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Administrative Review Board

200 Constitution Ave. NW

Washington, DC 20210-0001

In the Matter of:

SHANNON GLADDEN,

ARB CASE NO. 2022-0012

COMPLAINANT,

THE PROCTOR AND GAMBLE

COMPANY,

ALJ CASE NO. 2021-SOX-00012

ALJ MONICA MARKLEY

DATE: May 9, 2023

RESPONDENT.

Appearances:

For the Complainant:

Spencer H. Silvergate, Esq. and Craig Salner, Esq.; Clarke Silvergate,

P.A.; Miami, Florida

For the Respondent:

Scott A. Carroll, Esq. and David A. Nenni, Esq.; Jackson Lewis P.C.;

Cincinnati, Ohio; Jeffrey A. Schwartz; Jackson Lewis P.C.; Atlanta,

Georgia

Before HARTHILL, Chief Administrative Appeals Judge, and BURRELL

and PUST, Administrative Appeals Judges; BURRELL, Administrative

Appeals Judge, Concurring in Part and Dissenting in Part

DECISION AND ORDER

HARTHILL, Chief Administrative Appeals Judge:

Shannon Gladden (Complainant or Gladden) filed a complaint under the

Sarbanes-Oxley Act of 2002 1 (SOX), as amended, and its implementing regulations, 2

18 U.S.C. § 1514A.

29 C.F.R. Part 1980 (2022).

alleging that The Procter and Gamble Company 3 (Respondent or P&G) unlawfully

retaliated against her. After an investigation, the U.S. Department of Labor’s

(Department) Occupational Safety and Health Administration (OSHA) dismissed

her complaint. Complainant filed objections and requested a hearing with an

Administrative Law Judge (ALJ). Respondent filed a Motion to Dismiss, arguing

that res judicata barred the action. The ALJ issued an Order Granting

Respondent’s Motion to Dismiss (D. & O.) and denied Complainant’s Motion for

Reconsideration.

Complainant timely appealed the ALJ’s decisions to the Administrative

Review Board (ARB or Board). After the parties had completed briefing on appeal,

the Board issued an order inviting the Assistant Secretary of Labor (Assistant

Secretary or amicus) for OSHA to submit a brief as amicus curiae. 4 The Assistant

Secretary filed an amicus brief and the parties filed responses. For the following

reasons, we now affirm the ALJ’s D. & O. and Order Denying Complainant’s Motion

for Reconsideration.

BACKGROUND

Complainant worked for Respondent as a relationship manager for a contract

between Respondent and Promoveo Health (Promoveo) to sell Respondent’s dental

products. 5 On or around September 2018, Respondent’s human resources

Respondent has represented to the Administrative Review Board and the

Administrative Law Judge that “The Procter & Gamble Company is not a properly named

respondent. Complainant Shannon Gladden’s employer was The Procter & Gamble

Distributing LLC, an indirectly but wholly owned subsidiary of The Procter & Gamble

Company.” Respondent (Resp.) Response to Assistant Secretary Amicus Brief (Response to

Amicus Br.) at n.1; see also Resp. Appendix (App.) at Tab 1, Resp. Memorandum in Support

of Motion for Dispositive Action (Mot. for Dispositive Action) at 1 n.1. However, it does not

appear that Respondent requested either adjudicatory body to substitute the subsidiary

company as the named respondent in this matter.

Specifically, the ARB invited briefing on “[w]hether the doctrine of res judicata

applies to bar SOX whistleblower retaliation claims that remain within the Department’s

adjudicative tribunal, after a federal court has issued a final decision in a case involving the

same cause of action, when the federal court’s decision occurred more than 180 days after

the SOX claim had been filed with OSHA and the complainant could have removed the

OSHA claim to federal court.” ARB Order Inviting Amicus Briefing By Assistant Secretary

for OSHA at 5.

Gladden v. Proctor & Gamble Distrib. LLC, No. 1:19-CV-2938-CAP-JSA, 2021 WL

4929913, at *1 (N.D. Ga. Sept. 8, 2021) (decision adopting magistrate judge’s report and

department (HR) began investigating complaints that Complainant had violated

company policy by sharing confidential information about the Promoveo contract

with outside parties and contacting Promoveo employees about their salary. 6

During the investigation, Complainant admitted to discussing compensation with

Promoveo employees, and Respondent placed her on paid leave. 7 On September 28,

2018, Respondent terminated Complainant’s employment, stating that Respondent

had lost trust and confidence in Complainant’s ability to perform her job. 8

On March 21, 2019, Complainant filed gender discrimination and retaliation

claims with the Equal Employment Opportunity Commission (EEOC), alleging that

Respondent had discriminated against her based on her gender in violation of Title

VII of the Civil Rights Act of 1964 (Title VII). 9 A party that intends to file a Title

VII discrimination lawsuit in court must first file the charge with the EEOC. 10 If

the EEOC dismisses the claim or has not brought a civil action under the charge

within 180 days after the filing of the charge, the EEOC must issue a notice of right

to sue (right-to-sue notice) permitting the party to file a civil action within 90

days. 11

On March 22, 2019, Complainant filed a complaint with OSHA, alleging that

Respondent had violated the SOX by discharging her in retaliation for her reporting

that Promoveo was falsely portraying itself as a minority-owned business. 12 A party

that alleges discrimination under the SOX must initially file a complaint with the

Department and OSHA will begin an investigation into the complaint. 13 A

recommendation (Decision Adopting R&R)), aff’d, No. 21-13535, 2022 WL 2974066 (11th

Cir. July 27, 2022), cert. denied, No. 22-713, 143 S.Ct. 1044, 2023 WL 2563446 (2023).

Decision Adopting R&R at *2.

Id. at *3.

Id.

Resp. App. at Tab 6, Resp. Memorandum in Support of Motion to Dismiss (Mot. to

Dismiss) at 2; Decision Adopting R&R at *1.

Forehand v. Fla. State Hosp. at Chattahoochee, 89 F.3d 1562, 1567 (11th Cir. 1996)

(citation omitted).

42 U.S.C. § 2000e-5(f)(1); 29 C.F.R. §1601.28(b). The complainant may also request a

right-to-sue letter after 180 days after filing the charge. 29 C.F.R. §1601.28(a)(1).

D. & O. at 1-2. Complainant also raised allegations of “wire fraud and fraud against

the shareholders.” Id. at 2 (inner quotations omitted).

18 U.S.C. § 1514A(b)(1); 29 C.F.R. § 1980.104. The party files the complaint with

OSHA. See 29 C.F.R. § 1980.103.

complainant may bring an action in federal district court if OSHA has not issued a

final decision within 180 days of the filing of the complaint. 14

The EEOC issued a right-to-sue notice to Complainant, stating that it was

unlikely that the EEOC would be able to complete its investigation within 180

days. 15 The EEOC therefore terminated its processing of the charge and

Complainant had the right to bring her civil action. 16 On June 26, 2019,

Complainant filed a wrongful discharge claim under Title VII in the U.S. District

Court for the Northern District of Georgia. 17 Complainant claimed that Respondent

had unlawfully terminated her employment because she was a woman and because

she engaged in protected activity by informing HR that the investigation into her

actions was being conducted in a more antagonistic manner compared to

investigations of her male colleagues. 18 On October 9, 2019, P&G filed its Answer in

the Title VII action in which P&G claimed that “Plaintiff’s claims are barred, in

whole or in part, by the doctrines of waiver, estoppel, and/or unclean hands.” 19

During OSHA’s investigation into the SOX complaint, P&G filed a letter with

the OSHA investigator on July 25, 2019, in which P&G noted that Gladden’s SOX

complaint had been “superseded” by Gladden’s Title VII lawsuit, filed on June 26,

2019. 20 In particular, P&G argued that “Gladden’s federal lawsuit claims defeat her

SOX claims with OSHA because she asserts that she would still be employed by

P&G if it were not for gender discrimination and her complaints about gender

discrimination.” 21 In addition, P&G argued that “[t]his means that she contends her

18 U.S.C. § 1514A(b)(1); 29 C.F.R. § 1980.114.

Complainant (Comp.) App. at Tab F, EEOC Notice of Right to Sue.

Id.

Resp. App. at Tab 6, Resp. Mot. to Dismiss at 2; see also Amicus Brief (Br.) at 4.

Decision Adopting R&R at *4, 8.

Resp. Supplemental (Suppl.) App. at Tab 14, Resp. Answer at 12. The Respondent’s

Answer includes a certificate of service, certifying that Respondent electronically served the

Answer on Gladden’s counsel. Id. at 16.

Resp. Suppl. App. at Tab 13, Resp. Response Letter to Comp. June 24, 2019 Letter

at 8. P&G provided Gladden’s counsel with a copy of its July 25, 2019 letter to OSHA. See

Resp. Suppl. App. at Tab 13 (July 25, 2019 email from David A. Nenni to Craig Salner).

at 8.

Resp. Suppl. App. at Tab 13, Resp. Response Letter to Comp. June 24, 2019 Letter

purported complaints about Promoveo’s alleged breaches of contract would not have

resulted in her termination and SOX is not implicated in any way.” 22

On September 19, 2019, OSHA issued Complainant a “kick out” letter

informing her that she could bring her SOX complaint in federal district court

because the Secretary of Labor had not issued a decision on her claim within 180

days. 23 Complainant did not move her SOX claim to federal court but instead left it

within OSHA’s jurisdiction.

On February 8, 2021, OSHA completed its investigation and issued findings

that there was no reasonable cause to believe that Respondent had violated the

SOX with regard to Complainant’s termination, and therefore dismissed the

complaint. 24 On March 9, 2021, Complainant objected to the findings and requested

a hearing before an ALJ. 25 On April 23, 2021, Respondent submitted initial

disclosures to Gladden in the SOX matter pending before the ALJ. 26 Respondent’s

Initial Disclosures stated: “P&G . . . objects to this appeal because Gladden is

pursuing piecemeal litigation about the subject of her termination in two separate

forums.” 27 Furthermore, on May 4, 2021, Respondent filed a memorandum in

support of its Motion for Dispositive Action in the SOX action, in which Respondent

noted that: “P&G . . . objects to issues of Gladden’s discharge being heard piecemeal

in different venues.” 28

On January 11, 2021, both Complainant and Respondent moved for summary

judgment in the Title VII action. 29 On February 1, 2021, Respondent filed a

Id.

Comp. App. at Tab G, OSHA Letter to Comp. The e-mail accompanying the OSHA

letter states: “Please see the attached OSHA letter advising you of the ‘kick out’ option for

this matter.” See Comp. App. Tab G (September 19, 2019 e-mail from Federal Investigator

to Craig Salner).

D. & O. at 2; Comp. App. at Tab I, Investigator’s Findings.

D. & O. at 2.

Resp. Supp. App. at Tab 15, Resp. Initial Disclosures.

Id. at 1 n.1. P&G provided Gladden’s counsel with a copy of its Initial Disclosures.

See Resp. Supp. App. at Tab 15 (April 23, 2021 email from David A. Nenni to Craig Salner).

Resp. App. at Tab 1, Resp. Mot. for Dispositive Action at 7 n.6. Respondent provided

notice of its Motion for Dispositive Action to Gladden’s counsel. See Resp. App. at Tab 1

(Resp. Notice of Motion for Dispositive Action).

Resp. Br. at 5; Decision Adopting R&R at *1.

memorandum in opposition to Complainant’s Motion for Summary Judgment

(Opposition Memorandum). In the Opposition Memorandum, P&G stated that

“Gladden has a pending OSHA [c]harge she brought pursuant to the SarbanesOxley Act (‘SOX’), in which she brought similar . . . claims regarding purported

retaliation for compliance concerns. The elements of a SOX retaliation claim stand

independent of and are unrelated to Title VII claims.” 30 P&G went on to claim that

“[t]hese are different statutes concerning different fact situations,” and that the

court “should ignore any effort by Gladden to conflate the two.” 31

On July 26, 2021, the presiding magistrate judge issued a report and

recommendation (R&R) that the district court judge grant Respondent’s Motion for

Summary Judgment in the Title VII action. 32 Complainant filed objections to the

R&R. On September 8, 2021, the district court judge issued a final order adopting

the R&R and dismissing the Title VII action, concluding that there was no genuine

issue of material fact that Respondent’s stated reason for Complainant’s firing was

not pretextual and that Complainant had failed to establish a prima facie case of

retaliation. 33

On August 26, 2021, the ALJ took official notice of the magistrate judge’s

R&R upon Respondent’s request. 34 On September 24, 2021, Respondent filed a

motion to dismiss the SOX claim, noting the district court judge’s dismissal order

and arguing that res judicata prohibited further prosecution of the SOX claim

before the ALJ. 35

On October 22, 2021, the ALJ granted Respondent’s motion to dismiss. The

ALJ considered whether Respondent had proven the four required elements of res

judicata: (1) a court of competent jurisdiction entered a final decision on the merits

in a previous action, (2) the current action involves the same parties or their privies

in the previous action, (3) the current action raises claims that were litigated or

Amicus Br. Exhibit (Ex.) A, Resp. Memorandum in Opposition (Mem. Opp’n) to

Comp. Motion for Summary Judgment (Mot. Summ. J.) at 14-15 (citations omitted).

Id. at 15.

Resp. App. at Tab 4, Resp. Notice of R&R to the Office of Administrative Law

Judges.

Decision Adopting R&R at *1, 7, 8.

D. & O. at 2.

Id. at 1-2.

could have been raised in the previous action, and (4) the cases involve the same

cause of action or common nucleus of operative fact. 36 The ALJ concluded that the

first two of four required elements of a res judicata defense, a prior final decision by

a court of competent jurisdiction and a second action involving the same parties,

were met. 37

For the third required element, the ALJ noted that the parties did not litigate

the SOX claim in district court but that Respondent had argued that the claim could

have been brought with the Title VII claim. 38 Respondent cited Evans v. Affiliated

Computer Services, 39 an ALJ decision in which a complainant had filed an

employment retaliation case in federal district court and a SOX complaint with

OSHA that both involved the same operative set of facts. 40 After the district court

had dismissed the retaliation case, an ALJ dismissed the SOX claim because there

had been no impediment to the complainant consolidating the SOX claim with the

retaliation claim in federal court. 41 Like in Evans, the ALJ noted that she and the

district court judge had to discuss the same facts involving Complainant’s

termination in considering the parties’ arguments and that Complainant could have

easily consolidated her SOX claim with her Title VII action. 42 The ALJ therefore

found that the case met the third element of res judicata. 43

Last, the ALJ determined whether the cases involved the same cause of

action, or nucleus of operative facts. The ALJ cited Thanedar v. Time Warner, Inc., 44

Id. at 3-4 (citing Abbs v. Con-Way Freight, Inc., ARB No. 2008-0017, ALJ No. 2007STA-00037, slip op. at 7 (ARB July 27, 2010)). Although the ALJ used the term “should,”

the correct inquiry is whether the claim could have been raised in the other action. In re

Piper Aircraft Corp., 244 F.3d 1289, 1296 (11th Cir. 2001). See also McNeill v. Crane

Nuclear, Inc., ARB No. 2002-0002, ALJ No. 2001-ERA-00003, slip op. at 4 (ARB July 29,

2005) (“Claim preclusion refers to litigation of a matter that never has been litigated but

could have been litigated in an earlier suit.”) (citations omitted).

D. & O. at 3-4 (citation omitted). The ALJ noted that the parties did not dispute the

first two elements. Id. at 4.

Id.

ALJ No. 2012-SOX-00035 (ALJ Jan. 29, 2019).

D. & O. at 4.

Id.

Id. at 4-5.

352 F. App’x 891, 898 (5th Cir. 2009).

in which the Fifth Circuit Court of Appeals concluded that a plaintiff’s Title VII suit

and subsequent SOX complaint arose from the same core set of facts and that the

later suit was barred by res judicata, even if the retaliatory motives in both cases

were different. 45 The ALJ determined that Complainant’s two actions involved the

same nucleus of operative facts because both cases focused on whether Respondent

had a legitimate reason for discharging Complainant and examined the

circumstances of the termination. 46 Therefore, the ALJ concluded that the fourth

required element of res judicata was met and granted the motion to dismiss. 47

On November 1, 2021, Complainant filed a Motion for Reconsideration of the

dismissal. 48 Complainant argued that the ruling morphed her permissive right to

remove the SOX claim into an obligation, that the cases cited by Respondent were

distinguishable, and that the application of res judicata created a manifest

injustice. 49 On November 16, 2021, the ALJ denied the motion, holding that

Complainant had failed to present evidence of an intervening change in the law,

new evidence, a clear error, or manifest injustice and that the motion consisted

mostly of the same arguments Complainant had made in her opposition to the

motion to dismiss. 50

JURISDICTION AND STANDARD OF REVIEW

The Secretary of Labor has delegated to the Board the authority to act on

appeal from ALJ decisions arising under the SOX and issue agency decisions in

those matters. 51 In SOX cases, the Board will affirm the ALJ’s factual findings if

D. & O. at 5-6 (citing Thanedar, 352 F. App’x at 898).

Id. at 6.

Id. at 6-7. Complainant had moved to require Respondent’s compliance with

discovery in her opposition to the motion to dismiss, which the ALJ denied as moot. Id. at 7.

Order Denying Comp. Motion for Reconsideration at 1.

Id.

Id. at 3.

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of

Responsibility to the Administrative Review Board (Secretary’s discretionary review of ARB

decisions)), 85 Fed. Reg. 13186 (Mar. 6, 2020).

supported by substantial evidence but reviews all conclusions of law de novo. 52 The

Board reviews orders on motions to dismiss on a de novo basis. 53

DISCUSSION

Complainant contests the ALJ’s orders dismissing her complaint and denying

her motion for reconsideration, arguing that res judicata does not bar her SOX

claim. Under the doctrine of res judicata, also known as claim preclusion, a final

judgment on the merits of an action precludes the parties or their privies from

relitigating claims that were or could have been raised in the prior action. 54 Res

judicata arises from a judgment. 55 Thus, if two actions are pursued simultaneously,

the first judgment to be entered is entitled to res judicata effect without regard to

the order in which the two were commenced. 56

The doctrine protects against “the expense and vexation attending multiple

lawsuits, conserves judicial resources, and fosters reliance on judicial action by

minimizing the possibility of inconsistent decisions.” 57 A party seeking to apply the

doctrine must establish that (1) a court of competent jurisdiction entered a final

decision on the merits in a previous action, (2) the current action involves the same

parties or their privies in the previous action, (3) the current action raises claims

that were litigated or could have been raised in the previous action, and (4) the

cases involve the same cause of action or common nucleus of operative fact. 58 We

review de novo whether Respondent properly established each element.

29 C.F.R. § 1980.110(b); Burns v. The Upstate Nat’l Bank, ARB No. 2017-0041, ALJ

No. 2017-SOX-00010, slip op. at 2 (ARB Feb. 26, 2019).

Yadav v. Frost Bank, ARB No. 2020-0048, ALJ No. 2020-SOX-00017, slip op. at 4

(ARB June 24, 2021).

In re Piper Aircraft Corp., 244 F.3d at 1296; see Abbs v. Con-Way Freight, Inc., ARB

No. 2008-0017, ALJ No. 2007-STA-00037, slip op. at 7 (ARB July 27, 2010). See generally 18

CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND

PROCEDURE § 4402 (3d ed. Apr. 2023 update).

Id. § 4404.

Id.

Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1238 (11th Cir. 1999) (quoting

Montana v. United States, 440 U.S. 147, 153-54 (1979)).

Abbs, ARB No. 2008-0017, slip op. at 7; In re Piper Aircraft Corp., 244 F.3d at 1296;

cf. McNeill, ARB No. 2002-0002, slip op. at 4.

1. Final Decision on the Merits and Same Parties

First, a court of competent jurisdiction must have entered a final decision on

the merits in a previous action. Complainant contends that res judicata does not

apply to her claim because the SOX whistleblower claim was never adjudicated in

any forum. However, this factor concerns only whether a court with proper

jurisdiction rendered a final decision in a previous action. Complainant does not

argue that the federal district court lacked jurisdiction over the Title VII claim in

the previous action, and summary judgments are considered final judgments on the

merits. 59 Therefore, the first element is met because the district court ordered

summary judgment on Complainant’s Title VII claim.

Next, res judicata requires that both cases involve the same parties or their

privies. There is no dispute that Complainant and Respondent were the parties in

the district court action and in the action before the ALJ. Therefore, the second

element of res judicata is also met.

2. Claims Previously Litigated or Could Have Been Litigated

The third required element of res judicata considers whether the second

action involves claims that were litigated or could have been litigated in the

previous action. 60 It is a “well-established rule that a plaintiff cannot avoid the

effects of res judicata by ‘splitting’ his claim into various suits, based on different

legal theories.” 61 Therefore, the fact that Complainant’s SOX claim involved

allegations of protected activity related to her revealing contract issues involving

Promoveo, while her Title VII action involved claims of gender discrimination and

retaliation, is a distinction that makes no difference with regard to the applicability

of res judicata.

Complainant asserts, instead, that the procedural timing of her two claims

prevents the establishment of this third element of res judicata. The facts reveal

otherwise. Complainant filed her Title VII claim on June 26, 2019. She had the

option to move her SOX claim to federal district court in early September 2019.

Bazile v. Lucent Techs., 403 F. Supp. 2d 1174, 1181 (S.D. Fla. 2005); Jang v. United

Techs. Corp., 206 F.3d 1147, 1149 (11th Cir. 2000).

In re Piper Aircraft Corp., 244 F.3d at 1296.

Riel v. Morgan Stanley, No. 06-CV-5801, 2009 WL 2431497, at * 4 (S.D.N.Y, Aug. 6,

2009) (quoting Waldman v. Vill. of Kiryas Joel, 207 F.3d 105, 110 (2d Cir. 2000)).

Respondent did not move for summary judgment on the Title VII claim until

January 11, 2021. Therefore, though she was not initially able to bring both claims

together because of statutory mandates, Complainant had at least a year to join the

SOX claim with the Title VII claim in federal court. As noted by Respondent,

Complainant could have amended her complaint in district court to include the SOX

claim as a matter of course under the Federal Rules of Civil Procedure (FRCP) by

October 23, 2019, 62 over a month after OSHA provided the “kick out” letter to

Complainant on September 19, 2019. 63 Even if she did not amend the complaint by

then, the FRCP provides that a court “should freely give leave” to amend pleadings

“when justice so requires.” 64 Therefore, Complainant could have litigated the SOX

claim in district court with her Title VII claim. She chose not to do so.

Complainant and the dissent claim that applying res judicata converts her

option to move her SOX claim to federal court into an obligation, which conflicts

with the SOX’s statutory scheme. 65 While we appreciate the significance of the SOX

statutory scheme, providing complainants with the option to keep their claims

within the Department, the language and policy of SOX do not undercut the

application of well-settled res judicata principles. 66 Complainant did not lose her

FED. R. CIV. P. 15(a)(1)(B) (“A party may amend its pleading once as a matter of

course . . . if the pleading is one to which a responsive pleading is required, 21 days after

service of a responsive pleading.”). Respondent filed its answer to the Title VII complaint on

October 2, 2019. Resp. App. at Tab 10, Resp. Opposition to Comp. Motion for

Reconsideration at 4-5.

Comp. App. at Tab G, OSHA Letter to Comp.

Fed. R. Civ. P. 15(a)(2).

See 18 U.S.C. § 1514A(b)(1)(A)-(B) (a person who alleges discharge or other

discrimination may seek relief by filing a complaint with the Secretary of Labor, or in

federal district court if the Secretary has not issued a final decision within 180 days of the

filing of the complaint).

See Woods v. Dunlop Tire Corp., 972 F.2d 36, 39-40 (2d Cir. 1992) (applying res

judicata while also acknowledging the court’s commitment to giving full effect to the Title

VII scheme set up by Congress). The dissent also argues that courts have protected a

complainant’s right to the administrative process, even when it leads to judicial inefficiency

if the complainant subsequently removes the claim to federal court. Dissent Opinion

(Dissent) at 36-38 (citing Lawson v. FMR LLC, 724 F. Supp. 2d 141, 151 (D. Mass. 2010),

rev’d on other grounds, 670 F.3d 61 (1st Cir. 2012), rev’d, 571 U.S. 429 (2014); Stone v.

Instrumentation Lab. Co., 591 F.3d 239, 249 (4th Cir. 2009)). Those cases are not applicable

here because they did not include a final decision, which is necessary for res judicata to

apply (Lawson and Stone involved collateral estoppel). After the ALJ had issued a ruling on

their SOX claims, the complainants in Lawson and Stone filed for de novo review in federal

district court pursuant to § 1514A(b)(1)(B), which prevented the ALJ’s rulings from

statutory choice of forum, and was not “obligated” to remove her SOX claim to

federal court; rather she assumed the risk that having made her choice not to join

the claims, her SOX claim might be subject to a res judicata defense. 67

Indeed, in Leon v. IDX Systems Corp., 68 the Ninth Circuit Court of Appeals

held that a complainant’s SOX claim before the Department was subject to res

judicata after the parties had litigated several claims concerning the same cause of

action, including a Title VII claim, in federal district court. 69 The court held the fact

that the complainant “did not actually bring a SOX claim [in district court] does not

preclude the satisfaction of the identity of claims requirement, because he could

have amended his complaint to add the SOX claim after 180 days had passed

without any action by the [Department].” 70

The dissent attempts to distinguish Leon as a sanctions case, rather than a

res judicata case, noting that a district court dismissed plaintiff’s initial federal

action because of spoliation of evidence and that the Ninth Circuit merely gave

effect to the first court’s sanction. We do not agree that these factual differences

meaningfully distinguish Leon from the present case. The dismissal for spoliation of

evidence in Leon was a final judgment on the merits, necessary for claim preclusion

to apply. The Ninth Circuit never expressly or implicitly suggested that a sanction

of dismissal makes the application of res judicata in that case distinguishable from

other applications of res judicata, nor that perceived bad acts on the part of a party

becoming final decisions. See Lawson, 724 F. Supp. 2d at 148, 150-52; Stone, 591 F.3d at

242, 249. In contrast, the case at hand includes a final judgment on the merits in a Title VII

suit, allowing for the application of res judicata to Complainant’s SOX suit. Furthermore,

Lawson and Stone are not applicable here because repetition in those cases “was clearly

contemplated as possible by the statute’s general provision for ‘de novo review.’” Lawson,

724 F. Supp. 2d at 151. We decline to expand the courts’ statutorily-mandated outcome in

those cases to swallow the application of res judicata in other contexts.

As noted, in Section 4 infra, the defense is subject to exceptions, such as the

opposing party’s acquiescence.

464 F.3d 951 (9th Cir. 2006).

Id. at 955-56, 963. The employer had moved to enjoin the Department’s investigation

of the SOX claim as barred by res judicata in federal court under the All Writs Act. Id. at

957. The All Writs Act “empowers a district court to issue injunctions to enforce judgments

and to reinforce the effects of the doctrines of res judicata and collateral estoppel.” Id. at

961 (quoting Charlton v. Estate of Charlton, 841 F.2d 988, 989 (9th Cir. 1988)). The district

court denied the motion to enjoin, and the Ninth Circuit reversed the order denying the

injunction and remanded the injunction issue for further consideration. Id. at 961-62.

Id. at 962 n.8.

is at all relevant to the application of the legal doctrine. Rather, the court endorsed

the use of res judicata to bar a SOX claim from continuing to be processed within

the Department after the resolution of a previous federal court action involving the

same cause of action. Indeed, the court noted that Leon, like Complainant in the

present case, had an opportunity to merge the SOX claim with the district court

action 180 days after filing the claim with OSHA. While Leon differs from this case

because there the defendant was requesting a federal court to enjoin the

Department’s processing of the SOX matter under the All Writs Act rather than

requesting an ALJ to dismiss the claim, we determine that these were merely two

different procedural mechanisms available for dismissing a claim barred by res

judicata.

The dissent further claims that the third element of res judicata is not met in

the instant case because the SOX claim could not have been brought initially with

the Title VII claim in federal court, noting that the doctrine of res judicata does not

apply to claims that arise after the filing of the initial complaint. 71 The dissent

appears to argue that the SOX claim reaching the 180-day mark permitting its

removal amounts to the maturation of a new claim, which prevents the application

of res judicata.

The dissent discusses three cases in support of this argument, all of which

hold that claims that arise during the pendency of the initial litigation are not

barred by res judicata: (1) Manning v. City of Auburn, 72 (2) Legnani v. Alitalia Linee

Aeree Italiane, S.P.A., 73 and (3) Los Angeles Branch NAACP v. Los Angeles Unified

School District. 74 All of these cases involve “a transaction [between the parties]

occurring after the commencement of the prior litigation.” 75 In Manning, the

plaintiff alleged discriminatory acts that occurred after the earlier filing of a class

Dissent at 33 (citing Addis v. Dep’t of Labor, 575 F.3d 688, 689 (7th Cir. 2009)).

953 F.2d 1355, 1360 (11th Cir. 1992) (“[W]e do not believe that the res judicata

preclusion of claims that ‘could have been brought’ in earlier litigation includes claims

which arise after the original pleading is filed in the earlier litigation.”).

400 F.3d 139, 141-43 (2d Cir. 2005) (“Claims arising subsequent to a prior action

need not, and often perhaps could not, have been brought in that prior action . . . .”)

(citation omitted).

750 F.2d 731, 739 (9th Cir. 1984) (“The scope of litigation is framed by the complaint

at the time it is filed.”).

Legnani, 400 F.3d at 141.

action lawsuit alleging a pattern of discrimination by her employer. 76 In Legnani,

the plaintiff’s retaliatory discharge claim was not barred because she had not been

fired from her job before the filing of her earlier Title VII sexual harassment

claim. 77 In Los Angeles Branch NAACP, the court held that claims of unlawful acts

of segregation committed by the defendant after the close of the previous litigation

seeking to desegregate a school district were not barred by res judicata. 78

Unlike the plaintiffs in those three cases, Complainant does not allege that

any further unlawful actions occurred after she filed her Title VII claim in federal

court. Rather, the factual predicates of Respondent’s employment termination,

which occurred before either claim was filed, are the same in both the Title VII and

SOX actions and the same underlying occurrence constitutes the cause of action.

The fact that her SOX claim reached the 180-day mark did not constitute a new

transaction between the parties or new discriminatory act giving rise to a new

claim, rather, it provided Gladden with the statutory option to move her existing

SOX claim from DOL to federal court.

Federal courts have determined that claims that are part of the same

transaction must be brought if they can be brought during the pendency of the

litigation, even if a particular claim was not yet available at the time the initial

action was filed. 79 This includes claims that involve some form of administrative

953 F.2d at 1357-58. A previous class action lawsuit had alleged that the plaintiff’s

supervisor had engaged in a pattern of discrimination including denial of overtime and sick

pay. Id. at 1357. The court dismissed plaintiff from the class action because of lack of

participation. Id. The plaintiff later filed a discrimination action alleging that her employer

began to deny her employment entitlements on the basis of sex and age after the filing of

the class action. Id. at 1357-58.

400 F.3d at 140-41. The plaintiff alleged that she was fired in retaliation for

bringing the Title VII claim. Legnani v. Alitalia Linee Aeree Italiane, S.P.A., 274 F.3d 683,

685 (2d Cir. 2001).

750 F.2d at 734-46 (applying California law).

See Stone v. Dep’t of Aviation, 453 F.3d 1271, 1278 (10th Cir. 2006) (“[D]octrine

requires a plaintiff to join all claims together that the plaintiff has against the defendant

whenever during the course of the litigation related claims mature and are able to be

maintained.”); Bravo-Pedroza v. Gonzales, 475 F.3d 1358, 1360 (9th Cir. 2007) (ruling that

doctrine of res judicata barred initiation of a second deportation case against alien on basis

of the same charges, where new charges could have been brought during pendency of prior

proceeding); Role Models Am., Inc. v. Penmar Dev. Corp., 394 F. Supp. 2d 121, 134 (D.D.C.

2005), aff’d, 216 F. App’x 5 (D.C. Cir. 2007) (holding that a plaintiff “cannot later litigate a

new claim against the same defendant (or its privy) where the facts supporting the

subsequent claim arose from the same set of events as the prior action and were known to

exhaustion requirement prior to litigation in federal court, such as Title VII claims.

Similar to SOX whistleblower complaints, Title VII discrimination claims may be

brought in federal court after the plaintiff initially files the claim with a federal

agency, the EEOC. The plaintiff in the Title VII complaint must receive permission

to file in district court from the EEOC via a right-to-sue notice, which generally

occurs either after the EEOC dismisses the claim or 180 days pass from the filing of

the claim without the EEOC filing a civil action. 80

The case of Woods v. Dunlop Tire Corp., 81 is instructive on this point. In

Woods, the Second Circuit Court of Appeals held that res judicata barred the

plaintiff’s Title VII claims even though she had not yet received her EEOC right-tosue notice at the time she filed a Labor Management Relations Act claim in federal

court, which claim involved the same cause of action and parties and was later

dismissed by summary judgment. 82 Citing Woods, in Jang v. United Technologies

Corp., 83 the Eleventh Circuit Court of Appeals held that res judicata applied to an

Americans with Disabilities Act discrimination claim, which also requires a rightto-sue notice from the EEOC for removal, after the plaintiff failed to obtain the

notice during the pendency of previous litigation involving the same cause of

action. 84 Several other circuits also have held that res judicata applies to Title VII

claims in which plaintiffs failed to take measures to avoid preclusion, despite the

the plaintiff during the pendency of the prior action . . . .”); Schwartz v. Bogen, 913 F.3d

777, 782 (8th Cir. 2019) (holding that res judicata barred ERISA violation lawsuit in federal

court because the claim ripened before the entry of a state court judgment involving same

cause of action); Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398, 403 (5th Cir. 2009) (ruling

that res judicata applied where the allegedly false advertisements at issue were aired

during the pendency of the prior claim involving the same false advertising).

42 U.S.C. § 2000e-5(f)(1) (“If a charge filed . . . is dismissed by the Commission, or if

within one hundred and eighty days from the filing . . . the Commission has not filed a civil

action . . . the Commission . . . shall so notify the person aggrieved and within ninety days

after the giving of such notice a civil action may be brought against the respondent . . . .”)

972 F.2d 36 (2d Cir. 1992).

Id. at 38-41. The court concluded that the application of res judicata was not

inconsistent with the Title VII administrative scheme, holding that “the fact that Congress

preferred that Title VII disputes be resolved in the administrative forum does not

necessarily excuse compliance with general rules governing federal litigation respecting

other potentially viable claims.” Id at 39-40.

206 F.3d at 1149.

Id. at 1149. A plaintiff is entitled to request a right-to-sue letter after 180 days of

filing a claim if the EEOC does not provide one on its own initiative. Heyliger v. State Univ.

& Cmty. Coll. Sys. of Tenn., 126 F.3d 849, 855 (6th Cir. 1997).

plaintiff’s inability to initially file the Title VII claim with other claims concerning

the same cause of action. 85 The reasoning behind these results is clear: if a plaintiff

did not have the obligation to merge the claim with a pending district court action,

“a significant fraction of legally questionable discharges would give rise to two

suits,” which would cause an “inefficient manner of litigation . . . .” 86

The dissent asserts that his approach of evaluating “the application of res

judicata at the time the complaint is filed fits the doctrine’s purpose to avoid claim

splitting in the form of unnecessary repeat litigation, especially vexatious repeat

litigation.” 87 This approach, however, would upend the basic principle that res

judicata arises from a judgment. 88 Thus, if two actions are pursued simultaneously,

the first judgment to be entered is entitled to res judicata effect without regard to

the order in which the two were commenced. 89

The dissent also expresses concern that the application of res judicata in

these circumstances could require complainants to rush to merge their SOX claims

with their concurrent district court litigation at the 180-day mark to avoid potential

dismissal on res judicata grounds. 90 While a party may need to take a few

additional procedural steps in these circumstances, the requirement is

nonburdensome and does not require efforts beyond ordinary due diligence to avoid

a race to the courthouse. 91 A SOX complainant has several options available to

avoid claim preclusion. For example, a party awaiting the 180-day mark may bring

their other claims in district court and request to stay the proceedings until they

See, e.g., Davis v. Dallas Area Rapid Transit, 383 F.3d 309, 315-16 (5th Cir. 2004)

(describing several of the circuit courts’ holdings on this issue).

Herrmann v. Cencom Cable Assocs., Inc., 999 F.2d 223, 225 (7th Cir. 1993). The

dissent’s reliance on Addis v. Dep’t of Labor, 575 F.3d 688 (7th Cir. 2009) is misplaced. The

court held that res judicata did not apply because the complainant in that case was unable

to bring her ERA claim (which, like SOX, requires DOL administrative adjudication) before

the Illinois state court and unable to bring her Illinois claim before the Department. Id. at

689. That is not the case here, however, because Gladden was able to bring her SOX claim

before the district court.

Dissent at 32.

18 WRIGHT, MILLER & COOPER, supra note 54, § 4404.

Id.

Dissent at 36.

Rivers v. Barberton Bd. of Educ., 143 F.3d 1029, 1033 (6th Cir. 1998); Heyliger, 126

F.3d at 856.

can amend the SOX claim to the pending action. 92 The complainant may also wait

to file the other claims until after the SOX claim can be brought in federal court. 93

Further, the parties can explicitly agree to split the claims into separate suits or to

not apply the statute of limitations for the other related claims while the SOX claim

matures. 94 Complainant could have employed any of these measures to avoid res

judicata but did not do so.

3. Same Cause of Action

The final element of res judicata requires that both actions involve the same

cause of action. 95 For the purposes of res judicata, cases involve the same cause of

action if they share the same nucleus of operative facts or factual predicate. 96

Courts make a fact-based inquiry to determine whether multiple actions arise out of

the same cause of action. 97 Complainant’s Title VII claim in district court alleged

that Respondent had unlawfully discriminated against her based on her gender and

retaliated against her when it terminated her employment. Complainant’s claim

before the ALJ alleged that Respondent had violated the SOX by discharging her in

retaliation for engaging in protected activity. Accordingly, both claims concern

whether her termination was unlawful and, thus, arise out of the same cause of

action. 98 Therefore, all four elements of res judicata are met.

See, e.g., Herrmann, 999 F.2d at 225.

Palka v. City of Chicago, 662 F.3d 428, 438 (7th Cir. 2011).

Id. Complainant and the amicus argue that Respondent acquiesced to claim

splitting, thereby waiving the ability to rely on a res judicata defense. However, as

discussed in Section 4 of this Decision, we find that Respondent did not acquiesce to claim

splitting.

Abbs, ARB No. 2008-0017, slip op. at 7; In re Piper Aircraft Corp., 244 F.3d at 1296.

Griswold v. Cnty. of Hillsborough, 598 F.3d 1289, 1293 (11th Cir. 2010).

Trustmark Ins. Co. v. ESLU, Inc., 299 F.3d 1265, 1269-70 (11th Cir. 2002).

In Riel v. Morgan Stanley, the court found that “[t]his action and the related action .

. . both arise out of Morgan Stanley’s termination of Riel’s employment.” No. 06-CV-5801,

2009 WL 2431497, at * 1 (S.D.N.Y, Aug. 6, 2009). Thus, the “claims asserted in [the first

action] were based on essentially the same operative facts plaintiff had relied on in his

[second action, the] SOX complaint before OSHA.” Id.

4. Exceptions to Applying Res Judicata

A. Acquiescence

When a defendant acquiesces to claim splitting, the defendant waives a res

judicata defense. 99 Consent to claim splitting may be “in express words or

otherwise.” 100 Courts have “recogniz[ed] an exemption to res judicata when the

parties have agreed in terms or in effect that the plaintiff may split his [or her]

claim.” 101

Amicus argues that the ALJ erred in dismissing this case as res judicata

because P&G acquiesced in the splitting of Gladden’s claims between the

Department and the federal district court. 102 Specifically, amicus asserts that P&G

acquiesced to parallel proceedings before the federal district court and the

Department, by (1) failing to timely object to claim splitting and (2) affirmatively

acknowledging the claim splitting prior to the federal court’s entry of judgment on

Gladden’s Title VII claim. 103 We disagree with amicus because Respondent timely

objected to claim splitting and, although it is a close call, we find that Respondent

did not expressly consent or consent “in effect” to claim splitting.

i. Respondent Timely Objected to Claim Splitting

In an effort to avoid a finding of acquiescence, P&G asserts that it made

objections to claim splitting at various times and in all forums where the cases were

pending. Specifically, P&G points to its statements in: (1) Respondent’s July 25,

Amicus Br. at 11-12. See also Riel, 2009 WL 2431497, at *6.

Lee v. Norfolk S. Ry. Co., 187 F. Supp. 3d 623, 629 (W.D.N.C. 2016), aff’d, 670 F.

App’x 777 (4th Cir. 2016) (inner quotations and citations omitted).

100

101

Id. (emphasis added) (inner quotations and citations omitted).

On appeal, Complainant raised acquiescence in its Initial Brief and Reply Brief.

Comp. Br. at 17, 21; see also Comp. Reply Br. at 5. The parties robustly briefed the issue of

acquiescence in response to the Assistant Secretary’s Amicus Brief. Complainant

specifically adopted the Assistant Secretary’s position that the ALJ erred in applying res

judicata to bar a hearing of her claims on the merits, while also noting minor opposition to

certain points in the Amicus Brief. Comp. Response to Amicus Br. at 2.

102

Amicus Br. at 13. The Assistant Secretary explained that “a defendant’s failure to

promptly object to claim splitting and a defendant’s affirmative acknowledgement that

separate claims will go forward support a finding that a defendant acquiesced to two claims

proceeding in separate forums.” Id. (citing Lee, 187 F. Supp. 3d at 629).

103

2019 Letter to the OSHA Investigator in the investigative stage of the SOX action;

(2) Respondent’s October 9, 2019 Answer in the Title VII federal court proceeding,

while the SOX action was still under investigation; (3) Respondent’s April 23, 2021

Initial Disclosures to Gladden at the ALJ adjudicatory stage of the SOX action; and

(4) Respondent’s May 4, 2021 memorandum in support of its Motion for Dispositive

Action in the SOX action before the ALJ. We examine each of these in turn.

a. Respondent’s Letter to the OSHA Investigator in the SOX Action

During OSHA’s investigation into the SOX complaint, P&G filed a letter with

the investigator on July 25, 2019, in which P&G noted that Gladden’s SOX

complaint had been “superseded” by Gladden’s Title VII lawsuit, filed on June 26,

2019. 104 P&G asserted: “Gladden’s federal lawsuit claims defeat her SOX claims

with OSHA because she asserts that she would still be employed by P&G if it were

not for gender discrimination and her complaints about gender discrimination.” 105

In addition, P&G argued that “[t]his means that [Gladden] contends her purported

complaints about Promoveo’s alleged breaches of contract would not have resulted

in her termination and SOX is not implicated in any way.” 106

A statement that a SOX claim is “superseded” by a separate Title VII claim is

neither expressly nor unambiguously an objection to splitting those two claims in

two different forums. Taken out of context, these statements could be perceived as

an indirect objection to Gladden maintaining separate claims based on the same set

of facts. Here, however, P&G made this statement to persuade OSHA to dismiss the

complaint because Gladden’s claim that she was terminated due to her gender was

inconsistent with her claim that she was terminated because of her SOX-protected

activity. This argument was made in an effort to persuade OSHA that the SOXclaim had no merit, not to suggest that it should be joined with Complainant’s Title

VII claim. 107 Hence, we are unable to conclude that these statements, standing

alone, constitute an objection to claim splitting that would put Complainant on

notice that P&G was objecting and thereby preserving its res judicata defense.

104

at 8.

Resp. Suppl. App. at Tab 13, Resp. Response. Letter to Comp. June 24, 2019 Letter

105

Id.

106

Id.

Gladden could not have removed her SOX claim to federal court at that moment in

time because her claim was still within the 180-day OSHA investigation period.

107

b. Respondent’s Answer in the Title VII Lawsuit

On October 9, 2019, P&G filed its Answer in the Title VII action, in which

P&G claimed that “Plaintiff’s claims are barred, in whole or in part, by the doctrines

of waiver, estoppel, and/or unclean hands.” 108 P&G argued that its reference to

waiver and estoppel defenses constituted an objection to claim splitting. 109 The

inclusion of boilerplate waiver and estoppel affirmative defenses in a filed Answer,

standing alone, is not a clear, unambiguous objection to claim splitting in that it

provides no notice to the other party of the specter of res judicata. Notably, Federal

Rule of Civil Procedure 8(c)(1) identifies res judicata, estoppel, and waiver as

separate and distinct affirmative defenses. 110 Although the Rule’s reference to

estoppel has been treated as including collateral estoppel (issue preclusion), a

variety of res judicata, 111 we find that P&G’s single reference to “estoppel” was

insufficient to constitute an objection to Gladden splitting her claim between the

administrative and Article III forums. A boilerplate assertion of estoppel could not

have put the Complainant on notice that P&G intended to raise or preserve the

defense of res judicata.

c. Respondent’s Initial Disclosures to Gladden in the SOX Action

On February 8, 2021, OSHA completed its investigation, and on March 9,

2021, Complainant objected to the investigator’s findings and requested a hearing

before an ALJ in the SOX matter. 112 Respondent objected to claim splitting on April

23, 2021, when it submitted initial disclosures to Gladden in the SOX matter before

the ALJ. 113 P&G stated: “P&G . . . objects to this appeal because Gladden is

pursuing piecemeal litigation about the subject of her termination in two separate

forums.” 114

108

Resp. Suppl. App. at Tab 14, Resp. Answer at 12.

109

Resp. Response. to Amicus Br. at 6, 8-9.

110

See FED. R. CIV. P. 8(c)(1).

18 WRIGHT, MILLER & COOPER, supra note 54, § 4405; see also id. at § 4402

(explaining terminology and distinction between claim preclusion (res judicata) and

collateral estoppel (issue preclusion) (citations omitted)).

111

112

D. & O. at 2.

113

Resp. App. at Tab 15, Resp. Initial Disclosures.

114

Id. at 1 n.1.

This objection was unequivocal and occurred prior to September 8, 2021—the

date the district court entered final judgment on Gladden’s Title VII claim.

Therefore, P&G sufficiently notified Complainant of potential res judicata

implications of her multiple claims and provided Complainant with the opportunity

to preserve her claims through consolidation. 115

d. Respondent’s Motion for Dispositive Action in the SOX Action

On May 4, 2021, Respondent objected to claim splitting when it filed a

memorandum in support of its Motion for Dispositive Action in the SOX action.

Respondent noted in the memorandum that: “P&G . . . objects to issues of Gladden’s

discharge being heard piecemeal in different venues.” 116 Again, this objection was

unequivocal and occurred prior to September 8, 2021—the date the district court

entered final judgment on Gladden’s Title VII claim. Therefore, P&G adequately

raised the potential res judicata implications for Complainant’s consideration and

thereby presented Complainant with an opportunity to consolidate her claims. 117

ii. Respondent Did Not Consent to Claim Splitting

Having found that P&G objected to claim splitting, we now consider whether

P&G consented expressly or “in effect.” Amicus argues that Respondent “made

affirmative statements acknowledging the claim splitting” and Respondent “in

effect consented” to claim splitting in its Opposition Memorandum. 118 Specifically,

amicus highlighted that P&G stated in its Opposition Memorandum: “Gladden has

a pending OSHA [c]harge she brought pursuant to the Sarbanes-Oxley Act (‘SOX’),

in which she brought similar, meritless claims regarding purported retaliation for

compliance concerns. The elements of a SOX retaliation claim stand independent of

and are unrelated to Title VII claims.” 119 P&G also claimed that “[t]hese are

different statutes concerning different fact situations,” and that the court “should

115

See Riel, 2009 WL 2431497, at *6.

116

Resp. App. at Tab 1, Resp. Mot. for Dispositive Action at 7 n.6.

117

See Riel, 2009 WL 2431497, at *6.

118

Amicus Br. at 13, 15-17.

Amicus Br. Ex. A, Resp. Mem. Opp’n to Comp. Mot. Summ. J. at 14-15 (citations

omitted); see also Amicus Br. at 16-17.

119

ignore any effort by Gladden to conflate the two.” 120 In Response to the argument

raised by amicus, Respondent argues that these statements do not establish any

consent to claim splitting. 121

Reviewing Respondent’s statements in context, we do not interpret them to

imply that Respondent consented “in effect” to claim splitting. In Gladden’s January

11, 2021 Motion for Summary Judgment in the Title VII action, Gladden raised

claims of gender discrimination and retaliation for opposing discrimination, 122 but

Gladden also raised allegations related to fraud and contract violations by

Promoveo. In particular, Complainant alleged that “Promoveo had several contract

violations and was committing fraud both against [P&G] and Promoveo Employees.

Gladden made Promoveo and [P&G]’s management aware of contract violations and

fraud against [P&G] and Promoveo employees.” 123 In its Opposition Memorandum,

Respondent argued that Gladden had attempted to “make this case about purported

contract noncompliance concerns or Promoveo’s corporate structure,” which

Respondent described as a “red herring.” 124

In these statements, Respondent emphasized the differences between the

SOX and Title VII actions to demonstrate Complainant’s inconsistent rationales for

Gladden’s termination, not to consent to claim splitting “in effect.” Specifically,

Respondent stated in the Opposition Memorandum that Complainant’s SOX “claim

is at odds with [Gladden’s] allegations in this case in that it involves a wholly

different alleged motivation for her discharge.” 125 Respondent further emphasized

Amicus Br. Ex. A, Resp. Mem. Opp’n to Comp. Mot. Summ. J. at 15; see also Amicus

Br. at 17. Amicus claims Respondent consented “in effect” to claim splitting, like the

defendant was found to have done in Pueschel v. United States, 369 F.3d 345 (4th Cir.

2004). Amicus Br. at 16. Amicus highlights how in Pueschel, “the defendant acquiesced to

claim splitting” because “the defendant noted that Pueschel had ‘filed another

administrative EEO complaint’ which was ‘being investigated and thus not part’ of the

lawsuit before the court.” Id. at 15-16 (citing 369 F.3d at 356).

120

Resp. Response to Amicus Br. at 14-15. P&G contends that its statements in the

Title VII case are distinct from Pueschel, because in Pueschel, the OWCP “claim was

different from the other claims and the defendant recognized this difference in briefing.” Id.

at 14. In contrast, P&G argues “Gladden’s Title VII and SOX wrongful discharge claims

concern the same decision, her discharge.” Id. at 15.

121

122

Comp. Mot. Summ. J. at 1.

123

Id. at 4 (citations omitted).

124

Amicus Br. Ex. A, Resp. Mem. Opp’n to Comp. Mot. Summ. J. at 14.

125

Id. at 15 n.5.

Gladden’s inconsistent rationales for termination, stating: “It would seem even

Gladden is not certain what it is she believes was the basis for P&G’s decision to

terminate her employment.” 126 Therefore, when Respondent highlighted differences

between the SOX and Title VII suits, Respondent was not effectively consenting to

claim splitting. Instead, Respondent was attempting to illustrate how Complainant

had advanced inconsistent theories for her termination in order to undermine

Complainant’s argument and credibility.

Respondent’s statements also do not squarely fit within the types of

statements courts have found to constitute consent to claim splitting. P&G did not

expressly or clearly consent to claim splitting, in contrast to the defendant’s

statements in Matter of Super Van, Inc. 127 The court in that case found that the

defendants acquiesced to claim splitting because they “actually stated a preference

for the splitting.” 128 When the court sua sponte raised the issue of whether the two

suits should be consolidated, defendants’ counsel “stated that the defendants . . .

preferred not to have the two actions consolidated.” 129 In the present case, unlike

the defendants in Matter of Super Van, Inc., Respondent did not clearly consent to

claim splitting or state a preference for claim splitting.

The facts in this case are also distinct from those in Lee v. Norfolk Southern

Railway Company, 130 a case cited by amicus to show that P&G consented “in effect”

to Gladden splitting her claims. 131 In Lee, the defendant’s counsel noted in a

deposition that “the agreement among counsel is that whether the OSHA

complaint can be gotten into in this lawsuit will be deferred . . . .” 132 The

126

Id.

92 F.3d 366, 371 (5th Cir. 1996). The court also found that the defendants

acquiesced to claim splitting because they never objected to claim splitting. Id.

127

128

Id.

Id. at 369. Defendants’ counsel “stated two reasons for preferring no consolidation:

the defendants (1) did not want to confuse the issues because the First Adversary

Proceeding ‘is one particular matter’ while the instant suit involved many more issues and

facts; and (2) were satisfied to leave the First Adversary Proceeding in bankruptcy court

but wanted the instant suit to go before a jury because of the larger damages at stake.” Id.

at 369 n.8.

129

187 F. Supp. 3d 623, 187 F. Supp. 3d 623 (W.D.N.C. 2016), aff’d, 670 F. App’x 777

(4th Cir. 2016).

130

131

Amicus Br. at 16-17.

132

Lee, 187 F. Supp. 3d at 629.

Court found that, even though the relevant statements were “not the pinnacle of

clarity, it was a sufficient basis to support Lee’s reliance in splitting his claims.” 133

In other words, the Court found that the defendants in effect consented to claim

splitting in the deposition statements and that, due to counsel’s statements, the

complainant was never put on notice to preserve his claims.

In the case at hand, Respondent’s Opposition Memorandum is also not the

“pinnacle of clarity,” but lack of clarity does not imply consent “in effect.” Unlike in

Lee, where the defendants expressly discussed consolidation and deferred the issue

of whether the claims would be consolidated to a later date, Respondent’s

Opposition Memorandum did not address the issues of consolidation or claim

splitting. Instead, Respondent focused on highlighting the differences in the suits to

emphasize Complainant’s inconsistent rationales for termination and undermine

Complainant’s argument.

Moreover, even if one could argue that Respondent consented “in effect” to

claim splitting in its Opposition Memorandum, Respondent subsequently raised

timely objections, which notified Complainant of the need to consolidate her

claims. 134 Therefore, we conclude that Respondent did not acquiesce to claim

splitting, either expressly or in effect.

B. Manifest Injustice

Complainant argues that, even if the elements of res judicata are met, the

doctrine should not apply because doing so would result in manifest injustice in this

case. Complainant argues that she did not engage in vexatious litigation and that

the dismissal was inconsistent with the purpose of res judicata. Further, she notes

that she did not join the SOX claim in the district court action because she was

required to initially bring the claim separately and that neither the statutory

133

Id.

P&G’s objections distinguish the instant case from Lee and Matter of Super Van, Inc.

The Lee court found that the defendant did not timely object to claim splitting while the

suits were pending at the same time, therefore the complainant was never put on notice to

preserve his claims. Id. at 630. The court in Matter of Super Van, Inc. similarly found that

the defendants acquiesced to claim splitting because they never objected to claim splitting.

92 F.3d at 371.

134

language of SOX nor OSHA’s kick-out letter provided that she had to move the

claim to federal court. 135

Courts have on rare occasions rejected strict application of res judicata when

its use would result in manifest injustice. 136 This exception should be applied only

in narrow circumstances, such as when personal liberty is at stake or in cases

involving civil commitment of the mentally ill or custody of a child. 137 The United

States Supreme Court has also “cautioned against departing from accepted

principles of res judicata,” 138 stating that there is “no principle of law or equity

which sanctions the rejection of” res judicata. 139 Because Complainant had ample

opportunity to merge her SOX claim with the Title VII action but failed to attempt

to join the two, the ALJ did not err in declining to apply the manifest injustice

exception. 140

Further, the application of res judicata in this case does not conflict with the

purpose of the doctrine. A “major function of the doctrine” is to “prevent piecemeal

litigation.” 141 Here, Respondent would have had to defend against two separate

actions in different tribunals at various times, despite Complainant’s ample

opportunity to merge the two actions in district court. Though she criticizes the

permissive language regarding removal of the claim from OSHA under the SOX

that did not apprise her of the application of claim preclusion, it was Complainant’s

obligation to organize her litigation to avoid res judicata and preserve her claims. 142

Accordingly, the ALJ correctly dismissed the claim under the doctrine of res

judicata.

135

Comp. Br. at 13-16.

Moch v. E. Baton Rouge Par. Sch. Bd., 548 F.2d 594, 597 (5th Cir. 1977), cert.

denied, 98 S.Ct. 183 (1977).

136

137

Restatement (Second) of Judgments § 26 cmt. i (1982) (updated 2022).

138

Griswold, 598 F.3d at 1294.

Id. (quoting Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394, 401 (1981) (inner

quotations omitted)).

139

Id.; see also Jang, 206 F.3d at 1149 n.3 (declining to apply manifest injustice

exception despite EEOC’s failure to issue the plaintiff with a right-to-sue letter upon

request).

140

141

Norfolk S. Corp. v. Chevron, U.S.A., Inc., 371 F.3d 1285, 1290 (11th Cir. 2004).

142

Churchill v. Star Enters., 183 F.3d 184, 191 (3d Cir. 1999).

5. Complainant’s Motion for Reconsideration

Complainant also contests the ALJ’s decision to deny her motion for

reconsideration. Granting a motion for reconsideration is appropriate when the

tribunal clearly made a mistake of fact or law or when the factual situation has

changed materially since the previous decision. 143 Rulings on motions for

reconsideration are reviewed under an abuse of discretion standard. 144 Complainant

did not allege any major factual changes between the dismissal and the motion for

reconsideration, and the ALJ did not make an error of law or fact when dismissing

the case. Therefore, the ALJ did not abuse her discretion in denying

reconsideration.

CONCLUSION

Because res judicata bars Complainant’s SOX claim against Respondent, we

AFFIRM the ALJ’s D. & O. and Order Denying Complainant’s Motion for

Reconsideration. 145

SO ORDERED. 146

____________________________________

SUSAN HARTHILL

Chief Administrative Appeals Judge

____________________________________

TAMMY L. PUST

Administrative Appeals Judge

Powers v. Pinnacle Airlines, Inc., ARB No. 2006-0078, ALJ Nos. 2006-AIR-00004,

-00005, slip op. at 8 n.13 (ARB June 28, 2007).

143

Auto. Alignment & Body Serv., Inc. v. State Farm Mut. Auto. Ins. Co., 953 F.3d 707,

719 (11th Cir. 2020) (citing Lockard v. Equifax, Inc., 163 F.3d 1259, 1267 (11th Cir. 1998)).

144

In her reply brief, Complainant requested an opportunity to present an oral

argument for this appeal. We decline this request.

145

In any appeal of this Decision and Order that may be filed, we note that the

appropriately named party is the Secretary, Department of Labor, not the Administrative

Review Board.

146

BURRELL, Administrative Appeals Judge, concurring in part, dissenting in part:

Respectfully, I dissent from the majority’s affirmance of the ALJ’s application

of res judicata. I would reverse the ALJ’s decision because the doctrine of res

judicata was not available to extinguish Complainant’s SOX claim. I concur with

the majority’s acquiescence analysis, but add that Complainant did not split her

claims, and thus the Respondent did not acquiescence to claim splitting.

BACKGROUND

On March 21, 2019, Complainant filed gender discrimination and retaliation

claims with the Equal Employment Opportunity Commission (EEOC), alleging that

Respondent had violated Title VII of the Civil Rights Act of 1964. 147 The EEOC

issued a Notice of Right to Sue to Complainant, stating that it could not complete its

investigation within 180 days. 148 On June 26, 2019, Complainant filed her Title VII

claim in the U.S. District Court for the Northern District of Georgia. 149 On

September 8, 2021, the District Court issued a final order adopting the magistrate’s

recommendation and dismissing the Title VII action. 150

On March 22, 2019, Complainant filed a complaint with OSHA, alleging that

Respondent had violated the SOX by discharging her in retaliation for her reporting

protected activities. 151 On September 19, 2019, OSHA informed Complainant that

she may bring her SOX complaint in federal court because the Department of Labor

had not issued a decision on her claim within 180 days. 152 Complainant did not elect

to file her claim in federal court. On February 8, 2021, OSHA determined that

Respondent had not violated the SOX. 153 Complainant filed objections with the ALJ,

Gladden v. Proctor & Gamble Distributing LLC, No. 19-CV-2938, 2021 WL 4929913

(N.D. Ga. Sept. 8, 2021).

147

148

Comp. App. at Tab F, EEOC Notice of Right to Sue.

Gladden v. Proctor & Gamble Distributing LLC, No. 19-CV-2938, 2021 WL 4930535

(N.D. Ga. July 26, 2021) (magistrate’s report and recommendation for summary judgment).

149

Gladden, 2021 WL 4929913 (N.D. Ga. Sept. 8, 2021) (District Court adopting

Magistrate’s report and recommendation).

150

151

D. & O. at 1-2.

Gladden’s Mot. for Recon., Ex. A. Under SOX, if the DOL has not issued a final

decision on the complaint within 180 days of filing, the claimant may seek de novo review

in federal district court. 18 U.S.C. § 1514A(b)(1)(B).

152

153

D. & O. at 2.

asking for a hearing. Before the ALJ, on September 24, 2021, shortly after the

conclusion of the federal litigation, Respondent moved to dismiss on res judicata

grounds as the Northern District of Georgia had dismissed a Title VII action arising

from the same general facts underlying Complainant’s SOX claim. The ALJ granted

Respondent’s motion to dismiss on October 22, 2021. 154

DISCUSSION

The ARB reviews the ALJ application of res judicata de novo as a question of

law. 155 Res judicata, specifically claim preclusion, is the judicial preclusion of a

second claim based on the litigation between the same parties in a prior claim. Res

judicata has four main elements: (1) a final decision on the merits in the first action

by a court of competent jurisdiction; (2) the second action involves the same parties

or their privies as the first action; (3) the second action raises the same claim

litigated or a claim which could have been litigated in the first action; and (4) the

cases involve the same cause of action. 156 In simple prose, res judicata bars

relitigation of claims that were or could have been litigated in a prior action or

proceeding. 157

1. Final Decision on the Merits, Same Parties or Privities, and Same Cause

of Action

I concur with the lead opinion that the Title VII litigation was a final decision

on the merits by a court of competent jurisdiction involving the same parties or

privities. Under the transaction test, the Title VII and SOX claims constitute the

same cause of action as they involve the same operative facts even though

Complainant requests different legal theories of relief. 158

154

D. & O. at 7.

Gallas v. The Med. Ctr. of Aurora, ARB Nos. 2016-0012, 2015-0076, ALJ Nos. 2015SOX-00013, 2015-ACA-00005, slip op. at 4 (ARB Apr. 28, 2017) (“The ARB reviews de novo

an ALJ’s orders on motions to dismiss and for summary decision.”); Richardson v. Miller,

101 F.3d 665, 667-68 (11th Cir. 1996) (res judicata is a legal question).

155

Abbs v. Con-Way Freight, Inc., ARB No. 2008-0017, ALJ No. 2007-STA-00037, slip

op. at 7 (ARB July 27, 2010); In re Piper Aircraft Corp., 244 F.3d 1289, 1296 (11th Cir.

2001) (citations omitted).

156

Taylor v. Sturgell, 553 U.S. 880, 892 (2008); Ashbourne v. Hansberry, 894 F.3d 298,

302 (D.C. Cir. 2018).

157

Batchelor-Robjohns v. United States, 788 F.3d 1280, 1285-86 (11th Cir. 2015) (where

a case “arises out of the same nucleus of operative fact, or is based upon the same factual

158

2. Litigating the SOX Claim in the Federal District Court

Where I differ from the majority opinion is whether the claim could have

been brought in the prior litigation and the timing of that analysis. Because there

was overlap, I concur with the lead opinion that Complainant could have filed her

SOX claim with the District Court during the pendency of the Title VII litigation

under SOX’s kick-out procedure. The SOX claim reached the 180-day mark on

September 18, 2019. The federal claim was not dismissed until September 8, 2021.

But I disagree with the ALJ and the lead opinion that Complainant was compelled

to do so under res judicata principles. This is so because this right matured after

she filed her respective Title VII and SOX claims.

A. Res Judicata Criteria Are Measured at the Time the Complaint is Filed

The transaction test asks whether the two theories of recovery arise from the

same nucleus of facts surrounding an event. If so, then for purposes of res judicata,

the two separate claims involve the same cause of action even though they may

involve different theories of recovery. 159

Notwithstanding that two claims might constitute the same cause of action,

courts do not generally apply res judicata to extinguish a second claim if it could not

have been brought in the first claim at the time the first claim was filed or merged

with the first claim during the pendency of the first claim but before the second

claim was filed. 160 For example, if a first claim involved unlawful harassment in

violation of law protecting status or conduct, and the complainant was fired after

filing the first complaint, a second claim of unlawful termination may not be

precluded because it could not have been brought at the time the first complaint

predicate,” as a former action, the two cases constitute the same “claim” or “cause of action”

for purposes of res judicata) (quoting Ragsdale v. Rubbermaid, Inc., 193 F.3d 1235, 1239

(11th Cir. 1999)).

159

Ragsdale, 193 F.3d at 1239.

18 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL

PRACTICE AND PROCEDURE § 4409 n.10 (3d ed. Apr. 2023 update).

160

was filed. 161 A party may join the claims in supplemental pleadings but is not

compelled to do so. 162

In Manning, the Eleventh Circuit reasoned that the parties frame the scope

of litigation at the time the complaint is filed and that a judgment is only conclusive

regarding matters the parties might have litigated at that time but not regarding

“new rights acquired pending the action which might have been, but which were

not, required to be litigated.” 163 The Court:

[W]e do not believe that the res judicata preclusion of

claims that “could have been brought” in earlier litigation

includes claims which arise after the original pleading is

filed in the earlier litigation. Instead, we believe that, for

res judicata purposes, claims that “could have been

brought” are claims in existence at the time the original

complaint is filed or claims actually asserted . . . in the

earlier action. Our decision avoids the “potentially

unworkable requirement that every claim arising prior to

entry of a final decree must be brought into the pending

litigation or lost.”[164]

In Legnani v. Alitalia Linee Aeree Italiane, S.P.A., 165 the plaintiff filed a Title

VII and New York City Human Rights Law claim against her employer. After filing,

she was fired and sought to amend her complaint to add retaliatory discharge,

which was denied. Thereafter, she filed a second claim of retaliatory discharge. The

“Res judicata is no defense where, between the first and second suits, there has been

a[ ] . . . modification of significant facts creating new legal conditions.” Jaffree v. Wallace,

837 F.2d 1461, 1469 (11th Cir. 1988) (quoting Jackson v. DeSoto Parish School Bd., 585

F.2d 726, 729 (5th Cir. 1978)). State law may vary on this point.

161

18 WRIGHT, MILLER & COOPER § 4409 nn.10-14. There may be exceptions. Under

state law, for example, a party, to avoid res judicata, may be compelled to supplement

claims arising after filing but during the pendency of the first claim. See § 4409 n.14

(“Michigan imposes a duty to supplement the initial complaint with related fact allegations

that develop during the pendency of the state-court action.”).

162

Manning v. City of Auburn, 953 F.2d 1355, 1360 (11th Cir. 1992) (internal

quotations omitted).

163

Manning, 953 F.2d at 1360 (footnote omitted) (quoting Los Angeles Branch NAACP

v. Los Angeles Unified Sch. Dist., 750 F.2d 731, 739 n.9 (9th Cir. 1984)).

164

165

400 F.3d 139, 141-43 (2d Cir. 2005).

Second Circuit concluded that res judicata did not block her second claim. The

termination claim was not available to her at the time she filed her first claim. 166 In

Los Angeles Branch NAACP, the Ninth Circuit wrote:

The scope of litigation is framed by the complaint at the

time it is filed. The rule that a judgment is conclusive as to

every matter that might have been litigated does not apply

to new rights acquired pending the action which might

have been, but which were not, required to be litigated . . .

. Plaintiffs may bring events occurring after the filing of the

complaint into the scope of the litigation by filing a

supplemental complaint with leave of the court, . . . but

there is no requirement that plaintiffs do so.[167]

A similar result occurs if the first court’s jurisdiction is limited from

considering the second claim. 168 Although the above examples involve new factual

developments occurring after the first claim was filed, I would hold that these cases

are analogous, for purposes of res judicata, to Complainant’s statutory right to file

in federal court under the 180-day kick-out maturing after the respective claims

were filed. 169

Id. at 141-43 (internal citations omitted); Curtis v. Citibank, N.A., 226 F.3d 133, 13940 (2d Cir. 2000) (“The crucial date is the date the complaint was filed. The plaintiff has no

continuing obligation to file amendments to the complaint to stay abreast of subsequent

events.”); Bethel World Outreach Ministries v. Montgomery Cnty. Council, 706 F.3d 548, 554

n.2 (4th Cir. 2013) (“[T]o avoid res judicata, a plaintiff need not ‘expand its suit in order to

add a claim that it could not have asserted at the time the suit was commenced.’”); Ripplin

Shoals Land Co., LLC v. U.S. Army Corps of Eng’rs, 440 F.3d 1038, 1042 (8th Cir. 2006)

(“[R]es judicata does not apply to claims that did not exist when the first suit was filed.”).

166

167

Los Angeles Branch NAACP, 750 F.2d at 739 (internal quotation marks omitted).

168

Restatement (Second) Judgments § 26(c) (1982); 18 WRIGHT, MILLER & COOPER §

4412.

“There is no preclusion of a claim that was not mature at the time the first action

was filed.” 18 WRIGHT, MILLER & COOPER § 4406 n.16. The case that § 4406 cites to at n.16

is distinguishable as the claim matured not only after filing but also after judgment in the

prior action. Nonetheless, drawing the line at the time the claim was filed fits the purpose

of res judicata and avoids the difficulty of requiring parties amend to include their postfiling rights or lose them. Supra note 164; cf. Welsh v. Fort Bend Indep. Sch. Dist., 860 F.3d

762, 764-67 (5th Cir. 2017) (Texas law does not invoke preclusion for claims that were not

mature at the time of the first action or that could not have been litigated because

administrative remedies had not been exhausted).

169

Evaluating the application of res judicata at the time the complaint is filed

fits the doctrine’s purpose to avoid claim splitting in the form of unnecessary repeat

litigation, especially vexatious repeat litigation. Claim splitting occurs when a

complainant has one or more claims arising from the same nucleus of facts in

multiple tribunals that could have been filed in the same forum. 170 The doctrine is

one of judicial efficiency and fairness to the courts and parties to avoid multiple

trials, multiple sets of discovery, burdens on witnesses, and so on. “To preclude

parties from contesting matters that they have had a full and fair opportunity to

litigate protects their adversaries from the expense and vexation attending multiple

lawsuits, conserves judicial resources, and fosters reliance on judicial action by

minimizing the possibility of inconsistent decisions.” 171

From the perspective of both the district court and the ALJ, Complainant had

to file both claims in separate tribunals. They were not part of the same convenient

trial unit. Complainant could not have included her Title VII claims with her

administrative SOX claim as DOL’s jurisdiction is limited to the statutes assigned

to it. At the time that Complainant filed her Title VII claim, she also could not have

included her SOX claim because she was required to exhaust administrative

remedies. Complainant’s adjudication before the DOL is more than a gatekeeping

function and opportunity for conciliation or arbitration prior to federal litigation as

it includes not only an OSHA investigation (accompanied by the potential remedy of

preliminary reinstatement) but is followed by the opportunity for either party to

request an adjudicatory hearing with a DOL administrative law judge, with appeal

rights to this agency review Board. 172 The DOL’s adjudication receives a level of

deference by the federal courts if parties seek judicial review from the final agency

decision. 173

Vanover v. NCO Fin. Servs., Inc., 857 F.3d 833, 841 (11th Cir. 2017) (analyzing the

interrelationship between claim splitting and res judicata); Taylor v. Sturgell, 553 U.S. 880,

892 (2008).

170

171

Montana v. United States, 440 U.S. 147, 153-54 (1979).

172

29 C.F.R. Part 1980.

“Legal conclusions are reviewed de novo, keeping in mind that agencies often receive

deference in construing the statutes they administer.” DeKalb Cnty. v. U.S. Dep’t of Labor,

812 F.3d 1015, 1020 (11th Cir. 2016) (citing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,

467 U.S. 837 (1984)).

173

Thus, the two tracts of litigation had to begin separately in separate

tribunals. As the Seventh Circuit said in a comparable whistleblower case,

“[Complainant] was unable to bring her ERA claim (which requires administrative

adjudication) before the Illinois state court and unable to bring her Illinois claim

before the Department of Labor. This precludes the application of res judicata.” 174

When the statutory and regulatory frameworks force theories of recovery into

separate tribunals, as is the case here, the applicability of res judicata is limited.

B. Cases Cited by the Majority Opinion and ALJ are Distinguishable

In granting Respondent’s motion to dismiss based on res judicata, the ALJ

relied upon Evans v. Affiliated Computer Services, another ALJ case. 175 The ALJ in

Evans in turn relied upon Thanedar v. Time Warner, Inc. 176 The ALJs’ reliance on

Thanedar is misplaced as that case is distinguishable on key grounds. In Thanedar,

the plaintiff filed a SOX claim with OSHA on January 18, 2005. Before filing that

SOX claim, Thanedar had filed multiple claims, including a Title VII claim in

federal district court. The district court dismissed the federal claim with prejudice

on February 8, 2006. 177 Availing himself of SOX’s kick-out provision, Thanedar

subsequently filed his SOX claim with district court in a separate action on June 26,

2006. 178 In granting respondent’s motion for res judicata, the district court, affirmed

by the Fifth Circuit, evaluated Thanedar’s options before filing the SOX claim in

federal court. From the perspective of his second claim with the district court, he

could have consolidated the claims in prior litigation. At the time that he filed his

second complaint, he had prior federal litigation arising from the same nucleus of

facts concluding on February 8, 2006. Thanedar chose to file in federal court once

with the Title VII claims. Thanedar chose to file again in federal court with the SOX

claim under the kick-out. This second case could have been avoided as it could have

been merged with his first claim before the second claim was filed.

The majority opinion’s EEO cases are subject to the same evaluation. In these

cases, the court is evaluating two tracts of litigation and applying res judicata to

174

Addis v. Dep’t of Labor, 575 F.3d 688, 689 (7th Cir. 2009).

175

ALJ No. 2012-SOX-00035 (ALJ Jan. 29, 2019).

352 Fed. Appx. 891 (5th Cir. 2009). In a January 4, 2008 Order, the District Court

assessed costs and sanctioned Thanedar for abusive conduct during a deposition.

176

177

Thanedar, 352 Fed. Appx. at 895.

178

Id.

preclude a second action by evaluating prior litigation before the second complaint

was filed in federal court. 179 From this vista, the district court can squarely apply

res judicata consistent with its principles. The plaintiff had federal litigation in the

first claim and the EEO action became ripe 180 during the first federal lawsuit but

before the second EEO claim had been filed in district court. 181

Here, we do not face a complainant filing a new proceeding with the ALJ that

could have been raised in prior litigation before filing the current claim with the

ALJ. 182 In other words, the ALJ’s application of res judicata is premature. A more

analogous application to Thanedar and the EEO cases would be if Complainant had

taken the additional step of filing her SOX claim with the district court through the

kick-out. Had this been the case, Complainant would have first chosen to file the

Title VII claim in district court and subsequently chosen to avail herself of the

district court again with the SOX kick-out in a separate claim. From this vantage

point of filing the second claim, the district court could deem the separate kick-out

claim res judicata because it could have been merged with the district court while

the Title VII claim was pending.

C. Leon v. IDX Systems Corp. is Distinguishable

The majority opinion also relies on Leon v. IDX Systems Corp. 183 In that case,

the federal court dismissed the first tract of federal litigation based on a sanction

due to spoilation of evidence. 184 The respondent also moved for a res judicata

injunction to enjoin SOX litigation pending with OSHA at the investigation stage.

179

See, e.g., Ashbourne, 894 F.3d 298.

The EEOC gives parties the right to sue in federal court if it cannot complete its

investigation within a specified time frame. https://www.eeoc.gov/filing-lawsuit.

180

181

Woods v. Dunlop Tire Corp., 972 F.2d 36 (2d Cir. 1992).

While the 180-day mark occurred before the Complainant appealed the case to the

ALJ, the complaint filed with OSHA and the appeal to the ALJ are part of the same

administrative claim for purposes of res judicata. 18 U.S.C. § 1514A(b)(2) (citing 49 U.S.C. §

42121(b)(2) (filing objections and requesting a hearing before an ALJ)).

182

183

464 F.3d 951 (9th Cir. 2006).

184

Leon v. IDX Sys. Corp., No. CO3-1158P, 2004 WL 5571412 (W.D. Wash. Sept. 30,

2004).

The district court denied the motion on lack of privity grounds. 185 The Ninth Circuit

reversed, concluding that the elements of res judicata had been met because OSHA

was in privity with Leon for purposes of res judicata analysis but remanding the

injunction issue back to district court for further analysis. 186

Leon is distinguishable based on facts unique to that case. First, federal

courts have powers of injunction that administrative tribunals do not have. Under

the All Writs Act (AWA) and principles of federal supremacy, federal courts may

enjoin current and future proceedings in federal or state courts to protect federal

jurisdiction or protect federal rulings from encroachment. 187 Second, the district

court’s consideration of a res judicata injunction was intertwined with the spoilation

sanction underlying the first case. Leon had engaged in significant spoilation of

evidence in bad faith. With res judicata injunctions, courts preclude future litigation

ab initio to prevent the moving party from the additional expense of having to

litigate and defend claims with res judicata multiple times. 188

Res judicata injunctions are most easily justified to protect

against a clear demonstration that vexatious,

multiplicitous, and harassing litigation of the same claim

has not been deterred effectively by ordinary methods of

defensive pleading. Some of the cases show appalling

patterns of abuse by repetitive litigants that compel

whatever protection may be affirmed by injunction and

ensuing contempt proceedings.[189]

Leon v. IDX Sys. Corp., No. CO3-1158P, 2005 WL 6127300 (W.D. Wash. Feb. 15,

2005); see also Leon v. IDX Sys. Corp., No. CO3-1158P, 2005 WL 6127299 (W.D. Wash. Apr.

7, 2005) (order denying reconsideration).

185

186

Leon, 464 F.3d at 962-63.

28 U.S.C. § 1651. For example, if a federal court dismisses a case with prejudice, it

might enjoin state proceedings to protect its ruling. Daewoo Electronics Corp. of Am., Inc. v.

Western Auto Supply Co., 975 F.2d 474, 477, 479 (8th Cir. 1992) (discussing exceptions to

the Anti-Injunction Act and citing the plaintiff’s bad faith conduct as a basis for injunctive

relief).

187

Other alternatives such as permitting litigation to continue subject to issue

preclusion are less appropriate in light of the abusive conduct.

188

18 WRIGHT, MILLER & COOPER § 4405.1; Thanedar, 352 Fed. Appx. at 900 (“It is

well-settled that a plaintiff’s pro se status does not give him a ‘license to harass others, clog

the judicial machinery with meritless litigation, and abuse already overloaded court

dockets.’ There is no constitutional right to prosecute frivolous actions, and preclusion

orders are appropriate tools for deterring vexatious filings. When issuing such an order,

189

Examining Leon’s res judicata injunction confirms that it was based on

preserving and giving effect to the federal court’s sanction in the first litigation. The

district court did not mention the 180-day kick-out provision in its initial

consideration of the res judicata injunction under the AWA or in its denial of

reconsideration. 190 The Ninth Circuit on appeal mentioned the 180-day mark in a

footnote as a basis for same cause of action. 191 Had merger rather than sanction

been the focus, presumably the district court would have emphasized the 180-day

mark.

3. The ALJ’s Application of Res Judicata Conflicts with SOX’s Statutory

Scheme

The application of res judicata at the time the ALJ applied it is in conflict

with the statutory scheme placing the administrative claim with the DOL and

giving the complainant the election to file in federal court. It transforms the election

to file in district court into a mandate or face res judicata dismissal. Further, there

is considerable uncertainty as to how such an application would work under the

various permutations that might arise after the 180-day mark in situations where

complainant has federal litigation but complainant’s preference is to keep her

OSHA claim in the administrative forum. 192

Judicial efficiency does not support the ALJ’s application of res judicata. By

statute, the two respective types of claims, Title VII and SOX, must begin in

separate jurisdictions. Courts have protected the complainant’s right to the

administrative process followed by the election to kick out even when those two

tracts of litigation are judicially inefficient. 193 In Lawson v. FMR LLC, the ALJ

however, a court must ensure that it is ‘tailored to protect the courts and innocent parties,

while preserving the legitimate rights of litigants.’”) (internal citations omitted).

190

Leon, No. CO3-1158P, 2005 WL 6127300, reconsideration denied, 2005 WL 6127299.

191

Leon, 464 F.3d at 962 n.8.

Under the ALJ’s application of res judicata, there could be a race to the courthouse

sometime after the 180-day mark that is inconsistent with SOX’s providing complainants

with the election to file in federal court.

192

Pfeiffer v. Union Pac. R.R. Co., 2013 WL 1367054 *5 (D. Kan. Apr. 3, 2013) (finding

that complainant’s election following an adverse ALJ decision was not bad faith); Wagner v.

Grand Trunk Western R.R., No. 15-10635, 2016 WL 1161351 *4 (E.D. Mich. Mar. 23, 2016)

(As the cases cited above demonstrate, the general rule is that removal pursuant to §

193

ruled against one of the parties, and the matter was on appeal with this Board. 194

Complainant kicked out the SOX claim to district court. Respondent moved for

collateral estoppel, a sister of claim preclusion, based on the ALJ’s ruling.

Respondent argued that allowing the matter for a trial de novo in district court case

would involve two tracts of litigation. The district court nonetheless refused

preclusion due to the statutory scheme giving the complainant the election to

pursue a new claim in district court. “To be sure, this may lead to duplication of

factfinding by the DOL and the federal courts, but that repetition was clearly

contemplated as possible by the statute’s general provision for ‘de novo review.’” 195

In Stone v. Instrumentation Lab. Co., 196 the Fourth Circuit stated:

[A] literal interpretation of the [SOX] does not lead to an

“absurd result.” In so finding, we reject as contrary to the

statute the Secretary’s “suggestion” that district courts

apply preclusion principles to effectuate a goal of efficiency.

First, as noted above, the plain text of the statute expressly

provides a complainant the right to de novo review. Second,

the DOL’s own regulations acknowledge that a district

court action may be filed while an appeal is pending before

the ARB. Third, even though preclusion principles are

generally favored, “[c]ourts do not, of course, have free rein

to impose rules of preclusion” if it was not intended by the

legislature. . . .[197]

Respondents in these cases would disallow complainant’s kick out following

adjudication before the ALJ on preclusion and judicial efficiency grounds. Courts

have consistently rejected these defenses, noting Congress permitted the de novo

trial in district court.

20109(d)(3), even where it leads to the duplication of efforts and engenders frustration, does

not constitute bad faith.).

Lawson v. FMR LLC, 724 F. Supp. 2d 141, 148 (D. Mass. 2010), rev’d on other

grounds, 670 F.3d 61 (1st Cir. 2012), rev’d, 571 U.S. 429 (2014).

194

195

Lawson, 724 F. Supp. 2d at 151.

196

591 F.3d 239 (4th Cir. 2009).

Id. at 249 (citations omitted); Lynch v. Union Pac. R.R. Co., 24 F. Supp. 3d 597, 60102 (N.D. Tex. 2014).

197

The ALJ’s application of res judicata in this case is the inverse of

respondents’ claims in Lawson and Stone and in violation of the same underlying

principle. Here, the ALJ extinguished the administrative claim by res judicata

because complainant had not taken advantage of the statutory election to file in

federal court. I would hold that this application of res judicata is at odds with SOX’s

language. Congress legislates against a background of common-law adjudicatory

principles, including res judicata. 198 Even though preclusion principles are

generally favored, “[c]ourts do not, of course, have free rein to impose rules of

preclusion” if it was not intended by the legislature. 199 In Wagner v. Grand Trunk

Western R.R., the Eastern District of Michigan stated:

Congress has the authority to displace the common law by

enacting a statute. To the extent that § 20109(d)(3) allows

an employee to pursue claims that, in the absence of this

statute, might be barred by res judicata or collateral

estoppel, Congress had the power to authorize such claims.

The statute provides for de novo review before a district

court “if the Secretary of Labor has not issued a final

decision within 210 days after the filing of the complaint

and if the delay is not due to the bad faith of the

employee[.]”[200]

I would remand the matter back to the ALJ for further proceedings.

____________________________________

THOMAS H. BURRELL

Administrative Appeals Judge

198

Taylor, 553 U.S. at 891.

199

Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 108 (1991).

200

Wagner, No. 15-10635, 2016 WL 1161351 *5 (internal citation omitted).

CERTIFICATE OF SERVICE

ARB-2022-0012 Shannon Gladden v. The Procter and Gamble Company (Case No: 2021-SOX-00012)

I certify that the parties below were served this day.

05/09/2023

(DATE)

Craig Salner

799 Brickell Plaza

Suite 900

Miami, FL 33131

--Electronic

David A. Nenni

201 East Fifth Street

PNC Center 26th Floo

Cincinnati, OH 45202

--Electronic

Douglas Parker

Assistant Secretary of Labor

for Occupational Safety and Health

200 Constitution Avenue, N.W.

Washington, DC 20210

Jeffrey A Schwartz

171 17th Street, NW

Suite 1200

Atlanta, GA 30363

--Electronic

Shannon Gladden

799 Brickell Plz

Ste 900

Miami, FL 33131

--Electronic

Thomas O. Shepherd, Jr., Esq.

Clerk of the Appellate Boards

Associate Solicitor

Division of Fair Labor Standards

U.S. Department of Labor

Room N2716, FPB

200 Constitution Ave., N.W.

Washington, DC 20210

Hon. Stephen R. Henley

Chief Administrative Law Judge

Office of the Administrative Law Judges

800 K Street, N.W., Suite 400

Washington, DC 20001-8002

Office of the Solicitor, Division of Fair Labor

Standards

200 Constitution Ave, NW

Room N-2716

Washington, DC 20210

--Electronic

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.