# U.S. Department of Labor

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URL: https://www.frixlaw.com/law-library/documents/agency%3Adol%3Aa80e8d7d938ac6d4

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

U.S. Department of Labor

Administrative Review Board
200 Constitution Ave. NW
Washington, DC 20210-0001

In the Matter of:
SHANNON GLADDEN,

ARB CASE NO. 2022-0012

COMPLAINANT,
v.
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
1

18 U.S.C. § 1514A.

2

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

2
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.
3

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.
4

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
5

3
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).
6

Decision Adopting R&R at *2.

7

Id. at *3.

8

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.

9

Forehand v. Fla. State Hosp. at Chattahoochee, 89 F.3d 1562, 1567 (11th Cir. 1996)
(citation omitted).
10

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).
11

D. & O. at 1-2. Complainant also raised allegations of “wire fraud and fraud against
the shareholders.” Id. at 2 (inner quotations omitted).

12

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.
13

4
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

14

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

15

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

16

Id.

17

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

18

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.

19

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).
20

21

at 8.

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

5
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
22

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).

23

24

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

25

D. & O. at 2.

26

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).
27

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).

28

29

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

6
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).

30

31

Id. at 15.

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

32

33

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

34

D. & O. at 2.

35

Id. at 1-2.

7
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).

36

D. & O. at 3-4 (citation omitted). The ALJ noted that the parties did not dispute the
first two elements. Id. at 4.
37

38

Id.

39

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

40

D. & O. at 4.

41

Id.

42

Id.

43

Id. at 4-5.

44

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

8
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

45

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

46

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.
47

48

Order Denying Comp. Motion for Reconsideration at 1.

49

Id.

50

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).
51

9
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).

52

Yadav v. Frost Bank, ARB No. 2020-0048, ALJ No. 2020-SOX-00017, slip op. at 4
(ARB June 24, 2021).
53

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).
54

55

Id. § 4404.

56

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)).

57

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.
58

10
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).
59

60

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)).
61

11
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.

62

63

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

64

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).
65

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
66

12
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.

67

68

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.

69

70

Id. at 962 n.8.

13
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

71

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.”).

72

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).

73

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

74

75

Legnani, 400 F.3d at 141.

14
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.
76

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).
77

78

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

79

15
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 . . . .”)
80

81

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.

82

83

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).

84

16
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).

85

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.
86

87

Dissent at 32.

88

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

89

Id.

90

Dissent at 36.

Rivers v. Barberton Bd. of Educ., 143 F.3d 1029, 1033 (6th Cir. 1998); Heyliger, 126
F.3d at 856.

91

17
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.

92

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

93

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.
94

95

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

96

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

97

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.
98

18
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,
99

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

19
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

20

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.

21

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

22
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.

23
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.

24
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

25
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).

26
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

27
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.

28
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

29

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

30
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).

31
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

32

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

33
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.

34
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).

35
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

36

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

37
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

38
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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Adol%3Aa80e8d7d938ac6d4. Public record. Not legal advice.