“An agency’s conclusions of law are reviewed de novo and its findings of fact are reviewed for substantial evidence.” (citing Willy v. Admin. Rev. Bd., 423 F.3d 483, 490 (5th Cir.2005))
How later courts described this case
- “An agency’s conclusions of law are reviewed de novo and its findings of fact are reviewed for substantial evidence.” (citing Willy v. Admin. Rev. Bd., 423 F.3d 483, 490 (5th Cir.2005))
Written by the judges who cited it.
The opinion
Case: 14-60061 Document: 00512834360 Page: 1 Date Filed: 11/12/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 14-60061 United States Court of Appeals
Fifth Circuit
FILED
AMERISTAR AIRWAYS, INCORPORATED, November 12, 2014
Lyle W. Cayce
Petitioner Clerk
v.
ADMINISTRATIVE REVIEW BOARD, UNITED STATES DEPARTMENT
OF LABOR,
Respondent
Petition for Review of the Final Decision and Order of the
United States Department of Labor Administrative Review Board
Before REAVLEY, SMITH, and SOUTHWICK, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
This court previously affirmed the Administrative Law Judge’s (“ALJ”)
determination that Ameristar Airways was liable for discharging Thomas
Clemmons in violation of the Wendell H. Ford Aviation Investment and Reform
Act for the 21st Century (“AIR21”), 49 U.S.C. § 42121. We remanded for the
determination of a single issue: whether an e-mail found by Ameristar after
Clemmons was fired “was of such severity that [he] would have been
terminated on those grounds alone . . . .” Ameristar Airways, Inc. v. Admin.
Rev. Bd., 650 F.3d 562, 570 (5th Cir. 2011) (alteration in original) (quoting
McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352, 362–63 (1995)). On
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remand, the ALJ determined that Ameristar failed to meet the high burden of
proof required in AIR21 cases. The decision was affirmed by the
Administrative Review Board (“ARB”). Ameristar now petitions for our review,
arguing that it proved the validity of its defense. The petition is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
In September 2002, Ameristar Airways hired Thomas Clemmons as its
Director of Operations. His duties included hiring and scheduling pilots,
maintaining training records, and updating manuals and charts.
Soon after he was hired, pilots complained to Clemmons that several of
Ameristar’s practices violated Federal Aviation Administration (“FAA”)
regulations. Clemmons was told that Ameristar pressured pilots to violate
FAA duty-time restrictions, which forbid pilots from being on duty longer than
16 consecutive hours in any 24-hour period. See 14 C.F.R. § 125.37. On
December 17, 2002, Clemmons e-mailed Ameristar President Thomas
Wachendorfer, Vice President of Operations Lindon Frazer, and Head of
Dispatch Stacy Muth to notify them of his concerns about these complaints.
Clemmons also raised concerns about Ameristar’s practice of requiring
pilots to confer with company officials before recording any maintenance
problems in their logbooks. He believed that requirement also violated FAA
regulations.
Later that month, Clemmons complained to Muth that Ameristar was
sharing another airline’s call signal without FAA approval. Clemmons offered
to request a new signal for Ameristar flights, but Frazer instructed him not to
do so. Ameristar was later fined $123,000 for this violation.
The following week, Clemmons and his chief pilot met with an FAA
official at Ameristar’s headquarters and reported their concerns about duty-
time and call-signal violations. Management was aware of the meeting.
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Shortly thereafter, Frazer recommended to Wachendorfer that Clemmons be
terminated. Wachendorfer agreed. Clemmons was terminated on January 20,
2003.
Throughout the subsequent litigation and unemployment compensation
proceedings, Ameristar asserted varying reasons for why Clemmons was
terminated. The ALJ determined that Ameristar fired him in violation of 49
U.S.C. § 42121. We affirmed as to liability. Ameristar Airways, 650 F.3d at
570-71. At the current point in the litigation, the only issue is whether an e-
mail found by Ameristar after he was fired “was of such severity that [he]
would have been terminated on those grounds alone,” such that back pay
should have ended when the e mail was discovered. Id. at 570 (alteration in
original) (quoting McKennon, 513 U.S. at 362–63).
Clemmons was responsible for preparing pilot schedules. Frazer and
Wachendorfer instructed Clemmons to prepare a “two weeks on, one week off
schedule.” Clemmons attempted to prepare those schedules. On January 9,
2003, Wachendorfer sent a memorandum to Clemmons to notify him that the
schedule he prepared was unsatisfactory. Clemmons submitted a revised
schedule. Wachendorfer again rejected it. Ultimately, Frazer scheduled the
pilots for 15 days on and 6 days off.
After this exchange, Clemmons sent an e-mail to Ameristar pilots
explaining the revised schedule. That clearly disrespectful e-mail is the after-
acquired evidence that concerns us. It read:
Today I submitted a revised schedule to Mr.
Wachmeoffendorfer as per his demand. It was 14 on and 7 off as
promised when you were hired. It was (surprise, surprise) not
acceptable. He added days to give you 15 on and 6 off so you may
have a weekend off. Really you have only 5.5 days off and work
15.5 days. I DID NOT MAKE THIS SCHEDULE AND I AM
SORRY! It is effective immediately.
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I have received a few resignations. If you decide to leave
please be very explicit in your letter of resignation. I would expect
you to cite your concerns and address each one, ie concerns about
safety, pay was not as promised, days off and on are not as
promised, having to ask permission before log book write ups,
encouragement to violate duty rest time rules, etc…
I will support fully your unemployment claims by sending a
letter, on company letter head, supporting your individual claims.
I will furnish each of you a copy of your training records and a
letter recommendation if needed.
Hopefully I will not be here much longer myself. If I can help
you in any way please let me know…while I am still the DO. Again
I thank you all for your support. Good Luck to us all!
Tommy
In the e-mail, in which he crudely referred to Wachendorfer as “Mr.
Wachmeoffendorfer,” Clemmons implicitly encouraged pilots to leave the
company. Ameristar did not discover the e-mail until March 28, 2003, two
months after Clemmons was terminated.
Following his termination, Clemmons filed a claim for unemployment
compensation benefits with the Texas Workforce Commission (“TWC”).
Ameristar contested the claim. Ameristar made filings in the case on February
5, March 31, April 4, and June 26, 2003. Even though the March, April, and
June filings were all submitted after Ameristar had discovered Clemmons’s e-
mail, none mentioned the e-mail as one of the reasons for his termination.
The TWC initially granted Clemmons’s request for unemployment
benefits. Ameristar appealed. At a hearing in June 2003, Ameristar for the
first time relied on the e-mail as one of the reasons for termination. Based on
that new information, the TWC reversed its award of benefits.
In April 2003, while the TWC proceeding was pending, Clemmons filed
a complaint with the Occupational Safety and Health Administration
(“OSHA”), alleging that Ameristar terminated him in violation of the
whistleblower protections of AIR21. AIR21 protects airline employees who
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report violations of federal regulations from discharge or discrimination. See
49 U.S.C. § 42121. In his complaint, Clemmons alleged Ameristar violated
AIR21 by terminating him after he reported violations of FAA regulations. On
May 9, Ameristar submitted a full position statement to OSHA wherein it
identified the e-mail as one of the reasons for Clemmons’s termination. After
conducting an investigation, OSHA found that Ameristar had violated AIR21
and ordered Ameristar to pay back wages.
Ameristar appealed and an ALJ affirmed, finding Ameristar liable for
retaliation and awarding Clemmons $56,746.23 in back wages. Ameristar next
appealed to the ARB. The ARB vacated and remanded because of legal error.
On remand, the ALJ again found Ameristar liable for retaliation and
reinstated the damages award. On appeal, the ARB affirmed the ALJ’s
decision but reduced the back pay award to $37,995.09 to reflect a deduction
in temporary income benefits and other earnings.
Ameristar then petitioned for our review. We held that substantial
evidence supported the ARB’s finding that Ameristar discharged Clemmons in
violation of AIR21. Ameristar Airways, 650 F.3d at 570. We also ruled, though,
that the ALJ erred in failing to consider whether the back pay award should
be reduced in light of the after-acquired evidence about the e-mail. Id.
Ameristar urged that even if it terminated Clemmons for impermissible
reasons, it would have fired him for the proper reason of his insubordinate e-
mail. We agreed that the argument had to be considered. Id. (citing
McKennon, 513 U.S. at 362). Because the ALJ failed to do so, we remanded for
further consideration and to “adjust the back pay award if necessary.” Id.
On remand, the ALJ concluded that Ameristar had failed to prove by
clear and convincing evidence that it would have terminated Clemmons solely
on the basis of the e-mail. The ARB affirmed. Ameristar now petitions for
our review. Ameristar argues that the ARB erred in holding that it must prove
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the after-acquired evidence defense by clear and convincing evidence instead
of a preponderance of the evidence. Ameristar also contends the ARB erred in
concluding that it failed to meet its burden of proving that it would have
terminated Clemmons on the basis of the e-mail alone.
DISCUSSION
This court must uphold an administrative agency’s decision unless it is
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law . . . .” 5 U.S.C. § 706(2)(A). An agency’s conclusions of law are
reviewed de novo and its findings of fact are reviewed for substantial evidence.
Willy v. Admin. Rev. Bd., 423 F.3d 483, 490 (5th Cir. 2005). “Under the
substantial evidence standard, the ARB’s decision must be upheld if,
considering all the evidence, a reasonable person could have reached the same
conclusion as the ARB.” Williams v. Admin. Rev. Bd., 376 F.3d 471, 476 (5th
Cir. 2004). “Substantial evidence” means “more than a mere scintilla but less
than a preponderance.” Id. (quotations and citation omitted).
AIR21 provides protections to encourage airline employees to report FAA
violations. It also prohibits airlines from penalizing an employee for reporting
a violation and permits an award of monetary relief for employees who have
been wrongfully discharged or suffered discrimination. See 49 U.S.C. § 42121.
Even if liability is established, relief may not be ordered if the employer
“demonstrates by clear and convincing evidence that [it] would have taken the
same unfavorable personnel action in the absence of that behavior.” §
42121(b)(2)(B)(iv).
Monetary relief may also be limited through use of after-acquired
evidence. In our previous opinion, we noted that “‘where there is after-acquired
evidence of wrongdoing that would have led to termination on legitimate
grounds had the employer known about it,’ back pay should be limited to the
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period ‘from the date of the unlawful discharge to the date the new information
was discovered.’” Ameristar Airways, 650 F.3d at 570 (quoting McKennon, 513
U.S. at 362). Now that the ALJ has applied the McKennon standard following
the remand, our focus is whether the standard was applied correctly.
I. Standard of Proof
Ameristar argues that the ARB erred in holding that it must prove its
after-acquired-evidence defense by clear and convincing evidence. It
maintains that AIR21 does not identify the standard of proof for this defense.
McKennon is silent on the issue. In its remand order, the ARB instructed the
ALJ to consider the proper standard, saying that it was “strange that the
burden of proof would change in this case where the after-acquired evidence
involved an incident occurring before the termination but merely discovered
afterwards; that would result in a windfall to the employer solely because it
learned of such information later.” On remand, the ALJ did not conduct an in-
depth analysis of the issue, noting “I see no reason not to accept the [ARB’s]
determination that Ameristar’s burden of proof is clear and convincing
evidence; especially in the absence of a showing of Congress’s intent to find
otherwise.”
On appeal from that ruling, the ARB provided a detailed analysis of the
standard of proof. The ARB rejected Ameristar’s argument that AIR21 is silent
on the question. After a complainant shows a prima facie violation, relief may
not be ordered under AIR21 if an employer proves “by clear and convincing
evidence that [it] would have taken the same unfavorable personnel action in
the absence of that behavior.” 49 U.S.C. § 42121(b)(2)(B)(iv). According to the
ARB, the only purpose of the after-acquired evidence is to limit relief already
granted, not to alter a finding of liability. The ARB held that the clear and
convincing standard applies to all situations where an employer is seeking to
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avoid paying back wages, regardless of whether it is relying on information
acquired before or after termination.
Ameristar argues the ALJ and ARB misinterpreted the language of the
statute. It contends that Section 42121(b)(2)(B)(iv) only applies when an
employer relies on pre-termination evidence to avoid paying back wages. In
its view, the ARB improperly interpreted the section as applying to “any issue
related to damages.” Ameristar suggests that the section ultimately deals with
the issue of establishing liability, not damages.
Ameristar relies on a Supreme Court case, Desert Palace, Inc. v. Costa,
539 U.S. 90, 99 (2003), to support its argument that when Congress has
intended to create a heightened-proof requirement, it has been “unequivocal”
in so stating. According to Ameristar, Congress has not unequivocally stated
that evidence acquired after termination is subject to a heightened-proof
requirement in AIR21 cases and, thus, there can be no such requirement.
Instead, Ameristar argues, the default preponderance of the evidence standard
applies to what must be shown using after-acquired evidence.
The Secretary responds that the ARB correctly held that Section
42121(b)(2)(B)(iv) applies in all situations in which relief is at issue, regardless
of whether the issue relates to the relief that may be awarded based on pre-
termination evidence or the limitations that may be placed on relief based on
after-acquired evidence. The Secretary also suggests that Congress intended
to make it difficult for employers to avoid paying damages in “mixed-motive
cases” in order to protect whistleblowers. Further, this “plain reading” of the
statute avoids a windfall to employers.
The Secretary presents the more well-reasoned argument. AIR21
imposes a heightened burden of proof for employers seeking to avoid providing
“relief.” As the ARB stated, imposing a heightened burden of proof on
employers relying on pre-termination evidence, but not imposing such a
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burden on employers relying on after-acquired evidence, would be an anomaly
favorable to employers. We hold that the heightened burden applies equally
in all instances in which an employer is seeking to avoid providing relief,
regardless of whether the employer is relying on pre-termination evidence or
after-acquired evidence.
II. Whether Ameristar Met Its Burden
This court remanded to the ARB to resolve whether Clemmons’s e-mail
to pilots, discovered by Ameristar two months after Clemmons was terminated,
“was of such severity that [he] would have been terminated on those grounds
alone . . . .” Ameristar Airways, 650 F.3d at 570 (alteration in original; quoting
McKennon, 513 U.S. at 362–63). Ameristar claims it made this showing.
The ALJ determined that Ameristar failed to provide clear and
convincing proof that it would have terminated Clemmons solely on the basis
of the e-mail. The ALJ based its decision, in part, on Ameristar’s “shifting and
contradictory responses” to Clemmons’s discharge. The ALJ pointed out that
Ameristar had three opportunities to provide the e-mail as one of the reasons
for termination in its filings to the TWC and failed to do so. Although
Ameristar did mention the e-mail in the May OSHA filing and at the June
hearing, these contradictory responses could validly be seen as creating
ambiguity, not clarity, as to whether it would have terminated Clemmons on
the basis of the e-mail alone. Ameristar did not provide any evidence other
than the e-mail itself. Coupled with the discredited testimony of Ameristar’s
managers, the ALJ determined that, without any additional evidence,
Ameristar was unable to meet its burden.
Ameristar maintains that the ALJ’s reliance on the TWC filings is
unreasonable. It admits that the e-mail was not referenced in the three TWC
filings. It urges, however, that this is insignificant. According to Ameristar,
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the March TWC filing was filed only three days after the e-mail was discovered
and was essentially just a copy of what was previously filed with the TWC on
February 5. Moreover, there is no evidence that the HR representative who
filed the TWC document was made aware of the e-mail. Ameristar makes the
same arguments with regard to the April filing, which was made less than a
week later. It contends that failing to mention the e-mail in the June 26 filing
is insignificant because the e-mail was already referenced at the June 20
hearing. Finally, Ameristar suggests the TWC filings do not constitute full
position statements but rather merely responses to questions. When it did
eventually file a full position statement on May 9 in response to the OSHA
filing, it expressly mentioned the e-mail as one of the reasons for Clemmons’s
termination.
Ameristar further argues that the ARB ignored the severely
contemptuous nature of the e-mail and failed to acknowledge the “sole
inference arising from this e-mail and its context: Ameristar would never have
continued to employ Clemmons after learning that he was undermining its
president and actively seeking to destroy it.”
Ameristar may be correct that many employers would terminate an
employee after discovering Clemmons’s e-mail. But in this case, the ALJ had
completely discredited the testimony of Ameristar’s managers, and Ameristar
offered no evidence other than the e-mail. Consequently, there is substantial
evidence to support the ALJ’s determination that Ameristar failed to prove its
after-acquired-evidence defense by clear and convincing evidence.
Petition for review DENIED.
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