretext, the burden-shifting framework "drops out," and trier of fact must determine whether protected activity contributed to adverse employment action and whether employer can prove it would have taken the same action regardless of protected activity) with Araujo v. New Jersey Transit Rail Operations, Inc., 2013 U.S. App. LEXIS 3380 at *17 (3rd Cir. Feb. 19, 2013) (Federal Rail Safety Act ("FRSA") claim; holds that McDonnell Douglas does not apply and that "the AIR-21 burden-shifting framework that is applicable to FRSA cases is much easier for a plaintiff to satisfy than the McDonnell Douglas standard").
One thing that is clear is that AIR21 claims are becoming more prevalent, and that they need to be handled carefully from the outset, especially given the possibility that an OSHA reasonable cause finding may include a requirement that the employee be returned to work pending further appeal.
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